Institute for Health Economics and Policy

IHEP is a non-profit corporation approved by the Ministry of Health, Labor and Welfare. This research institute receives the full support of academic societies, the health care industry and the Japanese Government and was established to promote the studies of health economics and policy in Japan on October 1, 1993. The establishment of this kind of research institute had long been expected to activate the policy argument regarding Japanese health care issues, promote empirical studies in this field, and contribute to the development and improvement of health care policies. In response to the growing demand on health economics research, IHEP was founded with the strong support of specialists, researchers, medical institutions and the related industries.

The following are extracts from the IHEP prospectus

(This prospectus was drawn up as material for a promoters meeting held on May 14, 1993.)
The necessity to establish IHEP was explained as follows.

1

National medical expenses are currently estimated to exceed 24 trillion yen and to be more than 6% of national income.

Accordingly, the number of medical institutions is increasing year on year. There are more than 10 thousand hospitals, more than 80 thousand clinics and more than 50 thousand dental clinics. The number of people working at medical institutions amounts to more than 2 million.

There are a large variety of related industries in this field including the pharmaceutical industry, the medical equipment industry, the health care related distribution industry and the health care related service industry, and estimates of their output indicate the gradual strengthening of their positions in the Japanese industrial world.

Moreover, under the universal health insurance coverage system, the management of the health care insurance system has become an important financial administration problem which is now discussed in budget formation meetings every year.

2

Although health care occupies qualitatively and quantitatively important positions in the national economy, theoretical researches as to how to distribute economic resources for health care and empirical investigations fairly and efficiently and analyses of various economic/financial problems have not been thoroughly conducted. Some specialists have pointed out that health economics has not been established as a subject for scientific study in Japan.

3

In Europe and America, however, health economics has already been introduced into research education in universities. In these countries, there are many research institutes for highly academic health economic studies which contribute significantly to the improvement of the quality of health care services by conducting theoretical research, proposing policies and improving the quality of workers belonging to the health care industry.

The governments of European countries and America simultaneously establish and utilize these research institutes in various fields. In America, the development of diagnosis-related groups (DRGs) which are used as the basis for calculating hospital insurance benefits and the resource-based relative value scale (RBRVS) which is used as the basis for making the relative value scale, were the result of the studies conducted in the universities and private research institutes at the request of the Health Care Financing Administration.

4

In this environment, IHEP was established for the following purposes; to study the distribution of health care related resources and various economic and financial problems from the practical aspects of experience and policies, to educate specialists in health care economics, to found related research institutes and to train health care staff. Through these activities, the study of health economics in Japan can be promoted and reach a global level in the near future.