The proposal, which the government said was conditional on medical students agreeing to return to class, could potentially send the plan pushed by impeached President Yoon Suk-Yeol back to the drawing board in an effort to restore a healthcare system that has been upended by the walkout and boycott.
Here are some details about South Korea's medical system and the dispute.
DOCTORS BY THE NUMBERS
South Korea has a universal healthcare system funded by a public health insurance system though most doctors work in private practices and hospitals are usually privately owned.
The doctor-to-patient ratio of 2.6 per 1,000 people is one of the lowest among developed countries, according to data from the Organisation of Economic Cooperation and Development (OECD) countries. In contrast, top ranked Austria has 5.5 doctors per 1,000 people.
The government planned to increase admissions to medical schools in 2025 by 2,000 from the current 3,000 to fill what it projects to be a large shortfall of doctors by 2035.
The trainee doctors walked out claiming the increase would lower the quality of medical education and the qualification of new doctors. They argued that rather than just an increase in numbers more reform was needed in order to attract doctors into essential care such as emergency or pediatrics. Also it takes around 10 years for a doctor to be fully trained.
COMPENSATION
South Korea's specialist doctors are, on average, some of the highest paid among developed countries, with an average annual income of $192,749 in 2020, according to OECD data.
General practitioners, however, are paid less and there is also a significant disparity in specialists' income, according to health ministry data. Paediatricians are the lowest paid, making 57% less than the overall average. Plastic surgeons and dermatologists in private practice are usually better paid.
One trainee doctor involved in the dispute told Reuters he worked over 100 hours a week at a top university hospital for 2 million won to 4 million won ($1,400-$2,800) a month, including overtime pay. A first-year U.S. resident averages about $5,000 a month, according to American Medical Association data.
MEDICAL FEES
Under South Korea's national health insurance system, hospitals can only receive a fixed fee for "essential" medical care from patients, but fees set by the government were often too low to cover costs, some doctors say.
This had led to doctors shunning "essential" medical fields such as neurosurgery, emergency care and paediatrics, and instead going into fields such as dermatology and cosmetic surgery where they can make money off procedures that are not insured, they said.
The government has said its plan will lift investment and doctors' pay in regional and rural areas and that it has raised fees in essential services.
PUBLIC SUPPORT
The plan to increase medical school admissions initially drew broad public support. A Gallup Korea poll in the early weeks of the dispute showed about 76% of respondents backing the policy.
President Yoon's approval ratings edged up but critics accused him of picking a fight over medical reforms to benefit his party ahead of parliamentary elections in April last year.
The protracted dispute between the government and the medical community plus the fallout on patient service gradually eroded public support. An opinion poll by Hangil Research in January showed support for a medical school increase was 56%.
HOW MIGHT THE DISPUTE PLAY OUT?
Despite the compromise proposed by the government on Friday, it was not clear whether trainee doctors would return to work and medical students to class, as they have rejected a number of previous government moves to address their objection.
But the initial plan that focused on increasing the number of medical students has lost momentum, especially with the impeachment of Yoon over his short-lived martial law in December.
In 2020, Yoon's predecessor, Moon Jae-in, shelved a plan to boost doctor numbers after a strike by doctors that also coincided with a wave of coronavirus infections.
