Struggle against privatization: a case history in the use of comparative performance evaluation of public hospitals

After the 1997 economic crisis, the South Korean government implemented neoliberal policies in many sectors. In health care, the government attempted to privatize nine public hospitals, framing the initiative as "better management." In this discourse, public hospital workers were stereotyped as lazy and incompetent, while public hospitals were portrayed as poorly managed and of low quality. However, the government did not present any relevant evidence of improvement in already privatized hospitals, even though three hospitals had been semi-privatized at that time. In this study, the authors evaluated the effects of the semi-privatization, comparing the performance of the semi-privatized hospitals with that of the nine other hospitals targeted for privatization. The study found adverse effects on performance, unlike the claims made by the government. Semi-privatization intensified the workloads of hospital workers and the instability of employment, froze or decreased real wages, and drastically increased hospital revenue per patient stay. The changes may have resulted from redefining profit as the goal of the hospitals, as opposed to the previous focus on decision-making on public health. These research findings played a decisive role in the struggle to keep the targeted public hospitals free of privatization, especially in two of the nine hospitals targeted for privatization in 2001.