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Section 5. National Hospitals and Sanatoria as Provider of Policy-Based Medical Services

1. Execution of Policy-Based Medical Services and Implementation of Management Improvement

(1) Execution of policy-based medical services

Since the national hospitals and sanatoria were founded after the war as successors to the old army and navy hospitals, they have contributed greatly to the advancement of medical care for citizens including the treatment of tuberculosis, which used to be called a national disease. However, while medical environment is changing greatly with advancement and diversification of medical care and quantitative replenishment of medical institutions by other entities, they are expected to play an active role that is suitable to national medical institutions.

Considering this expectation, the "Basic Guidelines for the Reorganization and Rationalization of National Hospitals and Sanatoria" was issued in 1985 to define the role of national hospitals and sanatoria to implement the policy-based medical services which should be progressed as national policy while basic and general medical care services are entrusted to other public and private medical institutions.

Specific tasks of national hospitals and sanatoria are: 1 pioneering advanced medical care for cancer, circulatory diseases, etc., 2 medical care in the area where local hospitals and private hospitals have difficulties due to historical and/or social background, such as AIDS, Hansen's disease, tuberculosis, etc., 3 executing medical activities to satisfy their responsibilities for national crisis management and active international contribution, and 4 implementing policy-based medical services that are important for the nation.

As to above mentioned 1-3, national hospitals and sanatoria are implementing not only medical examination but clinical research, educational and training, and dispatching information. Their recent activities include: 1 establishment of the medical examination system by organ at the occasion of opening a new ward in the Central Hospital of the National Cancer Center, implementation of clinical test of proton beam cancer therapy at the East Hospital of the National Cancer Center, implementation of heart transplantation from a brain-death donor based on the Organ Transplantation Law (at the National Cardiovascular Center), implementation of kidney transplantation (at the National Nagasaki Central Hospital and National Sakura Hospital), 2 utilization of the "HIV Treatment Support Network System" which enables the delivery of high quality medical care based on the consultation with specialized doctors at the AIDS-treatment/R&D centers while patients are in a nearby model hospital, 3 dispatching physicians of national hospitals to disaster areas after the Columbia Earthquake, and 4 test implementation of fixed amount system for acute stage in-hospital medical care that is part of radical reform of the medical insurance system, and formulation of a model manual for the Computer Year 2000 problem, etc.

(2) Executing management improvement

In order for national hospitals and sanatoria to perform policy-based medical services, it is important to establish efficient management structure by executing management improvement successfully.

Until fiscal 1992 the financial conditions of national hospitals and sanatoria continued to worsen every year, but in June 1992 the "Report of the Round Table for the Managerial Improvement of National Hospitals and Sanatoria" was formulated and various measures were taken for management improvement such as: 1 clarifying the responsible accounts for specific expenditures by operating general medical services with the revenue of medical fee, and receiving fund transfer from the general account to bear the expenditures for policy-based medical services, etc. that are not part of revenue source, 2 introducing a system to operate the institution according to the business plans of individual facilities which are created based on the total revenue and total expenditures including the reimbursement for borrowed money, etc., and 3 evaluating the performance by setting and utilizing management indices. As a result of these efforts, the amount of fund transfer from the general account decreased greatly from \258.8 billion (24.9% of transfer rate) in fiscal 1994 to \141.8 billion (13.2% of transfer rate) in fiscal 1999.

2. National Hospitals and Sanatoria in the Scheme of Administrative Reform

(1) Promoting reorganization

In order for national hospitals and sanatoria to actively perform their mission of providing policy-based medical services, it is necessary to enhance their functions by collecting and concentrating limited medical resources to selected institutions.

To achieve this goal, institutions that cannot perform policy-based medical services will be transferred to private hospitals and local hospitals through merger and management transfer as instructed in the basic guidelines former mentioned, and in 1986 a reorganization plan was formulated to reduce 239 institutions at that time to 165 institutions. Since then the reorganization is in progress.

Recently, many years of efforts in the past are beginning to show success. In 1996 the Law on Special Measures Associated with the Reorganization of National Hospitals, etc., which stipulates the reduction of transfer value of the assets belong to national hospitals and sanatoria, aid for operation cost, etc., was amended to provide preferential treatment in order to expand the range of qualified recipients for asset transfer, etc. As a result, six cases of reorganization projects were completed in 1998 (two cases of merger, four cases of transfer), and the progress of reorganization is accelerating.

Furthermore to the promotion of reorganization, in 1996 the Cabinet established the "Administrative Reform Program" and indicated that the action measures including the close-down of institution must be decided by the end of fiscal 2000 and implemented as soon as possible for all subject institutions for the reorganization plan for which planned actions have not been completed, and additional target institutions should be considered for the reorganization.

In addition, the "Basic Law for Reform of Central Ministries and Agencies" established in 1998 and "the General Policies for Reform of Central Ministries and Agencies" decided in January 1999 are also stating the further promotion of reorganization.

Considering these laws and policies, the reorganization plan was reviewed in March 1999. The outline of the review is indicated below:

1 To concentrate the area of policy-based medical services in pioneering advanced medical care and treatment for intractable diseases, and to construct a national network for policy-based medical services to take charge for medical treatment, clinical research, education and training, and dispatching information by each area of policy-based medical services.

2 Handling of individual diseases in this scheme:
(a) For tuberculosis, services are basically concentrated in one institution per prefecture to improve the system to perform specialized medical care including the treatment for multiple drug resistance tuberculosis, etc.
(b) For serious conditions of mental and/or physical disabilities, as part of review with the viewpoint of long-lasting system, actions will be taken based on the model of management transfer to social welfare foundations, etc. with the prospect of desirable conditions for patients in the future.
(c) To improve medical care and research system for diseases unique to the elderly (medical care for longevity), Chubu Hospital of the National Sanatorium will be renovated to be the national center.

3 Based on the assumption of building this network for policy-based medical services, 12 institutions that cannot perform such policy-based medical services will be added to the subject for reorganization.

As indicated in the "Basic Plan on Reduction of National Administrative Organizations and Improvement of Efficiency" decided by the Cabinet in April 1999, these reorganization efforts will be further promoted according to the reorganization plan after review.

(2) Preparation for creating independent administrative institution

According to the Basic Law for Reform of Central Ministries and Agencies, details of the plan to change national hospitals and sanatoria to independent administrative institution will be discussed, except for the institutions to be maintained with the current status as advanced and specialized medical centers, sanatoria for Hansen's disease, etc. The timing for the transfer of national hospitals and sanatoria to independent administrative institution has just been decided to be fiscal 2004 in the "Basic Plan on Reduction of National Administrative Organizations and Improvement of Efficiency", and the status of the employees for those institutions will be national public servants employees. In subsequent activities, we must proceed preparation for both system design and actual jobs with careful consideration of the characteristics of institutions.

In any case, national hospitals and sanatoria will carry on their responsibilities for adequately performing policy-based medical services after becoming independent administrative institution, and they are expected to make great contributions to the improvement of medical care in the future with the expanded management autonomy and freedom in decision making process which enable them to realize efficient and effective hospital operation.

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