(Bloomberg) — For more than a century, Aizawa Hospital provided medical care to the people of Japan's mountainous prefecture of Nagano. Last year, it looked to broaden its patient base, opening a clinic in Beijing in March, and has been approached by hospitals in other cities to open more.
"In the age of globalization, we want to go wherever we are asked to help patients rather than being fixated on Japan," Takao Aizawa, chairman of the hospital, said in an interview in his office in Matsumoto city. "The money we make will be spent on improving medical services there."
Traditionally focused on providing care at home, government incentives have driven Japanese companies to look beyond its borders. Since the government announced a push towards medical commercialization in 2010, Japanese companies and hospitals have opened 19 medical service centers in 13 countries, including China, Russia, Indonesia and Vietnam, often in the form of ventures with local partners. Companies involved include Fujifilm Holdings Corp., Olympus Corp. and JGC Corp.
Thirteen more Japan-funded clinics are expected to start in coming years, according to Koji Fujimoto, deputy director-general at the office of the Chief Cabinet Secretary, a government department which oversees the international expansion initiative. The business prospects are so bright that companies outside the medical sector have started to join.
Many medical providers — even as they had been bracing for flagging demand with a shrinking population — had been reluctant to expand overseas out of a social contract to provide health care for their own citizens first.
"There is a strong perception that hospitals should not make money, and that it was frowned upon for them to look overseas," said Fujimoto. "They were instead expected to contribute to the local community."
The Ministry of Economy, Transport and Industry outlined a plan in 2010 that pushed for commercialization of medical services and started providing financial support for those expanding overseas. Besides seeing a reduction in patient numbers, technological advancements in Japan's medical industry will be limited if health care providers stayed in Japan, Fujimoto said.
Medical multinationals
Now even non-medical Japanese companies are looking to expand into health care abroad. Major trading houses Itochu Corp. and Mitsui & Co. recently tied up with Japanese hospitals and medical-device makers and opened clinics in emerging economies such as China, Indonesia and Russia.
Mitsui, which invested in two health care providers in the U.S. and Asia this year, said last month it will buy a 22 percent stake in medical equipment maker Panasonic Healthcare Holdings Co. for 54.1 billion yen ($470 million). Mitsui's Managing Officer Koji Nagatomi told reporters the latest acquisition is aimed at increasing its overseas exposure.
