Oriental medicine hospitals have been steadily increasing in Gwangju Metropolitan City and surrounding South Jeolla Province every year, causing not a few adverse effects.

As the number of traditional medicine clinics in the southwestern region gets far larger than any other areas, the hospitals are waging overheated competition to attract patients, leading to the increase in insurance crimes, too.

Moreover, some Chinese medicine hospitals run by non-medical practitioners bent only on increasing revenue are hurting the regional medical environment, industry watchers say.

According to the Health Insurance Review and Assessment Service_{건강보험심사평가원}(HIRA), the number of oriental medical hospitals in Gwangju and South Jeolla Province reached 112 as of last year, accounting for 39.7 percent of total 282 herb medicine clinics in Korea. The figure had increased 53.4% from 73 in 2013.

Medical bills statistics show a similar pattern. Medical expenses at traditional medicine hospitals in Gwangju and South Jeolla Prince amounted to 129.6 billion won ($115.3 million) last year, or 41.4 percent of the total 315.4 billion won recorded by all oriental medicine hospitals in Korea.

Source: Statistics of medical costs in 2016 released by HIRA

The surge of Chinese medicine hospitals in the region has resulted in an increase in their abuses and misuses, plaguing the area severely. As the herb medicine clinics jumbled up close together in the area, excessive competition among them to lure patients has turned them into hotbeds of insurance crimes. Because of some Chinese medicine hospitals primarily targeting auto insurance patients, offenses related to them have rapidly grown, according to local industry watchers.

“Some oriental medicine clinics have decorated their interiors luxuriously to lure and treat patients related to car insurance,” said Hong Kyung-pyo_홍경표, chairman of Gwangju Medical Association_{광주시의사회}. “Car insurance companies have reportedly operating ‘moral hazard teams’ in the region to prevent frauds. The association has also received phone calls concerning insurance scams from various agencies, including National Health Insurance Service _{국민건강보험공단} (NHIS) Health Insurance Review & Assessment Service_심평원(HIRA), indemnity insurance companies and the news media.”

It is not easy, however, to grasp even the exact state of affairs as these Chinese medicine hospitals keep opening and closing their business periodically.

“Gwangju and South Jeolla Province are suffering from supply glut of traditional medicine clinics, as seen by their undue concentration in the region accounting for more than 40 percent of the national total,” said an official at a nonlife insurance company. “If patients visit the hospital, consultants make sure whether they can receive insurance benefits before beginning to treat them, and overtreatments also occur in the process.”

He noted that some hospitals go beyond overtreatment to commit insurance frauds to swindle insurance benefits by making false claims and creating fake patients, forcing the insurance industry to keep a close watch on this region.

Moreover, some Chinese medicine clinics run by non-medical practitioners have jumped into the fray in this area, messing up the local medical environment further. The medical law stipulates only oriental medicine doctors can open hospitals. However, Gwangju Metropolitan Police Agency arrested non-medical practitioner, widely called “manager,” and a herb medicine doctor in April last year, for defrauding 13.9 billion won by illegally opening a Chinese medicine clinic, and charged 165 fake patients who made false claims with crimes.

According to police, the manager and other suspects Chinese medicine hospitals in Dong-gu and Gwangsan-gu in Gwangju for two years from October 2013 to April 2016, swindling 3.4 billion won from National Health Insurance Service (NHIS), and 10.5 billion won from private underwriters. The manager, who used to work as a hospital clerk, borrowed the license from the herb doctor to open these hospitals and mobilized bogus patients from among his relatives and friends. The oriental doctor forged medical records as if he had treated patients every day and made false claims. The agency also confirmed some parents of minors made false hospitalization to get insurance money.

Such rampant irregularities have forced the regional police to set up a research body to study insurance crimes, for the first time in the nation. The study society, composed of experts from Financial Supervisory Service_{금융감독원}, NHIS, and General Insurance Association of Korea_{손해보험협회}, is a group to research ways of preventing and effectively coping with insurance crimes.

“We have established the study society to preemptively tackle the surge in insurance crimes in our area, as shown by a recent series of statistics,” a police officer said. “The group will also study why oriental medicine clinics are concentrated in Gwangju.”

Noting that the police will be able to find countermeasures once they find true causes, he said, “We will conduct an intensive crackdown on those crimes by setting a special investigation period in the crime-infested areas until September 30.”

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