Date of Award

2017

Document Type

Open Access Dissertation

Department

Health Services and Policy Management

First Advisor

M. Mahmud Khan

Abstract

Since 2002, there has been active debate regarding the introduction of for-profit hospitals in South Korea: the advocates highlight the multiplication of economic value after the introduction of for-profit hospitals, whereas the opponents voice their concern about the possible negative consequences for-profit entities can create within the health care system. Various stakeholders including doctors’ associations, hospital associations, and civic groups have been for or against the introduction of for-profit hospitals, according to their interests. The government has tried to develop the national health and medicine system based on the positive and negative impacts of their introduction. In December, 2015, the government gave permission to establish Greenland International Hospital, the nation’s first for-profit hospital, on Jeju Island. This suggests that the government has decided that private for-profit hospitals will do more good than harm mainly because of the presence of private hospitals in the market on improved quality of medical services, development of medical industry, and creation of jobs rather than emphasizing the negative effects like rising medical expenditures and weakened access to medical services for low income populations. In South Korea, the medical system has largely developed around the private sector which are sanctioned as not-for profit hospitals. There are many different types of governmental regulations in place which assumes that medical care is not a market commodity and medical service providers are not supposed to be for-profit entities. This view has affected the development of the health sector in Korea and facilities tend to register themselves as not-for-profit because of regulatory reasons. To prepare for the introduction of advanced foreign medical services, to increase the demand for advanced medical services, and to strengthen the competitiveness of the medical industry as a new industry sector, the Korean government has tried to introduce for-profit hospitals as a means of policy. The survey conducted in this study shows that 90% of survey respondents had a positive opinion about the introduction of for-profit hospitals in South Korea, with the remaining 10% foreseeing that their introduction would be impossible. The survey results also show that respondents believed the introduction of for-profit hospitals should come after the revision of Medical Service Act and the abolishment of obligatory insurance authorization systems. A high percentage of respondents mentioned the positive effects of introducing for-profit hospitals: creation of jobs, improved quality of medical service, and active investment of private capital. The biggest reported negative effect was differences in access to medical services between the rich and the poor. In addition, the present study conducted meta-analysis of previous studies on patient satisfaction, financial performance, and social contribution (community benefits, charitable contribution, or commitment to the public interest) of for-profit and not-for-profit hospitals. The meta-analysis results showed that patient satisfaction in for-profit hospitals was lower in comparison with notfor-profit hospitals. Financial performance was better in for-profit hospitals in comparison with not-for-profit hospitals. Moreover, social contribution in for-profit hospitals was lower in comparison with not-for-profit hospitals

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