‘Weaning tertiary hospitals off reliance on trainee doctors will raise labor costs by 50%’

A recent study showed that shifting the core workforce of tertiary hospitals from trainee physicians to specialists is expected to increase labor costs by more than 50 percent.

Depending on the additional number of specialists to replace vacant trainee doctors, university hospitals may have to spend up to 1.3 trillion won for annual labor costs, according to the study. Experts said Korean national health insurance may not be able to cover the expenses of specialist-based tertiary hospitals.  

Professor Jung Jae-hun of the Department of Preventive Medicine at Gachon University Gil Medical Center conducted the study based on government data such as the Health Insurance Statistics Annals and a survey by the Korea Institute for Health and Social Affairs. Jung presented the findings at the Hospital Innovation and Patient Experience Conference 2024 (HiPex 2024) at Severance Hospital on Thursday last week.

Korean university hospitals have heavily relied on trainee doctors. When more than 12,000 junior doctors resigned in February to protest the government's push to increase the number of medical school seats, tertiary hospitals were hit hardest among medical institutions. 

A 2022 statistics showed that there were a total of 12,774 trainee doctors, including 3,137 interns and 9,637 residents working in 45 tertiary hospitals in Korea. They accounted for 11.4 percent of the total physician workforce of 112,331. In particular, 8,687 trainee physicians, or 68 percent, worked in tertiary hospitals. Of the 22,683 doctors in tertiary hospitals, 38.3 percent were trainee physicians.

The proportion of trainee physicians was even higher in the nation’s five largest hospitals, known as the Big Five, all located in Seoul. Samsung Medical Center (SMC), Seoul National University Hospital (SNUH), Seoul St. Mary's Hospital, Asan Medical Center (AMC), and Severance Hospital had 2,745 trainee physicians, accounting for 39 percent of the total physician workforce of 7,042.

Following the resignations of trainee doctors, the government announced plans to reduce tertiary hospitals’ reliance on trainees and shift the core workforce to specialists. The government has not set a specific target for reducing the proportion of junior doctors, but industry watchers expect it to be around 10 to 20 percent.

Specialist-centered tertiary care may need up to 1.36 trillion won per year

To determine the wage level needed to increase the number of specialists and decrease the proportion of trainee doctors, Professor Jung analyzed data from the Healthcare Workforce Survey released by the Korea Institute for Health and Social Affairs in 2022. This report, which includes average wages by specialty, is based on data from the year 2020.

As of 2020, there were 22,236 physicians working in tertiary hospitals, including 11,717 specialists. There were 7,648 trainee doctors, accounting for 37.8 percent of all doctors. If this proportion were reduced to 10 percent, the number of trainee physicians would decrease by 2,023 to 5,625.

Jung estimated the additional labor cost of replacing the 5,625 trainee doctors with specialists. As a result, replacing one trainee physician with one specialist would require 45 hospitals to spend an additional 481.3 billion won annually on labor costs. 

Replacing two trainee doctors with one specialist would cost an additional 384.1 billion per year in labor costs, he said.

Ideally, however, Jung said, the work of one trainee physician should be divided among two specialists. In this case, the additional annual labor costs for advanced general hospitals would total 1.367 trillion won, Jung noted.

To reduce the proportion of trainee doctors to 20 percent, the number of trainee doctors would need to go down from 7,648 to 4,047. Specialists would need to be hired to take on the duties of 3,601 of the reduced trainee physicians, with additional labor costs of up to 729.8 billion won per year.

Is it possible to inject more money by increasing the role of specialists?

Jung described the scenario of reducing the proportion of trainee doctors to 20 percent and replacing each trainee with two specialists in tertiary hospitals as “the most appropriate.”

"Assuming that specialists take over a significant portion of the roles of trainee physicians, the overall physician labor expenditure will increase by about 50 percent in each hospital," he said.

He warned that even if specialist-centered tertiary hospitals are institutionalized, the nation’s health insurance system may not be able to sustain them.

"There seems to be enough money for the pilot project, but it is questionable whether this system (specialist-centered hospitals) can be sustained for 10, 20, or 30 years," Jung said, pointing to rising medical costs. 

As healthcare costs rise, so do health insurance premiums, and in 30 years, "you may have to pay 15 percent of your salary for health insurance," he said.

"From an overall system perspective, I think it makes the most sense for trainee doctors to play their current roles well and maintain the system while looking for alternatives," Jung added.