Japan hospitals face soaring nurse referral fees
· UPIMay 18 (Asia Today) -- Japanese hospitals are facing growing financial pressure as they pay large referral fees to private recruiting agencies to hire nurses and doctors amid a worsening medical staffing shortage.
The Yomiuri Shimbun reported Monday that Japan's Ministry of Health, Labor and Welfare will strengthen healthcare hiring services through Hello Work, the country's free public employment office, again this year.
When Japanese medical institutions hire nurses or doctors through private recruiters, they typically pay fees equal to 20% to 30% of the worker's annual income. In some cases, hiring a single nurse can cost 1 million yen, or about $6,300, based on XE's recent mid-market exchange rate.
According to the ministry, Japanese medical institutions paid 88.1 billion yen, or about $554 million, in referral fees to private agencies in fiscal 2024. That included 28.3 billion yen for doctors and 59.8 billion yen for nursing staff.
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Compared with fiscal 2019, referral fees rose about 30% for doctors and about 60% for nursing positions.
The system may be unfamiliar to Korean readers. South Korea also faces medical staffing shortages, but hospitals do not commonly pay large private referral fees each time they hire a nurse on the same scale seen in Japan.
In Japan, many job seekers use private agencies for convenience, while hospitals increasingly depend on them because direct recruitment has become difficult.
One mid-sized hospital in Tokyo hired 31 nurses and other workers through referral agencies in 2025. Including the cost of securing on-call doctors, referral fees totaled about 40 million yen, or about $252,000.
The hospital recorded a loss as it also faced rising prices and higher wages for existing staff. Hospital officials said about 80% of midcareer hiring now depends on private agencies because job postings through Hello Work draw few applicants.
Hospitals are especially sensitive to nurse recruitment because Japan's medical reimbursement system links part of hospital revenue to nurse staffing levels. If nurse numbers fall, hospital income can also decline.
That creates a cycle in which hospitals must pay high fees to secure nurses even as labor shortages raise costs and threaten revenue.
Medical groups are calling for tighter regulation. In March, the Japan Medical Association and hospital organizations asked the ministry to strengthen rules on medical recruiting businesses, including possible caps on referral fees.
Japan Medical Association President Yoshiro Matsumoto warned that difficulty securing healthcare workers could threaten regional medical systems.
The ministry remains cautious about fee caps. Instead, it plans to strengthen Hello Work by having staff visit medical institutions year-round to collect job listings and share information with public nurse referral services.
Japan's Ministry of Finance has also raised concerns, noting that medical reimbursement is funded by insurance premiums and taxes. If too much hospital funding flows to referral fees, it could add pressure for higher insurance premiums.
-- Reported by Asia Today; translated by UPI
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Original Korean report: https://www.asiatoday.co.kr/kn/view.php?key=20260518010005010