Hankyoreh | 14 Nov 2011
American for-profit hospitals to expand under KORUS FTA:report
The report contrasts with MOFAT claims that the trade pact does not impact the current domestic healthcare sector
By Jung Eun-joo
With the passage of the South Korea-U.S. Free Trade Agreement (KORUS FTA), the American medical industry expects to widen its opportunities to establish for-profit hospitals in South Korea in addition to limiting domestic authority to close them once they are established, according to a report by the U.S. Department of Commerce released Sunday. The report’s contents stand in contrast to claims by South Korea’s Ministry of Foreign Affairs and Trade (MOFAT) that the establishment of commercial hospitals within the Free Trade Economic Zone is not part of the free trade deal and there would be no change to current domestic medical environment.
From the report titled “Opportunities for the U.S. Services Sector,” the U.S. Department of Commerce expects its service industry to have easier access to a number of service sectors including those run by the state, such as medical, education, postal, legal, accounting, broadcasting, finance and communications industries. The Commerce Department report is the official assessment of the effects of the trade deal with the Asia’s fourth largest economy to the Office of the United States Trade Representative (USTR).
The U.S. Commerce Department points out in its study that CEO Leonard Karp of Philadelphia International Medicine (PIM), representing nine hospitals in the region, fully supports the ratification of the trade pact.
“Philadelphia International Medicine, a company founded in 1999 to market the services of Philadelphia area hospitals internationally, is keenly interested in the trade agreements which will remove barriers hindering the export of medical services. In particular, the U.S.-South Korea Free Trade Agreement contains specific language that would allow U.S. hospitals to establish medical facilities in key foreign trade zones in South Korea, and would permit U.S. licensed physicians to practice in these facilities,” said Karp in his letter sent to the U.S. Department of Commerce. “Inclusion into the trade agreement strengthens the rights of U.S. health care organizations and practitioners by making it more difficult for the Korean legislature and executive branch to remove those benefits through changes in domestic legislation.”
Karp went on to say, “My company has already served as a consultant for the development of U.S.-style academic medical centers in the Incheon Free Economic Zone and in the Jeju Special Economic Zone. The KORUS FTA would help remove barriers that hinder development of such medical centers.”
His remark demonstrates understanding held by Washington that it would be impossible to reverse or amend the enforcement ordinance by Seoul once the KORUS FTA takes effect. The ordinance is designed to allow foreign commercial hospitals to open up their institutions in the FEZ.
The Lee Myung-bak administration announced earlier this year it would review and seek changes to the ordnance if deemed necessary this year.
MOFAT officials have claimed profit-seeking hospitals are to be “only built in selected areas such as the FEZ,” while emphasizing there have thus far been “zero medical institutions established in the country with the sole purpose of generating profits.”
(Translated by Kang Jin-kyu, Intern)