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Japanese hospitals struggled for profitability in FY 2018: survey

This file photo shows a hospital room. (Kyodo)

TOKYO (Kyodo) -- Hospitals in Japan faced continuing financial difficulties in fiscal 2018, with institutions across the country registering a 2.7 percent negative profit margin on average, a government survey showed Wednesday.

    The negative profit margin for those hospitals with 20 or more beds was 0.3 percentage point better than in the previous year, while clinics with up to 19 beds remained in the black, according to a biennial health ministry survey.

    Profit margins of health clinics, dental clinics and pharmacies stood at 12.9 percent, 20.5 percent, and 5.5 percent, respectively.

    The results of the survey by the Health, Labor and Welfare Ministry will be used to determine the size of medical service payments paid to health institutions under the public social insurance scheme. The fees will be reviewed in April.

    In the year through March, about 42.6 trillion yen ($390 billion) in total was paid to healthcare institutions in the country.

    Among hospitals, public institutions struggled in particular with those run by local governments incurring a negative profit margin of 13.2 percent, while national hospitals logged negative 2.3 percent.

    Private hospitals were in the black with a profit margin of 0.9 percent, with their directors earning about 30.42 million yen annually on average, down 0.5 percent from fiscal 2017.

    Heads of clinics earned about 28.07 million yen annually on average, while doctors at private hospitals earned about 16.41 million yen a year, according to the survey.

    Medical service fees are funded by taxes, insurance premiums and out-of-pocket payments by patients, and increased service fees lead to inflated medical spending and a heavier contribution burden.

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