Tax hike hits hospitals hard

Unlike many countries that do not tax essentials such as food and medicine, Japan's consumption tax hike from 5 percent to 8 percent applies to both, and will negatively affect hospitals and clinics. While grocers can increase prices 3 percent to cope with the increase and pass it on to the consumer, hospitals do not have this option.

The government sets health care fees for both inpatients and outpatients. These fees cannot be altered. In fact, the fees that can be charged have been reduced overall since April 1, adding insult to injury. Only things like the room charge and those procedures not covered by national insurance (such as childbirth) can have their fees increased.

So patients can look forward to higher room charges, a higher fee for delivering a baby, a higher parking fee and higher fees for all commercial activities that operate within the hospital such as the barber shop, the laundry and the coffee shop. Staffing might be reduced. Instead of salary increases now touted by politicians, bonuses are likely to be reduced, salaries capped and hiring freezes imposed. Linen might not be changed as often, food quality and quantity might suffer, and maintenance might get deferred.

The hospital might appear a bit darker as lower-wattage light bulbs are used, and the hospital might feel a bit colder in winter and warmer in summer as the hospitals struggle with increases in electrical utility costs while nuclear power facilities are idled.

New technology could be delayed because of increased costs, forcing hospitals to make due with adequate but older-generation technology. Perhaps hospital physicians will be restricted from attending professional conferences, and the medical library will cancel some journal subscriptions.

All of this belt tightening will not counteract the loss of revenue occasioned by paying the additional 3 percent in tax. Because 90 percent or more of a hospital's revenue comes from providing health care under fees strictly regulated by the government, the reduction in revenue for hospitals will be severe.

With so many hospitals already borderline bankrupt, or heavily leveraged financially to stay open these days, watch for reductions in service and hospital closures later this year. Expect this trend to accelerate in the near future after the consumption tax is increased further to 10 percent.

Just when the economy seems to be improving, hospitals get an anchor chain instead of a life jacket, and patients are sure to notice. We are going backward, but as usual, there is no outcry from consumer groups, the Japan Medical Association, the Japan Hospital Association or the Ministry of Health, Labor and Welfare. What a shame.

The opinions expressed in this letter to the editor are the writer's own and do not necessarily reflect the policies of The Japan Times.