This paper considers the demand for health care more comprehensively, by separating analysis of decision making on whether one should contact a physician or not, and analysis of choice of what kind of contact (outpatient, inpatient after outpatient service and inpatient) one should take.
We use pooled individual medical claim data with permission of three mutual health insurance associations. By aggregating the medical claim data by episode, we focus on empirical analysis of both how the "first contact" with a physician was affected by the rise of the co-insurance rate in September 1997, and what type of contact (outpatient, inpatient after outpatient service and inpatient) was chosen.
Our results show that the rise of the co-insurance rate in September 1997 (1) decreased probability of "first contact", but (2) had no effect on choice of contact type. These results indicate that the rise of the co-insurance rate decreases the demand for health care, but they do not indicate with statistical significance the worsening of health due to the rise of the co-insurance rate.
In our analysis, we compared the results by the simple use of dummy variables and the use of the difference in difference method. They give us relatively similar results when the data has a longer time horizon.

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Negative binomial model was applied to the reimbursement records of large companies in Japan. The data include about 540 thousand male/female employee and spouse reimbursement records for 2 years (1997-1998). The means and variances in health capital could not be directly observed from reimbursement records. However, the number of healthy days, defined as the number of the days individuals spend without health care, could be obtained by subtracting the number of inpatient and outpatient days in each month. In the demand equation for health care, the dependent variable is the number of treatment episodes, and the independent variables include mean healthy days per month in the preceding year, while standard deviation of healthy days by month in the preceding year, in addition to age, wages, etc. Mean and standard deviation of healthy days in the preceding year were used as proxies of the expected health and the degree of uncertainty in health. Estimated results were consistent with the results of theoretical models which modify the hypothesis on the distribution of health capital in Dardanoni and Wagstaff (1990). Mean healthy days has a negative effect on the demand for health care. A one day increase in mean healthy days reduces treatment episodes by 0.09. Standard deviation in healthy days has a positive effect. A one day increase in standard deviation in healthy days increases treatment episodes by 0.02. These results show that patient behavior is related not only to the expected health but also to the variance in health.

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We compare the two-part decision making hypothesis that distinguishes between users and non-users with the one-part decision making hypothesis of medical care demand. Using count data finite mixture techniques, this paper provides more flexible frameworks for medical care demand that have features of both hypotheses.
We apply the deterministic annealing EM algorithm in order to estimate complicated finite mixture models. In model comparison using information criterion and goodness of fit tests, we find some evidence that the frequently used one-part finite mixture model may not be adequate to describe this type of medical care demand and that the one-part and two-part finite mixture model may be more desirable.

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The purpose of this paper is to investigate the effects of nondistribution-of-profit constraint and payment system for medical services on economic behavior concerning private and public hospitals respectively in Japan.
First, nondistribution-of-profit constraint is one of the major institutional arrangements which prevents private hospitals from seeking profits through the provision of medical services. However, through the economic applications of property rights theory to the residual claims in private hospitals, it is made clear that this regulation does not neutralize the motivation to seek profits by running hospitals. This effect causes a difference in economic incentives between private and public hospitals.
Second, as far as the payment system is concerned, medical services are appraised individually according to the uniform fee schedule regulated by government. This fee-for-service payment system is one of the institutional arrangements to reduce transaction costs which are caused by asymmetric information between patients and doctors. Our theoretical results, however, show that the system is not neutral for selecting inputs to produce medical services and induces private hospitals to take opportunistic behavior for profits.
This paper shows that these regulations cause a difference in economic behavior and, as a result, weaken competitiveness between private and public hospitals. Empirical evidence in the Japanese health care system supports our theoretical results.

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In this paper, the technical efficiency of Japanese public hospitals is analyzed by means of Data Envelopment Analysis (DEA). Three models of DEA are used: a constant returns to scale (CRS) model, an input-oriented variable returns to scale (VRS) model, and an output-oriented variable returns to scale model. The efficiency score of the CRS model is 0.86, that of the input-oriented VRS model is 0.90, and that of the output-oriented VRS model is 0.88 on average.
In addition, the determinants of the efficiency scores are investigated using censored regression analysis. In particular, we focus on the relationship between efficiency scores and subsidy. The coefficient of subsidy is positive and significant. This shows that an increase of subsidy reduces technical efficiency. The results of other variables show that a higher quality of nursing standard decreases technical efficiency. As well, hospitals that are inconveniently located also show lower technical efficiency.

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In this paper, the bankruptcy probability of hospitals was measured using micro data from the "medical facilities investigation". Although the"medical facilities investigation" was non-financial data, it extracted the proxy variables of income and made probit analysis to measure bankruptcy probability of hospitals, and it examined lax management and sluggish sales which are the representative reasons for hospital bankruptcy.
In hospital accounts, beds are an income item. Thus, holding beds for chronic term patients leads to maintaining of fixed income, and bankruptcy probability falls. On the other hand, outpatients do not have the effect of reducing bankruptcy probability. Two or three decades ago, drug and examination fees were high and the number of outpatients was central to hospital accounts. Now, costs of drug and examination are under the control of health policy and hospitals must use them more carefully. In terms of investment, hospital managers must take into consideration the cost and the use of equipment for examination as well as the demand forecasting. Under the present conditions, some small hospitals have very expensive and high performance examination equipment without enough demand. This is not efficient and it is one cause of bankrupt. Hospital managers should bear in mind that all hospitals (doctors) don't necessarily need to use the newest and most advanced medical treatments.

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Health Management is a discipline dealing with management issues of stakeholders in health and health care. With the share of health expenditures in GDP in Japan reaching some 8%, efficient and effective use of expenditures is strongly demanded, and the social need for this new disciplines is increasing, However, there seem to be very few systematic and standard textbooks in this field.
This article examines the scope and methods of Health Management and the structure and composition of a standard textbook. The focus of the discussion is on the management of medical institutions and health insurers. The analytical method is based on orthodox management and economic theory taking into account the realities of health care and institutional schemes in Japan. It also studies specific chapters in the standard textbook including exercises and case studies.
As a whole this article is a transitional essay and the author is hoping that further discussion will begin and several textbooks on this field will appear in the near future.

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This article explores how to design optimal health insurance that includes appropriate incentive schemes for physicians to choose medical treatment in an efficient manner when there is asymmetric information between physicians and patients. Physicians are assumed to face a set of alternative medical treatment technologies and recommend treatment to their patients in a way that maximizes utility. Physicians' utility depends both on the profit margin of the treatment and on the patients' health status after the treatment. The severity of patients is not observable, hence insurance contract cannot specify particular levels of reimbursement for particular levels of severity.
Analytical results are as follows. First, the optimal coinsurance rate might be lower when the more expensive and higher quality treatment is chosen, if the insured person's utility for income reveals a higher degree of risk aversion. Second, the optimal fee schedule for physicians must strictly specify particular prices per case for particular treatment technologies. The fee schedule must be set in order to constrain physicians' inherent incentive to recommend the more expensive treatment. The fee schedule is non-linear and apparently different from the fee-for-services payment scheme in the current Japanese Health Care System. One of the policy implications derived from the analysis is that even when there is asymmetric information and physicians have their own behavioral incentive the optimal contract can succeed in spreading the risk of substantial medical expenses as long as the appropriate fee schedule for physicians is implemented. From this respect the current prohibition of "mixed treatment" which allow patients to combine private treatment and publicly covered treatment might be inefficient. One of the urgent issues for health care reform is how to contrive an appropriate fee schedule for physicians.

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As one characteristic of the Japanese Health Care system, we can point out mixed treatment prohibition. Mixed treatment prohibition is a system such that if the insured receive uninsured medical service they usually cannot receive any insurance money for the matter even when they are also given insured medical service. In this paper, considering the diversity of risk for sickness or injury among individuals we investigate institutional effects of mixed treatment prohibition from an economic point of view. In particular, we study the difference of mixed treatment prohibition and permitted mixed treatment. Through the comparative institutional analysis, we obtain three main results: (1) under mixed treatment prohibition high-risk individuals reduce their medical expenditure compared with that under permitted mixed treatment. From a viewpoint of fairness, this feature is inconsistent with the public compulsory insurance system which is one of the characteristics of the Japanese Health Care system; (2) the higher the average income level of individuals, or the more the number of high-risk individuals, or the higher the probability of incurring sickness of high-risk individuals, the more socially desirable permission for mixed treatment tends to be; and (3) if the insurer does not sufficiently cover medical costs supplying insured medical service through the payment scheme, the effectiveness of permitting mixed treatment tends to vanish. Therefore, it is essential to introduce rules for the permission of mixed treatment to design an appropriate payment scheme.

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This paper investigates the speed of convergence in a growth model with health capital. The simulation of the model reveals two theoretical possibilities. First, under a standard parameter set, this type of two-sector model replicates a notable feature of endogenous growth models on convergence property. That is to say, our model exhibits a higher rate of convergence. Second, when a capital deepening externality in the second sector has relatively weak impact on additional health capital production and income tax rates which finance public health expenditure are at realistically reasonable levels, a slower speed of convergence occurs. Such slower adjustment process is consistent with the standard empirical results on growth and β-convergence.

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Using a theoretical framework in which individual future health care costs can be efficiently predicted by their present health status and present health care costs, we have tested the predictive powers of routine medical tests given to Japanese employees in their annual health checkups. As independent variables of health status, in addition to these routine tests, we have used the Disease Code dummies that have passed the Hausman specification tests. The data used for our estimation covers around 20 thousand employees of two corporations for several years with matching health checkup data and medical claims data. For the next year's health care costs, we find that the largest risk is the above average values of creatinine, but, sugar or uric acid levels in blood tend to work in the same way. On the other hand, all deviations (plus or minus) in BMI, total choresterol, and systolic blood pressure levels tend to increase the health care costs. For further into the future, the higher creatinine levels are consistently the most important risk factor of higher health care costs, but higher sugar and uric levels are also important risk factors as well. As to blood pressure, however, deviations in either direction in systolic pressure are associated with higher future health care costs, while, for diatolic pressure, deviation in the minus direction tends to decrease the future health care costs.

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Expenditures on terminal care are estimated to account for more than 20% of the total medical care expenses of the elderly population in Japan. This paper, however, is the first effort in Japan to investigate the determinants of patients' decisions concerning terminal care. Using self-designed survey data, this paper sheds light on the determinants of elderly patients' decision on whether to write a "living will" for terminal care denial. As a result, the price elasticity of demand for a "living will" of elderly patients is not significantly different from zero. In other words, increase in the self-pay burden would not encourage elderly patients to write a "living will" for terminal care denial.
On the other hand, using an approach of Conjoint Analysis, we find that other non-price factors are more important for the decision regarding making of a "living will". For example, the probability of writing a "living will" would rise by 6.0% if the effectiveness of a "living will" were to be ensured systematically. Additionally, the probability of writing a "living will" would increase by 11.2% if elderly patients were permitted to enter a hospice or receive palliative care when needed. This probability would also rise 3.2% given cautious certification concerning the need for terminal care were warranted. Finally, this probability would increase 9.1% if physicians were to fully inform elderly patients of their health condition. Hence, the most effective strategy toward the high medical expenses of terminal care is not to raise self-pay burden but to improve legislation and medical care environment to encourage more "living wills" for terminal care denial.

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In this paper, we investigate the effect of self-payment rate on the demand for long-term care service. We also examine the other factors affecting demand for services. For estimating the policy effect of changing in the price of services or self-payment rate, price elasticity of demand is very significant information. In this paper, we focused on the home help service (Homon kaigo) that is the most basic and common service of all long-term care services in Japan. In the process of empirical analysis, receipt data (from January, 2000 to May, 2002) of "home help service" was extracted on the basis of full cooperation from Inagi City in Tokyo. In this data, the information of each service user who has low income is reflected, and the rate of self-payment is politically and systematically deducted as to these people. We utilized these differences of rate to estimate the price elasticity of demand. As a result of regression in which a dependent variable was use per month, it was suggested that the price elasticity of demand for home help service is approximately 0.3. However, careful attention is needed to interpret this result because our price elasticity includes the effect of income level, which may cause underestimation. Furthermore, it was not statistically confirmed that the difference of income level would affect the demand, but the difference of service supplier significantly affects the amount of use.

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