tThe average length of stay (LOS) is considered one of the most significant indicators ofhospital management. The steep decline in the average LOS among Japanese hospitals sincethe 1980s is considered to be due to cost-containment policies directed at reducing LOS.Japan’s hospital sector is characterised by a diversity of ownership types. We took advantageof this context to examine different hospital behaviours associated with ownerships types.Analysing government data published from 1971 to 2008 for the effect of a series of cost-containment policies aimed at reducing LOS revealed distinctly different paths behind thedeclines in LOS between privately owned and publicly owned hospitals. In the earlier years,private hospitals focused on providing long-term care to the elderly, while in the lateryears, they made a choice between providing long-term care and providing acute care withreduced LOS and bonus payments. By contrast, the majority of public hospitals opted toprovide acute care with reduced LOS in line with public targets.