Objectives: To examine quantitatively the effects of an increase in patient copayments from 10% to 20% on the demand for medical services in Japan. Methods: The subjects of the study were the employees insured by the 1,797 health insurance societies, belonging to the National Federation of Health Insurance Societies, in 1996 and 1998. Indicators of medical service demands analyzed include the inpatient, outpatient, and dental case rates, the number of serviced days per case, the medical cost per day and the medical cost per insured. Results: When the effects of an increase in patient copayments from 10% to 20% were evaluated, taking into account the average age, the average monthly salary, the total number, the gender (male-to-female) ratio and the dependent ratio of the insured, the estimated change in the case rate was -6. 96% for inpatient, -4.79% for outpatient, and -5.77% for dental care. The estimated change in the number of serviced day per case was -4.66% for inpatient, -5.67% for outpatient, and -1.82% for dental care. The estimated change in the medical cost per day was -3.15% for inpatient, -13.00% for outpatient, and -11.48% for dental care. The estimated change in the medical cost per insured was -14.08% for inpatient, -21.54% for outpatient, and -18.11% for dental care. Conclusions: The increase in patient copayments from 10% to 20% enabled insurers to substantially reduce medical costs by cost shifting from the insurer to the insured, with resultant changes in the case rate and the number of service days per case.