A panel within a group of experts advising the government on social security has released an estimate of future medical and nursing-care costs based on four scenarios. The panel, established in January 2008 by then Prime Minister Yasuo Fukuda, states that if no reform improvements are carried out in medical and nursing-care services, the consumption tax needs to be raised by about 3 percentage points. If improvements are carried out, the tax would have to be raised by about 4 percentage points.

The estimate is just a starting point for discussing reform of those services and ways to raise necessary funds. Both the ruling and opposition forces should present their proposals, and then make them and other ideas, including this report, the subject of fruitful discussion.

The panel estimated the costs for 2025, when the graying of the population is expected to peak. Total costs for medical and nursing-care services in 2007 were about ¥41 trillion. If no reform improvements are carried out, they will reach about ¥85 trillion in 2025. If improvements are carried out, they will amount to between ¥91 trillion and ¥94 trillion.

All the three reform scenarios envisage increasing the number of doctors and nurses to cope with emergency cases, shortening the length of hospital stays and increasing the number of nursing-care facilities for recuperating patients. The number of nursing-care workers and helpers will have to more than double from the current 1.17 million.

The no-reform path will need about ¥11 trillion more in tax money — corresponding to a raise of about 3 percentage points in the consumption tax rate — and the reform paths about ¥14 trillion more — an increase of about 4 percentage points in the tax rate. Additional insurance premium payments of ¥9 trillion and ¥12 trillion will be needed, respectively.

The estimate shows fairly concretely the relationship between additional payments and improvements in services people will receive. But closer examination may reveal shaky assumptions. The reform requires reviews of the functions of various medical institutions, doctors, nurses and nursing-care workers, and changes of remuneration for medical professionals and nursing-care workers. These issues merit wide public discussion.