DRG/PPS and DPC/PDPS as Prospective Payment Systems.

Japan introduced a national health insurance system in 1961, subsequently earning a high reputation as the world’s most impressive healthcare insurance system thanks to the dedication of its health professionals. Indeed, health indicators published by the WHO and other organizations testify to this achievement. However, as the birth rate declined and medical care became more advanced, addressing the problem of financing rising medical costs became an urgent issue in 1997. Introducing a prospective payment method for acute inpatient care to the medical fee system was one of the approaches considered to deal with this issue. In July 2012, the South Korean government adopted a prospective payment system (PPS) based on a diagnosis-related group (DRG) pilot program for its health insurance system. This led to opposition from the medical profession, starting with the South Korean Medical Association, and an urgent symposium was called as medical professions prepared to strike. I gave a lecture on Japan’s experiences at the symposium as a case study on a country neighboring South Korea. This paper, presented to WMA uses the text of that lecture to reexamine DRG/PPS, a prospective payment method for acute inpatient medical care, and DPC/PDPS, Japan’s own unique system.