Empirical Analysis of the Reduction of Medical Expenditures by eHealth

This paper aims to examine reduction of medical expenditures by utilizing the system of Nishi-aizu Town, Fukushima Prefecture. The town office has been implementing it since 1994 and keeps receipts on medical expenditures of its approximately 4,000 residents paid by National Health Insurance for 5 years from 2002 to 2006. We select (1) users; and (2) non-users of the e-health system, and by comparing their medical expenditures, we examine: (i) difference in medical expenditures between two groups; and (ii) negative correlation between medical expenditures and the length of usage of the e-health system. We find that total medical expenditures of users are larger than those of non-users, whereas by restricting to lifestyle-related illnesses such as high blood pressure, cerebral infarction, strokes, and diabetes, medical expenditures of users are found to be smaller than those of non-users. The results we obtained here provide the rigorous economic foundation of the e-health system.