[Reimbursement] MHLW Clarifies Ambiguities Regarding Revisions to Prescription Concentration Rate Calculation Methods – Kosei Policy Research Institute

News Highlights

The Ministry of Health, Labour and Welfare (MHLW) has released clarifications regarding ambiguities related to the revision of the calculation method for the “prescription concentration rate” in the FY2024 medical fee revision. This is not merely a change in calculation method but also prompts consideration of healthcare institutions’ management strategies, particularly economies of scale through group formation and tax schemes for transitioning to specific medical corporations or social medical corporations. The importance of medium- to long-term management and succession strategies, considering the revision cycle, is re-emphasized.

M&A Medical Editorial Department’s Perspective

This revision to the prescription concentration rate calculation method is presumed to reflect a stronger policy intent not just as a clerical amendment, but to enhance the “primary care physician” function in regional healthcare and promote the use of generic drugs. For single-specialty clinics and small hospitals in particular, this “prescription concentration rate” can affect the calculation requirements for drug dispensing fees and enhancement of medical functions, making it a critical issue directly impacting management. M&A strategies that leverage economies of scale through group formation, aiming to maintain facility standards and distribute the burden of capital investment, can be a more realistic and strategic option in light of these medical fee revision trends. Furthermore, considering tax schemes with a view to transitioning to specific medical corporations or social medical corporations is also essential for long-term business succession and management stabilization.

Issues Highlighted by This News

• The change in the prescription concentration rate calculation method may reflect policy intentions for regional healthcare collaboration and promotion of generic drug use.
• The impact on the calculation of dispensing fees and enhancement of medical functions in single-specialty clinics, etc., directly affects management.
• Economies of scale through group formation are effective for maintaining facility standards and distributing capital investment burdens.
• The importance of considering tax schemes with a view to transitioning to specific medical corporations and social medical corporations is increasing.

Practical Questions Arising from This News

• Specifically, which calculation requirements for additional fees will change with the revision of the prescription concentration rate calculation method?
• What management strategies can be considered if the generic drug utilization rate is low?
• We would like to know the specific tax advantages and disadvantages of group formation.

If You Feel “Should I Consult?”

Healthcare institution managers who wish to specifically understand the impact of the prescription concentration rate calculation method revision on their institution’s management, or who are seeking professional advice on medium- to long-term management strategies and business succession in light of medical fee revision trends, are encouraged to consult with an M&A intermediary company. Including options such as group formation and corporate status transition, it may be possible to find the optimal solution tailored to your institution’s situation.

M&A Medical (CentralMedience Inc.) supports the business succession of medical corporations, hospitals, and clinics on a full success fee basis as an M&A support institution certified by the Small and Medium Enterprise Agency. Consultations are kept strictly confidential. Free consultation here