Cost, Length of Stay, and Health Outcome: A Comprehensive Evaluation of Prospective Payment System in Japan

2022 Fiscal Year Final Research Report

• Project/Area Number: 19K13729
• Research Category: Grant-in-Aid for Early-Career Scientists
• Allocation Type: Multi-year Fund
• Review Section: Basic Section 07050:Public economics and labor economics-related
• Research Institution: Waseda University
• Principal Investigator: FU RONG 早稲田大学, 商学学術院, 専任講師 (70805259)
• Project Period (FY): 2019-04-01 – 2023-03-31
• Keywords: Hospital Payment

Outline of Final Research Achievements

This project aims to assess the impacts of the 2003 adoption of Diagnostic Procedure Combination Per-Diem Payment System (DPC/PDPS) on medical costs, hospital operational efficiency, and healthcare quality. Focusing on before-after changes of the 82 special functioning hospitals enrolled mandatorily into the program in 2003, we aim to (1) examine whether hospitals allocate more resources to procedures paid outside of DPC/PDPS, and derive a monetary gain/loss for such reallocation; (2) assess a possible improvement of operational efficiency in terms of decline in length of stay (LOS), and how the improvement may vary as LOS extends; (3) clarify a potential change in healthcare quality in terms of change in health outcome at discharge.

Free Research Field

Health Economics

Academic Significance and Societal Importance of the Research Achievements

This project would provide concrete and practical implications for policy-makers to refine the medical reimbursement system further as well as to formulate health policies for cost containment in a long-run perspective.