South Korea’s long-delayed Framework Act on the Development of the Service Industry has again been pushed for passage, but lawmakers remain deadlocked over whether to include the health and medical sector.
On May 3, the Ministry of Economy and Finance and other agencies said the government has resumed efforts to pass the bill, known as the “service industry development act,” including by commissioning research projects.
The bill has been stuck in the National Assembly for 15 years largely because no agreement has been reached on the scope of health and medical services. Since it was first introduced in 2011, the government, the medical community and civic groups have failed to narrow sharp differences.
Opponents say including health and medical services could open the door to privatization. The government argues inclusion is needed to reduce gaps between industries and foster high value-added sectors.
Medical groups and civic organizations have warned that bringing health care under a broad service-industry promotion law could lead to commercialization and conflict with the Medical Service Act, which is grounded in public interest principles and bans profit-seeking as a basic ideal.
They also argue that greater inflows of private capital and changes to hospitals’ revenue structures could weaken the public health care system. Concerns have also been raised about expanded telemedicine, allowing nonprofessionals to establish medical institutions, and broader health management services, which critics say could undermine public health care and patient safety.
The government and industry, however, view health and medical services as central to making the bill effective. They say South Korea needs a systematic approach to developing high value-added service industries such as tourism and health care to better balance manufacturing and services.
The government has consistently said the bill is intended to promote the service sector overall and that health and medical services, as a major pillar of that sector, should be included. It has also stressed the need for a legal basis to support exports of medical technology and development of digital therapeutics.
In recent discussions, a third option has been floated, such as separating health and medical services or limiting the law’s scope, but it has not unified the two sides.
Four key health-related laws now being discussed as possible exclusions from the bill’s application are the Medical Service Act, the Pharmaceutical Affairs Act, the National Health Insurance Act and the Framework Act on Health and Medical Services. Under that approach, the bill would be enacted while carving out core statutes seen as posing risks to health care’s public nature.
Supporters of exclusions say explicit carve-outs could block privatization disputes in the text of the law, reduce prolonged political battles, and speed regulatory reforms in areas such as tourism and content that have been delayed by health care-related conflict. They also acknowledge that limits would likely remain in some areas, including digital health care and medical technology exports.
Some, however, argue the government should move cautiously rather than rush the bill, warning that legislation could hinder, rather than promote, industry growth.
Seo Yong-gu, a professor of economics at Sookmyung Women’s University, said, “AI-based service industries and the software industry are areas that grow by market logic,” adding, “It is true that productivity in Korea’s service industry is low, but it is preferable to leave it to the market’s autonomy rather than enact a law.”
* This article has been translated by AI.
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