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High-Tech Medical Complex on Verge of Shutting Down

기사승인 2017.02.02  15:59:27

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- High-Tech Medical Complex, built on 500 billion won of taxpayer money, is on its way to closing its doors.

Crisis hits Daegu-Gyeongbuk Medical Innovation Foundation and Osong Bio Promotion Foundation as both foundations, built on 492.7 billion won of government funds, are on the verge of shutting down.

An audit performed by the Board of Audit and Inspection revealed that the 2 foundations were severely mismanaged, and branches of the government have been negligent by shifting responsibility from one branch to another. All parties involved are busy pointing fingers for the mismanagement of the two foundations, which are currently facing severe financial difficulties.

The Board of Audit and Inspection announced the results of the ‘Health Care Industry’s Developing Businesses Management Evaluation’ audit on January 24, 2017. The Ministry of Health and Welfare has been notified to examine the feasibility of sustaining the two foundations.

The government established the High-Tech Medical Complex in Daegu-Gyeongbuk and Chungbuk Osong regions for the development of high-tech medical equipment and new medicine, investing roughly 492.7 billion won from 2009 to 2016. The government intended to invest a gross of 8.7 trillion won until 2038.

The government’s policy was to fully fund the operating expenses of the High-Tech Medical Complex from its establishment in 2014 to the year of 2016. The government then intended to cut funds in half starting in 2017, and further cut off funds completely in 2018.

However, the sustainability of the 2 foundations in the upcoming year is questionable, as the operating expense ratio (income divided by operating expense) amounts to a dismal 4.4%, or roughly 2.2 billion won annually, presumably because no plan was established for the sustainability of the two foundations.

In addition, the lack of operating funds contributed to the underutilization of the original human resource quota, wherein the foundations were only able to hire 319 employees out of a maximum capacity of 669 people. The operating ratio of the purchased equipment, worth 193 billion won, also stagnates at an average of 38% over the past 2 years.

The Ministry of Health and Welfare, Ministry of Future Creation Planning, and Ministry of Trade, Industry and Energy have jointly stated that “ensuring the sustainability of the High-Tech Medical Complex is not in our jurisdiction, rather in the hands of other ministries and the Industry Promotion Foundation.”

The Board of Audit and Inspection forecasts that the foundations will not be able to operate functionally when government subsidies are cut off in 2018, even under the assumption that occupancy rate rises to 100% and equipment operating ratio rises to 70%.

The Board of Audit and Inspection has stated that “the Ministry of Health and Welfare, Ministry of Future, and Ministry of Industry have failed to procure the operating funds for the foundation. It is necessary to thoroughly examine the feasibility of retaining the two foundations without the support of the government. In the case that the two foundations are to be maintained, then crucial action must be taken to establish a plan for self-sustainability and also to establish follow-up measures.”

Marian Chu yjc@docdocdoc.co.kr

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