2007 Volume 19 Issue 1 Pages 37-51
The purpose of this paper is to investigate the relationship among the need for health care, the amount of health care service provided, and the money transfers to Japanese public hospitals from the viewpoint of horizontal equity. The current allocation system should be revised if horizontal inequity regarding money transfers to public hospitals exists, because individuals with the same need for health care should receive the same amount of health care and the same amount of money transfers to public hospitals, irrespective of the distribution of income.
For this analysis, we used a dataset combining the variables concerning residents' health status and the data of public hospitals. The major findings can be summarized as follows. First, outpatient care services had a pro-poor distribution effect in regard to the need for health care, but municipal subsidies had a pro-rich distribution effect in regard to need. Second, municipal subsidies were almost a horizontal equity for inpatients with cerebrovascular diseases; the subsidies were distributed so as to favor those who could be admitted to public hospitals located outside of their location of residence. Finally, public hospitals can gain revenue by increasing the utilization of beds under the direction of local government, allowing for a reduction in municipal subsidies.
From a theoretical point of view, we concluded that the money transfers to public hospitals are not efficient when their amount depends on a distribution of physicians which does not correspond to the number of doctor consultations.
