Lee Soon-nam, director of Ewha Womans University Medical Center, urged the government to reconsider its health care insurance policy, saying it would keep hospital earnings low and hold back innovation the medical services industry.

“The government’s health care reform is in the right direction, in terms of strengthening social security. But the government should consider raising insurance premium fees and medical service fees. Otherwise, hospitals will end up with the burden of providing even more services at lower cost,” she said in an interview with The Korea Herald last week.

The Park Geun-hye government plans to sharply increase state insurance coverage for four major categories of illness ― cancer, heart disease, cerebrovascular disorders and rare and incurable diseases ― without a major premium raise. The government plans to raise insurance fees by an average 2.6 percent, even less than the 3.04 percent rise over the last five years. The plan was one of Park’s major campaign pledges.

Korea’s universal health insurance system has been internationally touted as a model for public health care. But doctors have complained about the government keeping service fees low in order to maintain its low-premium insurance policy. Health care providers in Korea are reimbursed by the regulated fee-for-service system.

Hospitals have been suffering financially because medical service fees are lower than the cost of providing the service, Lee said.

If the government goes with the plan while keeping medical service fees low, hospitals may go through restructuring to deal with the losses and face labor-management disputes.

“The recent labor-management dispute at Seoul National University Hospital exactly reflects the reality of Korean hospitals today, in which even large hospitals like SNU have been suffering from snowballing deficits,” she said.

Lee claimed that the country’s low-cost, high-quality medical service was possible thanks to Korean doctors’ painstaking efforts.

“Private hospitals have been embracing the role of public hospitals although they get no support from the government,” she said.

“The plan would discourage doctors even more. This would also result in impeding the development of medicine,” she added.

By Cho Chung-un (christory@heraldcorp.com)