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Japan: Govt Acted Reasonably in Cutting Medical Treatment Fees for FY14
Source: http://the-japan-news.com
Source Date: Saturday, December 21, 2013
Focus: Institution and HR Management
Country: Japan
Created: Dec 24, 2013

To maintain the social security system, it is indispensable to hold down medical expenses, which have continued to increase.

The government has thus decided to substantially decrease medical treatment fees, which go to medical institutions as income, by 1.26 percent for next fiscal year. This is the first reduction of such costs in six years.

When medical treatment costs increase, health insurance premiums and payments at medical institutions also rise. When coupled with next spring’s increase in the consumption tax rate, the increases in medical treatment costs will put a double strain on household finances.

Although the extent of the cut is not sufficient, we believe the government has acted reasonably in having settled the matter by substantially decreasing the medical treatment fees. The cut will likely curb negative effects on spending and business sentiment.

In terms of the medical fee structure, the main portion that includes a doctor’s technical fee was raised by 0.1 percent, while the “charge for medicine” category was lowered by 1.36 percent. The latter move reflected the actual trading prices of medicine.

Private hospitals last year posted a ¥76 million surplus on average, up from the previous year. Salaries of doctors working at hospitals have also increased. The government must have judged that it is increasingly unnecessary to raise medical treatment fees.

However, costs including the fee charged for a patient’s first visit were raised to supplement the greater financial burden medical institutions are expected to face due to the scheduled increase in the consumption tax rate. As a result, the medical treatment fee was raised by 0.1 percent in this main category, which should be considered inevitable.

Various efforts needed

The Liberal Democratic Party proposed increasing the medical treatment fees at the request of parties concerned, including the Japan Medical Association, which has called for improving labor conditions of doctors and mitigating the shortage of doctors. However, the Prime Minister’s Office and the Finance Ministry, both of which aim at keeping medical costs from rising, largely brushed off the request.

Indeed, labor conditions of doctors working at hospitals remain serious. At many hospitals, doctors routinely work long hours, including overnight, and conduct surgeries after their night duties.

However, the main cause of the lack of doctors is the uneven distribution of doctors, depending on treatment department and region. A major improvement in labor conditions of doctors cannot be expected by simply increasing the total amount of medical treatment fees.

The Central Social Insurance Medical Council, an advisory panel to the health minister, will discuss how to distribute medical treatment fees among various fields in the New Year. It is important to intensively distribute health care reimbursements to the busiest departments, such as emergency medical service, pediatrics, obstetrics and surgery. It is also necessary to enhance treatment fees at hospitals, which face a more serious doctor shortage, rather than at small clinics.

Efforts must also be taken to cut wasteful medical expenses. There is a large margin for cuts in drug costs in particular.

Regarding drugs prescribed by doctors, the percentage of lower-priced generic medicine has been kept at about 40 percent. The use of generic drugs should be further promoted.

Also, the compounding fee for drugs available at pharmacies outside medical institutions is higher than that of the same drugs available at in-hospital pharmacies. This is one reason for the increase in the cost of prescription drugs. We hope this point is also swiftly addressed.

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