Seoul National University Hospital, Asan Medical Center, and Severance Hospital have identified 'establishment of branch hospitals' as a key goal for the new year. Local governments that have long sought to attract university hospitals are accelerating their efforts. However, there are concerns as rising construction costs due to raw material price increases and prolonged conflicts with the medical community have deepened management difficulties.
According to the medical community on the 6th, this year, Seoul National University Hospital and Asan Medical Center plan to break ground on hospitals in Siheung Baegot and Incheon Cheongna, respectively. The project had previously faced uncertainty due to rising construction costs and long-term conflicts arising from the expansion of medical school admissions, but each local government is now leading the initiative once again.
First, the construction of 'Siheung Baegot Seoul National University Hospital' is set to begin this year. Siheung City announced that it has signed a construction contract with Seoul National University Hospital and Hyundai Construction, and plans to go through administrative procedures for project briefing and licensing this month, aiming to start construction with a target opening in 2029.
It has been over five years since Siheung City and Seoul National University Hospital signed the agreement for the establishment of the hospital in May 2019. The hospital is planned to be built with a total of 800 beds across a total area of 117,338 square meters, consisting of two basement levels and 12 above-ground floors. The original target opening was set for 2027, but the timeline has now been delayed.
The Baegot Seoul National University Hospital construction project began with the signing of the hospital establishment agreement in May 2019 and passed preliminary feasibility studies conducted by the Ministry of Strategy and Finance in April 2021. By March 2022, basic plans for the Siheung Baegot Seoul National University Hospital were completed and bidding announcements were made, but no construction firms responded to the call. The construction cost proposed by Siheung City at that time was approximately 378.1 billion won, which was set at around 10 million won per 3.3 square meters, leading the construction industry to respond that the costs were undervalued given the rising prices of materials and labor.
As the project faced uncertainty, Siheung City formed a task force and requested active support and cooperation from the National Assembly, Seoul National University Hospital, and Seoul National University. Subsequently, in September 2023, the project cost increased to 588.3 billion won, reflecting an increase of 57.1 billion won due to price fluctuations. Seoul National University will bear 429.5 billion won while the government will inject 158.8 billion won.
The construction of Asan Medical Center Cheongna, which will be built in Incheon Cheongna Medical Complex Town, is also expected to commence this year. The Incheon Free Economic Zone Authority announced that on the 28th of last month, it signed a land purchase agreement with Cheongna Medipolis PFV, the operator of Incheon Cheongna Medical Complex Town, and Asan Medical Center at Incheon City Hall.
The Cheongna Medical Complex Town project is designed to be developed over an area of 260,336 square meters (approximately 78,000 pyeong) into two blocks within the Incheon International City investment attraction site, with a total project cost of 2.404 trillion won, but it has yet to break ground after a decade. A hospital with 800 beds is set to be built on this site, aiming to start construction by the end of this year and open in 2029. Additionally, facilities such as the Korea Advanced Institute of Science and Technology (KAIST) research institute, Massachusetts General Hospital (MGH) research institute, and Life Science Park, which is an educational facility for startups, are expected to be located there.
Incheon Songdo Severance Hospital, which broke ground in December 2022, aims for completion by the end of 2026. It will be constructed with an investment of 880 billion won over an area of 85,800 square meters within the Yonsei University international campus in Songdo 7 District, comprising three underground floors and 15 above-ground floors, with a capacity of 800 beds.
Within the medical community, there are growing concerns regarding the timing of branch hospital constructions. Following opposition to the medical school expansion policy last year, residents and fellows left the medical field, leading to significant declines in hospital admissions and surgeries, which worsened financial performance. A hospital labor union representative noted, "Initial losses are inevitable when opening a new hospital," and added, "If the ongoing medical revenue deficit due to conflicts with the medical community continues, it could put considerable strain on the operation of the new branch."
Recently, construction projects initiated by major hospitals have also faced cancellations. Gachon University Seoul Gil Hospital was scheduled to be established in 2027 within Wirae Medical Complex, but a consortium composed of Gil Medical Foundation, Mirae Asset Securities, and Hoban Construction had its designation as the preferred negotiation partner canceled after failing to pay the 97.5 billion won installment of the land cost after September of last year. The comprehensive hospital construction project promoted by Myongji Medical Foundation, which entered into a sales agreement with Chungnam Development Corporation in May 2002, has also ultimately been canceled. The foundation was required to make an interim payment by December 17 of last year but failed to do so, leading Chungnam Development Corporation to issue a termination notice. An interim payment of 16 billion won, excluding the 3.6 billion won deposit, will be refunded to the foundation.
An anonymous university hospital professor stated, "It is not the right time to establish and operate branch hospitals associated with university hospitals," adding, "There is a time lag until completion, so starting the project now will come with burdens." He noted, "In the case of Ewha Womans University Medical Center, which opened when the medical system was operating normally before the transfer conflict, it incurred an annual deficit of 40 billion won," emphasizing that ultimately, the key issue is financial adequacy.
Meanwhile, hospital directors believe that despite government support and increases in service fees, they will continue to operate at a loss this year. According to data received by Han Ji-ah, a member of the National Assembly from the People Power Party, the combined net loss for the 'Big 4' hospitals—Seoul National University Hospital, Asan Medical Center, Severance Hospital, and Seoul St. Mary's Hospital—is projected to reach approximately 213.5 billion won in the first half of 2024. According to Kim Gi-chang, Vice President of Yonsei University and Director of the Medical Center, Yonsei Medical Center recorded a medical revenue deficit of over 120 billion won last year due to the medical community crisis.