The health care sector has become a major component of the contemporary econo mies of Japan and the United States. It absorbs significant proportions of the GDP in both countries and places increasing stress on private, government and corporate budgets. As their income rises, the citizens ofJapan and the United States choose to allocate increasing portions of it on health care services because ofthe direct contri bution of health care services to prolonged life expectancy, reduced morbidity, or other indicators of improved health and well-being. The health care sector is a ma jor source ofemployment and affects the lives of all citizens. Adequate health care services are expected to have an important contribution to the quality of human life in any society. With so much at stake, arrangements for planning, financing, and operating health care service systems have increasingly come to be regarded as im portant economic and political issues. The political importance of health care is evidenced by the health care reform proposals of the Clinton administration in the United States and the deep involve ment of the government in the medical care security system in Japan. As policy makers in both countries look ahead to the coming decades, they realize that the imperatives of economic restructuring, globalization, and their rapidly aging socie ties will affect the way in which health care is organized, delivered, and financed.