TOKYO -- Mrs. Tanaka, Mrs. Watanabe and Mrs. Suzuki are regulars in the waiting room of the local clinic, where they chat, read magazines and generally relax coffee shop-style for an hour before consultations with the doctor. One day, Mrs. Tanaka doesn't come. "Where is she?" asks a nurse. "Oh, she's sick today," her friends explain.

This story was going the rounds a few years ago as Prime Minister Yasuhiro Nakasone prepared a shock for the Japanese, who had grown used to having government insurance cover their medical bills virtually in full. Now, they would have to pay 10 percent. This was necessary, Nakasone said, to rein in frivolous "social" visits to the doctor and to save money for the taxpayer.

Japan has had a nationwide health insurance scheme since 1961 that offers just about all of the 120 million Japanese some form of public or private coverage. It also has a flourishing private, for-profit medical system. Many doctors are in private practice and own their own clinics. They can sell prescription drugs to boost their incomes.

At the same time, fees at clinics and hospitals are set by the government and tend to be standard from the big cities to small hamlets.

A small number of private clinics, catering primarily to the wealthy, offer medical care outside of the insurance system.

Nakasone's plan to restrain rising medical costs went into effect, but not without causing a public outcry. In the postwar era, health care and insurance coverage had advanced to the point where many Japanese considered getting medical treatment for free, or almost free, to be a fundamental right.

Among the industrialized nations, Japan is a notorious laggard in many social services, preferring to sink resources into economic growth. But in medicine it has more than held its own, constructing a high-tech, $120 billion-a-year system that last year treated some 8 million people.

No one denies that the country's national health insurance system has made medical care available to virtually everyone in the country and helped to give the Japanese the world's longest average life span -- 80.5 years for women and 74.8 for men in 1985.

Yet the system is often assailed for ignoring patients' individual needs, giving too little time with doctors and dispensing too many drugs.

Keisuke Amagasa, for example, a 40-year-old publishing company employe in Tokyo, had a typical experience when earlier this year he began suffering mysterious vomiting and loss of appetite.

His first consultation was at a government hospital in Kanagawa prefecture with a doctor he had never met. It took place after a long wait and produced the news that he probably had an ulcer. Tests were required, but the hospital was so booked up that he had to come back in two days, then return again for the results.

At that point, signs of liver trouble were showing up, so he was passed to a specialist and came back to the hospital on three separate occasions to swallow a stomach camera, get a sonogram and a CAT scan.

Along the way, he was given powdered medicine and then pills. He was told they were for his liver but nothing more, and he was supposed to take 12 a day. But he decided not to take the pills. "Too many drugs can't be good for you," he says.

In the end, Amagasa's stomach problems cleared up and he regained his health. But he got sufficiently fed up with the waiting and medicine to tell his story to a doctor's group that is critical of the system.

It seems to have been a fairly typical encounter with the health care facilities -- anonymous doctors with lots of equipment, many visits (Amagasa had nine of them), long waits, much medicine and low cost to the patient. Amagasa's policy, which in general covers 70 percent of costs, left him to pay about $175.

In general, the fees, which are controlled by the government, are relatively low compared to those in the United States. One doctor's group here estimates that an emergency appendectomy runs on the average about $1,285, including seven days' stay in the hospital. In the U.S., the bill would run about $3,200. It is possible to go three times to a doctor for treatment of a minor throat infection and have the whole bill come to just $32. Private physicians in the U.S. charge new patients an average of $50.22 for an office visit.

Just how much the Japanese patient will have to pay in out-of-pocket expenses will depend on the type of insurance.

Japan has no single program for insurance, though there is talk of making one. About 60

million people are covered by various company employe programs, which are largely managed by the government. Employes contribute a bit over 4 percent of their salaries, matched by an equal amount from their employers. In general, the employes get 90 percent of medical costs covered (they were in the group that formerly got 100 percent) and their dependents 80 percent.

The so-called National Health Insurance plan covers the rest of the population -- about 45 million people. Households pay an average $740 into it annually and get benefits that generally cover 70 percent of costs. But costs over $360 are deductible from income taxes.

People over age 70 or more still pay zero, except for negligible monthly fees for hospitalization. Another special category: survivors of the atomic bombings of Hiroshima and Nagasaki, who get special subsidies on medical care for life.

Hospitals are run by a rigid set of rules set by the government. The average stay is much longer than in the U.S., around 39 days in 1985. This is because many patients with chronic disease go to the hospital instead of a nursing home.

Hospitals, in general, are clean and efficient, but patients sometimes complain of humiliating treatment. Newspapers not long ago reported about wards for elderly people where everyone was required to wear diapers for incontinence, regardless of whether they had ever suffered from it.

Physicians hold a very privileged position. The Japanese revere authority, and no one wields it like oisha-san, "honorable doctor." The concept of partnership between patient and doctor that is spreading in the U.S. is all but unknown here. Doctors normally give patients only vague explanations of their illnesses and hand out pills and injections with little if any discussion. Second opinions are rare, as few patients have the nerve or desire to question directly their doctor's competence.

A person who has cancer may never learn of it (or ask about it either). Hemophiliacs who have contracted AIDS through blood transfusions have been deliberately kept in the dark, on the ground that the knowledge would only upset them needlessly.

Japanese husbands generally wait at home or at work for word that their wives have given birth. Their presence in the delivery room is almost unheard of -- few doctors allow it and probably even fewer men ask. Many women feel hospitals promote bottle-feeding. One possible reason: Doctors like to know exactly how much a baby is getting. If the mother insists on breast-feeding, the hospital will often weigh the baby after each feeding so the charts will be complete.

"Doctors are inclined to believe the hospital belongs to them," says Dr. Kiyohiko Yoshida, director of the Japan Doctors Association. Doctors do not always live up to the public trust. The profession has been disgraced by appearing at the top of a list of tax cheaters that the government publishes. Periodically, doctors are caught fraudulently billing the insurance programs. In 1980, there was a celebrated case of a doctor in Saitama prefecture who ordered more than 1,000 unnecessary operations at a private women's hospital.

Critics of the system feel the real problem is not overt crime but "bad" doctoring fostered by the system. The low fees encourage doctors to cram as many patients into a morning as possible, critics say. ("Three hours waiting for three minutes with the doctor" is how many people put it.) Medical tests tend to proliferate, as they are another way to make money.

Doctors also sell patients drugs. There is growing concern, even in the U.S., where legislation has been introduced to restrict such a practice on the assumption that it encourages unnecessary prescriptions. Critics here say the same regulation is needed in Japan.

"It's reasonable to spend 10 percent of medical costs on drugs," says Akira Sakuma, a clinical pharmacology professor at Tokyo Medical and Dental University. "In Japan, it sometimes reaches 40 percent or more."

Over all, the quality of care is considered to be world standard in most fields of advanced medicine. A major exception is organ transplants. In 1967, a doctor performed Japan's first heart transplant, only to be charged with murdering the donor by removing the heart too soon. The charge was later dismissed, but no doctor has dared do another, pending clarification of standards by which a donor can be judged dead.

For 20 years, the medical establishment has been debating the issue. A report issued this spring by the Japan Medical Assocation, a group linking doctors, scholars and others involved in the profession, suggested brain death as the standard, but that is being challenged by others in the field. As a result, someone needing a heart transplant must go abroad.

Health care spending, meanwhile, has snowballed in recent years, causing concern in the ruling Liberal Democratic Party about government finances, since the insurance programs are subsidized about 40 percent by tax money. Nakasone's initiative to increase out-of-pocket expenses on the insurance payments was one sign of this worry.

But more than government finances are at stake. "A limitless increase of medical fees can harm the national economy as well," notes one Ministry of Health and Welfare official. Health expenditures as a percentage of gross national product has been creeping up steadily despite government efforts to control it, reaching an estimated 6.45 percent in the year that ended March 31.

And it stands only to grow in future years. Japan has already become the world's grayest society and is getting grayer by the year. More old people mean more medical spending and fewer young people working to support it.

Special correspondent Shigehiko Togo contributed to this article.