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Competitiveness of Korea(Jin, Ki Nam)
1) The document analyzes Korea's competitiveness in the global healthcare market using Porter's Diamond Model. It finds that while Korea has strong clinical factors, its hospital strategies, supporting industries, and government policies need improvement to strengthen competitiveness. 2) Targeting key markets like China, Japan, Russia, and UAE, the analysis identifies strengths and weaknesses in Korea's ability to attract patients for specialties like beauty/cosmetic, wellness, primary care, and critical care. 3) Recommendations are made to improve factor conditions, hospital management, related industries, information/media strategies, and the government's role through better coordination, goals, and branding.
Competitiveness of Korea(Jin, Ki Nam)
- 1. Analysis of Korea’sCompetitiveness in the Global Healthcare Market 2016 Medical Korea Ki Nam Jin Dept of Health Administration Yonsei University
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- 3. The Korean governmentconsidered 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 sawa 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 ofthis 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
- 6. II. Competitiveness ofKorea in Global Healthcare Market
- 7. Analytical Framework: Porter'sDiamond Model Diamond Model Factor Conditions Input Conditions Firm Strategy, Structure & Rivary Related & Supporting Industry Nations Chances
- 8. Factor conditions referto 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
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- 10. This element ofthe 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
- 11. Strategy: diversification oftarget markets
- 12. Management style How medicalinstitutions are organized and managed influences the competitiveness: 1) Two-tier pricing 2) Cultural competence of organization 3) Global networks
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- 14. Demand conditions involvesuch 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
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- 16. Spatial proximity ofupstream or downstream industries facilitates the exchange of information and promotes a continuous exchange of ideas and innovations Related Supporting Industries
- 17. Nation Health Tourism Medical Care Wellness Resources Tourism Thailand Medical Service Massage Shopping India Yoga HungarySpa South Africa Safari Korea ? Wellness Tourism Resources
- 18. Wellness Resources Cosmetics: Beauty & Personal care market($14 billion) SkinCare SPA: Red Ginseng SPA Temple Stay Café: Herb tea café, Healing cafe Healing Food: Fermented food Figure 1. Wellness tourism resources Globalized Less Globalized
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- 21. Chance refers torandom 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 properrole 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 strategy1) 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 humanresources · Personnel change at all levels(government, institutes, hospitals) - Few experts - Weak international network - Insufficient information on the global market Problems
- 25. III. Analysis ofCompetitiveness of Korea for Target Nations
- 26. Specialties Rank 1 2 34 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. Competitivenessof 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. Competitivenessof 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. Competitivenessof 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. Competitivenessof 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 forImproving 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) Continuousimprovement 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 & SupportingIndustries 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 onthe global market - Systematic collection & dissemination 2) Media relationship management
- 37. Government 1) Reconfiguring thegoal - 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 NamJin Dept of Health Administration Yonsei University Korea