Social & Ethical Issues of Medical Tourism in

Korea

2016 Global Healthcare Policy & Management Forum

Ki Nam Jin

Dept of Health Administration

Yonsei University

Introduction

Medical tourism in Korea: Trend & Policy

Social Issues

Ethical Issues

Conclusion

Contents

I. Introduction

The Korean government considered the globalization of healthcare as growth engine for economic development.

For the globalization of healthcare, inbound & outbound policies were adopted.

There has been steep increase of foreign patients from 16,000(2009) to 300,000(2015).

As of 2015, nearly 140 medical institutions opened overseas offices.

Background

For a short period of time, Korea made a productive outcome.

However, in the process of making it, we encountered with social as well as ethical issues.

In order to make a sustainable development of current policy, we need to review the issues behind it and look for the solution.

Background

The objectives of this presentation are:

1) To review the trend and policy of medical tourism in Korea

2) To analyze the social issues related to medical tourism

3) To analyze the ethical issues related to medical tourism

Objective

II. Medical Tourism in Korea: Trend & Policy

Inbound

policy

Globalization of Healthcare

Outbound

policy

Medical

Tourism

Foreign

Direct

Investment

Policy for globalizing healthcare

Strategy

Legal & institutional

System

G2G Network

HR Development

Information System

Project Support

Marketing

1) V.A.T refund

2) Insurance for foreign

patients

3) Liability insurance

4) Certification of

medical institutions

5) Medical Visa

6) Task force team

1) Price range chart

2) Statistics on foreign

patients

3) Market information

Information System

1) Korea Human Resource

Development Institute for

Health & Welfare

2) National Certificate of MT

coordinator

3) Certificate of medical

translator

1) $400 million fund

2) Business consultation

service

3) Balanced regional

development

1) Medical Korea

Conference

2) FAM tour

3) Exhibition show

4) MT support center

5) MT award

6) Online website

Strategy for globalizing healthcare

1) G2G MOU

2) Visiting physician

temporary permit

Figure 1. Number of foreign patients

Nation 2011 2012 2013 2014

Average

annual

growth

rate (%)

USA 27,529 22.5 30,582 19.2 32,750 15.5 35,491 13.3 8.4

Japan 22,491 18.4 19,744 12.4 16,849 8.0 14,336 5.4 ∆14.9

China 19,222 15.7 32,503 20.4 56,075 26.5 79,481 29.8 41.7

Russia 9,651 7.9 16,438 10.3 24,026 11.4 31,829 11.9 32.5

Mongolia 3,266 2.7 8,407 5.3 12,034 5.7 12,803 4.8 6.4

Canada 2,051 1.7 2,756 1.7 2,770 1.3 2,941 1.1 6.2

Vietnam 1,336 1.1 2,231 1.4 2,988 1.4 3,728 1.4 24.8

Philippines 1,178 1.0 1,787 1.1 1,848 0.9 2,032 0.8 10.0

UAE 158 0.1 342 0.2 1,151 0.5 2,633 1.0 128.8

Kazakhstan 732 0.6 1,633 1.0 2,890 1.4 8,029 3.0 177.8

Table 1. Nationality of medical tourists - top 10 (2011~2014)

Unit : person, %

Department 2011 2012 2013 2014

Average

annual

growth rate

(%)

Internal Medicine 34,330 22.2 45,994 22.2 68,453 24.4 79,377 22.3 16.0

Health Examination 19,894 12.9 23,898 11.5 28,135 10.0 35,858 10.1 27.4

Dermatology 12,978 8.4 17,224 8.3 25,101 9.0 29,945 8.4 19.3

Obstetrics ＆

Gynecology 7,568 4.9 10,905 5.3 15,899 5.7 19,039 5.4 19.7

Orthopedics 6,876 4.4 9,643 4.7 14,597 5.2 19,211 5.4 31.6

Plastic Surgery 10,387 6.7 15,898 7.7 24.075 8.6 36,224 10.2 50.5

Otorhinolaryngology 5,080 3.3 7,313 3.5 10,069 3.6 11,860 3.3 17.8

Dentistry 5,220 3.4 7,001 3.4 8,878 3.2 11,707 3.3 31.9

Ophthalmology 5,821 3.8 7,933 3.8 9,421 3.4 14,618 4.1 55.2

General Surgery 4,304 2.8 6,530 3.2 10,232 3.7 12,465 3.5 21.8

Oriental Medicine 9,793 6.3 9,464 4.6 9,554 3.4 11,743 3.3 22.9

Urology 4,027 2.6 5,616 2.7 7,906 2.8 9,604 2.7 21.5

Neurosurgery 3,053 2.0 5,144 2.5 7,897 2.8 10,307 2.9 30.5

Unit : person, %

Table 2. Number of medical tourists by department (2011~2014)

Department Rank

1 2 3 4 5

Internal Medicine Russia USA China Mongolia Japan

12,878(18.8) 11,798(17.2) 10,909(15.9) 5,627(8.2) 3,830(5.6)

Health Examination Russia China USA Mongolia Kazakhstan

7,694(27.3) 4,859(17.3) 4,420(15.7) 1,864(6.6) 987(3.5)

Dermatology China Japan USA Russia Mongolia

9,151(36.5) 4,382(17.5) 3,027(12.1) 2,162(8.6) 1,090(4.3)

Obstetrics &

Gynecology

Russia China USA Mongolia Japan

3,268(20.6) 2,653(16.7) 2,372(14.9) 1,958(12.3) 868(5.5)

Orthopedics China USA Russia Mongolia Japan

3,211(22.0) 2,481(17.0) 2,140(14.7) 1,164(8.0) 431(3.0)

Plastic Surgery China Japan USA Russia Mongolia

16,282(67.6) 1,367(5.7) 1,031(4.3) 861(3.6) 608(2.5)

Ophthalmology USA China Russia Mongolia Japan

1,650(17.5) 1,533(16.3) 1,213(12.9) 709(7.5) 251(2.7)

Oriental Medicine Japan China Russia USA Germany

4,429(46.4) 800(8.4) 778(8.1) 640(6.7) 108(1.1)

(Unit : person, %)

Table 3. Nationality of medical tourists by major departments (2013)

III. Social Issues

Facts:

1) The Korean government has pursued inbound & outbound policy

for globalizing healthcare. This required the activation of human

resources in healthcare field.

2) Healthcare providers(physician, nurses) to population ratio:

This ratio serves as a useful starting point in assessing community

need for healthcare services.

2.2 physicians per 1,000 population (2013)

5.2 nurses per 1,000 population (2013)

Policy for globalizing healthcare

Issue: Does the policy undermine the accessibility of healthcare?

Cons of policy: If healthcare personnel are sent abroad for overseas expansion, shortage of

human resources would be worsened in Korea. The accessibility of healthcare by

Korean people can be undermined by the globalization policy.

Pros of policy: Since most of the foreign patients are visiting Seoul area where most of the

healthcare resources are concentrated in, the policy’s negative effect on the

accessibility of Korean people would be marginal.

Since nearly half of the foreign patients are using primary care services(e.g.,

internal medicine, health checkup) or beauty related services(e.g., cosmetic

surgery, dermatology, oriental medicine), the policy’s negative effect would be

marginal.

Even in case of tertiary hospitals, there is 5% upper limit of hospital beds

allocated to foreign patients.

Facts:

1) Concentration of foreign patients into Seoul & vicinity area: 79.7%(2014)

2) In order to encourage the balanced regional development, the

Korean government supports the provinces to develop medical tourism

products.

- Ministry of Health & Welfare: $900,000 fund per year

- Ministry of Culture, Sports & Tourism: $700,000 fund per year

Policy for balanced development in medical tourism

2014

Seoul: 58.1%

Incheon: 6.6%

Kyungkido: 15%

Seoul & vicinity area:

79.7%

Distribution of foreign patients by region

Issue: Is the balanced development in medical tourism necessary?

Cons of policy: Most provinces except Seoul are suffering from shortage of healthcare resources.

The regional healthcare needs are not fulfilled. The spatial maldistribution of

healthcare resources leads to inequity in access to healthcare.

The number of specialist, dentist, dental clinics, clinics, oriental medical clinics,

pharmacists, and pharmacies were statistically significantly favoring the rich region in

Korea(Jeon et al., 2012).

The study revealed that residents in rural areas traveled about 10 times more long

distances than those whom lived in larger cities after adjusting for various

variables(Shin & Lee, 2011).

Under this condition, diverting the focus to foreign patients may undermine the

local people’s accessibility of healthcare in the provinces. Municipal government

need to focus more on improving the accessibility of local people.

Physician to 1,000 population ratio by

region

Seoul

Kyungido Incheon

Busan

Accessibility index

Accessibility to private healthcare institutions

Pros of policy: In the process of globalizing the healthcare, the medical institutions can improve

the quality and develop the medical techniques. This is ultimately beneficial to the

people in the region.

In the process of developing the medical tourism product, the ecological

system(e.g., wellness tourism resources) of the region can be developed. The

regional development can be achieved.

Facts:

1) Allowing meditel(Medical hotel) business

2) Allowing hospitals to make subsidiary companies

3) Allowing foreign investment in hospital industry

Deregulation

Issue: Does deregulation lead to privatization?

Cons of policy: Since the healthcare is a public good, it should be strictly regulated. The policy of

deregulating the healthcare market can lead to privatization. These policy actions

would make the healthcare providers to pursue the profit by enhancing

commercial activities. This would in turn result in price hike.

Foreign investment in Korean healthcare market can make two-tier system.

Pros of policy: In order to compete with leading nations in global healthcare market, Korean

hospitals need financial resources to develop the facilities or to invest overseas.

The success in global competition would result in the development of healthcare

industry. This would in turn result in more job openings.

Since foreign patients are distributed across diverse hospitals/clinics, there would

be less chance of two-tier system.

IV. Ethical Issues

Facts:

1) World’s highest rate of cosmetic surgery

2) Foreign patients in cosmetic surgery clinics:

- 36,224(2014)

- $100 million payment(2014)

3) A string of lethal cosmetic surgery accidents

4) Shadow doctors

5) Uncertified or Unlicensed doctors practicing cosmetic surgery

6) Unregulated marketing

- “almond-shaped eyes,” “magical V-shaped face”

- before & after picture

7) Two-tier pricing

Cosmetic surgery booming

Demand for beauty

Issue: Is cosmetic surgery losing sight of real values?

Cons of the current trend: “A recent series of plastic surgery accidents were caused by some doctors’

unethical and illegal acts, largely prompted by over-competition and

commercialization of medical institutions”(Korean Association of Plastic Surgeons,

2014).

Some doctors deliberately injected a large amount of anesthetic drugs into

patients to secretly allow shadow doctors to conduct illegal operations.

Unethical tendencies in cosmetic surgery marketing can make harmful effects on

beauty culture, social norms and self-perception. Persuasive messages hidden

under rhetoric of advertising ultimately will motive people to undergo cosmetic

surgery which is unnecessary.

Pros of the current trend: Cosmetic surgery takes a big portion of global medical tourism industry.

Conjoined with global reputation of Korean cosmetics, Korea can be better

positioned as an attractive destination of the global customers looking for beauty.

The Korean government has implemented preventive measures to tackle ethical

and legal issue. The Korean cosmetic surgery market could shine again once the

mess is cleared.

Strategy

Legal & institutional

System

G2G Network

HR Development

Information System

Project Support

Marketing

1) Price range chart

1) V.A.T refund

2) Insurance for

foreign patients

3) Liability insurance

4) Certification of

medical institutions

Facts:

1) Most of the medical tourism facilitators in Korea: Patient broker

model

2) The commission is usually 15-30%.

3) In the case of Chinese brokers, they ask for 50-80% as their

commission.

4) V.A.T refund program: tax refund for foreigners receiving cosmetic

surgery(April, 2016-March, 2017) transparency in cost

Commission

Medical tourism facilitators

Issue: Is it ethical for a medical tourism facilitator to take

commissions from healthcare providers? Are they patient advocates?

Cons of facilitator: The commission-based relationship:

more sales-based than service-based.

“commodification of patients, leading to commercialization and debasement of

medical professionals”(Spece, 2010).

“exposing clients to risks”

“potential for a conflict between the interests of the facilitators and those of

patients” (Synder et al., 2012).

Pros of facilitator: The medical tourism facilitator as a patient advocacy:

- Important role to play in follow-up care

- Important channel of information for medical tourists

- Motherly role of offering emotional support (Cohen, 2015).

On the condition that the commission be disclosed between the facilitators and

patients, the medical tourism facilitator can preserve trust.

Facts:

1) International rate: 2.5-4 times higher

2) Competitors(Malaysia, EU member countries): No international rate

Two-tier pricing

Issue: Is it right for healthcare providers to charge higher fees to

foreign patients?

Cons of the two-tier pricing: Two-tier pricing: discrimination against foreign patients(Reisman, 2014).

Foreign patients as revenue generators?

Pros of the two-tier pricing: The foreign patients cost more to local hospitals(e.g., translation of document,

translator, training, food preparation, facility renovation).

The current fee structure of Korea is under valued.

- It is not value based.

- It does not reflect the actual cost in the field.

- International rate reflects real cost.

V. Conclusion

Government

Healthcare

providers

Medical tourism as a lucrative business opportunity

Focus on quantifiable outcome instead of qualitative outcome

300,000 foreign patients(2015)

1 million foreign patients(2020)

$600 million

earnings

Job

Market

Current focus:

Achievement of goal

Social issues

Ethical issues

Foreign patients

Accountability

safety

Transparency

Destination brand:

Korea as the destination country promising

the following…

References

• Cohen, I. G. (2015). Patients with Passports. New York: Oxford University Press.

• Jeon, B., Choi, S., & Kim, C. (2012). Socioeconomic Equity in Regional Distribution of Health Care Resources in Korea. Korean Journal of Health Policy and Administration, 22(1), 85-108.

• Kim, J., Hong, I., Lee, J., Kim, C., Lee, W., & Ko, E. (2014). Spatial Distribution of Public Healthcare Personnel. Journal of Korea Planning Association, 49(8), 161-174.

• Reisman, D. (2014). Trade in Health: Economics, Ethics and Public Policy. Northampton, MA: Edward Elgar.

• Shin, H & Lee, S. (2011). Factors Affecting Spatial Distance to Outpatient Health Services. Korean Journal of Health Policy and Administration, 21(1), 23-43. doi:10.4332/KJHPA.2011.21.1.023

• Snyder, J., Crooks, V.A., Wright, A. & Johnston, R. (2012). Medical Tourism Facilitators: Ethical Concerns about Roles and Responsibilities. In J. Hodges, L. Turner, and A. Kimball (eds.) Risks and Challenges in Medical Tourism: Understanding the Global Market for Health Services.

• Spece, R. G. (2010). Medical Tourism: Protecting Patients from Conflicts of Interest in Broker's Fees Paid by Foreign Providers. Journal of Health and Biomedical Law. 6(1), 1-36.

Thank you

Ki Nam Jin

Dept of Health Administration

Yonsei University

Korea