Impact of the Japanese Diagnosis Procedure Combination-based Payment System in Japan

In the health insurance system of Japan, a fee-for-service system has been applied to individual treatment services since 1958. This system involves a structural problem of causing an increase in examination and drug administration. A flat-fee payment system called DPC was introduced in April 2003 to solve the problems of the fee-for-service system. Based on the data of 2003 and 2004, we assessed the impact of DPC in Japan, and obtained the following conclusions: First, the introduction of DPC in Japan could not decrease the absolute value of medical costs; second, the internal efficiency of the institutions was improved, for example, by reducing the mean length of hospitalizations; third, the DPC-based diagnosis classification is considered to be effective for simplifying the medical fee system within the framework of EBM and for providing patients with information; and fourth, after introduction of the DPC, structural problems remain in the flat-fee payment system, such as examination and treatment of low quality, selection of patients and up coding. Its introduction should thus be performed with sufficient caution. We will make greater efforts to establish a better medical fee system by evaluating these problems.