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2020.05.26

【Aging, safety net and fiscal crisis in Japan】No.225: Profit margins of medical corporations that run hospitals in metropolitan areas

In this column series, Yukihiro Matsuyama, Research Director at CIGS introduces the latest information about aging, safety net and fiscal crisis in Japan with data of international comparison.

There are 47 prefectures in Japan. Column No. 215 shows the average operating profit margin of medical corporations that run general hospitals in seven prefectures (Hokkaido, Kochi, Kyoto, Hyogo, Gunma, Tottori, and Nara, which are classified as local) was 2.3%, and the margin of psychiatric hospitals was 4.6%. After reading my report, a member of the Diet, who runs a large-scale medical corporation in Tokyo, requested a survey of medical corporations in metropolitan areas. Therefore, I obtained and analyzed the financial statements of 9,760 medical corporations that run general hospitals, psychiatric hospitals, general clinics, and dental clinics in the metropolitan areas of Tokyo, Osaka, and Aichi.

Interestingly, the average operating profit margin of the 594 medical corporations that run general hospitals in the metropolitan area was 2.3%, which is the same as that in the seven prefectures. Furthermore, I tried to analyze whether there was a difference in profit margin by revenue scale. As shown in Figure 1, the average operating profit margins of the two groups with revenues of less than JPY 0.5 billion, and JPY 10 billion ~ JPY 20 billion were found to be significantly low.

Figure 2 shows the distribution of the operating profit margins of 117 medical corporations that run psychiatric hospitals in metropolitan areas. As in the case of the seven prefectures, there is a large disparity in the profit margins of psychiatric hospitals. Moreover, the average operating profit margin of psychiatric hospitals is 3.5%, which is higher than the 2.3% of general hospitals.


Figure 1 Operating profit margins of medical corporations that run general hospitals

column/225-01.jpg*Please click the table image to find the original size image.


Figure 2 Operating profit margins of medical corporations running psychiatric hospitals

column/225-02.jpg*Please click the table image to find the original size image.

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