"Regulated Like Public Hospitals, Supported Like Private Businesses"...Calls for Reform of the Medical Corporation System

Korea Association of Medical Corporations Calls for Recognition as Public Healthcare Partners
Expansion of Participation in Regional and Essential Healthcare Policies
Easing Regulations on R&D and Venture Business Commercialization

Major medical corporations have called for the official recognition of medical corporations responsible for regional and essential healthcare as public healthcare partners, and for the establishment of support systems that are appropriate for such a role.

The Korea Association of Medical Corporations held a press briefing at a restaurant in Jung-gu, Seoul, on September 9, stating, "Medical corporations are subject to regulations on par with public hospitals, but are treated as private businesses when it comes to financial support. This structure should be improved."

According to the association, medical corporations face rigorous public regulation, such as needing prior approval from local authorities not only for establishment or dissolution, but also when selling, donating, leasing, or offering their basic assets as collateral. In contrast, when it comes to measures such as compensation for deficits or support for essential facility expenses, medical corporations are often classified as private entities, resulting in exclusion from support programs.

The association demanded that, to resolve this imbalance, medical corporations must be officially recognized as partners in national healthcare policy, allowing them to participate equally in regional essential healthcare support initiatives.

In particular, they argued that instead of relying solely on the construction of new public hospitals to resolve regional healthcare crises, the government should proactively utilize existing medical corporations already providing essential medical services in local areas. This is because in the current situation, where there is a shortage of essential healthcare personnel, building new public hospitals may actually result in staff being drawn away from existing medical institutions, thereby weakening patient care for emergencies and critical cases.

The association also argued that medical corporations should be allowed to engage in research and development (R&D) and venture business activities. Unlike hospitals under educational foundations, medical corporations face restrictions in conducting industry-academia cooperation and commercializing fields such as medical artificial intelligence (AI), biotech, and digital healthcare. The association explained that the Medical Service Act should be revised so medical corporations can reinvest profits from these ventures into hospital infrastructure and healthcare services.

Furthermore, there was a call to establish a merger system for medical corporations, which would allow those facing financial difficulties to merge with other financially sound medical corporations before gaps in regional medical services emerge.

The association also emphasized that the unique nature of medical corporations should be reflected in the follow-up measures to the amendment of the Framework Act on Small and Medium Enterprises, which recently passed the National Assembly plenary session. The current law defines small and medium-sized enterprises as for-profit companies that meet requirements such as revenue and total assets. Therefore, private clinics and hospitals operated by individuals can be recognized as SMEs if they meet conditions such as the average healthcare industry revenue standard of 60 billion won or less. However, medical corporations have been excluded from the SME category because they are classified as non-profit corporations under medical law. The revised bill allows medical corporations specified by presidential decree to be included as SMEs, making them eligible for SME support programs.

Kim Chuljun, Vice President for External Affairs of the Korea Association of Medical Corporations and Director of Daejeon Wellness Hospital, stated, "Over the past half-century, medical corporations have built up regional medical safety nets through voluntary dedication and commitment from the private sector, compensating for areas where the state fell short," and emphasized, "A shift in policy is needed to actively utilize medical corporations, which are already protecting community health, as public healthcare partners."

This content was produced with the assistance of AI translation services.