The government is initiating structural reforms in advanced general hospitals, urging pharmaceutical and in vitro diagnostics (IVD) companies to align with the evolving healthcare environment.

On October 24th, the Ministry of Health and Welfare (MOHW) announced eight hospitals, including Korea University Anam Hospital and Kyungpook National University Hospital, as participants in the Advanced General Hospital Structural Reform Support Program. Another ten institutions, such as Seoul Asan Hospital and Pusan National University Hospital, joined the initiative on October 29th.

This reform aims to establish advanced general hospitals as "critical care-centered hospitals," focusing on severe, emergency, and rare diseases. Hospitals will reduce general ward capacity by 4.5% to 14%, while maintaining facilities such as intensive care units, pediatric wards, high-risk obstetrics, and emergency services. Additionally, patient transfers between hospitals will be incentivized, with partner hospitals receiving new management fees for handling referred patients.

The program seeks to raise the proportion of critical care patients in advanced general hospitals from 39% to over 70%, redirecting less severe cases to general hospitals and clinics. This approach emphasizes a shift from volume-driven care to quality-focused treatment, with strengthened collaboration across medical institutions.

Sub-Title: Healthcare Crisis Spurs Patient Shift; How Will Pharma and Medical Device Firms Adapt?

The reform is expected to alter patient flow patterns, affecting pharmaceutical and IVD companies. A representative from a diagnostic testing outsourcing organization remarked, "Since the healthcare crisis in February, test volumes at clinics and general hospitals have surged, while institutions reliant on outsourcing from advanced general hospitals face challenges."

Similarly, an IVD device company official noted, "We observe a decline in test volumes at advanced general hospitals and an increase at other facilities. If reforms expand, these trends may persist. Next year, we will intensify sales efforts targeting general hospitals and outsourcing organizations."

A pharmaceutical industry representative added, "Though patient numbers at advanced general hospitals may decrease, their focus on critical illnesses ensures stable revenues for global pharmaceutical firms. However, we anticipate growth in chronic disease cases at clinics and are enhancing our marketing efforts targeting general hospitals and smaller facilities. Key Opinion Leaders at advanced general hospitals remain crucial to our strategies."

The reform underscores a significant realignment in South Korea's healthcare system, urging all stakeholders to adapt swiftly to the evolving patient care landscape.