A debate is raging on the government’s health care reform plans. Last October, the government announced a scheme to start providing telemedicine in 2015. In December, it also unveiled a plan to allow hospitals to set up subsidiaries to engage in for-profit businesses such as medical tourism and welfare facilities.

The plans triggered a strong backlash from physicians, health care workers and opposition parties. They denounced the government for pushing for the privatization of medical services, which would wipe out neighborhood clinics, cause a drop in the quality of medical services, drive up health care costs and eliminate numerous medical services jobs.

So the Korean Medical Association, a lobbying group for doctors, has resolved to go on strike on March 3 unless the government backtracks on its reform plans. But it accepted the government’s offer for talks, raising hope that the two sides could sort out the problems through dialogue.

The government, however, has made it clear that it will not retract its plans, saying that they have nothing to do with privatizing medical services. It also warns that should doctors collectively refuse to see patients, they would face stern punishment.

The Ministry of Health and Welfare asserts that, contrary to the arguments of critics, the plans will enhance access to medical services, help hospitals improve their balance sheets, stimulate investment in the health care sector and create many high-quality jobs.

The sharply conflicting views of the two sides have left many confused. Which side is in the right?

In the first place, those who argue that the government is pushing for privatization are making a straw man argument. Their claim is an intentional misrepresentation of the government’s position.

The government has repeatedly declared that it will not pursue privatization. Furthermore, its proposals can hardly be seen as a privatization attempt. As the Ministry of Health and Welfare notes, privatization would mean the dismantling of the national health insurance program through which the government provides universal health care to citizens. But the plans do not involve any change to the current system.

Those who attack the government for attempting to privatize medical services are no different from the rail workers who went on strike last month over what they claimed was a government attempt to privatize rail services.

The government repeatedly denied that it was pursuing privatization. But the workers turned a deaf ear. They intentionally misrepresented the government’s position to shape public opinion in their favor.

Some reckless people opposed to health care reform have spread rumors on the Internet that the cost of medical services would soon spiral out of control. For instance, rumors suggest that an appendectomy would soon cost 15 million won and a Caesarean section 20 million won ― several times higher than the current levels.

These rumors are totally groundless and remind us of the mad cow disease scare several years ago, when anti-American activists grossly exaggerated the health risks of U.S. beef to box the government into a corner.

It is hard to imagine an outrageous increase in the prices of medical services in Korea as this would be determined not by hospitals but by the National Health Insurance Corp. Ministry officials say citizens can rest assured that the reform plans will not cause a sudden increase in medical costs.

While physicians’ criticism of the government for pursuing privatization is misguided, their concerns about its reform plans are not totally unfounded.

Physicians note that the government’s plan to allow hospitals to set up for-profit subsidiaries will transform hospitals themselves into profit-centered entities. Under the current law, hospitals are non-profit organizations, meaning that all their profits must be plowed back into their operations and facilities.

The government’s scheme would allow hospitals to attract outside investment to help them establish their affiliates. Doctors say that this means hospitals would have to be run in ways that maximized the profits of their subsidiaries in order to satisfy the outside investors.

For instance, hospitals with affiliates specializing in medical equipment development would be compelled to use the new devices designed by their affiliates in order to boost their profits.

What this scenario implies is that the profits of hospitals could be siphoned off to their subsidiaries, counter to the government’s claim that hospitals would be able to bolster their finances with the profits of their subsidiaries.

To address this possibility, the government plans to require hospitals to reinvest at least 80 percent of their profits into hospital operations. Physicians are skeptical about whether regulations would foil attempts to tap into hospital funds. The Health Ministry will have to heed their concerns.

Doctors say the bigger problem with the government scheme is that it would cause hospitals to focus their attention on making money rather than treating their patients.

They argue that the government should help hospitals pay more attention to patient treatment. In this regard, they are demanding a substantial rise in medical fees, which they say are too low compared with those of other countries.

A recent report by a Yonsei University professor supports doctors’ claims, stating that an appendectomy costs about $2,000 in Korea, $14,000 in the United States, $5,622 in Australia, $3,741 in France and $3,351 in Germany. It says fees for other procedures are also much lower in Korea than in other countries.

A discussion of the fee hike will be included in the planned talks between physicians and government officials. The government is likely to accept a moderate increase as doctors’ dissatisfaction with the current levels is known to be the real motivation behind their strike threat.

The talks between the two sides will offer a rare chance to discuss other important issues facing the nation’s health care system. One such issue concerns the worsening imbalance in the health care delivery system. The nation relies too much on large hospitals in Seoul for treatment of patients, while underutilizing community clinics for preventive care. This is the main reason for the deteriorating quality of health care in Korea despite the constant increase in medical investment and health care costs.

The remedy for this problem is strengthening the infrastructure for primary care. More support should be offered to community clinics and public health centers to help them play a much larger role in providing preventive care and keeping people healthy. This will not only improve the quality of health care but rein in health care costs.

By Yu Kun-ha 

Yu Kun-ha is chief editorial writer of The Korea Herald. ― Ed.