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Medical institutions are struggling to survive in the wake of a government policy to curb national medical expenses from the current 30 trillion yen a year.

To meet the challenges presented by an era of fiscal austerity, many hospitals have closed or streamlined departments, merged with other hospitals or actively sought more volunteers.

Nowhere has this trend been more evident than in the branch of medicine devoted to treating children. The pediatrics department at Tokyo’s Aoyama Hospital will provide a concrete example of this when it closes its doors at the end of March.

The hospital in Shibuya Ward, which is run by the Tokyo Metropolitan Government employees’ mutual aid association, will also close three other diagnostic and treatment departments, including obstetrics.

Hospital officials say the closures are part of structural reorganizing made necessary by the continuing trend toward fewer children and the difficulty in funding the affected departments.

The hospital now plans to focus on lifestyle-related illnesses such as diabetes.

Aoyama Hospital is not alone in abandoning pediatrics. There were 3,528 pediatrics departments in general hospitals in 1999, a decrease of 14 percent from the peak in 1990, according to the Health, Labor and Welfare Ministry.

Aoyama Hospital’s pediatrics department had a daily average of 24 outpatients in fiscal 2000, compared with 40 in fiscal 1989. Its elimination of pediatrics is symptomatic of the major changes public and private hospitals are undergoing to increase revenue and restructure.

National medical expenses are expected to balloon to more than 80 trillion yen in 25 years in the face of a rapidly aging society, and the state’s insurance balance sheet is virtually in paralysis.

Keiju Medical Center in Nanao, Ishikawa Prefecture, is taking an unusual approach to pursue profitability. It has opened an in-house 24-hour convenience store and an open-air bath for paying customers to bring in revenue.

Center Director Masahiro Kanno said: “In an ordinary medical institution, the hospital director’s family sets up a company to handle medical instruments and bedding. The hospital may be in the red but the family company makes profits. The general public no longer permits such means of management.”

The medical center was able to open the convenience store and bath after receiving certification as a “special medical corporation” in 1999. The center has also introduced an “electronic critical pass” to give patients computer-stored information on treatment received and their expected discharge date.

Okitama General Hospital in Yamagata Prefecture is typical of the move toward streamlining medical facilities. It was jointly opened in November by the Kawanishi Municipal Government, the prefectural government and three local municipalities, with state-of-the-art equipment allowing delivery of advanced medical services to regional residents.

Its inauguration prompted the four municipalities to transform their old hospitals into satellite medical facilities.

Hospital Director Shozo Tsuboi said the establishment of Okitama hospital has made it possible “for a big hospital and clinics to cooperate in regional medical services.”

An official of Nagai, one of the four municipalities operating the hospital, said the four towns and cities were forced to jointly manage the new hospital because of a lack of financial resources and the continual deficits recorded by their respective medical facilities.

The Public Management, Home Affairs, Posts and Telecommunications Ministry said 758 local governments nationwide are engaged in medical business and 344 of them are in the red. Their debts form part of the nearly 666 trillion yen in combined debts held by the state and local governments.

Ako City Hospital in Ako, Hyogo Prefecture, has turned to volunteers to address its debt problems. It now has 130 registered volunteers serving as guides, assisting wheelchair-bound patients or holding exhibitions and concerts to help the hospital reduce deficits.

Osaka-based citizens group Consumer Organization for Medicine & Law received 661 complaints in 2000 from citizens unhappy about exorbitant fees charged by hospitals for the gap between insurance coverage and the price of beds in single rooms.

The Institute for Health Economics and Policy said these charges replace the income previously garnered by hospitals through pharmaceutical sales.

Sanno Hospital in Tokyo, noted for providing cutting-edge infertility treatment, in November became the first hospital in the nation to open a new ward in which 84 percent of the beds are available for those willing to pay the difference in bed fees.

Director Kuninori Takagi said: “Medical care is a service business. The introduction of the principle of competition is necessary through deregulation. It is impossible to embrace everything in public insurance.”

Health plan lagging

The government’s plan to provide round-the-clock emergency medical care for children nationwide is progressing far slower than expected, due largely to a dearth of pediatricians, according to Health Ministry officials.

The three-year plan began in fiscal 1999, but as of the end of fiscal 2000, on March 31, only 51 of 360 districts across the nation had emergency 24-hour child-care available, against a target of 240 districts by the end of the second year, the officials said.

The Health, Labor and Welfare Ministry now hopes to reach the 240-district target by the end of this fiscal year.

Many pediatricians are too busy with their regular work to participate in the plan, a pediatrics expert said.

Beginning this fiscal year, the ministry pushed the plan forward by increasing subsidies to hospitals participating in the plan to 26,994 yen per day from 20,610 yen.

The plan covers seriously ill children who require hospitalization or surgery. It aims to eliminate the risk of these children being rushed to several hospitals before a pediatrician is found.

Each designated district is required to have at least one hospital with pediatricians on call at all times.

The central, prefectural and municipal governments are required to share part of the personnel costs the hospitals have to bear.

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