The Ministry of Health and Welfare said Wednesday that it would seek to penalize doctors who go on strike against diagnosis-related group pricing system.

The strike, due to start July 1, is against the government’s policy to slash health insurance expenditure and is expected to cause chaos in the national medical industry.

“It is a shame that some of the facts have been distorted. The DRG-pricing system has been supported by about 80 percent of medical institutions nationwide and its effectiveness has been proven through long-term experiments,” said Choi Sung-rak, spokesman of the ministry on Wednesday.

Lee Chang-jun, a ministry official, said that the head of the group that directs class actions on the medical field, which is designated as one of the national staple industries, could be deterred from his post whereas individual medical institutions could be sought for prosecution.

Such an indignant response came after the Korean Medical Association, the largest interest group of 100,000 doctors in the country, on Tuesday said its members from the departments of surgery, obstetrics, ear-nose-and-throat and ophthalmology have decided to put down their tools for a week starting July 1 in protest of the government’s decision to fix prices for a total of seven treatments. July 1 is when the new pricing system comes into effect.

Under the new rule, patients with cataracts, ruptured or swollen tonsils, hemorrhoids or appendicitis, or who undergo a caesarian section or hysterectomy will be classified into 312 groups according to the severity of the illness or the place of treatment. Those in the same group will be charged the same price.

The program has been test run for the past 15 years and the authorities predict the fixed pricing system will help patients save an average of 21 percent on medical bills. Currently the program is adopted in most OECD member states.

The DRG-pricing system is expected to stem “unnecessary and excessive treatments” that some doctors perform in order to generate more revenue. There have been claims that doctors squeezed in trivial examinations or treatments in order to rake in more money.

“The system was designed to guarantee doctors with equal amount of income since the price for some procedures such as a caesarian section will likely go up. It will be a win-win situation for all,” Bae Kyung-taek, a ministry official, said.

Doctors on the other hand opposed the plan for restricting doctors’ freedom to choose their treatment regime.

They said no doctor would risk financial loss by adopting state-of-the-art medical equipment and new techniques because they will be paid the same and that doctors will use cheaper or low-quality materials and equipment to maintain their balance sheets.

“The fixed price system will bring down the overall quality of medical services, which will be a great disservice to the public,” said Song Hyung-gon, the spokesman of the KMA, to the press.

After strong reactions from the government, the KMA said on Wednesday afternoon that they withdrew appendix removal and caesarian section from their strike list.

Some observers said the fallout from the strike would not be strong.

“Most of those participating in the protest are physicians who run clinics. Patients can still refer their illnesses to large hospitals. Not too many doctors will participate in the KMA decision,” a field insider said.

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