The Ministry of Health and Welfare on Monday laid out a set of guidelines on the establishment of for-profit hospitals in free economic zones.

The law, which will come into effect in December, is expected to pave the way for the establishment of foreign franchise hospitals to look after foreigners in need of “more sophisticated medical services.”

The hospitals in the FEZ will be excluded from the state health insurance program, which will lead to higher medical fees than domestic institutions.

Franchise hospitals planning to set up a branch here must appoint a member of management from its headquarters as branch head rather than recruiting one in Korea. Moreover, more than 10 percent of employed doctors and dentists should be foreign-license holders.

Such measures are aimed at providing a sense of security to foreign patients who are not accustomed to Korean medical services. It is also intended to impose ethical and managerial responsibilities on franchise hospitals with overseas branch operations, the ministry said.

“Such hospitals are for foreign expats numbered around 10,000 in Songdo International Free Economic Zone of Incheon and about half a million in Seoul and its adjacent areas. Since Songdo is near to Incheon International Airport, our second target will be patients from Japan, China, Russia and other neighboring countries,” Lee Chang-joon, a ministry official, said.

A consortium of Japanese investor Daiwa Securities, Samsung and KT&G is reportedly considering establishing a profit-oriented hospital by the end of 2016 in Songdo. Some international powerhouses such as John Hopkins and others are also reportedly studying business feasibility in the area.

By Bae Ji-sook (baejisook@heraldcorp.com)