Abstract
During the last year, we had a very severe situation with the strike of physicians working in medical facilities. From that time, many politicians and scholars insisted on the expansion of public hospitals to enhance the public role in the medical care sector. They think that private medical facilities work for profit motivation and that the high proportion of private to whole facilities is an obstacle to the public function of medical care under social insurance system. They found that one of the reasons for failing to prevent the physicians' strike was the high proportion of private facilities. Others insisted that the strike was not a good reason for the expansion of public hospitals. The physicians' strike was a very rare case, and it is not a good basis for generalization of the discussion of public hospitals. Last year almost all apprentice physicians in public facilities took part in the strike, and consequently the public hospitals also lost the role of public function. They view this increasing involvement of government in the medical sector as improper and the cause of inefficiencies. In this paper we review the debate over the expansion of public facilities. To clarify the debate, we review traditional criteria for the role of government in a market system and to apply these criteria to medical care. There are two traditional areas where government Is acknowledged to have a role in a market system: market imperfections and market failure. Where market imperfections and market failure exist, there may be a role for government. The justifications for government intervention are consumer protection and the existence of externalities. One of externalities is to provide medical care for the poor. The appropriate measures to provide medical owe to the poor can be sought in both demand and supply side subsidies. National health insurance is a method of demand subsidies and establishment of public hospitals is a method of supply side subsidies. Under the National Health Insurance System, the expansion of public hospitals is not an appropriate subsidy policy.
