TOKYO, Dec. 20, 2024—Stubbornly spiraling goods and services prices and labor are imperiling Japan’s for-all national healthcare service as a rapidly growing number of large hospitals decry deepening balance sheet difficulties, disabling them to pay fair compensations to medical practitioners.
Japan’s large hospitals have hardly been profitable over decades, their revenues controlled rigidly by the government’s policies and annual National Health Insurance reimbursement reviews. They were released temporarily from the saga 2020-23 thanks to COVID-19 government subsidies, but it was discontinued in 2023.
Financial conditions of large Japanese hospitals in 2023 as a whole were not available yet, but Tokyo municipal-run hospitals’ results showed that their aggregate deficit in that year was close to 20 billion yen ($135 million), compared with 10 billion yen profit the previous year, as municipal government experts have suggested a larger deficit in 2024 warning that other large hospitals also are struggling.
What those rough figures laid bare was the financial plight of those Tokyo municipal hospitals that has no quick solutions anymore. Compared with 2019, the year before the COVID-19 outbreak, for example, The Institute of ScienceTokyo Hospital’s 2023 revenue was up 14 percent – but expenditures outgrew it by 17 percent because of higher labor, energy, outsourcing and other cost increases.
A doctor at a Japan Community Healthcare Organization (JCHO) hospital, which is a national government hospital chain, told The Prospect that her hospital told her that the facility began experiencing financial difficulties after subsidies were cut off in 2023. Her unit reduce the nursing staff to by 1/3rd while delaying replacing X-ray, EKG and other equipment with new ones.
She was told that medical staff compensations would be kept very tight, she said. Work conditions being as such, doctors and nurses that feel competent about their skills are migrating to private hospitals and clinics, or electing to open their own services.
Pharmacies also are struggling for survival as NHI reimbursements paid to them are tightly regulated and becoming slimmer than before, an owner of a small Tokyo pharmacy chain said.
He said that the current conditions are likely to continue over coming years and that what’s happening in Tokyo is bound to ripple into other Japanese areas, threatening the viability of Japan’s for-all medical service.
###