Telemedicine providers seek remedy abroad for business woes

Non-contact medical service providers are seeking greener pastures overseas as the government seeks to keep the service on a tight leash.

A physician demonstrates telemedicine service in Seoul on May 30, 2023. [YONHAP]

Telemedicine service providers are relocating overseas as frequent changes to domestic regulations and a lack of government investment in the field have created uncertainties about expanding in Korea.

Korean medical platforms grew rapidly during the Covid-19 era, but they are increasingly closing down locally and are finding opportunities abroad where regulations on non-contact medical treatment and pill delivery are less restrictive.

Seoul-based Medihere, the operator of a digital healthcare start-up DoctorHere, plans to relocate its headquarters to the United States.

The company has been providing non-contact healthcare services to local residents and Koreans living abroad but recently decided to relocate as the government tightens regulations on non-contact medical care, which was temporarily allowed for six months during the pandemic.

The government recently fully allowed non-contact medical care services as the country suffers a staff shortage from the walkout by trainee doctors, but related companies fear regulatory uncertainties as the government plans to draw back the scope of the service.

DoctorNow, the No.1 telemedicine startup in Korea, decided to focus on its business in Japan. Its founder Jang Ji-ho plans to establish a corporation in the neighboring country and expand the business there.

The company started reducing staff in Korea last year and is recruiting developers to work in the Japanese corporation.

“Non-contact healthcare service and remote medication counseling by pharmacists as well as pill delivery are legitimate, so related markets are growing bigger,” said Jang. “Its infrastructure with various medical institutions and pharmacy chains is its strength. We’re particularly eying the pill delivery market that is growing rapidly following Covid-19.”

A main page of telemedicine service provider Dr.Call [LIFESEMANTICS]

Dr.Call, another telemedicine service provider, is opening a business in Thailand.

The company has been providing telemedicine services to Korean residents abroad through the regulatory sandbox since 2020. It is establishing a platform in partnership with the Praram 9 Hospital in Bangkok to serve local patients in Thailand.

“Unlike in Korea, it’s easier to learn about the demand for telemedicine service abroad and pill delivery is also possible. That has created an environment to grow telemedicine into a ubiquitous service,” said a spokesperson for the company.

Korea has pushed for the adoption of telemedicine since 2000 without much success.

A total of 3.29 million people used a telemedicine service for three years from February 2020 through May 2023, but the government decided to downsize the service from June of last year after the medical industry demanded that the service be scaled back with reducing pandemic risks.

Nearly half of the telemedicine operators, which grew to 30 over the three years, had to close.

Korea’s trend contrasts with that of other advanced economies, including the United States, France, Japan and Britain, where telemedicine that started following Covid-19 is maintained. The governments in these countries are supporting the growth of telemedicine through legislation.

“Blending medical treatment with ICT is creating new and completely different services,” said Kim Dae-jung, a researcher at the Korea Institute for Health and Social Affairs. “Social benefits and costs need to be properly discussed first.”

Telemedicine and pill delivery are possible in all 38 members of the Organisation for Economic Co-operation and Development, excluding six countries: Korea, Chile, Estonia, the Czech Republic, Switzerland and Turkey.

The global telemedicine market is estimated to reach $158.5 billion this year and the figure is projected to reach $893.7 billion in 2032, according to Canada-headquartered Precedence Research.

Japan made a law on telemedicine in 1997 and conditionally approved the service in 2015. The scope of the service was gradually expanded to be fully allowed by January 2022. France from 2020 also expanded the scope of patients eligible for telemedicine treatment to include those receiving their first examination. Britain is also expanding telehealth services through the NHS, its public health system.

The Korean government only allowed patients suffering from certain types of illnesses to receive telemedicine from last June.

“In Korea, digital healthcare is stuck in the framework of telemedicine, but a law related to digital healthcare that can embrace both needs to be established,” said Kwon Yong-jin, a professor at Seoul National University (SNU) Hospital's institute of public health and medical service.

“It’s a shame that the perspectives of interest groups are growing more important than that of patients when it comes to making policy decisions,” said Kwon Soon-man, a public health sciences professor at SNU's Graduate School of Public Health. “The standstill status needs to be overcome through sufficient promotion and persuasion by the government of the usefulness and safety of telemedicine services.”

BY CHOI HYUN-JU [jin.minji@joongang.co.kr]