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7 !2#!1# 0# 1# 2# 3#!2#!1# 0# 1# 2# 3# Medical#Cost#(standardized) Local#Moran's#I#

8 ##of#doctors#(standardize) 3# 2# 1# 0#!3#!2#!1# 0# 1# 2# 3#!1# Local#Moran's#I#!2#!3#

9 LC : log µ xt ( ) = α x + β x κ t +ε xt, β x =1, κ t = 0. µ xt : α x : β x : κ t : ε xt ~ N ( 0,σ 2 )

10 ( ( ) κ ) t ( 0 µ xt = exp α x + β ) 1 x ι t x + β x α x : ι t x : κ t : ( ), s > 0 µ = exp x,tn +s ˆα x + ˆβ ( 0 ) x tn ι + ˆβ ( 1 ) +s x x κ tn +s ι tn +s x : κ tn +s : s :

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12 0"" 20"" 40"" 60"" 80"" 100"" 120"" 1999" 2000" 2001" 2002" 2003" 2004" 2005" 2006" 2007" 2008" 2009" 2010" 2011" 2012" 2013" 2014" 2015" 2016" 2017" 2018" 2019" 2020" 2021" 2022" 2023" 2024" 2025" 2026" 2027" 2028" 2029" 2030" 2031" 2032" 2033" 2034" 2035" 2036" 2037" 2038" 2039" 2040" Hokkaido" Aomori" Iwate" Miyagi" Akita" Yamagata" Fukusihma" Ibaragi" Tochigi" Gunma" Saitama" Chiba" Tokyo" Kanagawa" Niigata" Toyama" Ishikawa" Fukui" Yamanashi" Nagano" Gifu" Shizuoka" Aichi" Mie" Shiga" Kyoto" Osaka" Hyoko" Nara" Wakayama" ToNori" Shimane" Okayama" Hiroshima" Yamaguchi" Tokushima" Kagawa" Ehime" Kochi" Fukuoka" Saga" Nagasaki" Kumamoto" Oita" Miyazaki" Kagoshima" Okinawa" #"of"1000"parents

13 0.0## 100.0## 200.0## 300.0## 400.0## 500.0## 600.0## 700.0## 800.0## 1999# 2000# 2001# 2002# 2003# 2004# 2005# 2006# 2007# 2008# 2009# 2010# 2011# 2012# 2013# 2014# 2015# 2016# 2017# 2018# 2019# 2020# 2021# 2022# 2023# 2024# 2025# 2026# 2027# 2028# 2029# 2030# 2031# 2032# 2033# 2034# 2035# 2036# 2037# 2038# 2039# 2040# Hokkaido# Aomori# Iwate# Miyagi# Akita# Yamagata# Fukusihm a# Ibaragi# Tochigi# Gunma# Saitama# Chiba# Tokyo# Kanagaw a# Niigata# Toyama# Ishikawa# Fukui# Yamanas hi# Nagano# Gifu# Shizuoka# Aichi# Mie# ##of#1000#paoents

14 Capacity of Dept. of Medicine in universi5es un5l 2009: actual capacity ager 2010: capacity is fixed at 2009 level T D age T D age+1 T+2 D age+1 b age :Con5nue rate from age to age +1 Under 29 Age T+2 D age+1 T+2 D age+1 T = b age S age = b age ( T T 2 5 D age D ) age+1 Over 85 T+2 D age+1 = b age ( T T 2 5 D age + D ) age+1

15 45000"" 40000"" 35000"" 30000"" 25000"" "" 15000"" 10000"" 5000"" 0"" 2930)34" 35)39" 40)44" 45)49" 50)54" 55)59" 60)64" 65)69" 70)74" 75)79" 80)84" 85

16 0"" 5000"" 10000"" 15000"" 20000"" 25000"" 30000"" 35000"" 40000"" 45000"" 50000"" 1999" 2000" 2001" 2002" 2003" 2004" 2005" 2006" 2007" 2008" 2009" 2010" 2011" 2012" 2013" 2014" 2015" 2016" 2017" 2018" 2019" 2020" 2021" 2022" 2023" 2024" 2025" 2026" 2027" 2028" 2029" 2030" 2031" 2032" 2033" 2034" 2035" 2036" 2037" 2038" 2039" 2040"

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18 y i = ρwy i + X i β +WX i θ +α i j T + u T α i = α +η i + µ u T = λwu T +ε α i ρ,θ, λ : unknown parameters here, θ = λ = 0 α η i

19 ŷ i = ρwŷ i + X i,t+τ ˆβ + ˆε it I N ρw ( ) ŷ i = X i,t+τ ˆβ + ˆε it ŷ i = ( I N ρw ) 1 ( X i,t+τ ˆβ + ˆε ) it = I N ρw ( ) 1 X i,t+τ ˆβ + I N ρw ( ) 1 ˆε it I N ρw T i=1 ( ) 1 ˆε it = ˆε it T

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21 34.8% 38.9%% 43.5%% 48.7%% 55.5%% 59.5%% 61.2%% 63.6%% 30.7% 31.0% 33.1% 272.4%% 303.7%% 343.6%% 392.1%% 460.1%% 510.3%% 546.1%% 593.3%% 0.0%% 10.0%% 20.0%% 30.0%% 40.0%% 50.0%% 60.0%% 70.0%% 0.0%% 100.0%% 200.0%% 300.0%% 400.0%% 500.0%% 600.0%% 700.0%% 1999%% 2000%% 2001%% 2002%% 2003%% 2004%% 2005%% 2006%% 2007%% 2008%% 2009%% 2010%% 2011%% 2012%% 2013%% 2014%% 2015%% 2016%% 2017%% 2018%% 2019%% 2020%% 2021%% 2022%% 2023%% 2024%% 2025%% 2026%% 2027%% 2028%% 2029%% 2030%% 2031%% 2032%% 2033%% 2034%% 2035%% 2036%% 2037%% 2038%% 2039%% 2040%% Medical%cost%(Total,%es:mated)% Medical%cost%(Total,%actual)% Medical%cost%(per%capita,%es:mated)% Medical%cost%(per%capita,%actual)% mil.%yen%per%capita tril.%yen

22 0" 0.5" 1" 1.5" 2" 2.5" Na5onal Hokkaido Aomori Iwate Miyagi Akita Yamagata Fukushima Ibaraki Tochigi Gunma Saitama Chiba Tokyo Kanagawa Niigata Toyama Ishikawa Fukui Yamanashi Nagano Gifu Shizuoka Aichi Mie Shiga Kyoto Osaka Hyogo Nara Wakayama To[ori Shimane Okayama Hiroshima Yamaguchi Tokushima Kagawa Ehime Kochi Fukuoka Saga Nagasaki Kumamoto Oita Miyazaki Kagoshima Okinawa

23 Healthcare Expenditure (2040/2008) Ratio [1,1.5) [1.5,1.75) [1.75,2.1]

24 Healthcare Expenditure (2040) Tril. yen [0,0.5) [0.5,1) [1,2) [2,4) [4,8]

25 Healthcare Expenditure per Capita(2040/2008) Ratio [1.7,1.8) [1.8,1.9) [1.9,2) [2,2.1) [2.1,2.2) [2.2,2.3]

26 Healthcare Expenditure per Capita (2040) x10^4 yen [500,600) [600,700) [700,800) [800,900]

27 400,000( #(of(doctors 350,000( 355,186( 355,405( 349,803( 341,807( 340,322( 350,924( 359,753( 300,000( 250,000( 280,431( 294,153( 311,325( 327,194( 329,892( 315,254( 302,099( #(of(doctors( 200,000( Neccesary(doctors( 150,000( 100,000( 50,000( 77,840( 76,335( 70,661( 65,674( Shortage(of(doctors( 58,414( 51,290( 46,071( 0( 2010( 2015( 2020( 2025( 2030( 2035( 2040(

28 Shortage of Doctor (2010) # of Doctors [0,500) [500,1000) [1000,1500) [1500,2000) [2000,3000) [3000,7000]

29 Shortage of Doctor (2040) # of Doctors [0,500) [500,1000) [1000,1500) [1500,2000) [2000,3000) [3000,7000]

30 Healthcare Expenditure per Doctor (2040) Mil. yen/doctors [125,150) [150,175) [175,200) [200,225) [225,250) [250,300]

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