In Japan, large hospitals with 500 beds or over have been steadily increasing over the past 50 years, and these hospitals accounted for 21% of total hospital beds in 1995. Empirical analysis of these hospitals is necessary to design a hospital sector reform for the next century.
Five hundred and twelve hospitals with 500 beds or over in 1996 are identified in a hospital directory (“Byoin Yoran”) compiled by a section of the Ministry of Health and Welfare. They include 155 private, non-university hospitals,41 private university hospitals,52 public university hospitals, and 264 public non-university hospitals. In part one, sixteen kinds of data of each hospital including bed size by type of beds, ownership, number of hospital staff, location of hospitals, establishment year are collected and analyzed. Using several hospital directories and related facilities (including“Byoin Yoran”), publications, a telephone survey of hospital was conducted.
The main results of part one are as follows. (1) Clear bipolarization of large hospitals to general hospitals and chronic hospitals (geriatric hospitals and psychiatric hospitals) is detected. (2) The average hospital bed number of private university hospitals exceeds that of public university hospitals. Contrary to common wisdom, the average bed number of private non-university hospitals is larger than that of public non-university hospitals. All geriatric hospitals are private, and about 20% are giant hospitals with 1,000 beds or over. (3) Average hospital staff of private non-university hospitals exceeds that of private university hospitals. Average hospital bed number of geriatric and psychiatric hospitals is very low. (4) Majority of public hospitals and public university hospitals were established before 1950. Half of geriatric hospitals opened after 1980. (5) Thirty percent of large hospitals are concentrated in 13 largest cities.

View full abstract

The Japanese wholesale drug industry faces a harsh environment. In the search for methods to overcome the present environment, this study examined the possibility of developing a Japanese version of the NWDA (National Wholesale Druggist's Association) OS (Operating Survey). The study found the following four points.
1) The only available data source open to public,“Annual Report”, does not provide enough information for applying the U. S. 's NWDA.
2) Comparative financial analysis between the U. S. and Japan showed that the Japanese wholesale drug industry on the whole is lower in capital efficiency, and in labor productivity.
3) The comparative financial analysis between the industry and its“customer”, the hospital industry, showed that the wholesale drug industry (beyond the substantial difference among firms) has a larger amount of sales than the hospital industry. However, in terms of operating profit, the order was reversed.
4) The largest controllable cost of the industry is selling cost. The efficiency of cost was examined by looking at the relationship between MS (Marketing Specialist) workload and the amount of sales, as well as the relationship with the total profit. Since this study was based only on 6 firms and 9 branch offices, there was significant variation. However it should be useful in the start of developing a Japanese version of the NWDA.

View full abstract

The past studies on Japanese health care expenditures (HCE) fail to answer the question why there are regional differences in the per capita HCE and of what determines the per capita HCE. This study, utilizing 3,251 municipal health care, demographic and socio-economic data, develops a comprehensive path model on per capita HCE determinants to answer these questions. The analysis reveals:
(1) Hospital-concentrated areas have a high HCE in general, while Clinics/Nursing Home-concentrated areas have a low HCE for the retired and the aged (70 years old and older) and a high HCE for those in other age brackets (0∼69 years old).
(2) Metropolitan areas have a high HCE for the retired and the aged and a very low HCE for those in other ages, while less densely populated areas have the opposite, and among residential areas those that have more nuclear families and those aged living-alone have a higher HCE.
(3) The number of per capita hospitals, hospital beds and doctors, increases the ratio of hospitalization, which in turn increases HCE.
(4) The number of per capita special nursing homes increases the HCE for the retired and the aged, indirectly through the increase of the ratio of hospitalization as well as directly. The utilization rate of short-stay services decreases the HCE directly and indirectly while that of day-services increases the HCE.
(5) Age structures, household structures, population density, municipal income, personal income of regions affect the HCE directly as well as indirectly through the availability of hospitals and long-term care facilities and services. Detailed results of path analyses revealed the complex inter-related determinants of regional differences in HCE and their relative magnitude.

View full abstract

There are several, noticeable differentials in the manner of income flows and financial conditions among Japanese public and private hospitals. In general, the hospital as a not-for-profit organization is expected to be a medical provider thus tending to act as a quality maximizing firm. Facing, however, a lack of funds or the difficulty of income flow hospitals, particularly private hospitals, would be forced into a critical managerial crisis, and then they may fall short of patients'expectation.
In this paper, I collected and examined data on approximately 80% of Japan's private hospitals. The hospitals internal financial management difficulties are further exacerbated by Japan's health care policy reforms. Furthermore I examined the actual gap in hospital income flows in terms of the legal setting, medical policy and presented data concerning hospital debt financing within recent years. Consequently, I found, first of all, through official documents describing the hospital financing as“Economic Circumstance Survey in Health care;Iryo Keizai Jittai Chosa, Minkan Byoin Keiei Jittai Kinkyu Chosa”and annual report of fund lender;Iryo Jigyodan Kashituke Gyomu Tokei, that
1) over half the number of private hospitals stand in serious difficulty in income flow or condition,
2) many private hospitals seem to tend to borrow funds in terms of an amount of specific needed case or period and continue to need money after hospital bed regulation policy, and
3) it seems to be not so easy for many private hospitals that they meet their needs of income by borrowing from commercial banks because of strict lending criteria.
Furthermore, some implication induced from the above consequences are;
1) the dichotomous argument in Japanese hospital like asfor-profit or not-forprofitseems to be less meaningful,
2) we will have to conduct a deeper and wide-ranging investigation concerning hospital income flows/condition including estimation of welfare of, not only, hospital themselves but of patients, and also
3) rethink the principle work of market dynamics in establishing hospital policy.

View full abstract

The aim of this paper is to examine the relationship between out-of-pocket costs per day and total income. The demand for medical care requires both monetary cost and time cost. If out-of-pocket cost per day is given, time cost could be treated as a shift factor in the demand curve for medical care. If time, as well as medical service, is an input to produce health stock, a consumer would demand more medical care and less time with the increase in time cost. The increase in demand per day makes out-of-pocket cost per day expensive. The results of the empirical study using social insurance claims are the following. Total income increases out-of-pocket cost per day on male outpatient care and male dentistry care, and a decrease on inpatient care. Out-of-pocket cost per day is treated often as the price in estimating the demand function of medical care, we need careful interpretation of the estimated parameter of price.

View full abstract

The aim of the present study was to ascertain whether the amount of dental care received was influenced by supplier inducement in nursery school children. We analyzed the effect of the dentist rate per population on the amount of dental care treatment for deciduous teeth by individual claim data which was linked to annual examination data. The subjects were 485 nursery school children covered by National Health Insurance in 24 municipalities in Niigata Prefecture who visited a dental clinic after annual dental examination within 3 months. The difference between the number of treated teeth in the dental clinic (TTDC) and the number of decayed teeth at the annual examination was used as the measure of this analysis. The number of TTDC was 62% larger than the number of decayed teeth in posterior teeth, and no difference was found in anterior teeth. We estimate the effects of dentist rate per population on the amount of care treatment by using three models (weighted ordinary least square model, fixed effects model, random effects model). The independent variable was the difference between TTDC and the number of decayed teeth. The dependent variables were sex, age, dft (decayed or filling teeth) and the dentist rate per population. By using statistical tests for identification, the model with the best fit was determined to be the weighted ordinary least square model for whole teeth and posterior teeth, and the random effects model for anterior teeth. We found that the amount of care treatment was positively influenced by the dentist rate per population in each model significantly. In conclusion, we ascertained supplier inducement in dental care treatment for nursing school children.

View full abstract

The purpose of this paper is to analyze the impact of new drugs (NCE: New Chemical Entities) on the financial results of pharmaceutical companies. By using the approval patterns of NCEs as a measure of R&D activities, we analyzed a sample of 20 major Japanese pharmaceutical companies from 1976 to 1996. Our major findings are as follows:
(1) We regressed the number of manufacturing approvals on cumulative operating profits of the companies from 1976 to 1996. As a result, the coefficient of manufacturing approvals is statistically significant. This result is consistent with other research.
(2) The operating profits of the firms can be determined by the sales of the firms. Therefore, we regressed the profitability of the companies on the number of manufacturing approvals. As a result, the regression model is not statistically significant.
(3) We calculated the regression equation of operating profitability on four independent variables, which included manufacturing and import approvals as independent variables and these are further classified regarding R&D style (sole or joint R&D). The regression model is statistically significant, revealing that only the manufacturing approvals by joint R&D have importance in this model.
Why do the manufacturing approvals by joint R&D affect the profitability of the firm? There are several reasons; cost saving a associated with R&D and/or manufacturing, acquisition of flexible manufacturing capacity, and expansion of sales channels. In accordance with our analysis, pharmaceutical companies should choose collaborative strategies. Not all the companies, however, adopt the collaborative strategies. We think that NIH (Not Invented Here) Syndrome, lack of core competence, etc. are obstacles to collaboration.

View full abstract

Pharmaceutical Benefit Management (PBM) is a rapidly growing form of managed-care in the U. S. health care market. It evolved from a need to achieve better treatment outcome while assuring cost-effective use of drugs.
Because of economic incentives inherent in Japan's health insurance system, Japan's pharmaceutical expenditure is higher than most western countries. Numerous proposals are being discussed to reduce pharmaceutical expenditures, which tend to concentrate on increasing patients' copayments. A higher copayment will certainly reduce pharmaceutical expenditures, but may not be able to improve health outcomes and the effectiveness of pharmaceutical use.
In this article the authors look at PBM as a potential alternative to Japan's health insurance reform and will review its functions in light of the applicability of the same concept to Japan's health care market with particular emphasis being given to the legal implications of antitrust law when PBM services are provided by pharmaceutical manufacturers.
The conclusions were that although the PBM concept is not possible under Japan's current health insurance system, deregulation measures to permit individual insurers to contract with providers (hospitals, clinics, pharmacies) over formulary, price and utilization as proposed in the current reform agenda will make PBM an attractive alternative to increased patients' copayment.

View full abstract