Seongnam City Medical Center Faces Annual 27.5 Billion Deficit... Entrusted Operation to University Hospital

Plan for Entrusting the Operation of Seongnam City Medical Center to a University Hospital

Seongnam City Medical Center in Gyeonggi Province, which incurs an annual deficit of around 27 billion KRW, will be operated under consignment by a university hospital as early as the first half of next year.

Seongnam City announced on the 16th that if the current trend continues, the medical center's loss next year will reach 54.4 billion KRW, and at least 150 billion KRW of city financial input will be inevitable over the next five years. To improve this, the city has decided to entrust operation to a university hospital and plans to request approval for consignment from the Ministry of Health and Welfare within this month.

Once government approval is obtained, Seongnam City plans to seek the city council's consent for consignment and publicly recruit a trustee institution early next year, and sign a consignment agreement with a university hospital during the first half of the year.

This decision by Seongnam City is due to the enormous financial burden. Since the establishment of Seongnam City Medical Center in 2016, the city has supported the medical center with an average annual subsidy of 27.5 billion KRW over the past eight years. However, medical losses have been snowballing every year, with 46.5 billion KRW in 2020, 47.7 billion KRW in 2021, and 54.7 billion KRW in 2022. This year, the city is concerned that the medical center will incur a medical loss of 63.4 billion KRW and a net loss of 35.3 billion KRW.

In fact, looking at the operational status of Seongnam City Medical Center, the average daily number of surgeries per year since its opening ranges from a minimum of 2.2 to a maximum of 5.7. Even so, more than 80% of cases are general and mild illnesses such as acute appendicitis or fractures, and the bed utilization rate remains in the 20% range, according to Seongnam City.

Therefore, Seongnam City plans to develop Seongnam City Medical Center into a leading public medical service institution in the metropolitan area with the capacity to provide essential and severe medical care as well as rehabilitation care through consignment operation by a university hospital, as major surgeries are unavoidable.

In particular, along with consignment operation, the city will establish a non-reimbursable fee review committee directly under the mayor to adjust medical fee increases and expand public medical projects by returning profits to citizens.

Mayor Shin Sang-jin of Seongnam City stated, "Currently, Seongnam City Medical Center is operating in a way that makes it difficult to provide high-quality medical services, leading to a vicious cycle of citizen neglect and excessive medical losses." He added, "We expect the consignment operation method to be an opportunity for the medical center to rise beyond recovery to a level of transformation."

He especially noted, "All the ‘good deficits’ arising from consignment to a university hospital will be returned to the citizens," adding, "Next year's public medical project budget has been set at 730 million KRW, a 102% increase from this year."

Seongnam City has been promoting the ‘Improvement of Seongnam City Medical Center Operation Method’ as a campaign pledge of the 8th local government since Mayor Shin Sang-jin took office in July last year. In particular, over the past five months this year, the city has collected opinions from citizens and experts through a feasibility study on the improvement plan for the operation method of Seongnam City Medical Center.

According to two public opinion surveys conducted by Seongnam City this year on consignment operation by a university hospital, 61.9% supported the consignment operation in March, and 76.6% supported it in July.

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