3. The Korean government considered the globalization of healthcare as a growth
engine for economic development.
For the globalization of healthcare, inbound & outbound policies were
adopted.
There has been a steep increase of foreign patients from 16,000(2009) to
300,000(2015).
As of 2015, nearly 140 medical institutions have opened overseas offices.
Background
4. However, we saw a decrease in the growth rate of foreign patients
coming to Korea thanks to fierce competition, and a change in the
market environment.
We need to review the factors that influenced our competitiveness in
the global healthcare market and to suggest solutions for sustainable
development.
Background
5. The objectives of this presentation are:
1) To analyze the competitiveness of Korea in the global healthcare
market
2) To analyze the competitiveness of Korea for target nations
3) To suggest the strategies for improving the competitiveness of Korea
in the global healthcare market
Objective
7. Analytical Framework: Porter's Diamond Model
Diamond
Model
Factor
Conditions
Input
Conditions
Firm
Strategy,
Structure &
Rivary
Related &
Supporting
Industry
Nations
Chances
8. Factor conditions refer to inputs used as factors of service
provision – such as medical technology, healthcare providers,
capital and infrastructure.
Factor Conditions
Clinical
Effectiveness
• Cancer
survival rate
• Cosmetic
surgery
• Robot
surgery
Efficiency
• Ranked as
the World’s
5th Most
Efficient
Healthcare
•Source: Bloomberg
Academic
achievement
• Ranked 346th
in medical
schools
(Criteria:
Number of
publications and
Citations)
•Source: National
Research Foundation of
Korea
Human capital
&
Infrastructure
• Cultural
competence
• Language
• IT
infrastructure
• Modern
facilities &
equipment
10. This element of the Diamond model refers to how medical
institutions are organized and managed, their objectives and the
nature of rivalry in the healthcare market:
1) Management styles and strategies best suited to the global
healthcare market can produce competitiveness.
2) Intense competition among healthcare providers spurs
innovation.
Firm Strategy, Structure & Rivalry
12. Management style
How medical institutions are organized and managed influences
the competitiveness:
1) Two-tier pricing
2) Cultural competence of organization
3) Global networks
14. Demand conditions involve such factors as early home demand,
market size, market growth and sophistication.
1) The more demanding the patients, the greater the pressure facing
healthcare providers to constantly improve their competitiveness
via innovative services, through high quality, etc.
Demand Conditions
16. Spatial proximity of upstream or downstream industries facilitates
the exchange of information and promotes a continuous exchange
of ideas and innovations
Related Supporting Industries
21. Chance refers to random events that are beyond the control of the
healthcare providers. Chance events may be fluctuations in
exchange rates, political decisions by foreign government, changes
in the global economy, etc.
Chance
China
• Negative
media(e.g.,
CCTV,
Beijing news)
coverage(e.g.,
overcharging,
malpractice)
Japan
• Political
disputes
between
Korea &
Japan
Russia
• Economic
crisis
stemming
from oil price
collapse
UAE
• Budget
deficit
stemming
from oil price
collapse
• Government
encouraging
home care
22. Government
The Government’s proper role is to encourage healthcare providers
to raise their aspirations and move to higher levels of competitive
performance.
23. Strategy
Legal &
institutional
System
G2G
Network
HR
Development
Information
System
Project
Support
Marketing
Government strategy 1) V.A.T refund
2) Insurance for foreign
patients
3) Liability insurance
4) Certification of
medical institutions
5) Medical Visa
6) Task force team
1) Price range chart
2) Statistics on foreign
patients
3) Market information
Information
System
1) Korea Human Resources
Development Institute for
Health & Welfare
2) National Certificate of MT
coordinator
3) Certificate of medical
translator
1) $400 million fund
2) Business consultation
service
3) Supporting provinces
to develop medical
tourism products
1) Medical Korea
Conference
2) FAM tour
3) Exhibition show
4) MT support center
5) MT award
6) Online website
1) G2G MOU
2) Visiting physician
temporary permit
24. Lack of human resources
· Personnel change at all levels(government, institutes, hospitals)
- Few experts
- Weak international
network
- Insufficient information
on the global market
Problems
26. Specialties
Rank
1 2 3 4 5
Internal Medicine
Russia China USA Mongolia Kazakhstan
16,107(20.3) 14,493(18.3) 12,483(15.7) 5,385(6.98) 3,792(4.8)
Health Examination
Russia China USA Kazakhstan Mongolia
10,251(28.6) 6,117(17.1) 4,219(11.8) 3,087(8.6) 2,012(5.6)
Dermatology
China Japan USA Russia Kazakhstan
12,739(42.5) 3,542(11.8) 3,261(10.9) 2,928(9.8) 1,169(3.9)
Plastic Surgery
China Japan Russia USA Kazakhstan
24,854(68.6) 1,561(4.3) 1,506(4.2) 1,212(3.3) 748(2.1)
Obstetrics &
Gynecology
Russia China USA Mongolia Kazakhstan
4,348(22.8) 3,681(19.3) 2,304(12.1) 2,073(10.9) 714(3.8)
Orthopedics
USA China Russia Mongolia Kazakhstan
3,359(17.5) 3,235(16.8) 2,777(14.5) 1,225(6.4) 605(3.1)
General Surgery
Russia China USA Mongolia Kazakhstan
2,843(22.8) 2,319(18.6) 1,433(11.5) 894(7.2) 687(5.5)
Oriental Medicine
Japan China Russia USA Kazakhstan
4,586(39.1) 1,210(10.3) 882(7.5) 608(5.2) 359(3.1)
(Unit : person, %)
Table 2. Nationality of medical tourists by major specialties (2014)
27. Factor
conditions
Hospital
strategy,
structure,
Rivalry
Supporting
industries
Government
Chances
Demand
conditions
Figure 2. Competitiveness of Korea in the beauty market targeting China
China: Target of beauty market (Cosmetic surgery & Dermatology)
1) Clinical competence:
Customized techniques
for Asians
- Surgery
- Dermatology
2) Negative aspect
- Malpractice
- Shadow doctor
1) Good operation
& Service
management
2) Two-tier pricing
3) Lack of
accountability
4) Lack of strategy
1) Beauty industry:
- Cosmetics
2) Hallyu (Korean
Cultural Wave)
3) Medical tourism
facilitators:
- Lack of connection
in China
Negative framing
from Chinese Media
1) Price range chart
2) V.A.T refund
3) Insurance for
foreign patients
4) Liability
insurance
5) Certification
6) Medical Visa
7) Visiting physician
temporary permit
1) Korean patients:
high demand for
quality & beauty
Beauty
Market
28. Factor
conditions
Hospital
strategy,
structure,
Rivalry
Supporting
industries
Government
Chances
Demand
conditions
Figure 3. Competitiveness of Korea in wellness market targeting Japan
Japan: Target of wellness market (Oriental medicine & Dermatology)
1) Differentiation:
- Oriental medicine
for beauty
2) Poor reputation for
clinical excellence of
Western medicine
1) Low competition
2) Lack of strategy
1) Beauty industry:
- Cosmetics
2) Hallyu (Korean
Cultural Wave)
1) Political dispute
2) Currency
exchange rate
1) Korean patients:
high demanding
for quality &
beauty
1) Funding for
enhancing CAM
services
Wellness
Market
29. Factor
conditions
Hospital
strategy,
structure,
Rivalry
Supporting
industries
Government
Chances
Demand
conditions
Figure 4. Competitiveness of Korea in primary care market targeting Russia
Russia: Primary care market (Internal medicine & Health exam)
1) Clinical
Competence:
- Primary care
- IVF
2) Poor reputation in
Western region
1) Good operation
& Service
management
2) Lack of Human
resources
3) Two-tier pricing
1) Medical tourism
facilitators
2) Wellness tourism
resources (Hot
SPA)
1) Currency
exchange rate
- Economic crisis
1) Korean patients:
high demanding
for quality
1) Certification
2) Medical Visa
Primary care
market
30. Factor
conditions
Hospital
strategy,
structure,
Rivalry
Supporting
industries
Government
Chances
Demand
conditions
Figure 5. Competitiveness of Korea in critical care market targeting UAE
UAE: Critical care market (Cancer & Rehabilitation)
1) Clinical
Competence:
- Cancer survival rate
2) Poor reputation
1) Good Operation
& Service
management
2) Lack of human
resources
3) Low competition
1) Ecological system
2) Translators
3) Halal food
4) Lack of
connection:
- Medical tourism
facilitators
1) Budget deficit:
- Oil price
1) Korean patients:
high demanding
for quality
1) G2G
2) Certification
Critical care
market
31. IV. Strategy for Improving the Competitiveness
of Korea in Global Healthcare Market
32. Strategy
Factor
Condition
Demand
Condition
Hospital
Strategy,
Structure,
Rivalry
Related &
Supporting
Industries
Chances
Government
Strategy 1) Continuous
improvement of
clinical excellence
2) Improvement of
visibility of Korean
medicine
1) Development of
wellness tourism
2) Tourism infrastructure
3) Medical tourism
facilitators (Concierge
services)
Information
System
1) R&D activities
2) Globalization of human
resources
3) Networking with foreign
hospitals & insurance
companies
4) Effective marketing
5) Enhancing morale as a
global player
1) Information on global
market
2) Media relationship
management
1) Reconfiguring the goal
2) Reconfiguring the role of
the state
3) Coordination
- Central & municipal
government
- Government institutions
4) Destination brand
33. Factor Condition
1) Continuous improvement of clinical excellence
2) Improvement of visibility of Korean medicine (e.g., doctors, IT)
- Publications
- Participation in global conferences
- Collaborating with foreign experts or hospitals
34. Hospital Strategy, Structure & Rivalry
1) Supporting R&D activities
2) Globalization of human resources
3) Networking with foreign hospitals / insurance companies
4) Effective marketing
- Developing a message related to core values
- Developing a message related to extra value
- Developing effective marketing channel for target nations
- Developing viral marketing strategies
5) Enhancing the morale as a global player
35. Related & Supporting Industries
1) Development of wellness tourism industries (e.g., Skincare, SPA)
2) Development of tourism infrastructure
3) Medical tourism facilitators
- Development of profit model
- Development of concierge services
36. Chances
1) Information on the global market
- Systematic collection & dissemination
2) Media relationship management
37. Government
1) Reconfiguring the goal
- Incompatible goals (positioning for critical care market vs 1 million foreign
patients)
- Balance between qualitative (e.g., safety, transparency, accountability) and
quantitative goals (e.g., number of foreign patients, income)
2) Reconfiguring the role of the state
- from Leader model to Partner model (partnership between Government &
private sector)
3) Coordination
- Central & municipal government
- Government institutions (KHIDI, KTO, etc.)
4) Destination brand
- Key word
- Visual cue
38. Thank you
Ki Nam Jin
Dept of Health Administration
Yonsei University
Korea
