For-profit hospitals
Economic theory to derail medical system
There is at least one area in which economic policymakers should take a backseat. It is dangerous to see hospitals as an industry where free competition is encouraged. Korea must delay the introduction of for-profit hospitals until patients are ready to shoulder additional costs.
Strategy-Finance Minister Yoon Jeung-hyun rekindled the debate this week. He backs the scheme to attract foreign investment and ignite competition to improve the quality of medical services. He is right in saying that investor-owned hospitals will upgrade the quality of medical services, and create jobs. He misses the crucial point that upgrading quality entails a hike in costs.
The profit-seeking hospitals are necessary unless this leads to an increase in medical expenses.
It is questionable whether Korea badly needs foreign investment to run its hospitals.
Even without foreign capital, existing hospitals are thriving. As is well known, doctors hold one of the most highly-paid and coveted professions here. Even under state control, Korean doctors are ahead of or on par with Western peers in terms of skills. Many foreign patients visit Korea for treatment. The brightest high-school graduates are opting to enroll at medical schools. This illustrates the profession is still attractive.
With for-profit hospitals, doctors will rush to the highest-paying medical centers, widening the polarization of salaries. Many rural hospitals will disappear due to lack of profitability. Chaebol will build ultra-modern hi-tech hospitals, but only in Seoul and other major cities.
Competition will surely raise medical bills for all. Hospitals will increase money-making services and reduce unprofitable functions. This will help the rich enjoy extensive medical services while the poor will see hardships even in gaining access to hospitals in emergencies. This will create a polarization of medical service coverage.
Even under the current system, salaried people have seen a rapid hike in medical bills, which have been rising faster than wages. A lifting of price control will certainly raise bills.
The OECD reported that Korea would see the fastest rise in medical bills as the population has been aging fast. It sees a widening of the deficit in medical insurance funds, even under the current state-administered formula.
Koreans are still lucky to enjoy universal medical coverage regardless of wealth, status or location. Both the rich and the poor can gain equal access to hospitals, thanks to the egalitarian insurance coverage.
Yoon proposed the limitation of for-profit hospitals to Jeju and free economic zones. But once the plan is in place, all hospitals will become profit-seeking entities. This will surely raise medical fees.
A hasty decision might put the national medical system in an uncontrollable crisis.
Now is the time for Korea to balance quality and cost. A blind focus on quality is certain to raise medical charges and drive out the poor. Patients are ready to wait to see a doctor because it is cheap. The government should not deform the current faulty but efficient medical system.
There is at least one area in which economic policymakers should take a backseat. It is dangerous to see hospitals as an industry where free competition is encouraged. Korea must delay the introduction of for-profit hospitals until patients are ready to shoulder additional costs.
Strategy-Finance Minister Yoon Jeung-hyun rekindled the debate this week. He backs the scheme to attract foreign investment and ignite competition to improve the quality of medical services. He is right in saying that investor-owned hospitals will upgrade the quality of medical services, and create jobs. He misses the crucial point that upgrading quality entails a hike in costs.
The profit-seeking hospitals are necessary unless this leads to an increase in medical expenses.
It is questionable whether Korea badly needs foreign investment to run its hospitals.
Even without foreign capital, existing hospitals are thriving. As is well known, doctors hold one of the most highly-paid and coveted professions here. Even under state control, Korean doctors are ahead of or on par with Western peers in terms of skills. Many foreign patients visit Korea for treatment. The brightest high-school graduates are opting to enroll at medical schools. This illustrates the profession is still attractive.
With for-profit hospitals, doctors will rush to the highest-paying medical centers, widening the polarization of salaries. Many rural hospitals will disappear due to lack of profitability. Chaebol will build ultra-modern hi-tech hospitals, but only in Seoul and other major cities.
Competition will surely raise medical bills for all. Hospitals will increase money-making services and reduce unprofitable functions. This will help the rich enjoy extensive medical services while the poor will see hardships even in gaining access to hospitals in emergencies. This will create a polarization of medical service coverage.
Even under the current system, salaried people have seen a rapid hike in medical bills, which have been rising faster than wages. A lifting of price control will certainly raise bills.
The OECD reported that Korea would see the fastest rise in medical bills as the population has been aging fast. It sees a widening of the deficit in medical insurance funds, even under the current state-administered formula.
Koreans are still lucky to enjoy universal medical coverage regardless of wealth, status or location. Both the rich and the poor can gain equal access to hospitals, thanks to the egalitarian insurance coverage.
Yoon proposed the limitation of for-profit hospitals to Jeju and free economic zones. But once the plan is in place, all hospitals will become profit-seeking entities. This will surely raise medical fees.
A hasty decision might put the national medical system in an uncontrollable crisis.
Now is the time for Korea to balance quality and cost. A blind focus on quality is certain to raise medical charges and drive out the poor. Patients are ready to wait to see a doctor because it is cheap. The government should not deform the current faulty but efficient medical system.
Stem cell trials
It’s necessary to reactivate biotech research
South Korea has now emerged as the second country in the world to start clinical trials on embryonic stem cell therapies after the United States. On Wednesday, the National Bioethics Committee decided to allow Cha Bio & Diostech, a firm affiliated with the Cha Medical Center, to conduct such treatment with humans for the first time in the nation.
The approval has significant implications as it will reinvigorate stem cell research that has been in doldrums since a manipulation scandal involving disgraced cloning expert Hwang Woo-suk. The move followed the 2009 lifting of a ban on somatic stem cell cloning which had been imposed in 2006 in the wake of Prof. Hwang’s scam.
The Cha biotech firm is waiting for final approval from the Korea Food and Drug Administration (KFDA). For now, there is little possibility that the regulator may veto the clinical trial plan. The company is seeking to grow stem cells into retinal cells that will be used to treat a rare retina-related disease. One of the major hurdles is that the authorities have so far refused to allow stem cell experiments on humans.
The panel’s interpretation is that cells such as retinal ones grown from embryonic stem cells are not subject to a strict research ban under the bioethics law. It opens the way for researchers to find cures for intractable illnesses and conditions such as Parkinson’s disease, diabetes and spinal cord injuries.
It is necessary to promote research and development in both embryonic and somatic stem cells to beef up the nation’s biotech industry, one of the country’s promising growth engines. The world market for stem cell bioengineering is likely to grow to $40 billion in 2015. The U.S. invests $700 million in stem cell research every year, followed by Japan with $500 million.
However, Korea only sets aside a mere 40 billion won ($37 million) per year to support stem cell research. In addition to this budgetary problem, the nation is faced with the more challenging issue of life ethics. In theory, bioengineers may produce human organs from stem cells in the not-too-distant future. But, this is seen as a mixed blessing as the novel biotechnology could find a solution to incurable diseases, while posing a threat to human dignity and the value of life.
Thus, the authorities, scientists, researchers and businessmen should not neglect their efforts to respect bioethics, while stimulating stem cell experiments. What’s at stake is how to keep a balance between a biotech breakthrough and life ethics. This is easier said than done. But we had better face the brave new world without sacrificing important human values.
South Korea has now emerged as the second country in the world to start clinical trials on embryonic stem cell therapies after the United States. On Wednesday, the National Bioethics Committee decided to allow Cha Bio & Diostech, a firm affiliated with the Cha Medical Center, to conduct such treatment with humans for the first time in the nation.
The approval has significant implications as it will reinvigorate stem cell research that has been in doldrums since a manipulation scandal involving disgraced cloning expert Hwang Woo-suk. The move followed the 2009 lifting of a ban on somatic stem cell cloning which had been imposed in 2006 in the wake of Prof. Hwang’s scam.
The Cha biotech firm is waiting for final approval from the Korea Food and Drug Administration (KFDA). For now, there is little possibility that the regulator may veto the clinical trial plan. The company is seeking to grow stem cells into retinal cells that will be used to treat a rare retina-related disease. One of the major hurdles is that the authorities have so far refused to allow stem cell experiments on humans.
The panel’s interpretation is that cells such as retinal ones grown from embryonic stem cells are not subject to a strict research ban under the bioethics law. It opens the way for researchers to find cures for intractable illnesses and conditions such as Parkinson’s disease, diabetes and spinal cord injuries.
It is necessary to promote research and development in both embryonic and somatic stem cells to beef up the nation’s biotech industry, one of the country’s promising growth engines. The world market for stem cell bioengineering is likely to grow to $40 billion in 2015. The U.S. invests $700 million in stem cell research every year, followed by Japan with $500 million.
However, Korea only sets aside a mere 40 billion won ($37 million) per year to support stem cell research. In addition to this budgetary problem, the nation is faced with the more challenging issue of life ethics. In theory, bioengineers may produce human organs from stem cells in the not-too-distant future. But, this is seen as a mixed blessing as the novel biotechnology could find a solution to incurable diseases, while posing a threat to human dignity and the value of life.
Thus, the authorities, scientists, researchers and businessmen should not neglect their efforts to respect bioethics, while stimulating stem cell experiments. What’s at stake is how to keep a balance between a biotech breakthrough and life ethics. This is easier said than done. But we had better face the brave new world without sacrificing important human values.
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