Despite the fact that Japan is now rapidly facing the aging of society, the reform for the sustainable health system has not yet been realized, nor has that for the pension system. In the four chapters that comprise this paper, we consider Japanese health reform from the view point of patients/people. Firstly, we begin to consider why it is necessary to reform the health system urgently by forecasting future health expenditure. Secondly, we point out that too many medical regulations and powerful interest groups prevent urgent reform. Thirdly, the outline of our reform is aiming at introducing information technology to the field of the health market for the purpose of bridging the information gap between doctors and patients and recovering the role of insurer. Lastly, our concrete plan of the reform is proposed which would enable insurers to have a lot of information through transforming the patient chart to digital data and to get a countervailing power against the hospitals, for the purpose of improving the quality and efficiency of the Japanese health service, in addition to the deregulation lation of the health market. Concerning to the most outstanding problem of the health system for the elderly, we are also proposing a system of mutual aid between generations and the creation of a nationwide consensus on terminal care.

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According to the OECD (1999), health care policy should take into account a more integrated approach to health care and pursue four goals simultaneously: greater equity, increased efficiency, enhanced effectiveness and more empowerment of the public. These goals are briefly examined and reviewed from the viewpoint of economics here.
As for the Japanese health care system, equity in the cost-sharing among schemes, micro-economic efficiency and empowerment of the public seem to have some problems. Recent reform discussion about strengthening the “function of insurers” in the public health insurance system is related to these problems.
This article investigates the recent policy discussions about the role of health care insurers in Japan. They can be understood as an equivalent of the health care reform trends in several European countries in the 1990s, putting emphasis on the introduction of “quasi-market mechanisms”into the health care system. In other words, they can be defined as a transition from the traditional “command and control”model to the “contracting”model.
Two concrete reform proposals are made in the latter part of the article. One is strengthening the information function of health care insurers. The other is participation of insurers in decision-making about the regional medical supply system through allocating funds for capital expenditures of medical institutions. Both reforms are expected to enhance the role and the function of insurers as a countervailing power against the powerful provider-side of health care and to improve efficiency and quality of care.

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One of the issues selected is the consideration of the establishment of a medical system for the elderly from the perspective of the patient, and the handling of terminal care for the elderly and the effects on medical costs are examined. Terminal care through hospice programs has been being introduced in Japan since the 1990s, but it is hard to claim that it has become well established in society. Medical professionals have a greater awareness than the general public about selecting hospice as the form of assisted care.
It is pointed out that even economic inducements, such as “assisted care ward admission fees”and “general medical fees for in-home terminal treatment”through medical reimbursements have not had a large impact, even with increasing numbers of cancer patients and elderly persons living at home. It is emphasized that the proportion of medical costs spent on terminal care treatments is not that large, and the importance of quality of life (QOL) of the elderly as well as the appropriate allocation of resources to achieve this is clarified. Future issues include the following: (1) There is no way to verify the current confusion and intent of the elderly with regard to terminal care, so p rudent discussion is necessary to handle extreme arguments. (2) More so than the terminal care, there are problems with increasing medical costs due to long-term care of elderly patients, including hospitalization. Priority must be placed on reviewing the long-term medical care of elderly patients as well as on resource allocation (= methods of reimbursements for medical examinations and treatments). The issue of terminal care should be discussed after these other points are considered. (3) The medical system for the elderly is concerned with questions about how to respond to the wide range of views on health, and opinions about life and death of people who have lived long lives. The concepts of uniformity and equality that generally form the basis of the systems we build cannot be applied, and efforts are being made to devise solutions for these difficult problems.

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At the turn of the century, at a time when globalization is the most prominent consideration, values for various fields such as higher education, health care, medical education, research, business, finance, are shared by a wide spectrum of nations and people due primarily to the advanced means for transportation and communication. These advances have allowed more people to watch and see the outside world and naturally they demand such standards. In this regards, the “Japan Inc” system which has supported Japan for the last century, seems not to function properly and in fact may not be compatible with the “global standards”to compete in these fields which share global values. In this article, I have attempted to describe the basis and the historical background on why Japan cannot compete in this time of “globalization” and on the prospect of Japan even in Asia, a region which will grow in this century, unless some specific measures are taken fairly quickly. Nonetheless, the leadership in Japan may not understand what may be happening and what needs to be done. I also describe recommendations for reforms in health care and in medical education and training.

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Healthcare reform is an urgent problem that needs to be solved in Japan. Healthcare reform is composed of two categories, insurance and the providing system of healthcare. However, real discussion is limited to the financial aspect of healthcare.
Reform means change of system and change of outlook. Change of outlook means change of our own sense of values.
We must clarify the problems of the healthcare system, and then clarify the standpoint of discussion.
I present the correspondence of hospitals and association of hospitals to healthcare reform, especially from the standpoint of information technology and medical quality improvement.
A desirable healthcare service has: (1)suitability to patients' needs. (2) suit ability to its workers' reasons for living (3)a situation where every stakeholder has trust and feels at ease with the system.
A desirable hospital means (1)it functions as an organization. (2)it is based on a relationship of mutual trust (3) it is recognized as having a social existence.
Practical use of information technology is necessary for the intention of having trans-sectional communication in hospitals. The significance of infor mation technology is that of common ownership of information and standardization. Hospital associations must accumulate data with common purposes, methods and standards.
Management of hospitals must be based on facts and reality. I term this management method Evidence Based Management (EBM).

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