The Japanese national health care system has gone through various phases and reforms, experiencing both expansions and attempts to restrain medical costs, since World War II. During that time, the national and local governments have tackled problems with two types measures, medical fees and subsidies. This article describes the historical changes, analyzes the characteristics and merits and demerits of the two types of measures, and considers the appropriate mix of such measures, especially as a means of addressing the problems in the provision of health care services currently facing many local communities.