[3rd Supplementary Budget] Loans for Hospitals and Clinics Struggling Due to COVID-19 Doubled but Still Insufficient

Ministry of Health and Welfare's 3rd Supplementary Budget Proposal: 1.0542 Trillion KRW
Additional 400 Billion KRW Loan for Financially Struggling Medical Institutions, Totaling 800 Billion KRW
Expanded Support for COVID-19 Prevention Capabilities and R&D

Disinfection and quarantine company officials are conducting internal disinfection work at Keimyung University Daegu Dongsan Hospital in Jung-gu, Daegu, which was used as a COVID-19 isolation ward.

[Asia Economy Reporter Choi Dae-yeol] Most of the Ministry of Health and Welfare's supplementary budget focuses on responding to the novel coronavirus infection (COVID-19). To strengthen prevention capabilities, funds will be allocated to support ongoing vaccine and therapeutic research and development (R&D), while also improving the medical treatment system in preparation for possible second and third waves.

However, as some in the medical community hold negative views on telemedicine, it remains uncertain whether newly initiated or expanded projects in this area will see actual budget execution. The largest portion of this third supplementary budget is loans for medical institutions facing financial difficulties, but there are concerns about a disconnect between frontline demands and the support provided, so it remains to be seen if it will be truly helpful.

According to the third supplementary budget proposal released by the Ministry on the 3rd, the total amount is calculated at 1.0542 trillion KRW. 200.9 billion KRW is allocated to stockpile protective equipment such as Level D protective suits and masks necessary for COVID-19 treatment. The national influenza vaccination target has been expanded to include those aged 14 to 18 (2.35 million people), and the project also includes constructing permanent negative pressure screening clinics at 67 public health centers nationwide.

To support medical institutions experiencing financial difficulties due to reduced revenue from COVID-19, an additional 400 billion KRW has been added to the 400 billion KRW allocated in the first supplementary budget, totaling 800 billion KRW. Loan support for medical institutions was not included last year but has increased to 800 billion KRW this year. Many frontline medical institutions are struggling financially because patients either visit COVID-19 treatment centers or avoid hospitals and clinics due to infection concerns.

Following the first supplementary budget, loan applications for medical institutions were accepted in April, with the requested amount exceeding 1 trillion KRW. Given the significant damage caused by COVID-19 and the expectation that it will continue, the total budget of 800 billion KRW secured through this supplementary budget is considered insufficient. From the perspective of frontline hospitals and clinics, the support effect is minimal as they received less than half of the amount they applied for.

Reflecting criticism that support for R&D on COVID-19 therapeutics and vaccines was insufficient, 140.4 billion KRW will be additionally spent to support the entire clinical trial process and R&D related to prevention equipment and research infrastructure. There was no budget for therapeutics, vaccines, or prevention technology R&D in last year’s or this year’s first supplementary budget, but some has been included this time.

Under the government-wide 'Korean New Deal,' the Ministry of Health and Welfare will also try projects such as building smart hospitals (additional 6 billion KRW), supporting innovative health platform construction (3.3 billion KRW), ICT-based home health care (2.3 billion KRW), and mobile healthcare (1.1 billion KRW). However, unlike the government’s stance, some healthcare providers, civic groups, and members of both ruling and opposition parties view telemedicine negatively, so friction is expected during the actual implementation of these projects.

Meanwhile, the Ministry extended the emergency welfare support requirement relaxation period from July to the end of the year to expand support for low-income households, and included temporary job support for prevention assistance at public health centers and hospital-level medical institutions in this supplementary budget. As a result, the Ministry’s total expenditure increased from 86.165 trillion KRW to 87.1115 trillion KRW. The Ministry stated, "We plan to reduce 107.7 billion KRW through expenditure restructuring on projects difficult to execute due to COVID-19 and use it as supplementary budget resources," adding, "We will thoroughly prepare to ensure prompt execution after the National Assembly’s approval."

This content was produced with the assistance of AI translation services.