December 7, 2021

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Japan hospitals slide deeper into red amid virus crisis: survey

The profit margin at hospitals, excluding psychiatric institutions, in Japan stood at minus 6.9% on average in fiscal 2020, worsening by 3.8 percentage points from the previous year, a health ministry survey showed Wednesday.

A ministry official offered the view that the result came as people refrained from visiting medical institutions and the number of surgeries dropped amid the novel coronavirus epidemic.

Meanwhile, the profit margin came to plus 0.4% when taking into account subsidies such hospitals received under a state program aimed at supporting efforts to secure hospital beds for COVID-19 patients and implement infection prevention measures.

The ministry reported the results of the Survey on Economic Conditions in Health Care for the fiscal year that ended last March to the Central Social Insurance Medical Council, which advises the health minister. The results will be used as basic data for a fiscal 2022 revision of medical fees under health insurance programs. Such a revision is conducted biennially.

For the latest survey, 1,218 hospitals and 1,706 clinics across Japan gave valid answers.

The survey showed that hospitals run by medical corporations maintained a positive profit margin of 0.1%.

The profit margin at national and public hospitals came to minus 9.2% and minus 21.4%, respectively.

Clinics with less than 20 beds for inpatients, dental clinics and health insurance pharmacies enjoyed a positive profit margin of 3.8%, 6.3% and 6.4%, respectively.

The average annual income of hospital directors fell slightly from the previous fiscal year to about ¥26.9 million and that of doctors edged down to some ¥14.68 million.

Nursing staff’s average annual income was nearly flat at some ¥5.06 million.

“Hospitals were in the red without subsidies, and their management that relies on subsidies is unstable,” Japan Medical Association President Toshio Nakagawa said, stressing the need to raise the main portion of medical fees covering personnel costs.

By contrast, the Finance Ministry is calling for a cut in medical fees due to growing health care expenditures amid the aging of society.

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