【Aging, safety net and fiscal crisis in Japan】No.187:Total revenues of social medical corporations exceed JPY 2 trillion

In Column No.16 and 149, I commented on the significance of social medical corporations in Japan's health system and the data of their operating margins. A social medical corporation is an entity that receives tax-free preferential treatment by satisfying the following two conditions. The first is practicing policy medicine such as emergency, perinatal period, remote medical care, etc. without subsidy, which national and public hospitals regard as a cause of their deficit. The second is that the founder relinquishes ownership to management resources.

According to the Ministry of Health, Labour and Welfare, as of January 2019, there are 302 social medical corporations in Japan. Of these, 299 financial statements have been approved and disclosed by regulatory authorities. The social medical corporation system started in April 2007. Since then the number has continued to increase steadily, and their total revenue has exceeded JPY 2 trillion (Table 1). Of these, 59 social medical corporations are entities with revenues of over JPY 10 billion. However, as shown in Figure 1, there is a large difference in operating margins.

Table 1 Total of financial data of 299 social medical corporations (2017)

Source: Financial statements of social medical corporations

Figure 1 Performance of 59 social medical corporations with revenues over JPY 10 billion (2017)

Source: Financial statements of social medical corporations