A person undergoing a blood test (Yonhap)
SEOUL, Oct. 15 (Korea Bizwire) — The South Korean government has moved to dismantle decades-old billing practices between clinics and diagnostic laboratories, a reform it says is essential to restoring transparency and safeguarding patient safety.
But the medical community is pushing back, calling the measure hasty and detached from on-the-ground realities.
The Ministry of Health and Welfare announced plans to abolish the so-called “commission management fee” paid to clinics that outsource diagnostic tests such as blood or urine analyses.
Instead, both clinics and laboratories would submit separate insurance claims to the National Health Insurance Service under a new “split billing” system, slated for implementation as early as next year.
Currently, the health insurance program reimburses clinics 110 percent of the test fee, with the expectation that clinics retain 10 percent for administrative costs and pass 100 percent to the testing centers.
In practice, however, laboratories have long competed for contracts by offering steep discounts or rebates to clinics — an entrenched custom critics say undermines both quality and fairness.
The price-cutting, experts warn, has discouraged reinvestment in upgraded equipment and skilled personnel, eroding the reliability of medical testing. Outdated machines and understaffed labs, they argue, can lead to inaccurate results and potentially harmful misdiagnoses for patients.
By scrapping the 10 percent management fee and normalizing total reimbursements at 100 percent, the government aims to block opaque financial flows between institutions. “The goal is to enhance transparency and fairness in medical transactions,” the ministry said, adding that penalties could be introduced if the market fails to adjust voluntarily.
Doctors’ groups, however, accuse the government of breaking its promise to consult with the medical sector. The Korean Medical Association denounced the decision as a unilateral move that “undermines trust,” arguing that the real issue lies in excessive competition among laboratories, not in clinic billing practices.
They also contend that the management fee covers legitimate administrative costs — from collecting and storing samples to explaining results to patients — and that eliminating it without revising the broader fee structure is misguided.
Still, critics note that the medical community has shown little initiative to reform the opaque system on its own. With the accuracy of diagnostic testing directly tied to patient safety, the government’s resolve to end what it calls “distorted cost settlements” may soon test its ability to outlast resistance from one of the nation’s most powerful professional lobbies.
M. H. Lee (mhlee@koreabizwire.com)
