Imagine if the MD Anderson Cancer Center, one of the world’s most prestigious cancer hospitals, decided to build its first Asian hospital in Korea. This would provide an enormous boost to Korea’s medical tourism industry and contribute to the advancement of Korea’s already sound cancer research and treatment, ultimately benefiting the Korean economy and the health care industry.

In 2012, approximately 160,000 foreign patients from 188 countries visited Korea to receive some kind of medical treatment. And the number of those who don’t mind flying all the way to Korea for medical services has been on a steady rise in recent years, an international acknowledgement of Korea’s superior-quality medical services. If Korea hosted world-class foreign hospitals like the MD Anderson Cancer Center, it would then be able to attract ever more foreign patients from across Asia, the Middle East and other far-flung countries, who would otherwise have received medical treatments at major U.S. medical centers.

And the benefits do not end there. Affluent Koreans who can afford medical services from elite U.S. medical centers would be more likely to stay in Korea, instead of flying more than 10 hours each way to receive an operation. The general population in Korea would also be given more and possibly better options when determining where to get medical treatments requiring sophisticated medical skill and technology. Furthermore, it would strengthen academic, research and medical collaboration between incoming foreign medical centers and Korean health care institutes, helping to bring the quality of Korean health care to a new height.

The vast majority of the Korean public is concerned that the influx of for-profit foreign hospitals would trigger health disparities between the rich and the poor, and hence jeopardize Korea’s strong and well-instituted public health system. However, the chances of their concerns materializing seem extremely rare for a number of reasons.

For a start, only a limited number of foreign hospitals would be able to go into business here as by law they can only operate in Korea’s eight Free Economic Zones and Jeju Special Self-Governing Province. Secondly, for-profit foreign hospitals would go out of business if they were not profitable enough to sustain themselves financially. Those using for-profit foreign hospitals would have to pay for medical bills out of their own pockets or using private insurance, while Korea’s national insurance covers every Korean citizen as well as eligible foreigners. This would lead to different pricing structures between for-profit foreign hospitals and local Korean hospitals, with potentially higher prices charged by for-profit foreign hospitals for similar medical services. If one can get the equivalent medical service for less money, assuming the quality is similar, it follows that one will opt to pay less. This means the vast majority of Koreans would continue to use the existing medical services offered by Korea’s exceptional medical centers, with their medical bills covered by the national insurance. In response to this, for-profit foreign hospitals would have to prioritize and target high-income groups of domestic patients and a great number of foreign patients to be financially sustainable. Therefore, the negative effects of for-profit foreign hospitals on the local health care industry and medical centers, as claimed by some critics, would be minimal.

China recently announced that it will relax health care regulations to spur foreign investment in private health care. Foreign health care players such as Raffles Medical Group and IHH Healthcare Bhd are already active in the Chinese private health care market. Singapore has a booming private hospital market, while Dubai has been eager to bring top-notch American hospitals to the emirate state, with some success. The movements have significant implications for Korea’s efforts to attract foreign hospitals and foreign patients.

It is my view that for-profit foreign hospitals in Free Economic Zones should be viewed as part of a strategic industry rather than a public health matter. While public health should be maintained through Korea’s outstanding health care institutions and universal health insurance, the presence of small numbers of top-tier, specialty foreign hospitals would help the Korean economy by capturing an increasing share of global medical tourism and advancing Korean medicine to a higher level at the same time.

By Um Tae-won 

Um Tae-won is a project manager at the Daegu-Gyeongbuk Free Economic Zone Authority. He is responsible for attracting foreign investment. The views expressed herein do not reflect those of his employer. ― Ed.