Over 60% of Japan’s Hospitals Operating at Deficit as Cost of Living and Labor Rises, Survey Says

The Yomiuri Shimbun

15:24 JST, March 13, 2025

More than 60% of hospitals in Japan have been operating in the red due to the rising cost of living and higher wages, according to organizations such as the Japan Hospital Association.

Six organizations announced at a press conference Wednesday the results of an emergency survey, which found that hospitals are facing more severe financial difficulties after medical service fees were revised in fiscal 2024.

They asserted that the rising cost of living and rising wages have caused the cost of medical services, including treatments, to exceed hospitals’ revenue, resulting in a deficit in their current profit.

The survey was conducted from January to February among 5,901 hospitals belonging to the six organizations, with 1,816 facilities, or 30.8%, responding. Balance sheets from June to November last year, after the revision, were compared with the same period in 2023.

The results showed 61.2% of hospitals reporting a deficit in current profit, up by 10.4 percentage points from 50.8% in 2023.

While revenue from medical services, such as from inpatient and outpatient treatments, increased by 1.9%, personnel costs rose 2.7% and expenses for medical supplies and utilities grew by 2.4%, meaning costs outpaced growth in revenue.

With hospitals’ bottom line looking worse and worse every year, the six organizations and the Japan Medical Association emphasized the urgency of the situation in a joint statement on Wednesday, saying, “If things continue as they are, medical institutions will one day suddenly disappear from the community.”

“The situation is extremely severe and urgent,” said Japan Medical Association President Kichiro Matsumoto. “We need a system for medical service fees that adequately responds to rising prices and wages.”