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KMID : 0926620160210020037
Korean Journal of Hospital Management
2016 Volume.21 No. 2 p.37 ~ p.49
Investigating the Level of Competition between Public Health Centers and Private Clinics in Korea
Kim Hyun-Joo

Lee Jin-Yong
Jo Min-Woo
Eun Sang-Jun
Abstract
The purpose of this study is to investigate the level of competition between Public Health Centers (PHCs) and private clinics (PCs) by examining the number of patients that used PHCs vs. PCs, estimating the total amount of revenue generated from outpatient services at both PHCs and PCs, thereby analyzing the financial impacts on PCs derived from the PHCs. We utilized 2011 National Inpatient Sample data (NIS). Using the 20 table containing general information on each individual claims, we integrate it with the 40 table which contains all the diagnostic codes for each claim. Then, we disaggregate the bundled claims into the original individual claims. Overall, 3.1% of outpatient visits are made at PHCs while the rest was made at the PCs (96.9%). Among the total claim costs of 6.34 billion USD (as of 2011), PHCs occupy 2.0% (124 million USD), and 98.0% are contributed to PCs (6.21 billion USD). The estimated economic losses of PCs due to PHCs are summarized as follow; the maximum potential loss is estimated at 198 million USD in total and 7,099 USD per clinic when we include all patient types; the minimum loss is estimated at 71 million USD in total and 2,540 USD per clinic where Medical Aid recipients and the elderly (aged 65 and over) are excluded. Our results confirm the potential economic effect on PCs due to PHCs providing outpatient services. PCs and PHCs are the most important players providing primary care in Korea. Unnecessary competition between PCs and PHCs is not desirable. Health authorities should carefully examine the healthcare services currently provided by PHCs and their impacts on PCs.
KEYWORD
Community (Public) health center, Outpatient clinics, Economic competition, Primary care
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