In Japan, a nation renowned for its technological advancements and high-quality healthcare, there exists a challenge of ensuring equitable access to medical services. The country’s health care system faces issues such as uneven distribution of medical resources, rising costs, and aging population. Many people in rural regions have difficulty accessing adequate and timely health care. As the nation grapples with the spread of new COVID-19 variants and the challenges of an aging society, this healthcare gap threatens to become even more pronounced.

This growing disparity has paved the way for the rise of telemedicine in Japan, a field that holds significant potential for investors. Telemedicine involves leveraging information and communication technologies (ICT), such as the internet and smartphones, to enable remote consultations and treatments between physicians and patients. By breaking down the barriers of distance and time, telemedicine has the potential to revolutionize healthcare access in rural and remote areas of Japan.

By investigating the differences between urban and rural areas in Japan and studying the growth of telemedicine, we can gain a comprehensive understanding of this rapidly expanding market. Grasping the complexities of Japan’s healthcare system and the specific challenges faced by rural communities allows us to share valuable insights into the future of telemedicine. These insights not only inform potential investments but also underscore the importance of telemedicine in addressing the healthcare gap throughout the country.

In the following sections, we will delve deeper into the urban-rural healthcare disparities in Japan, explore the current state of telemedicine, and discuss the future opportunities that lie ahead for global investors in this burgeoning field.

Urban-Rural Disparities and Healthcare Access in Japan

Japan boasts an advanced healthcare system that ranks highly on a global scale, with top-class indicators such as life expectancy and infant mortality rates. The country has adopted a statutory health insurance system (SHIS), requiring all citizens and resident noncitizens to enroll in public health insurance and setting out-of-pocket expenses between 10% and 30% for most services, with some variations and safeguards depending on age, income, and medical needs.

However, in Japan, healthcare resources such as medical facilities and physicians are disproportionately distributed across regions, often making access to medical services difficult or delayed for people living in remote or sparsely populated areas. The following graph shows the number of physicians per 1,000 population in OECD countries, based on data from the Japan Medical Association Research Institute. Japan has 2.4 physicians per 1,000 population, which is lower than the OECD average of 3.5. The Ministry of Health, Labour and Welfare (MHLW) states that “there is no resolution to the regional and specialty maldistribution of physicians, and there are indications of physician shortages in some regions and specialties.”

As Japan’s population continues to age and become more nuclear, older adults face particular challenges in accessing healthcare facilities. For households with members aged 65 or older, couples with both partners aged 65 or older, and single-person households aged 65 or older, the proportion of households located more than 1 km away from the nearest medical facility is 24.4%, 21.5%, and 17.7%, respectively. This suggests that older adults’ residences tend to be located relatively farther away from medical facilities, particularly in rural areas.

This situation imposes both physical and economic burdens, particularly for the elderly and those requiring care, who often find it difficult to leave their homes and, as a result, face even more limited access to healthcare services.

In addition to the disparities in physician distribution and distance to hospitals, there are also noticeable differences in the number of clinics per 1,000 population across various regions in Japan, as illustrated in the figure above. The map displays a color-coded representation of clinic density, with darker colors indicating a higher concentration of clinics in a given area. While it’s expected that densely populated urban centers such as Tokyo, Kyoto, Osaka, and Kanagawa would have a lower number of clinics per capita due to the sheer volume of residents, it’s worth examining the situation in regions like Niigata.

Niigata, despite having only 15% of Tokyo’s population, also experiences a low number of 0.3 clinics per 1,000 population, indicating that the region may face challenges in providing adequate healthcare services to its residents. This raises the question of whether such a situation may be inconvenient for the elderly population living in the area. Inadequate access to clinics and healthcare services can negatively impact the overall health and well-being of residents, especially older adults who may require more frequent medical care.

The Role of Telemedicine in Addressing Healthcare Disparities

Telemedicine, which leverages information and communication technologies (ICT) like the internet and smartphones, offers a powerful solution to the healthcare disparities faced by rural residents in Japan. By enabling remote consultations and treatments between physicians and patients, telemedicine not only improves healthcare access for rural populations but also alleviates the burden on healthcare professionals, including doctors and nurses.

One of the primary benefits of telemedicine is the convenience it offers to patients. They can consult with specialists online from the comfort of their homes or nearby clinics, which saves time, reduces transportation costs, and minimizes the risk of infections. This aspect of telemedicine is particularly valuable in areas with limited medical facilities, such as remote locations and islands. Moreover, it allows patients to access healthcare services during difficult situations like disasters or infectious disease outbreaks when leaving home is challenging.

Telemedicine also enables physicians to monitor patients’ health conditions and lifestyle habits remotely, providing appropriate advice and prescriptions. This facilitates collaboration between doctors, allowing them to determine diagnoses and treatment plans more effectively. Nurses, too, can provide online health management and caregiving support to patients, further enhancing the quality of care.

By utilizing real-time health monitoring and advice for patients who require regular health management, such as those with chronic illnesses or the elderly, telemedicine can also support patients in managing their health at home. Services that employ wearable sensors and smartphones are instrumental in this regard.

The evolution of telemedicine in Japan has been marked by several key milestones, transforming the way healthcare services are provided to patients, particularly in rural areas.

Initially, telemedicine in Japan was categorized into two types: online consultations and telephone consultations. In March 2018, Japan’s Ministry of Health, Labour and Welfare (MHLW) introduced the Guidelines for the Appropriate Implementation of Online Medical Examinations, outlining the conditions and procedures for implementing online medical examinations. Although this enabled online medical examinations from the first visit, specific requirements needed to be fulfilled, such as physicians attending MHLW-designated training programs and patients signing consent forms.

However, the COVID-19 pandemic served as a catalyst for the further adoption of telemedicine and spurred the introduction of looser regulations. In April 2020, the MHLW issued temporary and special measures in response to the COVID-19 pandemic titled, Handling of Consultations Using Telephones and Information Communication Devices in Light of the Spread of COVID-19. These measures allowed for initial consultations to be conducted over the phone or online, while also relaxing requirements like physician training and patient consent form submission.

Further advancements were made in January 2022, when the Guidelines for the Appropriate Implementation of Online Consultations underwent revisions, expanding the scope and methods of online consultations. As a result, online consultations could now be conducted under a broader range of circumstances, enhancing the accessibility and convenience of telemedicine for patients across Japan. Under the amended guidelines, there are three specific scenarios in which online consultations can be carried out:

1. When a primary care physician, who already has an established face-to-face relationship with the patient, conducts the consultation.
2. When a physician can access and assess the patient’s medical history, medication history, allergy history, and other necessary information from past medical records, examination results, regional medical information networks, medication notebooks, Personal Health Records, and other sources. In this case, the physician must document the information obtained in the medical records.
3. When any of the following situations apply, and a physician conducts an online consultation after a pre-consultation, ensuring that the online consultation can be followed up with a face-to-face consultation if necessary for safety reasons:
   • The primary care physician is unavailable for online consultation or cannot provide online consultation during holidays or nighttime.
   • The patient does not have a primary care physician.
   • The primary care physician refers the patient to a specialized medical institution that offers online consultations for specific medical services or seeks a second opinion.

These revisions to the guidelines have significantly improved the flexibility and reach of telemedicine in Japan, making it an increasingly viable solution for addressing healthcare disparities, especially in rural and remote areas.

Future Prospects of Telemedicine in Japan

Telemedicine has the potential to not only enhance the quality and efficiency of healthcare but also to spur the creation of innovative business models and services. The future of telemedicine is likely to be shaped by the integration of advanced technologies, practical applications, and personalized care, offering exciting investment opportunities in the Japanese telemedicine sector.

First, harnessing artificial intelligence (AI) and big data analysis can significantly elevate telemedicine’s capabilities and accuracy. AI can aid in diagnosis and treatment planning, while big data analysis can assist in predicting preventive measures and prognoses. Moreover, AI can streamline administrative tasks and optimize workflows, ultimately reducing costs and minimizing errors. Notable examples of companies employing AI in telemedicine include Medley, a Japanese start-up offering app-based online consultations and prescriptions, and M3, a Japanese firm operating a web portal for doctors and providing AI-powered solutions for clinical trials and drug discovery.

Second, the incorporation of robots and drones can render telemedicine more practical and efficient. Robots can execute surgeries remotely, while drones can transport medications and medical equipment, enhancing healthcare accessibility in remote and underserved regions. Additionally, robots can offer companionship and assistance to elderly and disabled patients, enriching their quality of life. Companies utilizing robots and drones in telemedicine include Cyberdyne, a Japanese firm that develops robotic exoskeletons for rehabilitation and mobility support, and Medicaroid, a joint venture between Kawasaki Heavy Industries and Sysmex that developed hinotori, Japan’s first surgical robot system.

Lastly, the adoption of wearable sensors and smartphones can foster personalized and autonomous telemedicine. Continuous health monitoring and lifestyle habit tracking through wearable sensors and smartphones provide real-time feedback and alerts, optimizing care. Furthermore, these devices enable self-diagnosis and self-care, empowering patients to manage their own health. Omron, a Japanese firm producing blood pressure monitors and other devices that connect to smartphones, is a prime example of companies leveraging wearable sensors and smartphones in telemedicine.

As these technologies and approaches converge, a more advanced, practical, and personalized telemedicine landscape is expected to emerge. This will not only enhance patient outcomes but also foster the development of cutting-edge business models and services within the healthcare sector. For example, LINE, a Japanese social networking service, has introduced its Line Healthcare business in partnership with M3, aiming to connect doctors and patients via video. This development could unlock new opportunities for communication, collaboration, and commerce in the telemedicine industry, making it an attractive prospect for global investors.

A Path to Equitable Healthcare

In addressing the challenges and disparities faced by rural populations in accessing quality healthcare, telemedicine has emerged as a promising solution within the context of Japan. By leveraging advanced technologies such as AI, big data analysis, robotics, and wearable devices, telemedicine can improve healthcare access, reduce the burden on medical professionals, and promote personalized care for the population.

However, for telemedicine to realize its full potential, it is crucial to address the country-specific legal, technical, and ethical challenges that currently hinder its widespread adoption. Government bodies, healthcare organizations, and related institutions must collaborate to develop comprehensive frameworks and guidelines that promote the effective integration of telemedicine into the healthcare system.

As we look towards the future of telemedicine in the Japanese context, the continued development and implementation of innovative technologies and approaches will pave the way for improved patient outcomes and new business opportunities. By addressing the existing challenges and embracing the potential of telemedicine, we can work towards a more equitable, efficient, and accessible healthcare system for all citizens.

Investors can play a pivotal role in advancing healthcare equity in Japan by considering investment opportunities within the telemedicine sector. By providing financial support to innovative solutions and start-ups focused on telemedicine, investors can contribute to the growth and accessibility of quality healthcare services, particularly in rural and underserved areas.

For investors seeking further information about the telemedicine sector in Japan or assistance in connecting with relevant stakeholders in the field, please feel free to reach out to us.