Experts criticize government’s plan to establish regional hospitals for lacking in detail despite huge spending

The government has unveiled a healthcare reform plan to foster regional hospitals. The plan includes changing their structure through functional classification and establishing an appropriate compensation system.

However, experts pointed out that it lacks specifics. Some said they feared who would take responsibility if the policy, which would cost trillions of won annually, went awry.

The Ministry of Health and Welfare and the Special Committee on Healthcare Reform held a workshop on “Fostering Competent and Trustworthy Regional Hospitals and Revitalizing Primary Healthcare” on Monday at the Seoul-Gangwon Regional Headquarters of the National Health Insurance Service in Yeouido, Seoul.

The ministry and committee announced plans to redefine and strengthen the functions of secondary hospitals and clinics and establish a fair compensation system for essential medical care. The discussion was organized to collect opinions from experts and the field before announcing the second implementation plan for healthcare reform.

The Ministry of Health and Welfare's Healthcare Reform Task Force proposed measures to foster local hospitals and strengthen primary healthcare. These included transforming the structure of secondary hospitals and clinics to restore local and essential medical ecosystems, strengthening linkages and cooperation among medical institutions, and redesigning the support system for patient access to medical care.

Specifically, secondary hospitals are currently divided into general and specialized hospitals, and they will be reorganized into functional centers, including secondary, specialized, subacute, and simple care hospitals.

By function, secondary care institutions will treat severe emergencies and most diseases in the region; specialty care institutions will focus on specific diseases and specialties; subacute institutions will treat recovery and rehabilitation after severe surgery; and simple care institutions will treat minor hospitalized patients.

The government also proposed support measures for each institution.

For secondary care centers, the number of secondary eligible diseases will be increased, 24-hour medical support will be provided, and medical cooperation will be supported; for specialized care centers, the designation and evaluation criteria will be reorganized according to the characteristics of each hospital and the performance compensation system will be greatly strengthened; for subacute centers, performance support will be strengthened in consideration of improving the number of subacute functions and improving patient health; and for simple care centers, a customized fostering strategy will be promoted.

To transform the structure of neighborhood clinics, the government will promote a pilot project to introduce a performance and value-based compensation system, support the strengthening of linkage support functions, and prepare suitable education programs and training systems to foster specialized personnel.

To strengthen cooperation among medical institutions, the government proposed a pilot project for regional medical innovation to link and integrate medical institutions' electronic medical record systems (EMRs), allowing personnel to move in various ways for patient-centered cooperation.

As a blueprint for establishing a fair reward system, the ministry proposed segmentation of the conversion index, differentiated incentive support based on performance, support for excellent medical institutions after a comprehensive evaluation of medical expenses and medical performance, and a complete reorganization of the definite classification into a “performance reward system.”

Of these, the performance reward system will be applied from the designation of the sixth high-level general hospital in 2027 and will compensate 1.5 trillion won ($1 billion) in total for each institution.

Pouring 7 trillion won yearly without any detail: experts

However, experts and secondary hospitals questioned whether the plan is feasible as there is no specific implementation plan.

“It seems to be about changing the function rather than changing the structure (of regional hospitals),” said Professor Lee Sang-il of the Department of Preventive Medicine at the University of Ulsan College of Medicine. “This has been discussed for a long time through the Medical Delivery System Improvement Council. It's time to consider why the discussion results were not properly applied to the field.”

“At that time, the council created a plan (to improve the healthcare delivery system), but when it came time to implement it, the positions of the stakeholder groups were not harmonized,” he said. “We need to see if the government's proposal can be harmonized in the field.”

He also pointed out that the government has promised to increase compensation by reorganizing fees but has no concrete plans.

“There is talk of giving something more through reimbursement and payment system reform, but it is not just for the next few years, so there should be a way to secure continuous finances,” Lee said. “We should also look at whether the foundation is in place, such as whether there are enough evaluation data, to strengthen performance-based compensation.”

Shin Young-seok, a research professor at Korea University Graduate School of Public Health, criticized the government's plan, which will cost more than 7 trillion won ($4.7 billion) annually starting in 2025, as “completely devoid of details.”

“It is said that 30 trillion won will be invested in healthcare reform, which means more than 7 trillion won annually,” Professor Shin said. “There is no history of investing this much money since the introduction of the health insurance system in 1977. If it is a project that injects such a large amount of resources, it must be accompanied by appropriate institutional reform and innovation.”

“There is a concern about who will be responsible if the results do not come out,” Shin said. “We need to discuss it more actively than now. The government has announced now just a direction and no details.”

“The right direction is to measure how much demand there is at the local, regional, and specialty level to see where and how there are gaps before designing,” Shin said. “Once the cause is revealed, we should operate on it.”

Kim Byung-geun, chairman of Central Hospital, said securing specialists is crucial to fostering general hospitals.

“No matter how much the government supports local hospitals, they cannot succeed if there are no specialists to work there,” Kim said. “We need to develop a plan for specialists to work with pride in regional hospitals.”

“For the healthcare delivery system to work properly, the first step is to change the name of the senior general hospital. If there is a higher level, the rest of the hospitals can be treated as ‘lower,’” he said. “The establishment of university hospital branches, which disrupts the medical ecosystem, should also be improved through social consensus.”

Seo In-suk, president of Rochester Hospital, said, “If you look at the government's proposal, it seems to mean that it will provide direction and promote change in the hospital industry. We should not force the system but give incentives for following such a nurturing environment. (Participation in the program) should be encouraged, not forced.”

“However, there are a lot of positive stories, such as the essential medical care process and the declaration of low water, but there is no specific mention of how to finance it,” he said. “We must also consider whether the support will continue when the regime changes. (The hospital community) needs to be able to count on it.”