Financial Performance of Medical Corporations in Japan From 2016 to 2022: A Nationwide Longitudinal Analysis

Medical corporations (Iryohoujin) are central to Japan's healthcare delivery, yet their financial conditions have not been comprehensively assessed nationwide. This study aimed to describe financial trends and structural characteristics of hospital-operating corporations from fiscal year (FY)2016 to FY2022 and examine fluctuations, including during the FY2020-FY2021 coronavirus disease 2019 (COVID-19) pandemic.

A longitudinal analysis was conducted using financial data covering 95% of all hospital-operating medical corporations. Financial indicators, including total assets, medical revenue, and profit margin, were tracked from FY2016 to FY2022. Subgroup analyses were based on organizational size and integration. A linear mixed-effects model examined factors associated with profitability.

The number of hospital-operating medical corporations declined from 4,631 in FY2016 to 4,469 in FY2022. By FY2022, total assets and medical revenue reached 15.9 trillion Japanese yen (JPY) and 12.5 trillion JPY, respectively. Median medical profit margin declined from 1.8% (interquartile range [IQR], -1.2 to 5.3%) in FY2016 to 0.6% (IQR, -3.4 to 4.3%) in FY2021, then recovered to 1.6% (IQR, -2.5 to 5.5%) in FY2022. Smaller corporations, with fewer hospitals and beds, were more financially unstable, especially during the COVID-19 pandemic. A linear mixed-effects model showed that medical profit margin was negatively associated with hospital number and positively associated with long-term care and psychiatric beds.

This study highlights the structural scale and financial dynamics of Japanese medical corporations, revealing a large but unevenly resilient sector in which not only hospital size but also bed composition significantly influences profitability. These findings may inform policy discussions on healthcare system sustainability and financial support.