South Korea’s shift into a super-aged society is driving a sharp rise in demand for elder care, but the supply of nursing homes is falling far short, constrained by regulations that make it difficult to open new facilities. Industry officials warn that a “care gap” could soon become reality as entry barriers keep capacity from expanding fast enough.
As of Tuesday, industry sources said nursing home bed capacity has increased by an average of 8.4% a year since 2008. However, only 38% of facilities earned A or B grades in evaluations by the National Health Insurance Service, which are generally preferred by families. About one in four facilities was cited for violating staffing standards (24.9%), and 28.5% fell short on adequate toileting services, failing to meet basic requirements.
The mismatch is already visible on the ground. Mid- to large-sized nursing homes typically have capacity for about 200 residents, but waiting lists can run into the thousands depending on the facility, according to industry accounts. With population aging accelerating, the number of people waiting is expected to grow, yet new construction is not keeping pace.
Under the enforcement rules of the Elderly Welfare Act, operators seeking to build elderly medical welfare facilities or senior welfare housing must first secure land and buildings that meet set standards. In practice, that means a provider cannot establish a facility based only on operating capability or a service model; it must first obtain physical infrastructure, such as purchasing land and constructing a building or leasing suitable premises.
Industry officials say those requirements function as a steep barrier to entry. In urban areas, it is difficult to secure enough land for a nursing home, and land purchases and construction costs can range from tens of billions to hundreds of billions of won, effectively limiting new entrants. Factoring in the opportunity cost tied to owning land and buildings, losses in Seoul are estimated at about 8 million won a month, excluding noncovered service revenue.
The Ministry of Health and Welfare, the lead agency, has acknowledged the need to improve regulations and is reviewing revisions. But industry groups say steps such as limited easing of facility standards or streamlined administrative procedures have had little impact in the field. Related organizations have formally urged the government to relax establishment requirements and expand the use of public land for facilities.
Some experts also argue for a larger role for private nursing homes. Compared with public facilities, private providers can offer more varied services and more tailored care, and can differentiate themselves through facility conditions and programs. They also tend to have shorter waiting periods and can operate more flexibly in areas such as family visits and daily convenience, the article said.
Experts say the government should focus on oversight and safety nets while supporting private providers behind the scenes as the main source of supply. Jang Si-ryeong, a senior researcher at the Bank of Korea’s Economic Research Institute, said, “With the end-of-life elderly population set to double over the next 25 years, it is clear that public finances alone have limits.” She added that policymakers should consider ways to offset high real estate costs in major metropolitan areas such as Seoul and Busan to encourage a stable supply of facilities in city centers.
* This article has been translated by AI.
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