Willingness to pay for municipality hospital services in rural Japan: a contingent valuation study

BACKGROUND: The Japanese healthcare system has undergone reforms to address the struggles that municipality hospitals face. Reform guidelines clearly define criteria for administrative improvement. However, criteria to evaluate the demand for healthcare provisions in rural Japan, including the needs of rural residents for municipality hospitals in particular have not been specified. The purpose of this paper is to measure residents' willingness to pay (WTP) for municipality hospital services using the contingent valuation method, and to evaluate municipality hospital valuation on the basis of WTP. K town, located in the Hokkaido prefecture of Japan, was selected as the location for this study. Participants were recruited by a town hall healthcare administrator, hospital and clinic staff, and a local dentist. Participants were asked what amount they would be willing to pay as taxes to continue accessing the services of the municipality hospital for one year by using open-ended questions in face-to-face interviews. FINDINGS: Forty-eight residents were initially recruited, and 40 participants were selected for the study (response rate 83%). As compared to K town's population, this data slanted toward the elderly, although there was no significant difference in frequency among the characteristics. The median WTP was estimated at 39,484 yen ($438.71), with a 95% confidence interval 27,806-55,437 yen ($308.95-615.96). Logistic regression revealed no significant factors affecting WTP. CONCLUSIONS: If the total amount of residents' WTP for the municipality hospital were to be estimated by this result, it would calculate with 129,586,000 yen ($1,439,844). This is approximately equal to the amount of money to be transferred from the general account of the government of K town, more than one-half of the town tax of K town, and about two-fold in comparison to Japan as a whole. This showed that K town's residents placed a high valuation on the municipality hospital, which nearly equalled the amount that the K town government provided to the municipality hospital to cover its annual deficit. K town residents had come to expect not only general clinical practice, but also emergency medical services and night practice provided by their own town's municipality hospital. WTP can be used as a measure of hospital evaluation because it reflects the importance of the hospital to the residents in its region.