Regional differences in medical expenses for the elderly and the economic implications

The purpose of this paper is to clarify characteristics of regional differences in medical expenses for the elderly over the period 1983−1999 in Japan, and to propose a new hypothesis for explaining the differences from a viewpoint of property right theory. Under the Japanese healthcare delivery system, medical institutions coexist in spite of the various forms of their property rights, and provide a wide range of medical services. Throughout the period, regional differences in medical expenses per elderly person have been decreasing and still remained at the high level. With regard to inpatient medical expenses per elderly person, the maximum still exceed the twice of the minimum at the prefectural level. The empirical results show that private hospital institutions specialize in providing inpatient medical services for the elderly in the hospital sector, and the number of these hospitals is one of the major determinants for regional differences in inpatient medical expenses for the elderly