Prof. Masako Ii 1 (Japan) - Tokyo Development Learning Center

Health Care Reform in Asia:
Key issues in Japanese Healthcare
Professor Masako Ii
Hitotsubashi University
masako@econ.hit-u.ac.jp
3 December 2012
1
KDI School of Public Policy and Management,
The World Bank,
Tokyo Development Learning Center

“The Economics of Public Health Care Reform in
Advanced and Emerging Economies”, IMF (2012)
“The use of market mechanisms in Germany
and Japan is an important factor explaining the
low excess cost growth observed in these
countries – both of which score relatively high
in the indices for choice of insurer, choice of
provider, and private provision.”

“Health Care Systems: Efficiency and Institutions”
OECD Economic Department (2010)
“Although estimates of health care spending
efficiency should not be taken at face value,
Australia, Korea, Japan and Switzerland
perform best in transforming money into
health outcomes.”

The Economist, September 10, 2011
“Japan’s health-care system is the envy of the
world. It is also in crisis”

According to Table 2
Total health care expenditure/GDP is low in
Japan.
Is Japan’s total health care expenditure lower
than other OECD countries?
5

Outline of My Presentation
1. Overview the history and characteristics of
Japanese healthcare system including health
insurance.
2. What is the weakest point of Japanese
healthcare system ?
3. Primary care system is a key aspect to learn by
comparison with other countries' cases
4. What can developing counties learn from
Japan's healthcare system history ?

Health Care System in Japan
1. Good access to health care
Universal health insurance system since 1961
- Can visit any medical institutions regardless of type of
health insurance, residence, and referrals
- No gate-keeper system
- Long waiting time
2. Closed-system operation of hospitals
Unified payment to hospitals and physicians
3. Fee-for-service under a national uniform price schedule
Official prices for medical treatment
- Control of healthcare expenditures by the government
4. Dominance of (non-profit) private hospitals
7

• The payments doctors receive for medical
services are the same nationwide, with rates
set by the central government.
• There are few incentives for quality
improvement and little competition among
providers on quality
9

The characteristics of Japanese health care system
1. Lack of clear definition of hospital
2. Large number of the hospital beds
3. Low physician and nurse/bed ratio
4. Long average length of stay in hospital
5. Frequent medical usage among the elderly
6. Frequent usage of CT and MRI
10

Lack of clear definition of hospital
Japanese Hospitals
Social hospitalization
is prevalent.
Hospitals are used
mainly for nursing care
rather than
medical services.
11

Lack of clear definition of hospital
From the point of view of other countries,
Japanese Hospitals
Japanese hospitals
seem to be a
combination of
hospital & nursing
home.
12

Lack of clear definition of hospital
From the point of view of Japan,
U.S. Hospitals
In countries like the
U.S., hospitals seem
to be a combination
of ICU & very active
acute care unit.
13

The characteristics of Japanese health care system
1. Lack of clear definition of a hospital
2. Large number of the hospital beds
3. Low physician and nurse/bed ratio
4. Long average length of stay in hospital
5. Frequent medical usage among the elderly
6. Frequent use of CT and MRI
14

Frequent medical usage among the elderly
Outpatient Visits per 100,000 population
No. of persons (per 100,000 population)
70 and over (partially listed)
65 and over
35-64
Whole
0-14
15-34
Source: Cabinet Office, Structural Reform Evaluation Report 5
15

The characteristics of Japanese health care system
1. Lack of clear definition of a hospital
2. Large number of the hospital beds
3. Low physician and nurse/bed ratio
4. Long average length of stay in hospital
5. Frequent medical usage among the elderly
6. Frequent use of CT and MRI
16

Japanese elderly use a significant
portion of healthcare expenditure
• People aged 65 or over, occupy 22% of the
total population uses 54.6% of the total
expenditure.
• Per capita health expenditures among the
elderly are almost 4 times as much as the
amount spent for the 0-64 age group.
17

General Account Tax Revenues and
Government Expenditure
18

Japanese Government Expenditure
¥92.4 trillion (2011)
Redemption of
the National Debt
11590.3
13%
Interests
Payments
9958.8
11%
Social Security
28707.9
31%
Others
10110.6
11%
National Defense
4775.2
5%
Public Works
4974
6%
Education
& Science
5510
6%
Local Allocation
Tax Grants
15784.5
17%
Billion yen, % (2011)
19

Japanese Government Expenditure
¥92.4 trillion (2011)
Redemption of
the National Debt
11590.3
13%
Interests
Payments
9958.8
11%
Social
Security
31%
Others
10110.6
11%
National Defense
4775.2
5%
Public Works
4974
6%
Education
& Science
5510
6%
Local Allocation
Tax Grants
15784.5
17%
Billion yen, % (2011)
20

Japanese Government Expenditure
¥92.4 trillion (2011)
Redemption of
the National Debt
11590.3
13%
Interests
Payments
9958.8
11%
Social Security
28707.9
31%
Others
10110.6
11%
National Defense
4775.2
5%
Public Works
4974
6%
Education
& Science
5510
6%
Local
Allocation
Tax Grants
17%
Billion yen, % (2011)
21

National Medical Expenditure
¥34.1 trillion (2007)
It counts only medical services covered by the
public health insurance.
The following items are not included
- natural birth, non-insured dentistry
- health checkups, vaccinations,
- over- the-counter medicines
- subsidies to medical institutions or investment
- operation of medical insurances
22

• One of the problems in the Japanese medical
and long-term care statistics is absence of
clear systematic concept such as SNA.
• It is necessary to re-organize relevant statistics
by positioning OECD’s SHA (System of Health
Accounts) as a backbone statistics on medical
expenses
¥41.9 trillion (2007)
23

National Accounts: health sector
(2007)
1. Fixed capital formation
for the health sector:
Not available
2. General Government Final Consumption
Expenditure (Health): 35.3 trillion yen
3. Households Final Consumption
Expenditure (Health): 11.9 trillion yen
Total: ¥47.2 trillion
24

What is the weakest point of
Japanese healthcare system?
25

Inefficient primary care system!
26

What is Primary Care?
27

Diabetes
Dementia
Backache
Hearing
loss
Hypertension
Cataract

Primary Health Care
“Declaration of Alma-Ata”
International Conference on Primary Health Care
Alma-Ata, USSR, 6-12 September 1978
• Primary health care is essential health care based on practical,
scientifically sound and socially acceptable methods and technology
made universally accessible to individuals and families in the
community through their full participation and at a cost that the
community and country can afford to maintain at every stage of their
development in the spirit of self-reliance and self-determination. It
forms an integral part both of the country's health system, of which it
is the central function and main focus, and of the overall social and
economic development of the community. It is the first level of contact
of individuals, the family and community with the national health
system bringing health care as close as possible to where people live
and work, and constitutes the first element of a continuing health care
process.

Hospital-centrism: health systems built around
hospitals and specialists
For most of the 20 th century, hospitals, with
their technology and sub-specialists have
gained a pivotal role in most health systems
throughout the world.
Today, the disproportionate focus on hospitals
and sub-specialization has become a major
source of inefficiency and inequality.
“ Primary Health Care: Now More Than Ever”, WHO (2008)
32

Since the 1980s, many OECD countries have
tried to decrease reliance on hospitals,
specialists and technologies, and keep costs
under control.
Such countries as the UK, Netherlands,
Canada, Australia, NZ, and Scandinavian
countries such as Sweden and Demark have a
strong system to train family doctors/GPs,
specialist in primary care, as key players to
provide continuous, comprehensive, personcentered
care in the community.
33

Table 1 shows that Japan does not
have a system of family doctor
34

Without family doctors
- Common to visit general hospitals or
university medical centers for minor illnesses
such as tension-type headache or flu.
- Particularly among the elderly….
35

Japanese healthcare system needs
in this aging era
A good collaboration between specialists in the
hospitals and community based primary care
physicians.
36

Major lessons
After the disaster, many patients with primary care
problems rushed into secondary/tertiary care
hospitals, the function of the hospitals were
affected so much.
Even in the acute disaster period, a good
collaboration between specialists in the hospitals
and primary care physicians was in need.
Efficient primary care system is important for the
any country in any development stages.
37