South Korea’s Tertiary Hospital Reset Collides with Cost, Coordination, and Staffing Gaps
In late 2024, South Korea moved to reorient its tertiary hospitals toward severe, emergency, and rare disease care, a policy response to years of patient concentration at major centers and the acute stress created by the mass resignation of trainee doctors. A qualitative study in Healthcare captures how hospital directors experienced that shift on the ground: as both a necessary correction and an operational strain. Their accounts show a system trying to move away from volume-driven competition while still paying the economic and logistical price of the old model.
The study used reflexive thematic analysis of semi-structured interviews with directors from five tertiary hospitals, four in the capital area and one outside it. Interviews were conducted between 30 October and 7 November 2025, transcribed verbatim, and coded through the six-phase framework of Braun and Clarke. The small sample does not dilute the policy relevance of the findings; in a reform like this, the people leading hospitals are the ones who see where the incentives break down first.
Cultural Change Arrived Faster Than the Infrastructure Behind It
Directors described the project as a catalyst for a cultural shift toward a high-severity-centered model of care. In practical terms, that means tertiary hospitals began redefining their role less as catch-all institutions and more as centers reserved for complex, high-acuity patients who genuinely need advanced expertise and resources. Yet the change was not uniformly embraced inside departments, where older habits, entrenched referral patterns, and service-line priorities still shape day-to-day decisions.
The most revealing tension was psychological as much as structural. Hospital leaders saw the policy as directionally correct, but translating that mandate into routine practice meant asking clinicians to accept fewer low-acuity patients, narrower case-mix autonomy, and a different definition of institutional success. For hospitals long rewarded by patient throughput and market share, this is not a cosmetic adjustment. It changes what counts as value at the bedside, in the operating room, and on the balance sheet.
Severity Brought Clinical Complexity, Then Exposed the Financial Formula
One theme emerged with unusual force: the severity paradox. Treating sicker patients improves alignment with the tertiary mission, yet it can worsen profitability because complex care consumes more staff time, more specialist input, more diagnostics, and more resources per patient. Large restructuring costs added another layer of financial pressure, leaving directors with a model that is clinically coherent but economically fragile.
The paradox is easy to understand from a hospital finance standpoint. High-acuity patients often require intensive monitoring, multidisciplinary coordination, and prolonged treatment pathways, while reimbursement systems may not fully capture the intensity of that work. If payment does not follow complexity, then hospitals are asked to absorb the most expensive patients precisely when policy asks them to specialize in those patients. The result is a structural mismatch between public health goals and institutional solvency.
Complexity-based reimbursement emerged in the directors’ recommendations for a reason. Without payment that tracks severity and resource use more closely, the policy risks rewarding volume elsewhere while asking tertiary centers to shoulder a heavier and costlier burden. The study does not measure financial outcomes directly, but the directors’ concern is clinically plausible and administratively familiar: a high-severity hospital model cannot survive on mission alone.
Referral Expansion Stalled at the Missing IT Spine
Referral networks expanded, but the process remained constrained by the lack of an integrated IT system across that network. This mattered because referral reform is not just about telling lower-level facilities where to send patients; it requires fast access to records, imaging, test results, and clinical summaries so the receiving hospital can act immediately and avoid duplication. Without a shared digital backbone, coordination depends on manual communication and fragmented handoffs.
The absence of integrated IT is more than an administrative nuisance. It directly affects triage accuracy, transfer timing, and the efficiency of scarce specialist resources. A tertiary center cannot function as the end point of a region-centered system if it must rebuild the patient story from scratch every time a transfer arrives. Directors’ frustration here points to a basic truth of modern hospital reform: networked care needs networked data.
Workforce Stability Improved, Yet the Model Remained Unsettled
A specialist- and physician assistant-centered workforce model helped stabilize care in the face of staffing disruption, but the arrangement remained institutionally unresolved. Directors saw the model as a practical way to keep services running, especially during a period of physician shortage and instability, yet the absence of a clear legal framework for physician assistants left uncertainty over scope, governance, and long-term role design.
The workforce issue reaches beyond staffing counts. Tertiary hospitals depend on layered teams, and when physician availability becomes unpredictable, institutions look for substitutes that preserve continuity without compromising safety. Physician assistants can support that continuity, but only if the legal and organizational structure around them is explicit. In a high-acuity setting, ambiguity about responsibility is not a minor policy gap; it is a patient-safety issue.
Training also surfaced as a system-level need. Directors called for network-based training, suggesting that the new model cannot rely on isolated hospital silos. If tertiary centers are to function as regional anchors rather than rival institutions, training pathways need to mirror that geography. Clinicians must learn to operate within referral webs, not just within single hospitals.
Policy Recommendations Point to a Region-Centered Model
The directors’ recommendations were concrete: refined severity criteria, complexity-based reimbursement, a legal framework for physician assistants, an integrated IT referral system, and network-based training. Each recommendation addresses a different weak point in the reform architecture, but they point in the same direction. The system needs to move from competition among hospitals toward collaboration across a region.
This is where the reform’s future will be decided. A policy that redirects patients upward toward tertiary centers can succeed only if it is paired with mechanisms that make those centers financially viable, digitally connected, and staffable in real time. Otherwise, the system risks producing an institutionally cleaner referral map without giving hospitals the tools to operate inside it.
The study’s limits are straightforward. It reflects the views of directors from five hospitals, so it cannot claim to represent every tertiary institution in the country. Even so, the interviews capture the perspective of the people expected to implement the policy, which makes their concerns operationally important rather than merely opinion-based. Their accounts suggest that South Korea’s tertiary restructuring has already altered culture and patient flow, but its durability will depend on whether financing, digital infrastructure, and workforce rules are rebuilt at the same pace as the reform itself.