🏥 Thinking about the 'Deficits' of Municipal Hospitals—Is a Deficit Really Bad?
🩺 Introduction
On Thursday, October 23, 2025, the 'Iwate General Medicine Club,' held on the fourth Thursday of every month, hosted an online event titled 'Thinking About Municipal Hospital Deficits'. The guest speaker was Toru Tsuboya, Representative Director of the general incorporated association Minna no Kenko Lab.
The theme of this event was not merely 'management theory,' but rather
'What is a deficit?' and 'What is a hospital to a community?'
a thought-provoking discussion that re-examined these questions.
💡 Event Overview
Date and Time: Thursday, October 23, 2025, 18:30–19:30
Format: Online (Zoom)
Organizer: Iwate General Medicine Club
Guest: Toru Tsuboya (Representative Director, Minna no Kenko Lab)
🏥 1. Raising the Issue: 'Deficit' Does Not Equal 'Bad'
At the beginning, the following point was confirmed:
'Today, I do not intend to reach a conclusion on whether deficits are good or bad.'
In other words, this event was an attempt to reconstruct 'how we view deficits.' Before labeling the deficits of public hospitals as a 'problem,' it was a dialogue to clarify
what is actually the problem and what is a structural necessity.
Reference Articles:
🗣 2. The 'Reality of the Community' Seen Through Participant Voices
The opinions shared by participants included the following:
'If it is a deficit to protect necessary medical care, it cannot be helped.'
'Deficits caused by a lack of management effort are a problem.'
'The public sector should take responsibility for necessary medical care even if it is unprofitable.'
'It is difficult for nursing care facilities to turn a profit given their personnel cost structure.'
It was shared that we need a perspective that goes beyond mere numbers to discern the meaning of the deficit.
⚙️ 3. The 'First Principles' of Deficits
The reasons for viewing deficits as a problem have the following structure:
Delays in salary payments and loan repayments due to worsening cash flow
Reductions in local allocation tax and risks of administrative guidance
Difficulty in securing doctors and nursing staff
Reduction of services and decline in regional trust
However, a deficit is also the flip side of a 'regional cost.' Hospitals are not merely for-profit enterprises, but social infrastructure that supports employment, tax revenue, and the regional economy.
🏢 4. 'Crowding Out the Private Sector' and the Role of Public Hospitals
'Profitable businesses (health checkups, home medical care, etc.) are handled by the private sector. The public sector takes on businesses that are not profitable but are socially necessary.'
As examples, the crowding-out structures of the postal service, national railways, and JAL were also presented. In small local municipalities, the reality is that maintaining the 'only medical hub, even if it runs a deficit,' is actually a condition for regional sustainability.
💰 5. The Relationship Between Local Allocation Tax and Hospitals
Local allocation tax is a financial resource of approximately 20 trillion yen redistributed from the national government to local governments, and there is a tendency for the allocation amount to increase for municipalities that have large hospitals.
Related materials:
It was analyzed that this structure leads to the 'political and economic background where hospitals cannot be closed.'political and economic background where hospitals cannot be closed'.
📊 6. Comparison of Iwate, Hyogo, and Niigata
Comparison of Prefectural Hospital Kingdoms
Prefecture Revenue Expenses Deficit Amount
Iwate Prefecture 115 billion yen 122.3 billion yen ▲7.3 billion yen
Hyogo Prefecture 163.1 billion yen 172.1 billion yen ▲9.1 billion yen
Niigata Prefecture 74.1 billion yen 78.7 billion yen ▲4.6 billion yen
It is not just Iwate that is particularly bad.
Also, Iwate Prefecture has a surplus of 50 billion yen in its general account,
so 'is there capacity to cover it?' (I am not an expert in public finance, so I will avoid making a definitive statement)
Source:
🏙 7. Municipal hospitals are in a more serious situation
In all cases, the cash flow is in the billions, with deficits on the scale of 1 to 1.5 billion yen.
It was pointed out that the management structure of municipal hospitals is actually more severe than that of prefectural hospitals.
🧮 8. National trends and structural issues
70% of national university hospitals are in deficit.
Hospital management is deteriorating nationwide, leading to deficits.
➡ The question was raised: Is the deficit not due to problems with the hospitals themselves, but rather due tostructural flaws in the medical fee reimbursement system?
🧭 9. Decline in medical and nursing care needs and the 'retreat battle'
From now on, demand for medical and nursing care will certainly decrease in rural areas, starting with Iwate Prefecture.
Therefore, restructuring regional healthcare as a 'retreat battle' is unavoidable.
Reference:
🪶 Conclusion: Questioning Deficits Not as 'Evil' but as 'Meaning'
Instead of 'reducing deficits,' we must 'question the meaning of deficits.'
The deficit of a municipal hospital is not merely an accounting loss,
but in some cases, it is a 'necessary expense' to support the lives and livelihoods of the community.
Beyond fiscal theory, how do we redefine the value of regional healthcare as 'social implementation'?
That very question was at the heart of our dialogue.
That question was the center of this dialogue.
#RegionalHealthcare #MunicipalHospital #LocalAllocationTax #MedicalEconomics #PublicHospital #IwateGeneralMedicineClub #MinnaNoKenkoLab #DeficitHospital #CommunityBuilding
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