JANUARY

JAPAN
System (SSTNS), a system of unique identifiers, will begin in 2016. It will be used for social security from its
inception, and for health services, possibly including medical records, starting in 2018.
How are costs contained?
Price regulation for all services under the PHIS is a critical cost-containment mechanism (Ikegami and Anderson,
2012). The fee schedule is revised every two years by the government, following informal stakeholder
negotiations, and is based on the estimated overall rate of change in public health care expenditures and
expenditures in different health care sectors.
For medical, dental, and pharmacy services, the Central Social Insurance Medical Council revises fees on an
item-by-item basis in order to meet overall spending targets set by the cabinet. Highly profitable categories see
larger reductions. The revisions of prices of pharmaceuticals and devices are determined based on a market
survey of actual current prices (which are often less than the listed prices). Drug prices can be revised downward
for new drugs selling in greater volume than expected and for brand-name drugs when generic equivalents hit
the market. Prices of medical devices in other countries are also considered in the revision.
Negotiations between stakeholders take place only for the purpose of revising the fee schedule and the rule for
deciding pharmaceutical prices. Whether cost-sharing and the existing competition between providers contain
costs is unclear.
The number of hospital beds is regulated by prefectures in accordance with national guidelines. The national
medical student capacity, which is increasing since 2007 owing to physician shortages, is also regulated by the
government.
The government’s Cost-Containment Plan for Health Care is intended to promote healthy behavior, shorten
hospital stays through care coordination and home care development, and increase generic substitution. Each
prefecture makes cost-control plans in accordance with the plan. Both financial incentives in the fee schedule
and other incentives, including education and training, are used. Peer review committees in each prefecture also
monitor claims and may deny payment for services deemed inappropriate.
Currently, some pharmaceuticals whose medical effectiveness is considered uncertain are not covered by the
PHIS. A trial cost-effectiveness evaluation for coverage of selected pharmaceuticals and medical devices is
scheduled for fiscal year 2016.
What major innovations and reforms have been introduced?
Community-based health insurance plans in the PHIS, operated by municipalities, usually insure residents who are
sicker and less well-off than those covered by employment-based insurance plans. The plans vary significantly in the
number they insure, from fewer than 100 to more than half a million. To mitigate financial risk in small plans, the
national government has gradually expanded cross-subsidies between community-based plans while keeping its and
local governments’ subsidies. With increasing financial pressures and the development of region-based governance,
plans are being restructured under the 2015 Health Care Reform Act: from 2018, regions will take overall
administrative responsibility for community-based plans and work together with municipalities, which will still be
insurers of their residents, to set premium rates and to collect premiums. Meanwhile, subsidies from the national
government to the regions are to be slightly increased to help plans, and those with low incomes, with excessive
financial burdens.
A plan to strengthen the financial incentive for patients to use family physicians is intended to decrease demand on
hospital outpatient departments. Although hospitals with 200 beds or more are currently allowed to charge additional
fees to patients who have no referral for outpatient consultations, fewer than half of such hospitals have opted for this
extra charge. Under the Health Care Reform Act of 2015, highly specialized large-scale hospitals with 500 beds or
more will have an obligation to promote care coordination between providers in the community, as well as to charge
additional fees to such patients.
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