Medical feud leaves hospitals in financial crisis

As the medical void prolongs in South Korea with doctors continuing their walkout against the government’s medical school expansion plan since February, the number of major general hospitals struggling financially is on the rise.

Kyung Hee University Medical Center, which operates seven hospitals including two affiliated Kyung Hee University Hospitals, is considering suspending salary payments and implementing voluntary retirement from next month due to a daily deficit of hundreds of millions of won, according to medical circles on Monday.

The hospitals, where trainee doctors account for more than 30 to 40 percent of all doctors, saw their profits plummet by half as bed occupation rates fell to below 50 percent after junior doctors staged a walkout opposing the government's plan to add 2,000 medical school seats to the current annual enrollment quota of 3,058.

“The medical center’s viability is under serious threat due to the worst financial difficulties in 53 years since it opened,” Oh Joo-hyeong, president of Kyung Hee University Medical Center, reportedly wrote in an email to the center’s faculty on April 30.

“If the current situation continues, we are expected to run out of funds to pay salaries and other expenses,” Oh said, adding that the center is facing “a desperate situation” to the point where they will have to stop paying salaries from June this year and consider retirement.

Kyung Hee University Medical Center has activated an emergency management system since March and tried to retrench expenditures by implementing unpaid furloughs, retrieving extra pay and compensation for medical staff, cutting operating expenses and reducing capital investment.

Inje University Sanggye Paik Hospital also sent a letter to its medical professors urging them to agree to return a portion of their salaries for the next six months. They were given the choice of returning 480,000 won ($353), 1.16 million won, or a voluntary amount.

Among the "big five" hospitals, Seoul National University and Severance Hospital are also operating under emergency management systems, accepting applications for unpaid leave from employees excluding doctors, mainly comprising nurses in wards.

To take the initiative among the big five, Seoul Asan Medical Center has been accepting voluntary retirement applications from all employees barring doctors.

Meanwhile, as the feud between doctors and the government enters its 11th week, both parties are now out of cards to use against each other, watchers said.

The government has been putting a hold on its hard-line response, such as issuing administrative penalties against doctors who left hospitals or injunctions against medical professors who are taking collective action. Doctors, for their part, have virtually no recourse left to pressure the government, as many of them have already submitted collective resignations or attempted to suspend their practices and surgeries at big hospitals responsible for critical care.

The two sides are expected to lock horns on whether or not to expand medical schools as a precondition for talks for a while. They are both waiting for a high court ruling later this month on the doctors' request to suspend the expansion plan. A lower court dismissed the request last month.