Japan Medical Service Fee Revision Talks to Begin in Earnest

Tokyo, Nov. 29 (Jiji Press)–Japan is set to begin full-fledged discussions on revising medical service fees, set by the government under the public health insurance program, in fiscal 2026. Medical sector organizations including the Japan Medical Association are calling for a drastic fee hike to deal with inflation and wage increases, but the Finance Ministry opposes this, arguing that medical corporation-operated clinics are financially stable and can do without a sharp fee raise. The two sides are expected to debate fiercely on the matter until the end of the year, when the government will decide the overall revision rate. In the previous revision for fiscal 2024, the main portion of the fees, which cover labor costs for medical workers, was raised by 0.88 pct. The hike exceeded the 0.43 pct increase for fiscal 2022, reflecting higher wages and soaring food costs. Despite this, many medical institutions are operating at a loss due to inflation. According to a health ministry survey, about 60 pct of general hospitals in the country posted red ink in fiscal 2024. Public hospitals especially struggled, reporting a profit margin of negative 18.5 pct. “The main portion (of medical service fees) should be increased by at least 10 pct,” a source from one medical sector group argued. Some ruling bloc lawmakers believe it is possible to reward medical workers with a hike of the main portion by 2 pct to 3 pct, as revenue from health insurance premiums, which finances medical service fees, is growing thanks to wage increases across the country. The Finance Ministry recognizes the need for a fee raise to help medical workers deal with inflation, but remains cautious about a significant increase as this would lead to higher out-of-pocket payments by patients and insurance premiums for the working generation. The ministry has called for a well-balanced revision, pointing out that clinics are financially better off than general hospitals. Clinics run by medical corporations logged a profit margin of 4.8 pct in fiscal 2024. Attention is also being paid to how official drug prices will be revised. In the past, hikes in medical service fees were funded by reductions in official drug prices, as market prices were often below the government-set prices. As the gap between market and official prices has been mostly eliminated since the government began revising official prices annually from fiscal 2021, however, a senior health ministry official said, “No significant funding (for an increase in medical service fees) can be expected.” END [Copyright The Jiji Press, Ltd.]