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Development Overview
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Social Infrastructure

Establishment of the Korea medical center

1. Overview
 
The establishment of the Korea Medical Center (KMC) was one of the most prominent and representative of all Korea’s development projects, made possible due to aid received from three Scandinavian countries—Denmark, Norway and Sweden. In fact these three countries had provided emergency relief, including medical care, during the Korean War, and when the war ended it was their joint grant-in-aid, delivered to Korea via the United Nations Korean Reconstruction Agency (UNKRA), that funded the construction and operations of the KMC, a medical center of an unprecedented scale in Korea.


The KMC began construction in 1956, and opened its doors to the public in 1958. For the subsequent decade from its opening it was operated based on the financial contributions, medical expertise, management support, and technical resources of these donor countries, after which its management was handed over to the Korean government. But even after this management transfer, these three donors continued to provide pharmaceuticals, medical equipment, and overseas training opportunities for Korean medical staff over the next few decades. The Korean government, for its part, also continued to invest increasing amounts in the center, expanding and improving the range and quality of services it provided as a public general hospital.
                 
2. Background
 
Although the three Scandinavian countries did not dispatch any troops to the Korean War, they consistently provided emergency relief and medical aid throughout the war, as well as support for postwar rehabilitation and economic reconstruction. Having traditionally focused on humanitarian aid, these three countries are among the most active and supportive providers of development aid worldwide today.[1]


During the Korean War, Denmark, Norway and Sweden provided emergency medical and other forms of aid for war victims and refugees. Denmark deployed its hospital vessel, Futlandia, to Busan Port. Norway set up an itinerary surgery hospital in the Dongducheon area of Seoul. Sweden opened up a Red Cross hospital in Busan to provide a wide range of medical and health services.


International aid for Korea’s postwar rehabilitation and economic reconstruction originating from sources other than the United States was all delivered via the UNKRA. Thus the three Scandinavian countries co-organized a medical aid program with the UNKRA, and signed a five-party agreement on March 13, 1956, with the Korean government and the UNKRA on setting up a national and public medical center in Korea.[2] The agreement detailed the three Scandinavian countries’ intention to make humanitarian contributions to the hospital project effort in cooperation with the Korean government and the UNKRA.


The agreement also outlined funding for the plan: the UNKRA was to provide USD 2.4 million for the construction of the hospital; the Scandinavian countries, USD 2 million together to support staff, facilities, and equipment; and the Korean government, USD 930,000 (or 167 million hwan at the time) for the purchase of the hospital site and other related tasks. With an investment of USD 5.33 million in total, a general hospital of a national stature and scale came into being in 1958, and soon became an institution that not only provided care and services for patients, but also educated and trained medical practitioners.


The project involved support not only for the construction of the hospital, but also for operational aspects that included medical treatment processes and the education and training of medical staff. The three countries thus agreed to provide an additional USD 1.5 million each year together for five years after the hospital’s opening in support of these elements. The Korean government, in turn, agreed to bear current costs for the hospital’s operation, which included 173,000 hwan in its first year.


Despite the multiple parties and complex nature of aid involved, the project proceeded without any obstacles or interruptions. The construction process, which began in September 1956, successfully came to completion in less than two years, allowing the hospital to open on March 10, 1958. The KMC was the first modern hospital in Korea, equipped with a wide range of medical facilities and highly qualified personnel thanks to the wholehearted support of Denmark, Norway and Sweden.
Although the three Scandinavian countries had originally set out to assist in the operation of the KMC for the first five years only, at the end of this period they were requested by the Korean government to extend their support for another five years, until 1968, which they accepted. The continued support was carried out based on an addendum to the original agreement and signed by the governments of the three countries, the Korean government, and the UN delegation on June 19, 1964.[3]


The addendum required the Korean government to take over management of the hospital in October 1968, and detailed a comprehensive range of matters pertaining to hospital operation and preparations thereof. The addendum in this aspect provides a good example of project-type technical assistance.


Having agreed on the plan of transferring all authorities and responsibilities regarding the hospital’s operation to the Korean government in 1968, the three Scandinavian countries signed a memorandum of understanding to that effect with the Korean Vice-Minister of Health and Society in October 1967.[4] Accordingly, the Korean government took over control of the KMC in September 1968, after which the Korea-Scandinavia Foundation was established to promote continued medical and cultural exchange between Korea and the three countries. The foundation still remains active today, and keeps its headquarters in Seoul.

 
[1] These three Scandinavian countries spend the greatest proportion of their gross national income (GNI) on official development assistance (ODA) among the 22 member states of the Development Assistance Committee of the Organization for Economic Cooperation and Development (OECD/DAC). In 2002, Denmark, Norway, and Sweden contributed USD 1.643 billion, USD 1,696 billion, and USD 1,991 billion to ODA, respectively, or 0.96 percent, 0.89 percent, and 0.83 percent of their respective GNIs.
[2] Agreement for the Establishment and Operation of a National Medical Center in Korea.
[3] Addendum containing additional articles to the Agreement for the Establishment and Operation of a National Medical Center in Korea and its Annex of March 13, 1956.
[4] Memorandum of Understanding between the Minister of Health and Social Affairs of the Republic of Korea and the Scandinavian Board of the National Medical Center in Korea Regarding Transfer to Korean Authorities of Scandinavian Responsibilities at the National Medical Center.


Source: Korea International Cooperation Agency. 2004. Study on Development Aid and Cooperation for South Korea: Size, Scope and Exemplary Effects. Seoul.
 

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3. Details
 
It seems quite clear that Denmark, Norway and Sweden actively contemplated ways they could continue their medical support for Korea even after the Korean War. Although there are no extant records on preliminary studies, feasibility studies, and negotiations among the involved parties regarding the construction of the hospital, the three countries are likely to have performed all the necessary preparatory works prior to signing the five-party agreement in March 1956. Perhaps the reason for the absence of records on this process in Korea is that the project was conceived, prepared for, and implemented almost exclusively by the three Scandinavian countries and the UNKRA. In other words, the KMC project was a donor-led aid project rather than a recipient-led one.


The site for the hospital—where the Seoul Municipal Hospital for Citizens sits in Euljiro, Seoul—was decided without much difficulty. Although the donors hoped to build a major, treatment-centered hospital with 1,000 or so beds, the Korean government asked that education and training of Korean medical staff be included instead. In the end the hospital had 450 beds, and instead of additional facilities, hospital staff (doctors, nurses, technicians, etc.) received the training they needed.[1]


The hospital buildings, built and completed with USD 2.4 million from the UNKRA, included a main unit (9,127 square meters) with two floors below ground and seven above; an annex (3,097 square meters); and other ancillary facilities (totaling 21,870 square meters); all were cutting-edge facilities filled with the latest medical equipment. The main building was also one of the first buildings in Korea with elevators, which, by themselves, drew in numerous onlookers.


Such modern facilities and equipment were made possible with the aid provided from the three Scandinavian countries. The donated goods included not only pharmaceuticals and medical equipment, but also all amenities and supplies, even including meal trays for patients. It is nearly impossible to ascertain all the items that were provided at this time with exactitude. Nevertheless, the hospital was praised as the most modern and well-equipped in Asia at the time of its opening in 1958, and from that moment on continued to improve on the expertise of its staff, the quality of its treatment, and the level of its equipment through constant support from the three Scandinavian countries.[2] At the time of the transfer of the hospital’s management to the Korean government, all parts and supplies for maintaining the hospital’s medical equipment, worth USD 80,000, were provided free of charge.[3]


Any hospital to be successfully run requires competent staff and effective management. At the time of the KMC’s opening, Korea relied exclusively on the doctors and administrators dispatched from the donor countries. It was the Medical Mission, part of the Scandinavian Mission, which handled the operation and management of the hospital in its early years.


The three Scandinavian countries, who initially signed on to run the hospital for the first five years, provided USD 1.5 million each year until 1963, including the cost of dispatching their own doctors and technicians.


After the first five-years were up, however, the Scandinavian Mission concluded that it was yet too early for them to withdraw their support from Korea. These members of the medical and administrative staff of the KMC thus requested to their respective governments that they extend support and aid to the center, which each government accepted. They remained onboard the hospital’s management for another five years, until 1968.


The next five years of Scandinavian involvement were undertaken based on an addendum to the original agreement which detailed additional support for the center of up to USD 6.5 million, the transfer of center management to the Korean government in 1968, and specifics on the hospital’s operation and management outlined under the Plan of Operation for the National Medical Center.


The donor countries continued to provide human and other forms of support so that Korean medical and administrative staff could acquire the capability and know-how to run the hospital independently. In particular they introduced a governing board, and also organized the Advisory Committee on Scholarship, which provided overseas training for selected Korean medical practitioners and technicians.


Though the three countries had agreed to send around 80 medical practitioners to the KMC, in actuality they sent more than 90. The number of doctors dispatched gradually decreased over time, especially after 1964, as the quality of Korean medical staff continued to improve. The donor countries paid great attention to not only boosting the technical expertise of Korean medical staff, but also to enhancing and reinforcing Koreans’ capacity to operate and manage the hospital. The Scandinavian governments dispatched a hospital management specialist, in charge of auditing and advising the hospital, in 1965, and also invited two Korean hospital administrators for special training and education.


The KMC rapidly expanded the scope of its services and raised its status in the public eye as the leading medical institution in Korea. A nursing college was set up as an affiliate of the hospital in 1959 and a five-year specialist training curriculum for doctors was adopted in 1960. The KMC produced 1,300 specialists, 1,500 nurses, and 2,200 medical technicians.


The Scandinavian governments, moreover, provided opportunities, via such agencies as the Norwegian Agency for Development Cooperation (NORAD), the Danish Agency for Development Assistance (DANIDA), and the Swedish International Development Cooperation Agency (SIDA), for over 30 Korean doctors to study abroad for long terms. These agencies also provided countless opportunities for short-term training and trips abroad, thus helping to improve the quality of medical practitioners in Korea dramatically.


The KMC at first provided free and universal healthcare, modeled after the social democratic system of northern Europe. When the hospital was transferred to the Korean government, however, it changed to paid care, with the proceeds from medical services going toward ensuring that the high quality and standards instituted by the donor countries continued to be met.

 
[1] A 30-Year History of the Korea Medical Center, KMC, Nov. 1988, p. 17.
[2] KMC, 1988, pp. 46 and 54.
[3] KMC, 1988, p. 50.


Source: Korea International Cooperation Agency. 2004. Study on Development Aid and Cooperation for South Korea: Size, Scope and Exemplary Effects. Seoul.
 

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4. KMC after Scandinavian Assistance
 
The Korean government managed the KMC for about a decade after the donor countries withdrew without making any major new investment. In 1979, however, it borrowed foreign capital to purchase new cutting-edge medical equipment, and also invested domestic capital into expanding and upgrading hospital facilities overall. Between 1980 and 1983, the Korean government spent KRW 11.469 billion on building two new wards and adding 130 new beds, and also took out USD 9.925 million in development loans from the Overseas Economic Cooperation Fund (OECF) of Japan to purchase state-of-the-art medical equipment and devices.
 
<Details of Investments in the KMC>

  Facility expansion New equipment introduction
Project period Aug. 1980 to Dec. 1983 1980 to 1984
Amount invested KRW 11.469 billion USD 9.925 million (KRW 7.96 billion)
Description Addition of 2 new wards and 130 new beds Introduction of 312 items, including a new computer system and medical equipment.

 
As the leading medical institution in Korea, the KMC played a pivotal role in the development and advancement of not only medicine and healthcare in Korea, but also medical training. As private-sector medical institutions began to flourish in the early 1980s, improving on the quality of services and facilities, the KMC began to shift its focus to medical and related projects that private institutions were incapable of carrying out on their own.


The KMC throughout its history has made great efforts to root itself as a special medical institution of a particularly public nature. It created a blood center and provided emergency education for the first time in 1977; organized training programs for paramedics beginning in 1986; launched an organ transplant information center in 1998; began operation of an organ transplant center and a central emergency center from 2000; and has continued to focus much of its research and development efforts on ways to improve the hospital’s medical services and management.
 
 
5. Evaluation and Implications
 
The KMC project was a representative social development program pursued during the postwar rehabilitation period in Korea. It is also noteworthy as a major case of development in which the donor countries led the way, providing the needed capital, technology, and human resources, as Korea, the recipient, was unable to do much beyond providing the site for the hospital. The KMC is also an example of a development aid case wherein the donor helped the recipient overcome capital and technology gaps by providing assistance in all aspects of project processes from hospital construction and the purchase of medical equipment, to the training of medical and administrative staff and beyond.

 

The KMC project illustrates how consistent development aid can help the recipient country gradually enhance its capacity for development. The KMC, after having been managed by donor countries for 10 years, with great attention paid during that time to fostering Koreans’ own capacity for management, eventually saw the successful transfer of its management to the Korean government. And in the 1980s the Korean government fostered the hospital’s capacities even more through facility expansion and equipment purchase,projects undertaken with the help of development loans, not grants.


The KMC project is a good case in point for showing what happens when development aid works. The involved parties identified clear goals in a traditional area of development aid, and pursued them according to thoroughgoing plans, thereby not only achieving the goals, but also ensuring the sustainability and long-term effectiveness of the project for decades to come. Furthermore, although the KMC project was bilateral in form, it also made good use of multilateral resources: financial support from the UNKRA for the construction of hospital facilities enabled the three Scandinavian donors to focus their attention on providing quality medical equipment and medical and administrative staff.


It is often the case that when multiple parties are involved in the same project, complications result. Such complications were bypassed in this case because the three donor countries maintained open channels of communication and ensured the consistency of the project’s progress throughout the decade of support they provided, enabling the Korean government to inherit an already effective and well-organized hospital operation system. The donor countries’ emphasis on the development of professional workforces and system management capacity helped Korea manage a major project like the KMC with effectiveness, while also paving the ground for the hospital’s long-term sustainability.


The KMC, in the meantime, also focused its attention strategically on the comparative advantages offered by the donor countries, effectively avoiding problems associated with smaller scales of aid and also building much goodwill toward the donor countries.


The Korea-Scandinavia Foundation is another important outcome of the KMC project. Born in 1968 and active to this date, the foundation is a good example, on its own, of how important culture is in the implementation and success of projects of development and international cooperation. Founded on the basis of the accumulated proceeds that the KMC earned from foreign patients prior to its management transfer to the Korean government, the foundation not only commemorates the friendship that was formed between Korea and the three Scandinavian countries over medical efforts, but further promotes exchange and partnership among the involved countries. In addition to providing grants and fellowships for medical research and coordinating human exchange, the foundation also runs the Scandinavian Club, a buffet at the KMC. The club was initially created to provide Scandinavian medical staff residing in Korea during the early years of the KMC with meals from their home countries. Even after the Korean government took over management of the hospital, the club remained an integral part of the KMC, providing dishes of a distinctively Scandinavian taste to the Korean public. In this and other ways, the Korea-Scandinavia Foundation is a unique cultural property and symbol of the social and cultural exchange between Korea and Scandinavia. The foundation and the Scandinavian Club represent the continuing friendship between Korea and Scandinavia even after the end of the KMC project, and also stand as examples of ways recipient countries may learn about the cultures of their donors.

Source: Korea International Cooperation Agency. 2004. Study on Development Aid and Cooperation for South Korea: Size, Scope and Exemplary Effects. Seoul.