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The Japanese flag
In this section of the health care reform series, we are looking at systems that have implemented a national health insurance scheme based on a mixture of the private and public sectors.
In the previous article, we explored Germany’s health care system; and discussed the structure, strengths, weaknesses, as well as recently integrated reforms.
Read: A history of health care in the U.S.
Read: Distortions in the public debate on health care
Read: The Patients’ Choice Act
Read: The Affordable Health Choices Act
Read: The Public Option
Read: The Canadian health care system
Read: The British health care system
Read: The health care system of Taiwan
Read: The German health care system
Japan
This article will look at Japan’s national health care system, which like all of the other’s we have explored thus far, is universal, According to McKinsey Quarterly, “Japan’s citizens are historically among the world’s healthiest, living longer than those of any other country. Infant mortality rates are low, and Japan scores well on public-health metrics while consistently spending less on health care than most other developed countries do.” Japan’s health care spending consumes about 8 percent of GDP.
Despite these successes, the Japanese system is riddled with problems – some of which have no easy solution.
According to the National Coalition on Health Care (NCHC), Japan provides health care to all of its citizens under two large categories: National Health Insurance (NHI), and Employees’ Health Insurance (EHI). The EHI covers individuals in medium to large companies, national and local government, and private schools. Small businesses are covered through a government-run plan within the EHI. The NHI covers workers in the agriculture, forestry, and fishery industries; the self-employed, and the unemployed. Finally, there is also a national health program for those aged 70 and above, which is funded by the other two. Private insurance is rarely utilized in Japan.
Insurance premiums are compulsory, salary-based, and split between the employee and employer – the average contribution rate is about 4 percent (excluding bonuses). The system includes more than 4000 public and private payers. There is no discrimination based on health status, or pre-existing conditions; and insurers do not earn a profit.
There is no control over access; no gatekeepers; and few controls over the supply of care. There is also no central control over the hospitals – most of which are private institutions – a majority operating regularly in the red. In an effort to dampen the use of medical services, there is substantial cost-sharing among the insured. Members of the EHI pay 20 percent of hospitalization charges and 30 percent of the costs for outpatient care, in addition to prescription co-pays; however, there is an out-of-pocket ceiling. Members of the NHI pay 30 percent of in and outpatient costs, plus prescription co-pays, all of which are also capped.
According to the NCHC, covered services include in and outpatient care, home care, dental, prescriptions, long-term care, home nursing for the elderly, prosthetics, and cash benefits for childbirth. Costs that are not covered include additional fees incurred through hospital care, routine physical exams, some dental services, over-the-counter drugs, daily expenses incurred in health facilities (such as food), and some prosthetics. The plans also do not cover orthodontics, cosmetic surgery, vaccinations, abortions, injuries incurred while drunk or fighting, or treatment outside of Japan.
Physicians are paid on a fee-for-service basis standardized through a Medical Fee Table; and for drugs, the NHI price list. Even though the government has attempted to control costs by slashing reimbursement rates, this has not curbed the demand for health services. It could be argued the cuts actually incentive more care as wealth in the country grows, while co-payments decline.
The system also lacks a mechanism to distribute medical resources evenly. As a result, emergency rooms turn away tens of thousands of individuals in need of care each year. According to McKinsey, “Japan has three to four times more CT, MRI, and PET scanners per capita than other developed countries do, most of which “are woefully underutilized.”
Contributing to the emergency room crisis is the fact that hospital salaries are significantly lower than private clinics. There are also too many hospitals; most of which are small and have too few specialists to operate them. Many also lack the appropriate units to adequately service particular needs – for example, intensive care. In addition, many individuals seeking care through this medium do so unnecessarily for an ailment that a primary physician could have addressed at a lower cost.
In addition to the supply problem, demand is rising as the traditionally healthy diet of the Japanese is being replaced with more Western options, leading to an increase in obesity and diabetes. McKinsey defines four factors that account for the rising costs that Japan will experience over the next several decades if it does not pursue better measures of control over the health care industry: advances in medical technology; a rise in wealth among the population (encouraging more care); aging; and shifting treatment patterns based on the prevalence of different diseases.
As mentioned above, Japan has traditionally relied on controlling costs by cutting fees and prices, and the system does not offer incentives or rewards for best practices, or positive health outcomes. As a result, quality suffers. Furthermore, controlling costs by cutting fees is not sustainable, and does little to slow the growth of demand.
According to McKinsey, the Japanese system promotes overutilization because providers are encouraged to provide unnecessary services in order to make up for declining reimbursement rates. “On average, the Japanese see physicians almost 14 times a year, three times the number of visits in other developed countries.” Furthermore, “Our analyses suggest a direct relationship between the number of beds and the average length of stay: the more free beds a hospital has, the longer patients remain in them.”
In addition, providers bill separately for each service (i.e. to examine the patient, write a prescription, and fill it). Therefore, it should not be surprising that the Japanese use prescription drugs significantly more than other industrialized countries.
The quality of care varies because the hospital network is too fragmented, resulting in too few procedures performed in each location, and less specialized experience. Accreditation standards are also weak; professionals receive lifetime medical licenses, and there is no central authority to oversee training or criteria. As a result, the standards are much less stringent in Japan than other developed countries. The Japanese health care system also lacks incentives to encourage quality care. They do not collect information on patient outcomes, or adverse events, and thus, there is no way for consumers to compare providers. Finally, new treatments are delayed. Doctors are overworked, which makes it difficult to participate in clinical trials; and the agency tasked with approving drugs and equipment is understaffed.
Despite such positive health outcomes, the Japanese system has many areas of improvement for which to aspire; but reform efforts have not been popular. There are fears that the country would go into recession if it were to raise the consumption tax. An increase in premiums would hurt individuals and the competitive advantage currently held by employers, and higher co-payments would increase the burden of cost-sharing by individuals, which is already between 20 and 30 percent – though the fee schedule still keeps this amount relatively low.
Nonetheless, the system has much to boast about, and room for internal efficiencies. It could change its fee schedule and rework the incentives offered to providers. If the Japanese considered weighted capitation, they could incentivize the consolidation of their fragmented hospital network. There should be more centralized control over accreditation standards, and procedures implemented to track health outcomes – and make the results public. This would put pressure on hospitals to perform.
In the next article, we will look at the health care system in France, which has one of the most family friendly social insurance schemes in the world.
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*If you would like to submit a health care story, with the possibility of seeing it published here, please send me an email message at jennyk1981@gmail.com.
Copyright ©2009 Jenny Kakasuleff
For more info:
Five Capitalist Democracies & How They Do It
Improving Japan's health care system
Japanese Pay Less for More Health Care
Comments
Japanese are healthier than much of the world because they maintain a healthy weight with a nutritious diet loaded with vegetables and little starches. Well most Japanese with the exception of the gargantuan Sumo wrestlers that is... Great efficient culture, Tokyo the largest city in the world and one of the safest and cleanest. Bet they don't have too many LIBTARDS in Japan!
We don't allow LIEberals in our country, you keep them.
Is some of them there shiatsu massages part of universal health care in Japan?
For a good hisotry japan ,read Jared Diamond's Collapse. Collapse give a good insight into why japan is the way it is, and why it took the threat of military invasion by captain cook to open up the country
Yeah Tokyo is a magnificent city, but man I'm telling ya piasan, Hong Kong is the "Pearl of the Orient". Beautiful picturesque harbor with mountain backdrops and the skyline FUHGETABOUTIT piasan.
Dragon, you've never been to Japan, you havent even been to Italy.
Japanese food rocks, plenty of omega-3 fish oil. THe japanese are very liberal when it comes to environmetal policy. the reason they live in such cramped quarters is because they want to preserve the nations greenspaces
Dragon. what would you think of reading The Idiot, next? or maybe another Turgenev
Brad you just a boy, you aught not talk like that.
Brad looks up classics in Wiki to try to make everybody think he's smart, but yet he articulates and spells like a 4th grader.
We don't like lazy, whiny, parasites in Japan, no LIBTARDS please.
The Vegas boys are in town ladies.
I actually prefer Solzhenitsyn over Dostoevsky, but both are great writers.
Oh God NO. Not Brad with another book review!
Brad says:
Dragon, you've never been to Japan
And Brad has never read a book!
once again the grammer police are on the prowl. Hey 1954 called, it wants its point of view back.
And NONE of these plans you have written about are like the brutal, invasive, expensive, unwarranted, unsustainable and already failing HR 3200.
Hey Brad man like the Summer of Love ended in the Haight in '67 man like move on bro'
Peace
Sounds like the Bradford is into Russian writers, might I suggest Mr. Bradford that the next time you and Biff venture into a Barnes & Nobles for a latte, you select a copy of ' The Gulag Archipelago by Alexander Solzhenitsyn.
B.S Zone/Libtard
Say hi to Chris Hanson for me. Enjoy your iced tea
Mark/Libtard/B.s zone is a t.v star
youtube.com/watch?v=iPQq9Jv9tl0
i read the first ninety or so pages of the gulad archipeligo last winter, but i was too caughtr up in work to finish. that must of been frightening, how anyone and everybody could just be carted off like that for no good reason. i find it hard to believe that anyone could think that something like that would ever happen in america, considering how worked up we get whenever someone arrested for no good reason
NO WE WON"T. JUST SAY NO TO OBAMACARE.
Sayonara to Obama. Obama not my mama.
I don't need no stinkin' Socialized healthcare.
You may not need socialized healtcare, but about forty million or so americans do need socialized medicine. thats why the conservative/libertarians, will never win a popular vote, because they never see past their own interests
Brad, that's because conservatives and libertarians are willing to make it on their own, damn the torpedos full speed ahead. Speaking of Japan and/or other Asian peoples, ever notice how many of them who come to the US become successful, why you ask, it's because they bust their hump and don't look for handouts. That's not saying you will get rich by working hard, for there are many people rich who have never worked a day in their lifes, but at least you don't go around whining and waiting for someone else to make it for you.
Here is the true Obama.
www.whitehouse.gov/blog/Over-Beers/
Too damn bad the only Gentleman at the Beer Fest at the WH was Mr. Crowley.
Obama friend and fellow aggrieved black man
Mr Gates is being helped down the stairs by the white cop that arrested him while the other aggrieved black man could care less about helping his FRIEND down the stairs. Which man would you rather have around in the time of need?
On the OFFICIAL WH blog site no less. Whoever allowed this picture on there will be fired.
Yeah I never wanted any Libtards in my unit, they were worthless, and I sure as hell wouldn't want to be in some foxhole with one.
Mark, its sad that you cant comment under your own name. Did you read the article? Japan does have socialized medicine. they have a safety net in japan, which allows their citizens to take risks and go out on a limb because they know that they wont be left out in the cold if they fail. its unfortunate that so many libertarians, and rightists cannot see the connection between high standard of living, and social responsibility.
You LIEberals make fun of the 'birthers' and Obammy's BC, well this Obamacare isn't going to pass, so why don't you all just move on & get over it. Sheeessssh, talk about an obsession!!
I thought that you nuts on the right all believed that Obama was an iron fisted dictator, who was working to turn american into a socialist dystopia. now you are saying that he cant push a healthcare reform bill through congress. And you wonder why us liberals make fun of you. you say one thing, one day, and then you go the other way, you may disagree with my point of view, but atleast i am consistant, and dont resort to off the wall conspiracy theories. maybe us liberals would have some respect for your point of view if you were willing to stand behing your beliefs for a change.
F U grammer police
Sankyu fuhenteki youjou.
Sayonara
NO WE WON'T! RUSH RULES THE AIRWAVES 1989-2009+
CEO, the Trump Organization
I would hire him. He's handled the tremendous mess he walked into very well. He still has a daunting task ahead of him but he appears to be equal to the challenge. He has kept his eye on both national and international issues and his visits to foreign countries have shown him to be warmly received, which is certainly a change from the last Administration. I believe he should pay more attention to OPEC and what's going on there, but overall I believe he's done a very good job.
From HIS OWN WORDS.
"I don't think we're going to be able to eliminate employer coverage immediately. There's going to be potentially some transition process..."
www.youtube.com/watch?v=p-bY92mcOdk&feature=player_embedded
The worst 9 words you will ever hear are, " I'm from the government and I'm here to help." Ronald Reagan
Sorry Brad, unlike you I do not use other people's name. I did read the article and looks like they are having their own issues- Brad,I've got news for you-Hold your breath- Obama is not going to insure all of the uninsured- Yes you heard it here- His plan which is coming apart every day would give 16 (not 40) million people some type of a "Public Option" with an extremely high price tag and will make it very likely others will get knocked off of their private plans and forced into this mess. Support is dropping everyday as even Democrats are starting to wake up and see this for what it is-One of the biggest potential blunders in American history at the worst possible time. Again why can't Obama improve the current government services and demonstrate how he is able to solve problems and deleiver better services? NO- Its full speed ahead at warp 8 trying to pass a bill that most congressmen have not read which could cost a trillion dollars. Obama can't even organize "Cash for Clunkers".
"Obama is not going to insure all of the uninsured- Yes you heard it here- His plan which is coming apart every day would give 16 (not 40) million people some type of a "Public Option" with an extremely high price tag and will make it very likely others will get knocked off of their private plans and forced into this mess."
Actually, Mark, you heard it here first - but not from you. In my article some time back in this very series, I made note of the CBO estimate you reference above. The CBO estimates that some employers will opt out of private insurance and allow their employees to choose whether or not to enroll in a public option - the estimate does not include these same individuals who would likely purchase their own plan through the public option or any other of plans that will be available to them.
You miss the problem, because rather than examining it, you're repeating talking points. The problem is that Obama does not go far enough to regulate the private insurance market. The plan is not patient focused, because the president is too worried about bipartisanship and pleasing the business-class.
Private insurers are going to undercut the public option by offering very low premiums to healthy adults, while the sickest will be drawn to a more comprehensive and costly public option. Essentially, it will go broke, b/c the concept of pooling and community-rating is being ignored in the debate. A health system is only adequate if the healthy subsidize the sick - a feeling of solidarity is required, but Obama realizes all the individualistic, selfish teabaggers we have running around, and doesn't want to be called a "socialist." Thus, he is hoping that the markets will save him - they won't.
Logical thinking people have put the brakes on Obammy-Care, administer euthanasia to socialized health care ASAP.
Medicare and the VA system aren't getting repealed by Republicans. How come? Because they work better than the private insurance system.
Hey Brad isn't it about time for your book review? Have you read Michelle Malkin's new book yet, and if so how many stars do you give it?
i have no time for Michele Malkin. she is a space cadet. ive seen her on Bill Maher. Check out Boxed in By Mark Crispin Miller. He reviews old t.v like The Family Feud, and old t.v commercials. its before he got into politics.
I feel sorry for anyone not getting on board and grabbing hold of this liberal money. I'm raking it in and having a laugh as conservatives trifle with percentage points on their tax rates. Have fun filing for chapter eleven. All my bills are paid, plus some, because i am a liberal, i save my money, invest well, and conserve energy and gas, and other fuels. and i don't fall for that ethanol crap. Keep listening to your oxi contin munching blowhard, i will listen to scientist and respected economists.
Brad is that you again?
Jenny, then I hope this thing fails not to go through as it looks like neither one of us will be happy- Obama should have focused on properly stimulating the economy through the small business class and not Wall Street, now he is invested in this mess just as Hillary did in 1994-
Looks like the Birthers are in the Houuuuuse!
I Love Abortionists.
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