The Korean government finalized its 4th plan to invigorate investment aimed at easing rules on the medical and education sectors at the 4th trade and investment promotion meeting presided over by President Park Geun-hye in the Blue House on December 13.
President Park said, “It’s regrettable that local medical institutions’ main source of revenue is tied to hospital bills, while those in other countries are engaged in various activities for income,” adding, “It is important to create jobs for young people by developing the medical industry with a high performance workforce and big potential.”
The president continued by saying, “It is also vital to enhance the competitiveness of the medical industry and help it find new sources of revenue through creative alternatives under the premise that the sector will maintain the public nature of business.”
Related to the improvement of education services, she pointed out, “Singapore emerged as Asia’s educational hub by attracting branches of world-class universities or allowing joint institutes.” The president added, “We should do the same thing. In particular, we ought to provide greater autonomy for educational institutes in free economic zones or special education zones at home.”
The government also decided to let corporations that provide medical services to the public establish their subsidiaries for incidental business, for which only university hospitals are allowed at the moment. The decision targets 848 medical corporations that run 1120 hospitals. Samsung Medical Center and Asan Medical Center are excluded, since they belong to public-service corporations restricted from inter-company shareholding.
Apart from treating patients, medical organizations’ incidental businesses will be expanded from the current medical staff training, post-natal care, and auxiliary services for funeral homes to the hospitality industry, the tourism industry, and businesses aimed at attracting foreign patients. The purchase of medical equipment and the development of medicines, cosmetics, and medical devices will also be made possible.
As a result, 848 medical corporations in Korea will be able to be involved in various activities to make profits by setting up subsidiaries with an investment of corporations and venture capital firms starting in 2014.
However, some in the medical industry think that the establishment of medical corporation affiliates is a precursor to the introduction of for-profit hospitals. Besides, pharmacists tend to be negative about the issue. Hence, the improvement of the medical system is not likely to be easy.
Meanwhile, Seoul also agreed to enable the merger of medical facilities at risk of insolvency with financially sound hospitals by allowing the amalgamation between medical corporations. So far, it has been necessary for local medical corporations to go into liquidation in the event of business closures resulting from a deteriorating financial situation.
To boost the number of foreign patients, a single room with low occupancy rates by local people will be exempt from regulations on top-ranked hospital beds for foreigners (less than 5%). Accordingly, the number of those beds will increase from 2,000 to 4,500.
On top of that, overseas educational institutes will be able to establish their branches in partnership with local school corporations in eight free economic zones and Jeju Special Self-Governing Province.
The Korea International School Jeju, which is a for-profit organization, will be permitted to divide profits from running the school. Until now the government measure to ban profit sharing has been regarded as a stumbling block to attracting overseas schools.
From next summer, local elementary, middle, and high schools as well as universities can hold English camps by signing an MOU with other countries, local governments, or education offices to absorb the demand for short-term overseas study programs.
The Ministry of Education will select schools by considering ways to support the initiative such as setting limits on costs and reducing fees for low-income students. The plan will be implemented in 100 schools first, including international schools, foreign language high schools, and autonomous private high schools.