Acute care hospital reform in Japan: Outcomes in quality and market competition

Abstract

Acute care hospital reform in Japan: Outcomes in quality and market competition This paper describes why the fee system for acute care hospital reform in Japan is beginning to show results. It has been 20 years since the Japanese government introduced a comprehensive fee system (the Diagnosis Procedure Combination/Per- Diem Payment System [DPC/PDPS] ) for acute care hospital reform. While the DPC/PDPS was developed to provide visibility into the management and improvement in the management of acute care hospitals, the government's expected policy outcome was a reduction in inpatient care costs. To date, this goal has not been achieved, partly because the design of the DPC/PDPS is imperfect, and the population is aging, and longevity is increasing. However, other outcomes of introducing the DPC/PDPS are beginning to materialize; the first is an improved quality of medical care through an early discharge and segregation of medical functions, and the other is greater competition in the regional healthcare market.