Healthcare System of Japan

Tracey Lynn Koehlmoos, PhD, MHALecture 13

HSCI 609 Comparative International Health Systems

Before heading to Japan…

• Let’s go regional• In Europe we talked about the EU and its

relation to health systems• In the Pacific Rim we must talk about

APNHAN:• Asia-Pacific National Health Accounts

Network• APNHAN—a far cry from the EU but

definitely worth another slide…

APNHAN• Collective partnership of regional experts

(government and non-government) interested developing and maintaining national health accounting systems

• APNHAN hopes to provide a forum for regional collaboration and mechanisms for dialogue and technological exchange

• Broad range of economies in the region: Japan and Aus (OECD, highest % GDP spent on healthcare) and South Korea, Thailand and Bangladesh (lowest GDP % on healthcare)

• We should never ignore collaboration

Japan• Official name: Japan• Capital: Tokyo• Constitutional monarchy w/

parliamentary government• Administrative divisions: 47

prefectures• 2nd most technologically

powerful economy; 3rd largest economy in the world

• Keiretsu: manufacturers, suppliers, and distributors working together in closely-knit groups

Update for Japan

• Population: 127.4 million (2006)• Life expectancy: 77.9 male/ 84.7 female (highest)• Infant mortality: 3.2 per 1000 (lowest in world)• Population >65 years: 20% (highest in world)• Leading causes of mortality: cancer (31.0%), heart

disease (15.5%), cerebrovascular disease (13.2%), and pneumonia (8.9%) (2002)

• Health expenditure as % of GDP: 7.9 (2003)• Per Capita health expenditures: $2,139 US

Overall View of the System

• Universal coverage through a Bismarkian system of employer-based health insurance with strong government financial control

• Most provision takes place in the private sector with physicians having a powerful role in the healthcare system and in society

Organization

Ministry of Health, Labour and Welfare—– High amount of government regulation– Gov’t sets fee structure via the Medical Fee

Table and for drugs via the NHI drug price list– Provide funding for…

• Prefecture and municipalities– Conduct comprehensive planning and

implementation

Source of Funding Healthcare Expenditures

16%

65%

17%0%2%

Government

Social Security Funds

Private Household

Corporations

Other Private Ins

2000 data. Source: OECD Japan Country StudyAccessed 30 May 2006: http://www.oecd.org/dataoecd/8/32/33697370.pdf

Where is all the money spent?

61%20%

10%

4%3%2%

Curative & Rehab

Medical Goods

Long Term Care

Capital Funds

Prevention & PH

Administration

2000 data. Source: OECD Japan Country StudyAccessed 30 May 2006: http://www.oecd.org/dataoecd/8/32/33697370.pdf

More information on health expenditures…

• 51% of health expenditures are for hospital based services

• 29% goes to ambulatory providers

• 12.2% medical goods and supplies

• 2.9% nursing and residential facilities

How National Health Insurance Works

• Aged 3 to 74 years pay 30% of medical expenses

• Under 3 years pay 20% • Over 74 years pay 10% or 20%• Insurance carrier renumerates the doctor,

hospital, clinic, or other medical care provider directly

• Fee-for-service, determined by the Ministry of Health, Labour and Welfare

• Individuals and families are assigned to an insurance type based on career/employment

More on Health Insurance

• Two Major Types • Kokuho: National Health Insurance (45.45

million subscribers) covers the self-employed, farmers and jobless

• Employees' health insurance includes:– Shaho: Health Insurance Society (32.58

million) covers employees of large companies– Government-Managed Health Insurance

(37.58 million) covers employees of small to medium size companies.

Physicians• 2.0 per 1000 in 2003 (very low for OECD)• No academic differentiation between

specialist and generalists• Doctors are highly revered and well paid• Most clinics and small hospitals are owned

and operated by private physicians• However, the trend is now away from

private FFS practice toward more prestigious, salaried hospital-based practice

Physicians

• Physicians as businessmen

• Physicians as pharmacists

• Physicians as policy makers

• No emphasis on informed consent or full disclosure

Nursing

• Nurses in Japan have similar situations as in other OECD nations—lack of autonomy, low salaries, lack of professional recognition, MDs in teaching positions

Nursing

• Four levels of nursing:– Public health nurse: graduate program,

provide home health, pediatric check-ups, industrial health

– Clinical nurse: 3 yrs beyond high school, 80% in hospital, 15% in clinics

– Nurse Midwives: Critical role in prenatal care and delivery, clinical training & practicum, 50% hospital based, 33% own practice

– Assistant nurse: 2 year vocational program, like LPN in US

Hospitals

• An excess of beds, duplication of services

• 9,187 hospitals (2002)– 80% are privately owned– 20% large, public (mostly) teaching hospitals

• 94,819 general health clinics– Even these clinics have inpatient beds

Long Term Care• Long-term Care Insurance System: Started April

2000• Five Basic tenets:

1) Requires certification of condition for all plan recipients

2) Fixed-fee payment system

3) Professional collaboration among providers

4) Private companies MUST participate

5) Responsibilities delegated to regional authorities

Long Term Care

• LTC system seeks to unify nursing and health services in a single framework

• Removed responsibility for home-and facilities-based services from the auspices of the National Health Insurance system

• Source: JPMA website accessed 25 May 2006 http://www.jpma.or.jp/12english/guide_industry/healthcare/healthcare.html

The High Cost of Aging

• National medical expenditures 2002 were 31 trillion yen, or 8.6% of the national income

• Of health expenditures, geriatric medical care (for people aged 65 and over) comprised 49.0%

• The financial viability of the entire Japanese health insurance system is threatened with tremendous decline due to geriatric expenses

The High Tech/High Cost Challenge

• Japan is famous for adopting and adapting the best of other cultures—the same is true for healthcare and health technology

• The private ownership of hospitals/clinics and the cultural love affair with high technology combined with fee-for-service reimbursement has led to an explosion in the use of MRI’s and CT Scanners in Japan

• Example of potential of overuse of services

Japan v. USA

Japan USA*

MRI per million

population

35.3 8.6

CT Scanner

per million population

92.6 13.1

• USA under reports due to sampling technique of asking only if there is one piece of equipment in a facility rather than the actual number.Source: OECD 2003

Japan’s healthcare challenge• During the late 1990’s and into the 2000’s,

Japan saw an annual 5% increase in health related expenditures.

• Most of the increase is attributed to the high cost of providing services to the overwhelmingly increasing number of elderly citizens

• Economic growth has slowed and family size has decreased.

• The system must struggle and experience reform now in order to afford to be able to provide high quality cost in the near and long term

Summary

• Japanese culture values health and promotes a healthy lifestyle

• Japan enjoys some of the best health outcomes in the world (low infant mortality, high life expectancy)

• The future of the Japanese healthcare system will revolve around caring for an aged population to include the high cost of treating chronic illness and adapting new systems (nursing homes, home health) to fill the gap caused by societal changes