JANUARY

JAPAN
self-referral including extra charges for initial consultations at some large hospitals with many specialties.
Patients can choose and drop in at any clinic, except those requiring reservations. An entity managing many
clinics can share their resources, but there is no cross-entity resource sharing.
Payments for primary care are based principally on a complex national fee-for-service schedule, which includes
financial incentives for coordinating the care of patients with chronic diseases, and for team ambulatory and
home care. The schedule, set by the government (explained below), includes both primary and specialist
services, which have common prices for defined services such as consultations, examinations, laboratory tests,
imaging tests, and defined chronic disease management. Per-case payments can be chosen by providers in select
cases, such as daily payments for pediatrics care and monthly payments for treating patients with diabetes.
Bundled payments are not used. Balance billing is prohibited, but providers can charge for designated services.
Outpatient specialist care: Most outpatient specialist care is provided in hospital outpatient departments, but
some is also available at clinics, where patients can visit without referral. Fees are determined by the same
schedule that applies to primary care, as they do not usually vary by provider type, although some services must
be provided by specialists in order to be covered by the PHIS. There are no collective regulations on payments
for specialists. At hospitals, specialists are usually salaried, with additional payments such as night duty
allowance. Those working at public hospitals can work at other health care institutions and privately with the
approval of their hospitals, but in such cases they usually provide services covered by the public system. The
employment status of specialists at clinics varies similarly to that of primary care physicians.
Administrative mechanisms for paying primary care doctors and specialists: There are no direct payments
to primary care doctors and specialists in the PHIS. Although in principle patients are liable for copayments
at point of service, practically all fee transactions are mediated by statutory bodies. Self-employed clinic-based
primary care physicians and specialists receive all payments for services through the fee schedule, pay for
employees and other inputs, allocate funds for investments, and retain surpluses. Legal entities managing clinics
and hospitals send insurance claims, mostly online, to insurers in the PHIS.
After-hours care: After-hours care is provided by hospital outpatient departments, where on-call physicians are
available, and by some regular clinics and after-hours care clinics owned by local governments and staffed by
physicians and nurses that local medical societies provide. Hospitals and clinics are paid “top-up” fees for afterhours
care, including fees for telephone consultations. There is no strict formal requirement for clinics to provide
such services, although physicians have a general obligation to consult with patients when requested. Patients
can walk in at hospitals and clinics. National government grants subsidies to local governments for these clinics.
Patient information from after-hours clinics is provided to family physicians if necessary (necessary information
is often handed to patients to show to family physicians). There is a national pediatric medical advice telephone
line available after hours.
Hospitals: As of 2013, 14 percent of hospitals are owned by national or local governments or closely related
agencies (MHLW, 2014c); most of the rest are private and not-for-profit, some of which receive subsidies
because they are designated as having partly public roles. More than 20 percent of beds are in public hospitals;
the rest are in not-for-profit hospitals. The entry of private for-profit companies in the hospital sector is now
prohibited, while existing hospitals established by for-profit companies for their employees (e.g., Toyota) are
allowed to continue. Payments to hospitals from the PHIS include costs for physicians’ salaries.
Consultation fees for large hospitals and academic medical centers are lower than those for small hospitals and
clinics. More than half of all acute-care hospital beds are paid for by the Diagnosis Procedure Combination
(DPC) modification, a case-mix classification similar to diagnosis-related groups (DRGs) (Matsuda, et. al., 2008),
and the rest are paid for solely on a fee-for-service basis. Hospitals choose whether to receive the DPC
payments or to remain under fee-for-service. The DPC payment consists of a fee-for-service and a DPC
component in the form of a per diem payment determined by the DPC grouping, which includes basic hospital
services and less expensive treatments; the fee-for-service component includes surgical procedures,
rehabilitative services, and other specified expensive services (OECD, 2009). DPC rates are multiplied by
a hospital-specific coefficient that keeps them relatively in line with fee-for-service payments; it may also limit
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