14 National University Hospitals, Public Institution Status 'Uncertain'... Impact of 'Medical Strike'

Deliberation on Public Institution Designation
to Be Held Before Lunar New Year Holiday

The Public Institution Management Committee is reviewing the removal of public institution status for 14 national university hospitals, including Seoul National University Hospital. However, within the government, the prevailing view is that it will be difficult for these hospitals to be immediately removed from public institution status due to the aftermath of the medical strike. This is because, given the medical service gaps that became a reality during last year's strike, there is a judgment that the management and supervision system would be insufficient if the hospitals were removed from public institution status right away.

Yonhap News

According to related ministries on the 14th, the Ministry of Economy and Finance plans to hold a Public Institution Management Committee meeting before the Lunar New Year holiday to review and decide on the designation of public institutions for 2025. The committee is currently reviewing whether to remove the public institution designation for 14 national university hospitals, including Seoul National University Hospital. Last year, the Ministry of Economy and Finance stated, “Considering the increasing need to enhance the competitiveness of national university hospitals to strengthen essential regional medical capabilities, we decided to review the removal of their designation.”

However, within the government, there is a view that it will be difficult for these hospitals to be removed from public institution status this year. A government official said, “It is still under review,” but added, “Given the unsettled atmosphere due to last year’s medical strike, it is difficult to see that the conditions considered as prerequisites for removal of designation have been met internally.”

National university hospitals have long argued that, because they are designated as public institutions, excessive regulations on personnel and budgets are imposed, making removal of the designation necessary. National university hospitals fall under the category of ‘other public institutions’ in the public institution classification. Like other public institutions, the hospitals must set the total personnel expenses for medical staff they employ within the government-determined annual increase cap (3.0% this year). They must report the required staffing size to the Ministry of Education, which oversees them, and negotiate annually with the Ministry of Economy and Finance based on this. Both staffing and wages are regulated under the public institution framework.

The government had judged that the time to remove the public institution designation would come once national university hospitals meet minimum conditions such as expanding essential medical personnel to properly fulfill their role as regional medical hubs. If the designation is removed, hospitals would no longer be subject to personnel and wage regulations, enabling them to prevent the outflow of doctors or attract additional medical staff. This would allow national university hospitals to enhance their treatment capabilities and reduce patient concentration in large hospitals in Seoul. Accordingly, the government internally decided that public institution status should be removed once the ‘Essential Medical Policy Package’ is properly established and an appropriate management system is in place to oversee the hospitals even after removal.

The Essential Medical Policy Package, announced by the Ministry of Health and Welfare in February last year, includes ▲expansion of medical personnel (such as increasing medical school admission quotas), ▲strengthening regional medical care, and ▲establishing a safety net for medical accidents. The aim was to alleviate patient concentration in Seoul hospitals and ensure high-quality medical services are available anywhere in the regions. However, due to opposition to the government’s medical school quota expansion policy last year and the prolonged medical strike, the essential medical reform package has lost momentum. As residents opposing the medical school expansion collectively left hospitals, the medical service gap has actually widened. Consequently, the government currently views that conditions are not yet in place for national university hospitals to be removed from public institution status immediately.

The Public Institution Management Committee, which reviews the designation and removal of public institutions, is chaired by the Minister of Economy and Finance. Members include vice-minister level officials from the Office for Government Policy Coordination, vice ministers from various ministries, and representatives from the legal, economic, media, and academic sectors appointed by the President upon recommendation by the Minister of Economy and Finance. According to Article 4 of the Public Institution Management Act and its enforcement decree, organizations with 50 or more employees, total revenue exceeding 3 billion KRW, and assets over 1 billion KRW are classified as public institutions.