Journal of the National Institute of Public Health2013 Vol.62 No.1 p.36−45

Topics：Strategic management of evidence-based health and medical care policy: How to use new Digital Big Data in health care system＜Review＞
Economic background and issues of regional medical coordination
policy in Japan
Takuma SUGAHARA
Faculty of Economics, Hosei University
Abstract“Regional medical coordination” is a key concept in the consideration of future regional healthcare
provider systems as well as an important and strongly promoted policy issue. However, there have beenfew studies in which such policy and related issues have been organized and analyzed on the basis of
economic knowledge. This study outlines an approach based on basic economic concepts forinterpreting “regional medical coordination” within the context of economics, the implications derived,
and the points that society should consider while promoting desirable regional medical coordination.
In traditional medical care by self-contained healthcare institutions, each healthcare institution
pursues economies of scale and scope. Therefore, the economic motive aiming at self-contained
healthcare institutions exists. However, functional differentiation through regionally contained medicalcare may, under certain conditions, increase the capability to provide healthcare for the entire society
without increasing production resources. Promoting such a policy has a certain economic rationality,
given the severe labor shortages currently occurring in regional medical care. To build a favorable
cooperative system, development of an infrastructure that facilitates network externalities andeconomies of consolidation is important. Securing opportunities for mutual understanding, a long-termcooperative relationship, and third-party facilitation have been suggested as measures for improving
operational issues after building a cooperative system.
Regional medical coordination tends to be considered primarily from the perspective of provider
logic. However, when evaluating the policy as a whole, we must balance provider issues against thepolicy’s disadvantages and the resulting reduction in benefits to patients.
keywords: Regional medical coordination, healthcare provider system, functional differentiation,
regionally contained health care, network externalization, prisoner’s dilemma(accepted for publication, 17th January 2013)

I.

Background and progress of regional
medical coordination policy

The direction of current healthcare system reform inJapan is specified in the June 2006 Healthcare Reform Bill.
The rationale underpinning these reforms is set forth in the
Outline of Healthcare System Reform (Iryo-seido kaikaku
taiko in Japanese) approved by the government and rulingparty’s Council on Healthcare Reform in December
2005 [1]. One of the major pillars of this system reformoutline is the “emphasis on prevention and ensuring peaceof mind and trust in medical care” with “response to theissues of shortage of physicians” and “establishment of asystem of regional medical coordination” proposed as
supporting measures.
Coinciding with this outline, the Fifth Amendment to theMedical Service Law in 2006 serves the purpose of

Corresponding author: Takuma Sugahara
4342 Aiharamachi, Machida-shi, Tokyo, Japan.
Tel/Fax: 042-783-2535
E-mail: takuma_sugahara@hosei.ac.jp

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J. Natl. Inst. Public Health, 62（1）: 2013

Economic background and issues of regional medical coordination policy in Japan“Promoting the differentiation and coordination of medical
functions through the review of medical planning systems”
thus generating a requirement for a system of coordination
for four illnesses/five operations within the regional
medical plan. Furthermore, the “Outline of Integrated
Social Security and Tax Reforms” approved by the Cabinet
in February 2012 emphasizes collaboration and roledivision of hospital functions, increased cooperation
between hospitals, and the enhancement of in-homemedical care [2]. Given the aforementioned policies, we
can state without exaggeration that regional medical
coordination is the most important concept in future
healthcare provider systems in Japan.
What types of factors contributed to the backgroundfor regional medical coordination becoming a key conceptof healthcare provider system reform? Insufficientdifferentiation of medical functions has always been noted
as a problem with Japan’s healthcare provider systems. A
review of recent history reveals problems such as
insufficient functional differentiation of hospital beds,
including mixing acute patients and long-term care patients;
insufficient functional differentiation for outpatients inclinics and large, medium, and small hospitals; and issues
with long waiting times and patient focus in large hospitals,
all relating to the current status and issues in healthcare
provider systems within the “Challenges and Perspectivesof Healthcare Reform” issued in March 2001 by the
Ministry of Health, Labour and Welfare’s Central Office for
Promotion of Reforms such as Healthcare for the
Elderly [3]. Such recognition probably motivated thereview of hospital bed classification in the Amendment toMedical Services Law of the same year. Furthermore, withsociety’s growing sense of crisis in the decline of healthcare
institutions, “A Vision for Ensuring Peace of Mind andHope” was issued in June 2008, specifying that standalone
healthcare institutions should not provide healthcare by aself-contained healthcare institution, but should promote
regionally contained healthcare for the entire region witheach healthcare institution leveraging its specialty [4].
Consequently, the following comprised the backgroundfactors of regional medical coordination: recognition of past
problems arising from the lack of functional differentiationin healthcare institutions combined with numerous reportsof shortage in healthcare manpower since 2006, the state of
decline in regional healthcare, and the expectation of
measures to integrally improve these issues from a supplierperspective.
As such, regional medical coordination is an importantand strongly promoted policy issue; however, there havebeen few cases in which such policy and related issues havebeen organized and analyzed on the basis of economic
knowledge. We believe that there is profound significancein understanding the academic background relating to the
key concepts in building a regional health provider system

as well as examining its validity and related considerations.
Based on the above recognition and fundamental
economic concepts, this study outlines an approach tointerpreting regional medical coordination within thecontext of economics, the implications derived, and thepoints that society should consider in order to promotedesirable regional medical coordination.
This paper proceeds as follows. First, after defining“regional medical coordination” and noting specificsituations, SectionⅡreviews previous research related toregional medical coordination from an economic perspective.
SectionⅢ examines self-contained healthcare institutions--Japan’s traditional system of providing regional healthcare.
SectionⅣ examines each currently promoted economic
background factor for regionally contained healthcare.
SectionⅤ describes important points for formulating better
regional medical coordination from an economic perspective.
SectionⅥ discusses common problems in regional medical
coordination and approaches to dealing with them. Section
Ⅶ describes bottleneck problems that determine regional
medical coordination policy success or failure. SectionⅧ
describes the tradeoffs in executing the policy. Finally,
SectionⅨ concludes the paper.

II. Definition and elements of regional
medical coordination and previous
research review
Although described as “regional medical coordination,”the concrete implementation of the policy in the field andactual cases takes various forms. Then, how exactly should
regional medical coordination be defined?
According to the Ministry of Health, Labour and Welfare,regional medical coordination is defined as “the promotionof functional differentiation and specialization of healthcare
toward smooth coordination of all healthcare institutions
within a region in accordance with the circumstances ofregional healthcare institutions and the condition ofregional healthcare, so that the residents receive appropriate
and consistent healthcare within their region through theeffective utilization of the available resources.” [5] From
this definition, we can see that “specialization and functional
differentiation of regional healthcare institutions” as well as“smooth coordination” are the major pillars.
Actual examples of regional medical coordination
implementation based on “specialization and functional
differentiation” that demonstrate “smooth coordination” inthe formulation of clinical networks through IT, the designof systems such as collaborating coordinators, theinstallation and use of open hospital beds, and the shareduse of medical equipment can be observed. [6] As thedefinition suggests, this study discusses the central
problem of regional medical coordination by focusing onfunctional differentiation and specialization and smooth

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Takuma SUGAHARA

coordination.
Previous research has indicated the problem addressedin this study. Less research than expected discusses
regional medical coordination from an economic
perspective. The first noteworthy work is Yamamoto andKondo [7], which empirically examines the extent to whichfunctional differentiation of healthcare has actuallyprogressed from the perspective of understanding theactual condition. Within the context of public hospital
restructuring, Tanida and Hayashi [8] demonstrated thatthe selection and concentration of resources throughfunctional differentiation does not necessarily equate todesirable results for society. Furthermore, Hayashi [9]constructed a logical model focusing on the healthcare
functions of acute and recuperative care and analyzed
circumstances wherein the differentiation of healthcare
functions has proven effective from a societal standpoint.
The study also examined fees for medical services, which
influence differentiation. As a result, interesting implications
were suggested, such as (1) maintaining the disparity
between the fees for medical services at a certain level inorder to properly facilitate functional differentiation and (2)the necessity for cooperation between healthcare institutions
with emphasis on the public interest versus profit-oriented
healthcare institutions to obtain the optimal social solution
through functional differentiation of healthcare [9].
Each of the aforementioned examples of previous
research focus on functional differentiation without
sufficient consideration of issues related to smoothcoordination that arise after functional differentiation.
Although the regional healthcare provider system in Japanis undergoing a major transformation from healthcare by
self-contained healthcare institutions to regionally contained
healthcare, the economic factors behind each type ofsystem have not been sufficiently examined.
Therefore, in addition to briefly organizing the economic
background factors behind the regional medical systemthat has evolved to date as well as describing anew the rolesof functional differentiation, SectionⅢ addresses the
economic understanding of smooth coordination issues.
Furthermore, classification of perceptions of functional
differentiation in regional healthcare can occur on various
levels such as clinics versus hospitals, clinical departments
versus functionalities of healthcare institutions, and acuteversus chronic illnesses. This study advances the theory
and assumption that the conceptual model significantly
bisects chronic and acute healthcare required in a region.

healthcare services to patients (Figure 1). This system
contains multiple healthcare institutions with similar
treatment functions in the region with no major differences,
particularly in the types of patients treated. Because thesecircumstances present no clear differences in treatment
functions or patients among healthcare institutions, each
institution must differentiate itself by specializing inpatients within a limited area of medical practice. It is wellknown that numbers of high-cost advanced medical
equipment such as CT and MRI in proportion to the
population are extremely high in Japan when comparedinternationally; this phenomenon is probably motivated bycompetitive differentiation.
Although the introduction of advanced medical equipment
and new, extended, and renovated hospital wards is areadily understood means of differentiation, it also incurs
significant investment costs. If fixed costs are a large
portion of investment costs, each healthcare institution can
reduce unit costs by increasing the amount of services by
exploiting the capital. This background factor of “economies
of scale” underpins the principle of lower costs.
In the conventional fee-for services payment system(“dekidaka barai” in Japanese), each healthcare fees areunitary regulated, the total medical practice revenue isfundamentally determined by multiplying the per unit fee
for medical service by the amount of service provided. In
this revenue structure, the reduction of per unit costs
equates to increased profit. It is considered that the fee-forservices insurance payment system coupled with theeconomic motivation of pursuing economies of scale byincreasing the amount of services provided have influenced
healthcare institution management, especially in Japan
where the costs of investments in the facilities and theequipment of healthcare institutions are not explicitlyclassified and evaluated in the fees for medical services.
Reasons other than large fixed costs explain “economies
of scale”. Service production scale expansion brings about
volume purchasing of raw materials necessary for supply. If
the purchaser has more significant negotiating power overthe seller, costs decrease even further through deals withmore favorable terms such as discounts.

III. Economic background of healthcare by
self-contained healthcare institutions
In healthcare by self-contained healthcare institutions,
one healthcare institution has comprehensive healthcare
capability and provides comprehensive and complete

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Figure 1 Healthcare System by Self-contained Institutions

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Economic background and issues of regional medical coordination policy in Japan

It is considered that economies of scale accompanied by
improved purchasing power has occurred when regional
healthcare institutions’ treatment functions and theirpatients were not sufficiently differentiated because one
regional institution expanded to offer more comprehensive
treatment for acute and chronic illnesses.
Similarly, achieving economies of scope is anotherimportant motivation for self-contained healthcare institutions.
We usually explain economies of scope as follows. Twogoods and services, Y1 and Y2, are produced simultaneously
at a total cost of C(Y1, Y2). The cost of producing thesegoods and services separately as individual units is C(Y1, 0)
and C(0, Y2). Economies of scope is defined when the costof combined production is lower than the cost of producing
each unit individually, that is, when C(Y1, Y2) < C(Y1, 0) +C(0, Y2).
Although certain facilities and equipment in healthcare
institutions have been designed for use in a specificdepartment, multiple departments and medical treatment
functions can share most equipment, such as theaforementioned CT and MRI devices.
We can differentiate a healthcare institution with a single
department acquiring each piece of equipment separately
with one with multiple departments acquiring theequipment centrally for shared use to provide healthcare
services. When evaluated as a healthcare system for an
entire region, the second example, given the same qualityof care, is more effective with lower investment andmanagement operational costs. Of course, for a single
institution to provide comprehensive self-contained healthcare
services for patients, it must have departments andfunctions for medical services bridging acute and chroniccare. Therefore, self-contained, healthcare institutions haveenjoyed the benefits of economies of scope.
In addition to each institutions aforementioned economic
factors, we note three factors for regional healthcare by self-

Figure 2

contained healthcare institutions: factors for consistently
increasing population, popularization of medical insurance,and payment system for medical services based on fee-forservices. Increasing population and the popularization of
the insurance system affect the increased healthcaredemand. A fee-for services payment system that guarantees
increasing profits merely by accommodating thecorresponding increase in demand probably supported theunderlying motivation for self-contained healthcare institutions
by independently meeting many patients’ healthcare needs.

IV. Economic background of regionallycontained healthcare
Regionally contained healthcare is based on functional
differentiation of healthcare institutions and smoothcoordination, in contrast to healthcare through selfcontained healthcare institutions (Figure 2).
The theoretical background for the measurement offunctional differentiation resides in classical economic
concepts: Adam Smith’s advantage of division of labor andRicardo’s comparative advantage. Using the concept ofcomparative advantage, Ricardo [10] demonstrated theenhancement of both productivity in society as a whole andsocietal welfare through each country’s utilization of its
comparative advantage by specializing in the production of
goods of comparative advantage and cooperatively facilitatingproducts through trade. Although Ricardo used theframework of trade to demonstrate the benefits offunctional differentiation through comparative advantage,the implications can be broadly applied to other aspects ofsociety. Here, we broadly segment regional healthcare
service functionality into acute and chronic healthcare andexplain the advantages of functional differentiation on thebasis of comparative advantage.
Consider two healthcare institutions (Hospital a andRegionally Contained Healthcare System

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Takuma SUGAHARA

Hospital c) in a region where healthcare institutionfunctions are insufficiently differentiated. When a set
number of healthcare personnel work for a set number ofhours in Hospital a, Unit A provides acute healthcare
services, and Unit B provides chronic healthcare services.
On the other hand, when the same number of personnel
work for the same number of hours in Hospital c, Unit A’provides acute healthcare services, and Unit B’ provides
chronic healthcare services.
If A > A’, Hospital a has an absolute advantage overHospital c in providing acute healthcare services. If A/B >A’/B’, Hospital a has a comparative advantage over Hospitalc in providing acute healthcare services (in comparison tochronic healthcare services).
Because 10 > 9 and 5 > 3 in Table 1, Hospital a also has
an absolute advantage over Hospital c in providing acuteand chronic healthcare services. From a comparativeadvantage perspective, Hospital c has a comparativeadvantage in providing acute healthcare services because(9/3) > (10/5). That is, Hospital c can produce three unitsof acute healthcare service by sacrificing one unit ofchronic healthcare service, whereas Hospital a can
produce only two units of acute healthcare service bysacrificing one unit of chronic healthcare service. Hospitala has an absolute advantage over Hospital c with regard toeither healthcare service (As A > A’ and B > B’). In thiscase, we examine whether it would be advantageous for
Hospital a to form a collaborative relationship with Hospitalc.
This time, Table 1 displays the number of units of bothacute and chronic healthcare services that each healthcare
staff member can provide in Hospital a and Hospital cwhen working a set number of hours.
Assume that Hospital a and Hospital c each have 200
personnel, 100 of which provide acute healthcare services,while the remaining 100 provide chronic healthcare
services. Table 2 displays the acute and chronic healthcare
services produced by each hospital under this assumption.
Let us further assume that each hospital differentiates
functionally by the service for which it has a competitive
advantage (its specialty). For example, Hospital a increases
the number of personnel who provide the service for which
it has a competitive advantage (chronic healthcare
services) by 180, and Hospital c increases the number of
personnel providing such service (acute healthcare
services) by 200. Table 3 displays the acute and chronic
healthcare services produced by each hospital under thisassumption.
A comparison of Tables 2 and 3 reveals an increase in the
total number of services produced in the entire region
through functional differentiation based on current
capability.
The concept of “comparative advantage” is not limited tointernational divisions of labor, but applies broadly to40general divisions of labor intra-domestically, interinstitutionally, and thus among healthcare personnel. Policy
implications of functional differentiation in regional
healthcare lie in the enhancement of the entire region’s
service provider capabilities through each healthcare
institution apportioning roles and specializing in its area ofexpertise on the basis of comparative advantage without
having to increase production capability. This strategy has
significant implications in light of the recent extreme
difficulties in securing adequate regional manpower,
beginning with physicians and nurses. Similar to theaforementioned Hayashi’s [9] discussion on conditions forachieving functional differentiation of healthcare regionally,
we must remember that functional differentiation according
to comparative advantage does not operate unconditionally.
One effect that can be expected within institutions that
accompanies the development of functional differentiation
within each healthcare institution is the “experience curve
effect”. The experience curve effect generally refers to theability of individuals and organizations to handle issues
more efficiently as their experience increases [11]. In
addition to generating improved outcomes, designatedhealthcare institutions can amass more cases and achieve
higher treatment efficiencies if patients suffering from thesame illness, heretofore dispersed among all healthcare
institutions, now gather in a specific healthcare institution

Table 1 Comparative Advantage ＆ Absolute Advantage
Hospital a

Hospital cAcute Care Services

105

Chronic Care Services

93

Table 2 Total Amount of Services under NOT Differentiatedby Comparative Advantage
Hospital a

Hospital cAcute Care Services

1000（＝10×100人）

500（＝5×100人）

Chronic Care Services

900（＝9×100人）

300（＝3×100人）

Total Amount

1900

800

Table 3 Total Amount of Services under Differentiated byComparative Advantage
Hospital a

Hospital cAcute Care Services

200（＝10×20人）

900（＝5×180人）

Chronic Care Services

1800（＝9×200人）

0（＝3×0人）Total Amount

2000

900

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Economic background and issues of regional medical coordination policy in Japan

with functional differentiation.

V.

Important economic factors in promoting
regional medical coordination

Functional differentiation of each regional healthcare
institution alone is insufficient to achieve regionallycontained healthcare because regional contained healthsystem requires the simultaneous operation of smoothconnections among the functionally differentiated institutions.
This section describes the economic factors that encouragesmooth coordination.
We can safely state that building a system for regional
medical coordination requires the formation of a networkthat interconnects healthcare institutions previously
operating as individual units in a region. Within such a
network, increasing subscribers in turn expands network
connections and information sharing, thus generating
positive externalities in the form of increased utility forexisting subscribers [12]. Economic externalities arecertain economic decisions and activities that influence thedecisions and activities of other economic entities [13]. A
positive externality exists if the influence is a net gain. As
an example of regional medical coordination, the larger the
network of healthcare institutions with relationships thatcooperatively facilitate referrals, and the more theexchange referrals increase, the greater the increase insubscriber (healthcare institutions and patients) benefits
and in the value of the network itself. Although new
institutional subscribers consider only the subscribing cost
and the benefits of using referrals from other institutions
when subscribing, the further benefit of subscription is theincrease in potential referrals to existing network users.
Researchers acknowledge that the network subscription
behavior always tends to be less than the socially desirable
level when such a positive externality exists [14].
Actual examples of construction of systems for regional
medical coordination include exclusive networks consistingof only advanced institutions in a region or entities having
existing relationships. However, to widely enjoy the
aforementioned external benefits and enhance benefits forthe entire region, the policy must encourage broad network
participation by lowering entry barriers and widely
publicizing the formation of networks in regional healthcare
for the referral and exchange referral of patients as well as
for information sharing.
Building a network requires an awareness of the“economies of consolidation”. Economies of consolidationdiffer from those of scope and denote a phenomenon
wherein the sharing and trading of information reduces
costs more than the individual collection of information,even with weak technological relationships [15]. Such cases
involve sharing customer information across industries
such as insurance, securities, and banking. For regional

medical coordination, sharing information among healthcare
institutions becomes even more important, and thus, each
institution must make sufficient preparatory adjustments tocreate common ground on various levels such as
information systems, paths to regional coordination, andsharing of patient information forms.

VI. Economic interpretation and response
to issues arising in applied coordination
Besides creating the system structure that coordinatesand facilitates the participation of multiple regional
healthcare institutions, we must consider a number ofissues in operating and maintaining the collaborative
relationship.
For example, those who have implemented regional
medical coordination have wondered, “Will other
healthcare institutions actually obey the rules instituted
within our region with regard to patient referrals, exchange
referrals, and systems for admitting patients who have beenreleased? Perhaps our institution alone will end up bearing
the burden….” Others have stated that “We received arequest from a central hospital that is also a coordinating
institution to admit a released patient into our long-termcare ward. Although we have beds available to receive thispatient, the last time we took in a patient about whom wewere informed that he posed ‘no problems’, the truth wasvery different and caused us consternation. Will it be allright this time?” If cases such as these fester, mutual
distrust increases and may eventually destroy a promisingcollaborative system. Such a situation may be depicted as a
prisoner’s dilemma, where each entity’s attempt tomaximize its greatest temporary personal benefit in anenvironment lacking sufficient mutual understanding
causes the inability to obtain the maximum results for all.
Now, assume that two hospitals exist within a region:
Hospital a is responsible for acute healthcare and Hospitalc is responsible for chronic healthcare. When Hospital arefers a released patient to Hospital c, assume that there
are two options: the circumstances are always accurately
related, and the accurate information is inconsistently
provided. Conversely, assume that Hospital c has two
options for receiving the patient referred from Hospital a:always provide information on available hospital beds andreceive patients on the basis of this information, andvoluntarily perform such service in an inconsistent manner.
Under such conditions, which options will Hospital c andHospital a choose each? Table 4 uses a numerical value torepresent the gain for each option exercisable by Hospital cand Hospital a. For example, if Hospital a does notconsistently provide accurate patient information, it will
incur no particular loss if Hospital c accepts the patient;however, Hospital c incurs a loss from the volume of work
created in adjusting to the admission of a patient on the

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Takuma SUGAHARA

basis of inaccurate information. That is, the gain for
Hospital a is 0 and that for Hospital c is −15, where theintegers in Area C represent each hospital’s gain.
Conversely, if Hospital c has doubts regarding theinformation supplied and refuses admittance of patients
despite Hospital a providing accurate patient information,
Hospital a incurs a loss as it cannot ensure a destination for
discharged patients and must expend considerable effort inresolving the problem; on the other hand, Hospital c incurs
no particular loss (Area B). When considering the entire
region’s gain from the complementary gains of both
Hospital a and Hospital c, Area D (gains of Hospital a at −2
and Hospital c at −2) is the most advantageous with
Hospital a providing accurate patient information despite
the extra effort with the recipient and Hospital c readily
accepting patients on the basis of accurate information
sharing. Conversely, Area A represents Hospital aproviding inaccurate information and Hospital c refusing toadmit patients, which is the least advantageous result for
the entire region.
Given these circumstances for gain, what kind of options
will both parties exercise when making rational decisions?
Following the thinking of acute care Hospital a, saving
themselves the cost of providing accurate information (gainof −10) incurs lesser loss than that by providing accurate
information (gain of −15) if chronic care Hospital c
decides not to voluntarily accept patients. Even if chroniccare Hospital c decides to accept patients, saving
themselves the work of providing accurate information(gain of 0) incurs lesser loss compared to the option ofproviding accurate information (gain of −2). Therefore, theresult will be Hospital a exercising the option of saving thework of providing accurate information regardless of
Hospital c’s decision.
Following the similar thinking of chronic care Hospital calso results in the decision to not voluntarily accept
patients, regardless of Hospital a’s decision. This result
determined by both parties’ choices is the least desirable
gain for society represented by Area A (−10, −10).
This example is the setting for the two-player non-Table 4 Pay-off Matrix under Prisoner s Dilemma42

cooperative game in game theory. Given these circumstances,
why can the collaborating hospitals not choose the options(Area D) most beneficial to society: provide accurate
information and accept patients? Although a detailed
explanation exceeds the scope of this study, let us consider
three important factors in choosing the most beneficial
options. First, these settings do not provide an opportunity
for negotiation and mutual understanding. Naturally,
achieving the whole and harmonious distribution of
maximum benefits through both parties’ adequate mutual
understanding and negotiation equates to obtaining thegains in Area D. Second, the setting is depicted as a onetime deal only and does not take into account repeat twoparty decision-making in the context of an enduring
relationship. If the mutual relationship is a one-time deal,
the decision-making process has a strong incentive tomaximize temporary personal gain. However, these factors
differ when the relationship is long term and permanent.
Such a relationship sours through maximization of shortterm self-interest by outwitting your partner, and rather
than settling for a medium- to long-term decrease in gain,
parties probably have greater incentive to cooperate andmaximize medium- to long-term gain even by sacrificing acertain amount of short-term gain. Third, the placement ofa third party with neutrality and authority in a monitoring
capacity for the benefit of the two-player parties. Suchmeasures prevent the aforementioned circumstances andtypify the government’s expected function in a system ofregional medical cooperation.
The prisoner’s dilemma example suggests the following
three tactics for achieving successful coordination ofregional healthcare institutions: 1) ensure opportunities forsmooth communication and mutual understanding; 2)
increase the permanence of the collaborative relationship;and 3) interpose a neutral authority.

VII. The bottleneck problem in regional
medical coordination
The bottleneck problem is derived from the metaphor
that the amount of water outflow from a bottle is limited by
the thinness of the neck (bottleneck) regardless of how
much water the bottle contains, and refers to the mostpressing factors and problems that influence overall results.
Here we consider the bottleneck problem in systems forregional medical coordination from the perspectives of bothsupply and demand.
The bottleneck problem on the supply side, more thananything else, entails the absolute shortage of treatment
facilities and functions accompanied by the difficulty of
securing adequate manpower such as physicians andnurses. One reason for promoting regionally contained
medical coordination is to enhance supply within a region
without having to obtain new production resources

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Economic background and issues of regional medical coordination policy in Japan

externally through functional differentiation even with set
conditions. This issue is significant in promoting theregional medical coordination policy in circumstanceswhere many regional healthcare institutions currently haveextreme difficulty in securing physicians and nurses, withno particular prospects for improvement.
Unfortunately, coordination is not practical with anabsolute shortage of manpower and healthcare institutions
required to cover a region’s minimum healthcare functions.
The difficulty in coordination is especially obvious when
distinguishing between acute and chronic care in theabsolute shortage condition in chronic care facilities thatreceive patients released from acute care, such as longterm care facilities, nursing facilities, and home caresystems. From this perspective, a system of regional
medical coordination that promotes functional differentiation
and role apportionment must ensure that it is an effective
policy in regions with minimum healthcare functionality.
The bottleneck problem on the demand side lies in thecurrent and future healthcare needs within a region. Japan
continues to age as a nation. Although the need for chronic
healthcare is expected to increase, regions exhibit wide
disparities in age composition and population. Therefore,
they differ greatly in the required content and amount of
future healthcare. Although building a system for regional
healthcare promotes a unified national policy, such as the“five illnesses/five departments” rule required in regional
medical plans, the national system should provide sufficientconsideration of the disparities among regions’ current andfuture needs. The purpose of planning regional medical
coordination is to establish a system that effectively andadequately provides the required healthcare services forthe region’s residents. Policy makers must remember that
accurately understanding regional healthcare needs andsupplying a system that reflects those needs when
promoting such a policy ensure that the building of acoordination system does not become an object unto itself.

VIII. Tradeoffs between patient convenience andfunctional differentiation in healthcare
institutions
From the perspective of patients and users, functional
differentiation among healthcare institutions may cause thefollowing issues: 1) patients previously receiving complete
checkups at a single neighborhood healthcare institution
are now required to receive examinations at multiple
healthcare institutions because of coordination; 2) patients
who even though still receiving a complete checkup at asingle healthcare institution must receive it at a distanthealthcare institution because of functional differentiationof the institution where they had formerly received
examinations.
These issues reduce patient accessibility convenience.

Naturally, regional residents benefit from efficient
healthcare delivery and increased capacity to provide
services through functional differentiation and coordination.
That being said, we must acknowledge that the
restructuring and consolidation of regional healthcare
institutions under the functional differentiation umbrella
are overwhelmingly advanced in accordance with healthcare
providers circumstances and logic. I stress the importanceof 1) considering the level of patient convenience reduction
caused by the regional medical coordination policy, and 2)
evaluating the policy from the perspectives of both society
and the appropriateness of coordination-related restructuring
and consolidation.

IX. Summary and conclusions
Last, let us review the main points of this study. It first
discussed the traditional concept of regional healthcare
providers and introduced changing concepts of regional
healthcare, from the original “self-contained healthcare
institutions” to the new concept of “regionally contained
healthcare,” with the nature of each provider and thefactors inherent in each policy. In healthcare via selfcontained healthcare institutions, each medical facility
pursues economies of scale and scope on the basis ofsocietal and systemic contexts of consistent increase inhealthcare demand, fee-for services payment system, andfunctional differentiation, resulting in the internal economic
motive of healthcare via self-contained healthcare institutions.
In contrast, restructuring toward more effective regional
healthcare has become a societal demand in the societal
and systemic context of future population reduction andaging, absolute difficulties in securing physicians andnurses, and stringency in funding healthcare costs.
Researchers consider the introduction of a regional
healthcare coordination policy connecting functional
differentiation among healthcare institutions and institution
coordination an appropriate response to this demand.
The regionally contained healthcare framework supports
healthcare needed within a region through functional
differentiation and coordination. As classical differentiation
models adapted to acute and chronic regional healthcare
services suggest, functional differentiation may, undercertain conditions, increase the capability to provide for theentire society without introducing additional production
resources. Promoting such a policy has a certain economic
rationality in light of the current severe labor shortages inregional medical care.
Furthermore, society requires a good system of regional
coordination without relying completely on functional
differentiation. This goal demands infrastructure developmentthat enables smooth information sharing and morewidespread participation, producing the benefits of network
externalities and consolidation economies.

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Takuma SUGAHARA

We described circumstances similar to a prisoner’s
dilemma in the referral of patients as an operational
problem in a coordination system. Furthermore, wesuggested that guaranteeing opportunities for mutual
understanding, guaranteeing long-term coordination, andneutral third-party authority facilitation may be effective
measures for improving such situations.
Although creating a system of regional medical
cooperation is a policy project uniformly promoted by thegovernment, a fundamental definition of its success or
failure must consider the bottleneck problem. Supply side
factors include the absolute shortage of healthcare
resources required to cover a region’s minimum healthcare
functions. Demand side factors include a competent
understanding of current and future healthcare needs.
Support for regions experiencing absolute shortages ofhealthcare resources is an indispensable prerequisite inpromoting the regional medical coordination policy. A
coordination system should be built in accordance with
regional circumstances revealed by sufficient research andunderstanding of regional healthcare needs.
Finally, we stress that the regional medical coordination
policy primarily from the logic and perspective of providers,and an overall evaluation of the policy should include
sufficient evaluation of the inconvenience the policy causes
to patients.

Acknowledgements
I have had the generous support and encouragementfrom Dr. Toshiro Kumakawa (National Institute of Public
Health).
This paper is a part of an academic project entitled
Economic Analysis of Intergenerational Issues: Searchingfor Further Development (Project Director: Noriyuki
Takayama; Program Leader; Seiritsu Ogura), funded by aGrant-in-Aid for Specially Promoted Research from Japan's
Ministry of Education, Culture, Sports, Science andTechnology (Grant Number 22000001).

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地域医療連携政策の経済学的背景と課題
抄録「地域医療連携」は今後の地域医療の提供体制を考える上でのキーワードであり重要な政策課題として現在強力に推進されている．しかしこれまでその政策と関連課題について経済学の知見にもとづ
き整理，検討した例はきわめて少ない．本稿では「地域医療連携」が経済学の文脈のなかでどのように解釈され，いかなる意味をもつのか，また社会にとってより望ましい地域医療連携を図っていくた
めに留意すべき点は何かという点について，経済学の基本的な概念をベースとして概説した．
従来の「医療機関完結型」医療では，個々の医療機関が「規模の経済性」，「範囲の経済性」を追及するなか，結果として「医療機関完結型」医療を志向する経済的動機が内在していた．一方，「地域完結型」医療における機能分化は，一定の条件のもと追加的生産資源の投入なしに社会全体の提供能力を向上させる可能性があり，現在の地域医療における深刻な人材不足等を考慮すれば，この政策の推進には経済学的にも一定の合理性がある．また良好な連携体制の構築には，「ネットワークの外部性」，「連結の経済性」を享受できるような基盤整備が重要である．連携体制構築後の運営面での課題を改善する方策としては「意思疎通の機会の確保」，「連携関係の永続性確保」，「第三者の介在」が示
唆された．
地域医療連携政策は主として提供側の論理で考えられている側面が強く，政策全体の評価としては，
この政策でもたらされる患者側の不利益や便益低下についても十分配慮すべきである．
キーワード：地域医療連携，医療提供体制，機能分化，地域完結型医療，ネットワーク外部性，囚人
のジレンマ
菅原琢磨
法政大学経済学部

J. Natl. Inst. Public Health, 62（1）: 201345