Globalization of Healthcare in Korea:

Policy and Political Issues

IMTJ Medical Travel Summit 2016

Jin, Ki Nam

Dept of Health Administration

Yonsei University

I. Introduction

The Republic of Korea is the 12th largest economy in the world.

The main industries: semiconductor, electronics, steelmaking, shipbuilding, and automotive.

The export oriented economy

The Korean government looks for new growth engine.

Background Background

5th in Bloomberg’s Most Efficient Health Care Ranking(2015)

Healthcare information technology (expanded to global market)

Competitive services (e.g., Aesthetic medicine, Oriental medicine)

Increasing importance of healthcare industry in the economy

(potential for creating more jobs)

Background

Government’s needs to

develop new growth engine

Policy for

globalizing

healthcare

Competitive

medical

technology

& services

Background

The objectives of this presentation are:

1) To explain the policy for globalizing healthcare in Korea

2) To describe the current trend of globalization of healthcare

3) To explain the political issues related to globalization of healthcare

Objective

II. Policy for Globalizing Healthcare

Inbound

policy

Globalization of Healthcare

Outbound

policy

Policy Approach

Synergy Effect

Medical

Tourism

Foreign

Direct

Investment

Development

of

Healthcare

Industry

Globalization of Healthcare

Improvement

of

National

Brand

Economic Development

Policy Goal

Strategy

Strategy

Legal & institutional

System

G2G Network

Research

Information System

Project Support

Marketing

· Making a new law (related to globalization of healthcare)

1) Allowing non-profit healthcare organizations to start meditel business for foreign patients

2) Allowing non-profit healthcare organizations to make subsidiary company for hospital export

· Changing the existing law(e.g., Medical Law, Immigration Law)

1) Medical visa

2) Loosening the regulation on medical advertisement

3) Allowing the foreign direct investment in healthcare

· Public/private joint task force team

(control center for supporting globalization of healthcare)

· National certificate of global medical tourism coordinator

Legal & Institutional System

Overseas branch offices (e.g., KHIDI, KTO, KOTRA)

MOU between nations

Offering training courses to healthcare workers in other nations

Official Development Assistance(ODA) projects (e.g., KOICA, Economic Development Cooperation Fund)

G2G Network

Research on inbound/outbound strategy

Research on foreign healthcare market: market characteristics & barriers

Research on inbound/outbound strategies of other nations

Research on the needs of behaviors of foreign patients, etc

Research

Integrated information portal on foreign healthcare market

Newsletter

Making Ad materials (e.g., video, pamphlet)

Information System

Developing customized project for target nation

Developing business model & HR

Consulting services

Financial support (for research, consultation, initial cost for overseas expansion)

Project Support

Hosting global conference or event (e.g., FAM tour)

Making special task force team

Supporting FAM tour

Website (e.g., visitmedicalkorea)

Marketing

III. Current trend of globalization of healthcare

Figure 1. Number of foreign patients

Inbound Trend

Nation 2011 2012 2013 2014

Average

annual

growth

rate (%)

USA 27,529 22.5 30,582 19.2 32,750 15.5 35,491 13.3 8.4

Japan 22,491 18.4 19,744 12.4 16,849 8.0 14,336 5.4 ∆14.9

China 19,222 15.7 32,503 20.4 56,075 26.5 79,481 29.8 41.7

Russia 9,651 7.9 16,438 10.3 24,026 11.4 31,829 11.9 32.5

Mongolia 3,266 2.7 8,407 5.3 12,034 5.7 12,803 4.8 6.4

Canada 2,051 1.7 2,756 1.7 2,770 1.3 2,941 1.1 6.2

Vietnam 1,336 1.1 2,231 1.4 2,988 1.4 3,728 1.4 24.8

Philippines 1,178 1.0 1,787 1.1 1,848 0.9 2,032 0.8 10.0

UAE 158 0.1 342 0.2 1,151 0.5 2,633 1.0 128.8

Kazakhstan 732 0.6 1,633 1.0 2,890 1.4 8,029 3.0 177.8

Table 1. Nationality of medical tourists - top 10 (2011~2014)

Unit : person, %

Department Rank

1 2 3 4 5

Internal Medicine Russia China USA Mongolia Kazakhstan

16,107(20.3) 14,493(18.3) 12,483(15.7) 5,385(6.98) 3,792(4.8)

Health Examination Russia China USA Kazakhstan Mongolia

10,251(28.6) 6,117(17.1) 4,219(11.8) 3,087(8.6) 2,012(5.6)

Dermatology China Japan USA Russia Kazakhstan

12,739(42.5) 3,542(11.8) 3,261(10.9) 2,928(9.8) 1,169(3.9)

Plastic Surgery China Japan Russia USA Kazakhstan

24,854(68.6) 1,561(4.3) 1,506(4.2) 1,212(3.3) 748(2.1)

Obstetrics &

Gynecology

Russia China USA Mongolia Kazakhstan

4,348(22.8) 3,681(19.3) 2,304(12.1) 2,073(10.9) 714(3.8)

Orthopedics USA China Russia Mongolia Kazakhstan

3,359(17.5) 3,235(16.8) 2,777(14.5) 1,225(6.4) 605(3.1)

General Surgery Russia China USA Mongolia Kazakhstan

2,843(22.8) 2,319(18.6) 1,433(11.5) 894(7.2) 687(5.5)

Oriental Medicine Japan China Russia USA Kazakhstan

4,586(39.1) 1,210(10.3) 882(7.5) 608(5.2) 359(3.1)

(Unit : person, %)

Table 2. Nationality of medical tourists by major departments (2014)

Nation Average Payment

UAE $13,187

Kazakhstan $3,544

Russia $2,994

Indonesia $1,905

Mongolia $1,767

China $1,519

Saudi Arabia $1,467

USA $1,339

Uzbekistan $1,124

Vietnam $1,047

Japan $781

Table 3. Average payment by nationality of medical tourists(2014)

(Unit : USD)

79 91

111 125

141

2011 2012 2013 2014 2015

Overseas expansion of Medical

institution by year

52

33

9 8 8

31

Overseas expansion of Medical

institution by region

KHIDI Report(2015)

Outbound trend

IV. Political Issues

Ruling party

Government

Tourism

industry

Media

Hospitals/

Clinics

Opposition

party

Public

opinion

Academic

scholars Positive

Negative

Figure 1. Opinions of key stakeholders

Privatization of healthcare

· New law (allowing meditel business and subsidiary company by healthcare organizations)

Neoliberalism:

-Deregulation

-Healthcare as a

private good

Focus on the

development of

healthcare industry:

-New revenue

source

Outcome:

-Quality improvement

-Technology

development

-Employment

Ruling party Anti-neoliberalism:

-Healthcare as a

public good

Focus on the equity

in healthcare access

Outcome:

-Two-tier healthcare

system

-Price hike

Opposition party

Sustainability of national healthcare system

· Foreign direct investment in healthcare

Employment

Global hub of healthcare:

-Development of

healthcare industry

Economic development

Ruling party Inequity

- Distrust

Exposure to clinical risk

Profit withdrawal to

overseas:

-Limited effect on

economic development

Opposition party

Accessibility

· Export-oriented policy

Economic

development:

- Dollar earning

Development of healthcare industry

Improvement of national brand

Ruling party

Limitation in

positive effect:

-Development

-National brand

Negative effect:

-Doctor shortage

-Accessibility

problem

-Financial risk

Opposition party

Detraction of public fund

· Project support & Marketing activities

Government’s role

to develop new

market

Long-term investment

Ruling party Detraction of

public fund to support the

private market

Inefficiency:

- Waste of money (low ROI)

No evidence of effectiveness

Opposition party

Political Issues

Privatization of healthcare

Sustainability of national healthcare

system

Accessibility

Detraction of public fund

Thank you

Ki Nam Jin

Dept of Health Administration

Yonsei University

Korea