Finance Min. OKs 0.9% total medical fee cut

December 19, 2017

Tokyo- Japanese Finance Minister Taro Aso agreed on Monday to cut total medical fees covered by the country's public health insurance system by 0.90 percent from the current level.

The planned reduction under the cost revision for fiscal 2018, which starts in April next year, will mark the second straight decline in the fees, which are reviewed biennially in principle.

Of the total fees, drug prices are set to fall 1.45 percent reflecting market prices, while medical service fees will rise 0.55 percent, according to the agreement with the health minister as part of the fiscal 2018 budget compilation process.

The government now expects to achieve a target of cutting social security expenditures by 130 billion yen. The cabinet is seen adopting a draft budget on Friday.

Detailed prices for specific medical treatments will be set by the Central Social Insurance Medical Council, which advises the health minister, next February.

The envisaged decline in total medical fees is expected to reduce the amounts of relevant taxes and insurance premiums as well as out-of-pocket fees paid by patients, which basically amount to 10-30 percent of the total costs of the treatment they receive.

The margin of decline for drug prices will expand to 1.74 percent if reform measures, including a change to surcharges for new drugs, are taken into account. In this case, the drop in overall medical fees will reach 1.19 percent.

Initially, the finance ministry called for a reduction also in medical service fees, which are mainly intended to cover personnel costs at hospitals.

But it accepted the 0.55 percent rise, up 0.06 percentage point from the previous revision, in view of the support of the Japan Medical Association for Prime Minister Shinzo Abe's Liberal Democratic Party, which won a landslide victory in the Oct. 22 House of Representatives election.

Of the medical service fees, the government is set to lift general treatment fees by 0.63 percent, dental fees by 0.69 percent and dispensing fees by 0.19 percent.

Japan will also raise fees 0.54 percent for elderly nursing care services and 0.47 percent for services for the disabled in the fiscal 2018 revision, pushing up national expenditures by some 20 billion yen in total.

The fees for the care services for elderly people, reviewed triennially in principle, will see the first rise since fiscal 2012, except for special adjustments.

On Monday, the government decided to distribute to local governments 16 trillion yen in tax grants, including special budget account funds, in fiscal 2018. The figure is down by 300 billion yen from the current fiscal year, marking the sixth straight year of decline.

The planned reduction follows an increase in local tax revenues thanks to economic recovery. Jiji Press