Korean Medical Institutions’ Efforts for Overseas Expansion Not Paying Off

Korean hospitals have rushed into Asian and Middle Eastern countries since around 2000, when the popularity of Korean pop culture began to soar in these regions. However, an increasing number of them are returning to Korea, after experiencing bitter failure from around 2010.

The Korean Wave (Hallyu) phenomenon started to spread to not only Asia but also Europe and North America in the late 1990s, and various industries became confident of successful overseas business. The medical community was no exception, either. Many experts thought that Korea’s advanced medical technology and services would appeal to Southeast Asian nations with less-developed medical sectors, and in North America where medical costs are very high. The positive image of Korea created by movies and pop singers was expected to be a boon to localization in Southeast Asia, China, and the like, and cosmetic surgery demand would rise among Asian women thanks to the popularity of Korean TV dramas.

According to the Ministry of Health & Welfare and the Korea Health Industry Development Institute, more than half of large general hospitals surveyed last year said they were willing to participate in the government’s policy for overseas medical practices. In addition, 80 percent of general hospitals, medical institutions, and clinics actually joined its overseas expansion programs, and 60 percent of them were preparing or planning to do so with detailed roadmaps.

As of the end of last year, 111 medical institutions were in business in 19 countries. That was 20 more institutions and three more countries than a year earlier. The destinations included not just China and the United States but also the Philippines, Thailand, Malaysia, Hong Kong, Saudi Arabia, and the United Arab Emirates. The segments of the services were diversified as well, from cosmetic surgery and dermatology to medical checkups and comprehensive diagnoses. Most of the institutions entered such countries in partnership with local companies and major hospitals, because this is advantageous in terms of business permits and licensing, medical insurance applications, and adaptation to local culture.

Still, not a few institutions have had difficulties in the early stage due to the lack of understanding of the local law and market conditions and failed selection of locations. For instance, Seoul National University Hospital set up an office in the United States and opened a diagnosis center staffed with workers dispatched from Korea, but failed to attract a sizeable number of patients. The hospital recently determined that this has been owing to poor marketing, and decided to hold hands with a local assistant for a marketing strategy overhaul.