Problems of the Medical Service Market in Japan

Tadahiko Tokita

Japanese Economy, 1997, vol. 25, issue 2, 60-78

Abstract: This article surveys problems of the medical service market in Japan. First, the structure of the medical service market in Japan is considered in terms of supply, demand, and pricing. Then, the health insurance system, the coexistence of public and private medical institutions, the government's fee-for-service system, and other systemic and historical factors that control the market structure are explained. Next, behaviors of public and private medical institutions, which are the main suppliers of medical services in Japan, are considered. The working hypothesis is that public institutions increase the quality of service because they are required to balance their income and expenditures, while private institutions maximize profits. Finally, by schematicizing the medical market, the market outcomes that market structure and market behaviors are causing in the Japanese medical service market are examined. Certain market structure and market conduct is assumed, based on the facts to be reported in Chino (1995), and the market outcomes corroborated by these facts are explained.

Date: 1997
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DOI: 10.2753/JES1097-203X250260

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