Privatized Healthcare Fears Rise Following a Court Ruling on For-Profit Hospitals

Jeju District Court's ruling may be the first step toward privatizing healthcare over the long term.

Privatized Healthcare Fears Rise Following a Court Ruling on For-Profit Hospitals

Photo: Artist rendering of Greenland International Hospital in Jeju.  Credit: Greenland International Hospital.

South Korea’s basic healthcare system is a single-payer system: the National Health Insurance Service 국민건강보험 sets the price for most types of medical care, and pays for most of the medical bills out of the funds collected via taxes. Under this system, only non-profit corporations may open and operate a hospital; that is, a for-profit corporation that raises money from and pays returns to investors may not operate a hospital. (Individual doctors, however, may own and operate for-profit clinics.) The exception was in the Jeju-do Province 제주도, a Special Self-Governing Province 특별자치도 that may set its own travel and investment rules to encourage international tourism and investment.

One of the Jeju-specific exceptions is for-profit hospitals: there, international for-profits may open a for-profit hospital. Based on the exception, in August 2017, Greenland International Hospital 녹지국제병원 in Seogwipo, Jeju 제주도 서귀포시 opened as South Korea’s first for-profit hospital, with an investment from China’s Greenland Group. The provincial government, however, prohibited the hospital from accepting Korean nationals as customers, out of the fear that such a move would pave the way toward privatized healthcare. Greenland challenged the measure, and scored a major victory on April 5 when Jeju District Court 제주지방법원 struck down the restriction.

The court ruling will not lead to privatized healthcare in South Korea in the short term. The ruling is based on the special act that carves out the exception for Jeju-do Province and is not applicable to the rest of the country. The hospital never began its operation at any rate; the Greenland Group had already sold its stake to a South Korean investment firm in September 2021. Nevertheless, the court’s ruling opens the door for establishing hospitals that serve the general population outside of the national healthcare system, raising fears of privatized healthcare, especially as President-elect Yoon Suk-yeol 윤석열 당선인 has promised to allow investment capital into the healthcare sector.

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