Emergency Clinics Offering Nail Care and Developmental Delay Treatment... Hospitals Laden with 'Non-Covered' Services [Private Insurance Claims Leak]②

Unpopular Departments in Hospitals Expanding Non-Covered Services Unrelated to Their Specialties
Emergency Medicine and Pediatric Specialty Hospitals
Operating Manual Therapy, Problematic Nail, and Obesity Clinics
Brokers Encouraging Business by Connecting Hospitals and Centers

Located near a new town in the southern Gyeonggi region, Clinic A is an emergency medicine specialty clinic where the chief physician and all three specialists are emergency medicine experts. They provide emergency patient care every day of the year without closing even once, taking responsibility for the health of local residents.

Doctor.

However, from a business perspective rather than a medical one, emergency patient care is not a major source of revenue for Clinic A. Currently, Clinic A offers treatments beyond emergency medicine, including child psychological development, manual therapy, problematic nail conditions, and obesity clinics. An insurance industry official monitoring the large volume of non-reimbursed indemnity insurance claims from Clinic A said, "It is a very unusual clinic that handles all four so-called non-reimbursed indemnity 'big four' treatments, which have nothing to do with emergency medicine."

Opened in May of this year, Clinic A immediately hired therapists in almost all fields related to delayed child psychological development?such as speech, cognition, play, art, and sensory integration?in non-regular employment forms to operate the child psychological development clinic. Since then, they have opened specialized clinics every day except Sundays. They actively promoted these services in new town resident communities and elsewhere. Clinic A set prices for non-reimbursed treatments such as speech, play, art, cognition, and occupational cognition therapy at 80,000 KRW, intelligence tests at 200,000 KRW, and comprehensive developmental assessment treatments at 400,000 KRW.

The child psychological development treatments at Clinic A have recently become the item with the highest indemnity insurance claims. According to data obtained from the five major domestic non-life insurance companies (Samsung, Hyundai, KB, DB, Meritz) on indemnity payments by major treatment categories, indemnity insurance payments for developmental delay (both reimbursed and non-reimbursed) increased 3.7 times from 43.4 billion KRW in 2020 to 162.3 billion KRW in 2023. Compared to the overall indemnity insurance payments by domestic non-life insurers, which increased 1.3 times from 7.0696 trillion KRW to 9.0187 trillion KRW during the same period, this growth is remarkable. As of the third quarter cumulative data this year, 134.2 billion KRW was paid for developmental delay indemnity insurance claims, of which 124.5 billion KRW was non-reimbursed, accounting for the majority.

An illustration depicting ChatGPT opening a developmental delay clinic in an emergency medicine hospital and generating revenue. Provided by ChatGPT

Currently, in the metropolitan area, there are quite a few clinics like Clinic A that handle various non-reimbursed treatments as affiliated clinics rather than their main specialties. Clinic B, located in a five-story building in the southern Gyeonggi region, also has emergency medicine and pediatrics as its main specialties but operates non-related clinics such as manual therapy, problematic nail conditions, and obesity clinics.

At Clinic B, the problematic nail treatment is managed by a clinic director who holds both a nail technician license and a nursing assistant license, providing consultation and treatment. The non-reimbursed onychomycosis laser treatment costs 100,000 KRW per nail, and the match wire procedure for ingrown toenail treatment costs 200,000 KRW per wire. A local resident who used this clinic said, "After managing my nails here, I no longer need to go to a nail salon," adding, "They also provide scaling and callus removal, and since the treatment costs can be covered by indemnity insurance, I use it frequently."

An industry insider familiar with clinics operating in this manner said that in less popular departments such as emergency medicine, obstetrics and gynecology, and pediatrics, due to low birth rates and low fees, there is a trend to expand business through so-called profitable non-reimbursed treatments. While some hospitals directly employ staff for non-reimbursed treatments, brokers have recently been going around hospitals to promote these services. For example, in the case of the recently popular developmental delay treatments, brokers connect hospitals with developmental delay treatment centers. Hospitals operate non-reimbursed developmental therapy clinics with personnel dispatched from these centers and share a portion of the revenue generated with the brokers. Brokers typically take about 20-30%. Problematic nail treatments are practically a 'shop-in-shop' model where nail salons operate within hospitals. A medical industry official said, "Brokers persuade doctors by saying, 'We will handle the operations; you just need to provide prescriptions,'" adding, "It's easy to be tempted by promises of making big money."