How Commercialization of Medicine is Improving Japan’s Healthcare Industry

Legislation from 2010 surrounding healthcare commercialization is finally coming to fruition in Japan in the form of successful business partnerships and improving health outcomes in the Asian region.

Japan has long been known as a global leader when it comes to providing high-quality healthcare within its borders. Soon, it will be known for providing high-quality healthcare outside its borders as well. Changes have been in the works since 2010, when the Japanese Ministry of Economy, Transport and Industry (METI) announced a new strategy to address the changing health landscape and medical needs of the Japanese population and neighboring countries.

The plan identified several key domestic challenges: shifts in the disease burden toward non-communicable diseases, household composition changes, rising healthcare costs, inefficiencies and deficits in medical personnel, and the slow adoption of IT in health systems. In light of these challenges, the METI recommended an internal refocusing of healthcare resources. New policies were proposed to meet the needs of its aging population, expand child care services, address the high demand for pharmaceuticals, and support the growth of medical devices and care robot industries.

The strategy laid out by the METI also aimed to capitalize on the growing global trend of medical travel, in which patients cross borders to seek medical care, to attract patients from other countries to Japan. METI emphasized several additional key strategies to appeal to foreign patients, including the establishment of a system to foster networking and brand-promotion opportunities for medical centers, the creation of new medical visas and acceptance protocols for foreign patients, and the refinement of Japan’s medical technology business environment to encourage progress in medicine.

The plan seemed to work: Japan’s medical facilities hosted 27,000 foreign patients in 2012. Emboldened by this success, Prime Minister Shinzō Abe saw the opportunity to export Japan’s medical expertise abroad to support the development of high-quality healthcare services in countries home to the largest numbers of medical travelers, namely China, South Korea and Russia.

The Abe administration went on to introduce policies that created a “minimum regulation” business environment as part of an ambitious 2013 revitalization strategy intending to spur nationwide economic growth. These policies also worked to encourage the commercialization of healthcare services, as providers that created partnerships and built facilities in neighboring Asian countries could be reimbursed by the government.

The Aizawa Rehabilitation Training Center in Beijing, pictured here, is the product of a partnership between Aizawa Hospital in Japan and Beijing Puhua International Hospital.
The Aizawa Rehabilitation Training Center in Beijing is the product of a partnership between the Japanese Aizawa Hospital and Beijing Puhua International Hospital. Photo from Beijing Puhua International website

For example, Aizawa Hospital, based in Nagano, Japan, opened a clinic in Beijing in March 2016, and has since been successful in its expansion efforts. Aizawa is currently weighing expansion offers from several other cities.

Since METI laid the groundwork for medical commercialization in 2010, it seems that international partnership opportunities abound. Japanese providers and companies have established and funded a total of 19 medical facilities in 13 countries, with another 13 projects on the horizon. These numbers already far exceed the original goals of constructing at least 10 medical facilities abroad by 2020, and suggest high demand for Japanese healthcare services.

It’s not just healthcare delivery systems getting a boost from Abe’s plan. Actively exporting medical services has spurred growth within associated industries in Japan, including medical device production, pharmaceuticals and IT systems. And other companies outside the medical realm are getting involved in international partnerships, too. Itochu Corp. and Mitsui & Co. have partnered with hospitals and medical device manufacturers to open clinics in China, Indonesia and Russia, while water-purification system manufacturer Nihon Trim Co. plans to open a clinic in Beijing with a Chinese partner.

All of this international work could, in the end, have some serious benefits for Japanese citizens. Many policymakers have claimed that work abroad could introduce Japanese medical professionals to new challenges and lessons in service delivery, laying the groundwork for innovation and advanced care solutions at home. If all goes as planned, expansion into the global market will inspire technological advancements in Japan’s medical field and secure Japan’s legacy as an innovator in healthcare.

With enticing business prospects and incentivized growth potential, Japanese companies and hospitals may very well be taking over the Asian healthcare industry.

 

Alana Assenmacher

 

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