Medical services in the Tokyo metropolitan area are facing a serious danger of collapse as hospitals affiliated with private medical universities and private universities' medical schools, the key players in the region's medical services, are finding it increasingly difficult to make ends meet.
These institutions, long beset by higher labor costs than in other parts of the country, have been hit hard by the increase in the consumption tax from 5 percent to 8 percent in April last year. While they now have to pay higher taxes when purchasing pharmaceuticals and medical equipment, they cannot pass that incremental cost on to patients or health insurance associations. This is because medical services are exempt from the consumption tax, so patients and health insurance associations are not required to pay it.
Although the Health, Labor and Welfare Ministry and the Japan Medical Association are aware of the problem, they have not taken any countermeasures.