Rebirth Tokyo 1986

Chapter 342 Crisis is also an opportunity
In addition to mobile phones, Xinghai Second Laboratory also produces products such as VCD players.

Masato Takeshita did some research and even watched a Jackie Chan movie.

He then turned to the president of Xinghai Electronics, who had just arrived, and said, "We must control the production capacity of VCD players. This thing is destined to be just a transitional product."

"And I prefer selling core components to selling finished electronic products."

VCD players will not be phased out by developing countries in the short term, but they are easy to imitate, so competition is bound to be fierce.

It would be better to just produce core components; that would be more profitable and save time and effort.

This was also the usual practice of foreign multinational corporations in the past.

They abandoned the fiercely competitive and low-profit finished product manufacturing work, and instead enjoyed the most profitable and easiest core component production work.

In many cases, some companies simply have all the core components manufactured in China, while they only take charge of the design work.

"Understood. What about the high-end market?"

Hideyuki Hasegawa was somewhat reluctant to give up the profits in the high-end market and hoped that the company could retain this part of the market.

"The high-end market can be maintained normally, and developing countries still have great confidence in our Xinghai Group in the short term."

Developing countries, especially those with weak economies, often harbor unrealistic fantasies about developed countries.

They tend to think that products from developed countries must be better.

This situation will only decrease when the economy develops.

Therefore, the high-end market for VCD players can still be operated in the short term, but it will face competition from major manufacturers such as Sony and Panasonic.

"Yes, Chairman, we will make good product plans."

"Ah That's good."

He nodded in approval, then looked at Ryosuke Takada, the head of the second laboratory.

"How's the research on DVD technology going?"

Even before researching VCD players, Xinghai Group had been developing larger capacity CD discs, which is the next generation of DVD technology.

Although Hollywood will not officially initiate the development of DVDs until this spring, and will initially formulate DVD format standards in the second half of the year, it will certainly differ from the research conducted by Starship Labs II.

But that's okay, the essence remains the same no matter what.

Hollywood's pursuit of new CDs is basically about larger capacity, better picture quality, and clearer sound.

The research at the Xinghai Second Laboratory also follows this direction.

Once Hollywood officially establishes the standard, Starsea Group can quickly follow Sony's lead and develop suitable DVD discs.

"The capacity has more than doubled, and the duration is enough to hold a Hollywood movie. The picture quality has also been improved, reaching a resolution of 720*480."

"As for sound, our technical capabilities in this area are relatively weak, and the improvement is not very significant."

Xinghai Second Laboratory was established relatively late, so it naturally cannot compare with the established laboratories of Sony and Toshiba.

It is already quite remarkable that such a large-scale achievement has been made.

"It's okay, we won't be the main characters anyway, that's enough."

Xinghai Group is very weak in the audio-visual field and is simply unable to compete with the giants in this field. It can only do some peripheral work and obtain some non-core patents.

Of course, the location is what Xinghai Group values ​​most.

You can play a supporting role in the DVD Alliance, but you can't be excluded from the industry.

"Hi!"

Ryosuke Takada felt frustrated by the chairman's discouraging words, but there was nothing he could do.

The DVD format standard requires the support of Hollywood film studios and the five major music giants.

Xinghai Group has a short history of development, and even with great potential, it is difficult to obtain support.

Sony recognized this, which is why it worked so hard to develop Sony Columbia Pictures in Hollywood and Sony Columbia Music.

The young man noticed the grievance of the person in charge of the second laboratory and comforted him with relief.

"Keep a calm mindset. We are just supporting actors in this generation of standards, but we can become the protagonists in the next competition."

Then he suddenly raised his voice.
"Are you confident?"

"Have!"

Ryosuke Takada responded loudly as well, secretly resolving to develop even better playback technology.

"Very good, that's the kind of spirit that dares to be the first in the world."

After inspecting the Xinghai Second Laboratory, it was already night.

Masato Takeshita did not continue working and quickly returned home.

"Dad, Daddy."

Keiichi Takeshita, who was chattering away with his mother, immediately rushed over happily when he saw his father.

She misses her father very much these days because she doesn't see him often.

"Mmm, good girl, mua."

The young man picked up his daughter and kissed her with a big smile.

"Ugh, I'm an adult now, don't kiss me."

"Yes, you're an adult now."

Masato Takeshita didn't care at all about his daughter's shoving and chuckled as he put her back on the ground.

"Mommy, Mommy, look at Daddy."

Takeshita Kei was a little unhappy and ran to her mother to complain.

"Dad has worked all day, let's forgive him, okay?"

The little girl bit her finger and thought for a moment, then said in her childish voice, "Okay, then I'll forgive him this time."

After saying that, she ran over to the young man and patted his hand to show that she forgave him.

It's so childlike and fun; it's so healing to see Masato Takeshita like this.

"I'm planning to start my daughter in elementary school next year. Where do you think would be a good place?"

Although she is busy practicing singing and performing on weekdays, Izumi Sakai has never neglected her daughter's education.

Not only did they hire a private tutor, but they also frequently supervised their daughter's studies in person.

It can only be said that most parents have the desire for their sons to become dragons and their daughters to become phoenixes.

"Haven't we already agreed that I'd go to a public elementary school?"

"I know, but I don't know where to choose."

"Let's choose one with a good reputation and that's relatively close to home."

Although she secretly thought her lover was being too hasty, her daughter still had almost a year before starting elementary school.

But the young man didn't show it at all; he was afraid of causing family conflict and also afraid that his child would misunderstand and think that he didn't value her.

At the age of 5 or 6, many things have already begun to leave an impression.

"I know, but I'm a little hesitant. I feel like each one has its flaws."

"Okay, I'll find a professional to help you with your selection tomorrow, and then we can choose the most suitable one."

"Well, it's up to you."

After dinner, Izumi Sakai watched TV with her daughter, while Masato Takeshita watched the day's important news in another room with a TV.

When he saw Japanese Ministry of Health, Labour and Welfare officials say that Japan's health insurance funds were insufficient and that further reductions in health insurance spending and deeper healthcare reforms were needed, he couldn't help but slap his thigh. "This...our opportunity has arrived?"

Although I don't want to gloat, I feel a little sad, but now is indeed the best time for Xinghai Group to enter the medical industry.

In the 80s, Japanese society as a whole was very wealthy.

The government, with its deep pockets, provides substantial medical subsidies to the public, making pharmaceutical companies incredibly wealthy.

Pharmaceutical companies have money, so they are naturally very willing to invest in developing new drugs.

As a result, by the end of the 80s, Japan had become the second-largest pharmaceutical power after the United States, with its annual output of new drugs accounting for 29% of the world's total.

In the 90s, Japan's economy began to collapse, fiscal revenue declined, and the problem of an aging population began to emerge.

This healthcare model, which heavily relies on government funding, has come to an end.

At this point, the government faces a difficult choice.

With limited medical insurance funds, whose interests should be sacrificed?

If the affordable healthcare system is abandoned in favor of an open-source strategy, it will inevitably lead to a surge in treatment costs for patients.

With the economy declining and a wave of bankruptcies and unemployment emerging, a large number of people will fall back into poverty due to illness, further exacerbating already very serious social contradictions.

No one dares to do that; no one wants to be condemned by everyone.

If we insist on affordable healthcare, then we need to take the path of cost-cutting and reducing medical expenses.

This path has two main directions: reducing hospital costs and reducing pharmaceutical costs.

However, the hospital was already operating beyond its capacity due to the surge in the elderly population. If the hospital's operating expenses were reduced, the entire medical system would collapse, with far too severe consequences.

Therefore, reducing drug costs has become almost the only option.

More importantly, Japan's health insurance system is the largest buyer of Japanese pharmaceutical companies, leaving hospital companies powerless to resist.

Therefore, in 1991, the Japanese Ministry of Health, Labour and Welfare directly targeted hospital companies.

The blanket rule mandates that drug prices must be reduced by 5% every two years, regardless of the research and development and production costs.

This is the controversial drug price reduction reform in Japan.

Initially, apart from pharmaceutical companies, the public generally supported this government policy, believing that it would help reduce healthcare costs.

But everything comes at a price, it just takes time for that price to materialize.

"Indeed, you must always maintain your autonomy."

Thinking of the even more tragic fate of Japanese pharmaceutical companies, the young man couldn't help but shake his head.

Yes, the Japanese medical reforms of 1991 were just the beginning; the real brutalities were yet to come.

In 1993, as the economic situation further deteriorated, a wave of unemployment gradually spread.

More than one million Japanese households have stopped paying their health insurance premiums, and the National Health Insurance program has suffered a loss of over 100 billion yen for the first time.

What worries Japanese society even more is that with the arrival of the retirement wave, the number of people paying into health insurance is decreasing, while the number of people using health insurance continues to increase.

If the policies remain unchanged, the medical insurance deficit will increase further after the increase in one policy and the decrease in the other.

There's no other way but to continue the reforms.

This time, they're still targeting pharmaceutical companies that have no way to fight back.

In May of that year, Japan convened the "21st Century Development Symposium," which is considered to have changed the fate of the pharmaceutical industry.

The meeting's content was simple: pharmaceutical companies must produce cheaper drugs. They even radically proposed a generic drug substitution strategy.

Yes, Japanese pharmaceutical companies, known for their new drug development, are now regressing to producing generic drugs.

This policy can be said to have completely destroyed pharmaceutical innovation in Japan.

It's important to understand that in the 90s, drug development was shifting from chemical manufacturing to biopharmaceuticals, requiring substantial R&D investment.

Faced with harsh reality, Japanese pharmaceutical companies are simply unable to innovate in the field of biomedicine.

By 1996, pharmaceutical companies had less than 4% profit margin, less than screw-making factories, so where would they get the money for innovative research?

Therefore, a bizarre scene unfolded in the global pharmaceutical industry in the 90s.
While countries like the United States are increasing their investment in pharmaceutical innovation and research at a rate of over 15%, Japan's funding for pharmaceutical research and development has been decreasing year by year.

"It's time to buy land on a large scale and build hospitals; Japan's public hospital system is doomed."

Yes, although Japanese pharmaceutical companies suffered all kinds of torment, and were jokingly said to be fighting like ants in a hellish, cramped space, Masato Takeshita's first target was the hospital system.

Because pharmaceutical companies can still barely maintain the situation by relying on their accumulated resources.

Public hospitals have very weak risk resistance capabilities and are unable to meet the government's high requirements.

Indeed, with pharmaceutical companies struggling to make ends meet and unable to extract any profit, Japan's Ministry of Health, Labour and Welfare has no choice but to target public hospitals.

We must ensure an affordable healthcare system, and we are willing to pay any price for it.

The future may be important, but it is far less important than the present.

In 1994, just now, news reports indicated that the Japanese government implemented a fixed-amount reimbursement system for elderly patients based on their specific diseases.

Simply put, medical insurance sets a fixed reimbursement limit based on the type of disease, and hospitals are responsible for any amount exceeding this limit.

This strategy will inevitably lead to widespread losses in public hospitals.

Because the conditions of elderly people are usually more complex, the actual costs often exceed the prescribed limits.

Initially, after incurring losses, hospitals were able to maintain high-quality treatment, but in the long run, they will inevitably be forced to adopt placebo drugs with poor efficacy.

The public isn't stupid; they won't discover it in a short time, but it will inevitably be exposed over time.

Therefore, building a hospital now is just right.

After all, things still need some time to develop, and the construction is just in time to be put into use after the public hospital scandal broke out.

"Should we call now?"

The young man had just asked himself the question when he immediately rejected it to himself.

"Forget it, let's wait a bit longer. Starting tomorrow isn't too late. Building a hospital is a long-term project, so a day or two's delay is insignificant."

After all, this involves a matter of life and death, so the hospital must be secure.

It must not only protect against everyday fires, but also against earthquakes and tsunamis.

With this in mind, Masato Takeshita quickly took out his notebook and prepared to write down his ideas for building the hospital.

"First of all, there should be more middle-aged and elderly people in the neighborhood."

Middle-aged people are at their prime, when they are most capable and earn the most money.

They not only need it themselves, but their children also need regular check-ups and treatments.

"Secondly, these elderly people should ideally not have much power, but have a lot of spare money."

If someone has power and influence, they will receive the best treatment even in a public hospital.

It's different for ordinary people and wealthy people; they can only choose private hospitals.

"Finally, we chose a place with a high standard of living and a focus on healthy eating."

High-quality medical professionals will reduce medical disputes.

He didn't want his doctor to end up like that local hospital doctor, who was forced to apologize by a patient's family and then thrown in jail.

If it weren't for the doctors' collective protest, they might have actually been sentenced to several years in prison.

Hospitals are built near groups that value healthy eating because these groups typically also value medical health.

I regularly come to the hospital for checkups, and when I encounter minor problems, I choose quality care rather than delaying treatment.

(End of this chapter)