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Crafting the fiscal 2018 budget, the government has decided to raise by a small amount the medical treatment prices set under the public health insurance system.

Although the increases will lead to raises in health insurance premiums and fees patients pay out of their own pockets at medical institutions, as well as to an increased tax outlay, it is an appropriate decision that should address the deteriorating conditions that doctors and nurses face in their workplaces. Since the nation’s medical expenses are rising with the rapid aging of its population, it is all the more important for the government to make every effort to provide quality medical services while exploring the most efficient use of limited resources.

Fees paid to medical institutions for their services are reviewed biennially, while those for elderly nursing care services are re-examined every three years. Fiscal 2018 is a year in which both fees are reviewed simultaneously, which happens every six years. The bulging medical and nursing care expenses are an increasing burden on state finances — an issue that gets more serious as the nation heads toward the critical year of 2025, when all of the postwar baby boomer generation will have turned 75 or older, an age bracket that will account for 20 percent of the overall population.

Elderly people are susceptible to chronic diseases. Once they get sick, their conditions tend to be serious. To cope with this phenomenon, the government needs to devise a medical policy that best utilizes the available financial and manpower resources.

Under the government’s budget decision, medical treatment fees paid to hospitals and clinics, which become their income to pay for their personnel and other expenses, will rise 0.55 percent. In an effort to restrain the increase in total medical expenses, the government at the same time decided to cut the prices of drugs covered by public health insurance by 1.45 percent, reflecting real market prices. Combined, overall medical fees will decline by 0.9 percent. Meanwhile, the prices of nursing care services for the elderly, covered by the public nursing care insurance program, will rise 0.54 percent. In accordance with the decision, the Central Social Insurance Medical Council, an advisory body to the health and welfare minister, will decide next spring on the prices of specific drugs, medical treatments and nursing care services.

The fee increases for medical treatment and nursing care services are supposed to help improve working conditions for doctors, nurses and care workers. Deteriorating working conditions can lead to declines in the quality of medical and nursing care services.

Many doctors and nurses at hospitals are subjected to long work hours, leading in the worst cases to death from overwork. Doctors in obstetrics and emergency medicine departments are engaged in taxing work due to a severe manpower shortage. Despite their demanding jobs, pay is low for nursing care workers — their average monthly salary is about ¥100,000 lower than the all-industries average — which in turn exacerbates the severe staffing shortage at many care facilities. It is feared the nation will face a shortage of 380,000 nursing care workers in 2025.

But as far as hospital management is concerned, the latest decision may not help much because the overall medical fees, which include drug fees, will drop. A survey released in November by the health and welfare ministry shows that the average profitability of all general hospitals across Japan, both private and public, in fiscal 2016 was minus 4.2 percent — meaning they were in the red. Profitability declined by a 0.5 percentage point from the previous year.

As the Central Social Insurance Medical Council opens discussions on setting prices of specific drugs and medical services, one of its tasks should be to devise a fee system that will help clearly define the roles of hospitals and clinics. A clear division of roles between these institutions will help reduce the burden of hospital doctors. The council should also help create a rational division of roles and achieve better cooperation among hospitals for treating illnesses of patients, institutions specializing in rehabilitation of patients and nursing care facilities. Elderly people are less likely to suffer acute serious diseases than younger people, and an abundant availability of hospital beds tends to unnecessarily prolong their hospitalization. As the aging of the population progresses, it will be rational to reduce the number of hospital beds for patients of acute diseases and instead boost the capacity of rehabilitation facilities, which today’s elderly people badly need. The council should establish a pricing structure that will best help achieve these goals.

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