University hospitals are grappling with financial difficulties amid prolonged walkouts by trainee doctors, medical sources said.

These hospitals have cut back on medical services due to the exodus of interns and residents. As the collective action enters the third week, declining revenue is leading to deficits. Some provincial hospitals have resorted to borrowing to cover their operational costs.

The management deterioration occurred immediately after  nearly 10,000 junior doctors walked off their jobs across the nation. Within a week of their departure, medical income and bed utilization rates fell rapidly.

The Korean Hospital Association (KHA) compared the medical income and bed utilization rate of eight tertiary general hospitals from Feb. 20, when the mass resignation of doctors began, to Feb. 27. It found that the eight hospitals' revenue stood at 128.1 billion won ($96.3 million), down 16.2 percent from the same period last year.

The average medical revenue per hospital during the resignation period was 16.01 billion won, down 3.09 billion year-on-year. The bed utilization rate also remained at 55.3 percent, down 23.5 percent.

The financial deterioration is at its peak as the medical community and government conflict over expanding the medical school enrollment quota continues for the third week.

Some university hospitals, facing financial difficulties due to falling medical revenues that have turned into deficits, are resorting to "overdrafts" to keep afloat.

Others are tightening their belts by implementing an unpaid leave system to ease business difficulties caused by reduced treatment. Seoul National University Hospital and Asan Medical Center have announced that they will implement a short-term unpaid leave system for nurses.

The situation seems even more urgent for provincial university hospitals, which have already been experiencing business difficulties since Covid-19.

"It has been more than two weeks since the mass resignation of medical residents, and we feel financial strain due to curtailed operation, an official at Pusan National University Hospital told Korea Biomedical Review over the phone. Some university hospitals have already borrowed money. The red light is already on (for hospital management), and we don't know how to survive."

An official from Hallym University Sacred Heart Hospital said, "Hospitals are already pushed to the limit. University hospitals are structurally required to operate at full capacity to stay afloat. Now that the bed utilization rate has dropped by half, bankruptcy is possible if it prolongs."

In 2020, when Covid-19 prevailed, hospitals managed to continue operating. However, after the pandemic, none of them, including the 'Big Five,’ can afford to do so, the official said, adding that if the situation is prolonged, some provincial university hospitals may close their doors.

"In the end, hospitals facing financial difficulties will have no choice but to cut back on their biggest expense of labor cost, which is already happening," the official added.