Although there have been criticisms concerning the excessive use of drugs and laboratory tests, a nalysis of the 1987 to 1991 national claims data, mainly in ambulatory care, shows that this is mostly due to the diffusion of technology. The number of laboratory tests performed per claim was greater if the hospital was larger, in the public-sector, or attached to an university. For imaging, the number of CAT scans performed increased with some decreases in X -rays using contrast medium and specialized techniques. For drugs, there was a general tendency to use newer and more expensive drugs by all providers. To realize greater efficiency in the health care system, the following reforms should be considered: a hospital specific inclusive per-diem rate of payment linked to pre-determined performance indicators for public-sector hospitals, and the developement of an inclusive payment system for drugs together with more rigorous methods of evaluation.

“Poverty of theory” has been pointed out on social security. Having in perspective the structural change accompanying the population ageing, and also responding to the current issues with regard to the care system for the elderly, a new paradigm for social security is being required.

In this essasy, both from the historical perspective on relationship of economy and social security and the international comparisons, status of social security today is characterized as the convergence of social insurance and social welfare (public assistance). Based on this understanding, future directions of social security in Japan is discussed.

Recent progress of medical information systems has made it possible to feed back information to practicing physicians at the time of their medical actions, for instance ordering clinical tests or prescribing drugs. At the University of Tokyo Hospital, if physicians order unnecessarily numerous clinical tests, a warning sign appears on the computer screen，which says that the number of clinical tests to be ordered exceeds the standard procedure. After this system was introduced，the number of clinical tests ordered by the physicians showed marked decrease. The doctors were interviewed after they experienced the warning signs, and they mostly agreed the educational effects of the warning signs. By system, it may be said that the medical reasons and economical reasons were harmonized. Although this warning system was applied only in a hospital, but the same system can be applied to all the hospitals and clinics in Japan，then the economical effects will be large. But for the implementation of such system, the clinical standard which all the physicians agree must be developed.

We have a difficulty when discussing an oversupply of medical doctors (MDs) if we compare the number of MDs per population (MPP) in the developed countries because of differences in health care systems. We also have a difficulty with demonstrating an oversupply of MDs because of creating a normative discussion when we compare the number of MDs in terms of the ideal health care system. However, we can discuss the oversupply of MDs more realistically and reevaluate MD training programs when we review an MD's future earning power in a health care organization from the view point of the organization's management sustainability under the worse conditions of government's cost containment policy and an oversupply of MDs. In the case of Japan, even if the higher growth rate in health care expenditures is realized and the the MD's employment is ensured, it is not avoidable for MDs to lose some of their earning power due to a significantly increased number of MDs. And it may cause problems of deteriorating MDs quality because the simulation experiment forecasts that the average MD's wage would become similar to other salaried workers in 30 years in the worst case. Therefore, the Japanese government should control its MD training programs by keeping MPP below the level of USA in 1989 in order to avoid the above problem.

Medical care for the elderly is quite diversified and a lot of attention has been paid recently to elderly inpatients caused by non-meical reasons，or so-called “hospitalized for social reasons”. We tried to estimate the magnitude of these patients in terms of the number and medical expenditures by using the micro data obtained by the Research Project on Medical Expenditures of the Elderly. Those inpatients whose annual average per diem inpatient dxpenditure was less than certain amount were defined as hospitalized for social reasons. Such amousts were calculated locally by average per diem expenditure of long-term inpatients. About 3 to 6.5 percent of the population aged 70 or over was estimated as hospitalized for social reasons. Taking an intermediate case for example，about 4 percent of elderly population，on 19 percent of elderly inpatients，were hospitalized for social reasons and they consumed about 14 percent of total medical expenditures of the elderly. The proportion of hospitalized for social reasons to the population increased with age，was higher for females than males within the same age group，and increased sharply with length of stay. If we assume that there were no such hospitalization，the ratio of inpatient to outpatient in per capita medical expenditures of the elderly population changed from 1.14 versus 1.0 to 0.87 versus 1.0，shifting to larger outpatient expendioures. Although it is not easy to determine the quantity of hospitalized for social reasons quite objectively，the method proposed here was considered to be better than such method as to measure them solely through length of stay in hospitals.

Allocation decisions of health care resources in clinical settings may soon be considered social issues in Japan because the demand for efficiency has been increasing and medical technology has made advances. To examine this, we carried out social research focusing on community residents and medical professionals on the fairness of the allocation of health care resources. The results are as follows :

i) For resource allocation, in general, equality principles seem to be widely accepted.

ii) However, some parts of the results may indicate utilitarianism; specifically, in terms of those health care services which relate directly to life and death, as opposed to those, which do not.

iii) Concerning the criteria for resource allocation, “age” and “the role/position in family” are highly supported.

iv) Social status, occupation, and the degree of social contribution (i. e., volunteer) are not generally accepted as criteria.

We collected original published pharmacoeconomic studies conducted in Japan, through systematic database retrieval and other methods. Criteria for reviewing the studies were developed through an analysis of papers, textbooks, and regulatory guidelines in Australia, Canada, the U.K., and the U.S. The 10 Japan-based pharmacoeconomic studies were reviewed according to these criteria. A previous quality review of economic analyses in health care conducted in the U.S. was used as a reference for comparison. The overall quality of the Japan-based papers showed similar problems to the sample of U.S. papers on one criterion and ranked higher on two criteria. The analysis identified areas for improvement of Japan-based pharmacoeconomic studies, since most of the Japanese papers lacked some important elements of economic evaluation, such as clarification of viewpoints and sensitivity analysis on the discount rate.

We surveyed the representatives from the (1) Japan Pharmaceutical Manufacturers Association，(2) health economic researchers registered with Institute for Health Economics and Policy，(3) universities with pharmacy schools，(4) university hospitals and (5) Officials in the Ministry of Health and Welfare to assess current perspectives on pharmacoeconomic research (PER) in Japan.

We collected 114 returns of 268 mailed questionnaires designed to assess and describe the;

1) main conductors of PER，experience with research, and types of training received,

2) possible utilization of PER on various decision-making and on R&D processes for pharmaceutical development,

3) methods of PER,

4) the most common barriers to well-conducted PER.

Qualitatively，PER in Japan is in the initial stages of development, and approximately 60-65% of those sampled indicated that they are not actively conducting or utilizing PER. All respondents indicated that PER is potentially useful and on average see its utilization as most important in industry and in Phase IV of the R&D process. A consensus on methodology or objectives does not exist at this time. The largest barriers to PER in Japan were considered by respondents to be lack of trained experts and lack of good quality data.

The National Medical Expenditure, which comprehends and reftects the entire medical aid system of our nation, could not be said to have been fully analyzed and researched as we see it in current situation, despite the fact that it is called “an important indicator to the medical economy of Japan”. Especially as regards the method for estimation of the National Medical Expenditure, the whole picture has not been revealed at all to this day, consequently causing us to be distanced from the existence of the National Medical Expenditure as a result.

From such point of view, this report aims to denote a method for estimating system-division-based national medical expenditure, to make the National Medical Expenditure more a familiar notion as to become an asset and to contribute to the development of future analysis and research of National Medical Expenditure and for our nation's medical economy studies.

The report consists of 4 chapters, I-IV. The first chapter states the objective of the paper. The second chapter points out the problems and doubts on “the National Medical Expenditure”. The third chapter presents detailed sources pertaining to system-division-based national medical expenditure, while each respective section makes separate analysis attempting to state its method for estimation. Additionally, chapter four argues that “the natioal medical expenditure” which has been regarded as “estimation” should be rather referred to as “statistics”. The chapter also states the need to reinvestigate the concept of the National Medical Expenditure as well as to review its targets.