Comment on “How does the Price Regulation Policy Impact on Patient–Nurse Ratios and the Length of Hospital Stays in Japanese Hospitals?”

Abstract

It has been said that the fee-for-service (FFS) system in Japan's public health insurance system is a major contributor to Japan's relatively low national medical expenditures. Basically, this system allows the central government to almost fully control the prices of medical services through the reimbursement system of public health insurance, which covers most of the medical usage in Japan. This price control has been used for not only suppressing total medical expenditures, but also for balancing the allocations of medical resources by making higher rewards for services in short supply. Noguchi (2015), however, reveals the limitations of this approach by showing the “overreaction” of patient–nurse ratio (PNR) to changes in the FFS criteria. I have four major comments on Noguchi's (2015) paper. First, I would have liked to have seen a more detailed description about the reasons why the government wanted to lower PNR at the particular times it did. In particular, since the abstract and conclusion read as if the main policy implication of Noguchi (2015) is that the changes in the FFS caused an undesired outcome (an increase in beds for acute care), Noguchi should explain why the government, which wanted to reallocate health-care resources toward subacute and long-term care, also aimed to lower the PNR at the same time. As mentioned in Noguchi's paper, the changes in FFS intended to lower PNR and shorten the length of hospital stays (LHS), and the empirical results suggest that both PNR and LHS actually decreased in response to the changes. That is, the revision achieved its primary objectives. If the final goal of this fee revision is to expedite the treatment of acute diseases through the provision of more intensive human resources, I feel it is off the point to accuse hospitals of inducing more resources toward acute care. A second and related comment relates to the overall goals of the series of FFS revisions in Japan. In the concluding section, Noguchi argues that “[a] series of revisions of FSS aim to clarify and differentiate the roles and functions of medical facilities with various characteristics” (p. 318), and this argument seems to be the basis for the rather negative tone of Noguchi's overall evaluation of the FFS revision in 2000 and 2006. However, non-experts (like me) cannot see how the government actually planned to achieve such a differentiation by the FFS revisions. Were there any revisions other than the ones examined in this paper to focus on the differentiation, or were the policymakers just saying that the roles and functions of medical facilities should be differentiated? If the latter is the case, I think the problem is more on the self-inconsistency of the policy rather than the overreaction of the hospitals. Third, to me it was not very clear why the effect of the revisions on LHS is larger for small hospitals, whereas the effect on PNR is small and statistically insignificant for them. It is not surprising that small hospitals cannot recruit as many nurses as they want, and thus they cannot lower PNR as much as larger hospitals. Then, however, the effect on LHS should be smaller for them if the FFS revision affects LHS through a lower PNR. Even if the FFS revision has a direct effect on LHS through the price change, unless it differentiates hospitals by its size, it is not clear why small hospitals respond more. Fourth, it would be very informative if Noguchi provided further evidence on the heterogeneous effects across different types of hospitals other than those related to hospital size. For example, hospitals in underpopulated area may have difficulties in recruiting nurses because they are less attractive workplace for nurses and are more financially stressed than other types of hospitals. If so, the effects on PNR should be smaller for such hospitals. Also, the ownership of hospitals may affect hospital compliance. I believe such information should be available from the data used in this study, so it could be a good extension for future research.