Hospital Management Faces Numerous Challenges Despite Positive Revision – Nikkei Medical

The 2024 medical fee revisionwage increaseswas a positive revision with a focus on, however, as Nikkei Medical points out, the actual management sentiment on the ground remains severe. Especially for small and medium-sized hospitals, in addition to rising prices and utility costs, responding to the base-up evaluation fee and other factors, such asstructural increases in personnel costsare squeezing profits. This is not merely a deterioration of income and expenditure, but a situation where the "sustainability" of medical institutions is fundamentally being questioned.

In the context of medical M&A, this "hardship amidst a positive revision" accelerates the polarization of the industry. Hospitals struggling with self-funded wage increases and capital investments have entered a phase where they should accelerate integration with large groups or neighboring corporations that possess financial strength and recruitment capabilities."We're not in the red, so we're fine."Such a judgment is dangerous. Facing cost increases that outpace the growth in medical fees, it is crucial to consider organizational restructuring before the transfer value of the corporation passes its peak.

Directors facing succession issues should view this revision as an opportune moment for a "management handover." By partnering with a financially strong entity while their institution's functions are still needed in the community, they can improve staff employment conditions and enable updates to the latest equipment. This, in turn, becomes the best strategy to safeguard stable medical supply for local residents.