How does the price regulation policy impact on patient-nurse ratios and the length of hospital stays in Japanese hospitals?

This study examines how the 2000 and 2006 revisions of the fee-for-service system have affected patient-nurse ratios and the average length of hospital stays in Japan. The empirical results show that hospitals are quite responsive to changes in price policy. The fee revisions have certainly achieved the policy objectives of reducing patient-nurse ratios and the length of hospital stays. As a result, hospitals have responded by greatly increasing the number of expensive beds for acute care. However, this was not exactly predicted by the Japanese government, which has aimed to reallocate health-care resources, such as beds, to subacute or long-term care.