The impact of a new payment system with case-mix measurement on hospital practices for breast cancer patients in Japan

Breast cancer is the most common cancer in Japanese women. As the incidence of breast cancer rises, the economic burden of breast cancer treatment increases as well. In 2003, the Japanese government introduced a new payment system with case-mix measurement to encourage hospitals to utilize more effective inpatient management. The present study investigates the impact of the new payment system on hospital practices, as determined by changes in length of stay (LOS) and costs of health resource use in breast cancer treatment by either surgery or chemotherapy. Administrative claims data were collected from 41 national university-affiliated hospitals between 2003 and 2005, and multivariate analyses were performed using a multilevel modeling approach. We found shortened LOS for both treatments, which was the main contributor to the reduction in total costs of health resource use. Medication costs were significantly decreased due to increased use of generic medication in surgery cases, but not in chemotherapy. Surgery practices were determined to be more affected by the new payment system than chemotherapy. These results indicate that hospitals responded to the new payment system by controlling costs while maintaining the quality of care.