The government in its fiscal 2014 draft budget has decided to raise medical fees by an average 0.1 percent. Part of this increase reflects the consumption tax increase starting in April. Revenue from the fee hike is expected to be used mainly to improve emergency medicine and pediatric and obstetrical treatment — fields where quality care has rapidly declined in some localities due to a shortage of medical doctors.

Medical fees comprise two components — the first related to medical skills provided by doctors and the other related to drugs and medical instruments.

While the draft budget increases fees for the first component by 0.1 percent, it decreases them for the second component by 1.36 percent. To reflect the rising consumption tax, a 0.63 percent increase was added to the first component and a 0.73 percent increase was added to the second component. In total, overall medical fees were increased by 0.1 percent.

This increase comes at a time when the financial condition of medical institutions is improving, thanks to two rounds of medical fee raises during the Democratic Party of Japan administration.

In fiscal 2012, the surplus grew by 7 percent for clinics, and 3 percent for private hospitals, from the previous fiscal year. Still, it must not be forgotten that in some locations, emergency medicine and pediatric and obstetrical services are on the verge of collapse.

The Finance Ministry and labor and business organizations wanted to decrease overall medical fees in order to reduce the impact of the consumption tax hike on patients. But the health and welfare ministry and lawmakers from the Liberal Democratic Party who lobby for the medical profession called for the increase, citing the need to improve the quality of medical services. The overall increase of 0.1 percent is the result of their negotiations.

Apart from the increase in medical fees, which will bring in an additional ¥40 billion, the government has set aside a fund of about ¥90 billion to improve medical services in each prefecture. It plans to use the fund to reorganize local medical organizations and to improve nursing care services for the elderly.

But it must take care to prevent the political tendency to shower money on prefectures without focus and to favor particular organizations or localities. In some areas, some medical institutions and some departments within hospitals — mainly those involving emergency medicine, pediatric and obstetrical departments — are being closed because of the doctor shortage.

The main reason for this situation is that many doctors choose to work in urban instead of rural areas. The guiding principle for the use of the fund should be to meet the needs of local residents. It will also be important to create a mechanism that enables them to examine whether the fund is properly used.

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