The cost of medical services are expected to grow sharply in the coming years with the accelerated aging of the nation's population. The government is seeking to take steps to rein in medical expenses by 2025, when people 65 or older are projected to account for 30 percent of the total population and all of the postwar baby boomer generation will have turned 75 or older. The Health, Labor and Welfare Ministry's recent release of a list of public hospitals deemed to be in need of consolidation and reorganization is a part of such efforts.
The health ministry put 424 municipality-run hospitals and other public institutions, including those run by the Japanese Red Cross Society, on the list — or nearly 30 percent of the 1,455 such institutions nationwide that it surveyed — based on such criteria as the number of cases handled or the presence of similar institutions in nearby areas. The ministry is requesting the municipalities and the institutions to weigh their consolidation and reorganization by September next year, although its call has no legally binding power.
Medical expenses continue to balloon as the elderly population keeps growing and requiring care, and reform of the medical service system is unavoidable to curb the rising costs. A majority of the municipality-run hospitals across Japan are believed to be operating in the red, and the fiscal burden of covering their losses with taxpayer money, to the tune of hundreds of billions of yen each year, weighs heavily on the local governments. The reorganization of inefficient institutions with sluggish records of medical service will be inevitable.