The Role of Management in Japanese Hospitals

Americans are both envious and dismayed at Japanese managerial success. Surprisingly, health care management in Japan, particularly in hospitals, is very different from that in world-famous Japanese corporations. The majority of hospitals are owned by a physician, called the “incho,” who is usually both chief executive officer and medical director and who also actively practices medicine. Medical and administrative management are completely intertwined. Hospitals are paid set fees by mandated insurance schemes, and the public is free to choose from whom they receive care. Hospitals try to relate well to their communities and serve their needs, but this is done with little of the organizational flair that has made Japanese industry so successful abroad.