Growing Medical Community Concerns Over Court Ruling Effectively Allowing For-Profit Hospitals

KMA "Medical Care Could Become a Profit-Making Tool"
Korean Health and Medical Workers' Union "Fight to Abolish Laws Allowing For-Profit Hospitals"

[Asia Economy Reporter Lee Gwan-ju] The controversy surrounding for-profit hospitals has reignited following a court ruling that deemed the condition restricting treatment of domestic patients at Jeju Green International Hospital, the first for-profit hospital in Korea, illegal. The medical community has expressed concerns that this ruling could encourage the establishment of for-profit hospitals, turning healthcare into a tool for profit generation.

According to the medical community on the 9th, the Jeju District Court Administrative Division 1 (Chief Presiding Judge Kim Jeong-sook) ruled in favor of the plaintiff on the 5th in a lawsuit filed by Green Jeju Healthcare Town Co., Ltd., a subsidiary of China's Greenland Group, against Jeju Province. The court concluded that the ban on treating domestic patients, imposed as a condition for the hospital’s opening permit in 2018, was illegal.

A for-profit hospital, as the name suggests, is a medical institution that operates like a business, generating profits and distributing dividends to investors. It receives private capital investment like a general corporation and can distribute profits to investors upon settlement. In contrast, non-profit hospitals may generate revenue through profit-making activities but cannot distribute surplus funds as dividends; instead, they must use them according to the hospital’s founding purpose, such as for personnel costs, facility investments, and research expenses.

The medical community and civil society groups opposing for-profit hospitals fear that the court’s decision could effectively legalize the establishment of for-profit hospitals in Korea. The Korean Medical Association (KMA) immediately issued a statement on the day of the ruling, saying, "This ruling overturns the existing Medical Service Act and could lay the foundation for legalizing for-profit hospitals. For-profit hospitals will operate solely for profit rather than fulfilling the fundamental role of medical institutions," adding, "The introduction of for-profit hospitals will lead to large-scale capital investment and ultimately reduce healthcare to a tool for profit-making."

The KMA strongly criticized the potential collapse of public healthcare services. It stated, "The introduction of for-profit hospitals will not be limited to a single hospital issue but will likely transform Korea’s entire medical system into a profit-driven model, causing fatal harm," and predicted, "So-called essential medical departments that are not profitable will be excluded from treatment categories, and medical institutions responsible for essential care may face existential threats due to the dominance of for-profit hospitals backed by massive capital."

It continued, "Such a situation will lead to a vicious cycle of continuous closures of local small and medium-sized medical institutions, collapsing Korea’s healthcare system and threatening patients’ health and lives," emphasizing, "To wisely respond to future medical crises, a robust healthcare system built on a solid foundation is necessary, along with appropriate role-sharing and cooperation between the private and public sectors."

Healthcare workers also joined the criticism. The Korean Health and Medical Workers’ Union, affiliated with the Korean Confederation of Trade Unions, declared in a statement, "We will fight to block the opening of Greenland Hospital and abolish the legal system permitting for-profit hospitals." The union warned, "Once healthcare is used as a means of making money, protecting the public’s life and health rights becomes distant," and added, "If the establishment of Greenland Hospital becomes a reality, it could signal the start of nationwide for-profit hospital establishments. Allowing even a single for-profit hospital will distort Korea’s entire healthcare system into a profit-making tool."