Korea’s five largest hospitals continued to show robust performances in the third year of Covid-19 last year, as hospital visits increased. As the “Big Five” hospitals’ revenue increased, net profits also maintained an upward curve. However, the profit growth rate slowed due to inflation and other factors.

The Big Five medical institutions refer to Seoul National University Hospital (SNUH), Yonsei University Health System (YUHS), Samsung Medical Center (SMC), Asan Medical Center (AMC), and the Catholic University of Korea Catholic Medical Center (CMC).

YUHS recorded the largest net profit last year, but the figure marked a decline from 2021. Catholic Medical Center, which showed signs of recovery in 2021, the second year of Covid-19, saw its deficit widen again last year.

Korea Biomedical Review analyzed the five institutions’ balance sheets on these universities’ websites, public organizations’ management information systems, ALIO, and the National Tax Service’s Hometax website.

The balance sheets of YUHS, CMC, and AMC were the combined total of their subsidiary institutions.

YUHS marked the steepest revenue growth of 8.6 percent to a total of 3.04 trillion won ($2.35 billion) in 2022.

The revenue of AMC and its eight affiliated hospitals totaled 2.78 trillion won last year, up 7.2 percent from 2021. CMC recorded a 6.4 percent revenue growth to 3.12 trillion won.

SNUH also marked a gradual increase in revenue as Covid-19 entered its third year in 2022. Last year, SNUH recorded revenue of 1.34 trillion, an increase of 6.1 percent from 2021. SMC’s revenue climbed 5.7 percent to 1.73 trillion won.

Inflation’s ripple effects curtail net profits for YUHS, CMC

However, the five largest medical institutions showed mixed performances in net profits – revenue minus expense.

AMC and its subsidiary hospitals recorded the biggest growth in net profit. Their combined net profits totaled 18.4 billion won last year, jumping 39.7 percent from 13.1 billion won in 2021.

YUHS recorded the largest net profit last year, with 202.8 billion won, which, however, marked a decline of 1.2 percent year on year.

Among the total medical revenue, income from treating patients increased from 2.73 trillion won to 2.96 trillion won, a rise of 234.7 billion won. Other medical revenues, including those from health checkups, also rose 6.8 billion won from the previous year, contributing to the overall revenue growth.

However, YUHS’ medical expense increase exceeded revenue growth, pulling down its net growth from the preceding year. The institution’s medical revenue grew 8.6 percent last year, but its expense, including labor and raw material costs, jumped 9.4 percent over the cited period.

CMC’s deficit widened as its expenditure grew more rapidly than income. The institution recorded a net loss of 38.2 billion won last year, up from 24.7 billion won in 2021. The widened gap was also due to an increase in medical costs.

Rising inflation seems to have taken its toll, with labor and material costs, which account for more than 80 percent of healthcare costs, increasing by more than 7 percent. Last year, CMC’s medical expenses totaled 3.16 trillion won, up 7.3 percent from the previous year.

SMC and SNUH narrowed their losses thanks to increased medical revenue. SMC’s net loss declined 31.9 percent year-on-year to 83.7 billion won, and that of SNUH’s also fell 16.7 percent to 53.5 billion won.