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[New Year Special] Korean healthcare gears up for new decade of global business
  • By Kwak Sung-sun
  • Published 2020.01.03 14:15
  • Updated 2020.01.03 14:15
  • comments 0

This year marks a decade since the Korean healthcare industry began to enter the global market in 2010.

Before the 2000s, Korea’s first-generation global healthcare service was a part of the government’s official development assistance (ODA). In the 2010s, the second-generation healthcare expansion overseas occurred in the private sector, with physicians and experts actively seeking opportunities outside Korea. In 2020, Korea is entering into the third-generation expansion, where the government’s aggressive support for building midsize and large hospitals overseas is starting to yield meaningful outcomes.

The Ministry of Health and Welfare recently selected the support program for helping medical institutions enter foreign countries as one of the seven major tasks. This means that the Korean government regards the healthcare sector’s entry into the global market as a key national strategy.

Korea Health Industry Development Institute (KHIDI) has played a pivotal role in the overseas expansion of medical institutions in the past 10 years through its task force and practical work.

During the past decade, the institute has provided professional consulting for medical institutions’ global expansion projects, supported the recruitment of professionals, aided cooperation between medical institutions and diplomatic offices overseas, and supported healthcare cooperation between governments. The efforts led to the establishment of Korean hospitals in various countries, including Uzbekistan.

Kwon Deok-cheol, director of the Korea Health Industry Development Institute, speaks during a recent interview with Korea Biomedical Review.

KHIDI Director Kwon Deok-cheol, who left the health and welfare ministry as a vice minister in September, gave high marks on the institute’s programs to support the medical community’s expansion in foreign lands. However, he emphasized that KHIDI would need stronger endeavor and new ideas for the next decade, to see as many fruitful results as it did in the past decade.

Meeting with Korea Biomedical Review at the start of the New Year, Kwon said, despite state-of-the-art medical technologies, excellent know-how in hospital operation, and the well-established national health insurance system, Korean medical institutions have not been active in global expansion due to excessive competition in the local market, lack of overseas experience and know-how.

Through the cooperation in healthcare with other governments, however, the Korean government eased legal and institutional regulations and broadened collaboration channels with other countries, Kwon noted. As a result, more Korean hospitals, pharmaceuticals, medical device makers, constructors, and financial firms were able to enter foreign countries under a joint program recently, he added.

According to KHIDI, Korea’s Severance Hospital broke ground for a 1,000-bed hospital in Qingdao, China, in July 2018. Another Korean hospital built ROI (Rehabilitation On Imagination) Hospital in Putrajaya, Malaysia, in November 2018.

In April last year, Kim’s Eye Hospital opened a hospital in Vietnam after acquiring a Vietnamese hospital. In November, Himchan Hospital established a new branch specializing in orthopedics in Bukhara, Uzbekistan.

Kwon stressed that Korea needs a “sustainable new business model” and “global leadership” to attain a higher achievement in the healthcare sector in the next 10 years.

He said the nation could take a good look at examples in medically advanced countries that have already made an aggressive approach to tapping the global healthcare market for new business model development.

Japan reformed its system to allow medical institutions to provide overseas medical services in 2014 and established “Medical Excellence Japan,” a public-private joint medical institution.

Austria’s VAMED Group, which started as a medical device company, has recently set up a business model that encompasses all hospital operations from design, construction, equipment supply, and human resource training to operation, Hospital Information System (HIS) solution, facility management and medical consulting.

Citing these cases, Kwon said Korea also needs to develop a business model that creates value chains by combining related industries such as construction, pharmaceuticals, medical equipment, and consumables, based on excellent medical technologies and the efficiency of competitive hospitals.

To build global leadership in healthcare, Korea should pass on and share its development experience and skills with other countries that are relatively slow in development, because simply entering a country for economic benefit only would not be a sustainable partnership between nations, he said.

To attract more international patients to Korea, it is essential to provide continuous care for those who have already experienced Korean healthcare, Kwon said.

Since the government allowed hospitals to receive patients from overseas in 2009, the number of accumulated foreign patients surpassed 2 million in 2018.

To boost the number further and strengthen trust in Korean healthcare, the nation needs to expand care for patients with severe illnesses and provide continuous care for patients treated here, he emphasized.

“Patients with serious illnesses who visit Korea from Central Asia and Russia undergo surgery here and take a long flight back. If local hospitals do not follow up properly, their symptoms may worsen,” Kwon said. “We are making a post-care management system to resolve this issue.”

Kwon went on to say that the establishment of the Act on Support for Overseas Expansion of Healthcare System and Attraction of International Patients in 2016 made the invitations of foreign patients transparent.

“Before the 2016 enactment, hospitals suffered many ‘tricks’ by some brokers. After the law, however, medical service prices have become transparent through many policies such as offering tax refunds at the airport for cosmetic procedures and plastic surgeries,” he said.

As the Korean government obligated hospitals to report their attraction of foreign patients to the authorities, the medical institutions were able to attract more international patients, he added.

In response to the question what is the future value of Korean healthcare from the viewpoint of the head of KHIDI at the forefront of supporting the healthcare sector’s growth, Kwon said it was important to seek a balance between public and private needs.

The advancement of Korean healthcare will hinge on how players can use Fourth Industrial Revolution technologies such as artificial intelligence, big data, and biotechnologies, Kwon predicted. As long as the government actively supports the sector, however, Korean healthcare technologies will remain at high levels, he added.

In this situation, a debate between maintaining the public needs of healthcare and seeking more profits through healthcare will continue, he noted.

“As a state-run institution, KHIDI needs to establish public opinion on this issue and lead discussions,” Kwon said. “To do so, the institute plans to reorganize itself to strengthen research and expertise.”

As the last words for healthcare professionals around the world, Kwon emphasized that Korea was making endless efforts to provide more advanced healthcare services.

According to Kwon, Korean healthcare drew keen attention from healthcare experts around the world in both 2018 and 2019.

Korea received the "Medical Tourism Destination of the Year" award during the International Medical Travel Journal (IMTJ) Medical Travel Summit 2019, held in Berlin, Germany, on Dec. 2, for the second consecutive year.

“As a responsible country that can lead the global health market in the future, Korea will continue to strive to spread the value of coexistence and sharing all over the world and to increase their satisfaction with Korean healthcare,” Kwon said.

It will also accelerate the development of medical technologies that can treat rare and intractable diseases and cope with severe diseases, and raise the status of Korean healthcare to contribute to world humanity with the international community, he added.


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