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School of Public Health
History of measures to achieve universal coverage of
national health system and role of price control in Japan
Hideki HASHIMOTO, MD DPH
Professor in Health and Social Behavior
University of Tokyo School of Public Health
0
Tokyo Fiscal Forum 2016
School of Public Health
1
Japan’s Life Expectancy exceeded OECD avg. since 1970s
Male
Female
Canada
USA
France
Italy
Netherland
Norway
Sweden
UK
Japan
Main driver = Reduced stroke
mortality brought by • Improved living
standard • Public health
intervention • Widely available
anti-hypertensive medication
School of Public Health
Mandated universal coverage
Community based plans by municipal government insurers, and occupation based plans by NGO insurers (more than 3000 insures), with different premium rates
Standardized benefit package and payment scheme set by the central government
Dominantly private delivery system under tight price control
For details; see Japan Series in the LANCET, 2011 September
2
Japan’s healthcare system today
School of Public Health
Reference) OECD Health Data 2010 3
High % of public expenditure for Total Health Expenditure
School of Public Health
Not “big bang” introduction
Formal sector (rich) vs. Community based for informal sector (poor)
Original Source) Ikegami, et al. Lancet 2011, Figure 1,
Trends in health insurance coverage in Japan, 1927-90 modified by Hashimoto 4
History of Japan’s Universal Coverage
0%
20%
40%
60%
80%
100%
'27 '31 '39 '40 '43 '49 '53 '58 '61 '70 '80 '90
Year
Perc
en
t o
f p
op
ula
tio
n
GMHI
SMHI
CHINone
MAA
Community based plan
Plans for small business
Corps for large business
Other
WW II
School of Public Health
Business based plans for formal sector workers since 1927
Mandated
NGO insurers by large business
Government insurer for small business
100% coverage + work compensation
Militarism-based productivism
Community-based plans for informal workers since 1938
Voluntary community based NGO, with varying terms
Anti-poverty and social stabilization (very weak)
Reference) Shinmura T. The Era of Universal Coverage in Japan, 2011 pp42-44 5
Origin of public insurance plans (1922-1945)
School of Public Health
Extension of coverage first (1950-1961)
1958 general election (conservative liberal vs. socialism)
1958 amendment of community based plans (mandated)
Mix of social insurance and tax subsidy to extend coverage of informal sectors (Abandonment of Bismarkian system)
Matured welfarism under economic boom (1961-1973)
Expansion of benefit coverage (50->70%)
Subsidy to catastrophic copayment
Free care for the elderly (reduced copayment since 1983)
6
Policies under post-war democratic government
School of Public Health Outpatient utilization (x1000 visits/day)
7 7
1961;
UHC 1982;copayment reintroduced
1973; Free elderly care
Subsidy against catastrophic
copayment
Source) MHLW Patient Survey
School of Public Health
Low financial barrier to healthcare access
8
0
2
4
6
8
経済的理由で必要な医療サービスを
過去1年間に受けなかったことがあるものの割合(%)
65歳未満 65歳以上
Data source; Study of Health, Age, and Retirement in Europe
Japanese Study of Ageing and Retirement
Those who withdrew healthcare consultation due to financial concerns in the past year (%)
School of Public Health
Japan’s public health plans and financial contributions
NHIA (National
Health Insurance
Association);
medium to small
companies): 1
Employer Employee Self-employed
Premiums Taxes
Government
CHI (Citizens’ Health Insurance)
Municipalities: 1788
CHI Unions: 165
SMHI (Society-Managed
Health Insurance; large
companies): 1497
MAA (Mutual Aid
Associations; public sector):
77
1st Tier 2nd Tier 3rd Tier
10%
40%
50%
Premiums
From 1st to 3rd
tiers
75 and over
LEHI (Late Elder
Health Insurance;
prefectures): 47
4th Tier
Ikegami, et al. Lancet 2011 Fig 3.
Tax and inter-plan transfer to cover poorer plans
Achieving redistribution and contribution equal to ability to pay
School of Public Health
Revival of productivism (late 70s~mid 90s)
Economic stagnation since late 70s with skyrocketing medical expenditure due to generous scheme
Cost control through macro cap and fee schedule control by the government agency
MOF sets growth limit
Negotiation b/w payers and providers on fee schedule amendment
Item by item negotiation, controlling price and expected quantity
Little direct control for delivery process and resources
10
Challenges; population ageing and economic stagnation
School of Public Health
Originally started during war-time under strong central government’s coercive power, succeeded to post-war democratic government
Fee-for-service under standardized fee schedule, no extra charge allowed.
Fee schedule equally applied to the whole sector
Negotiation b/w payers and providers under macro cap set by MOF
Avoids low-price low-quality dilemma
11
Price control through fee schedule
Hashimoto, Ikegami, et al. 2011 Lancet Fig 1
School of Public Health
Medical exp. growth tightly controlled under
GPD growth rate since 1980
12
National Medical expenditure (Trillion JPY)
Medical exp growth rate
Economic growth rate (GDP)
Since 1980, ministry introduced price control through national fee schedule, while keeping fee-for-service scheme
Hashimoto, Ikegami, et al. 2011 Lancet
School of Public Health
Provider side
National fee schedule; item-by-item price list with reimbursement conditions
Price setting under macro cap set by Ministry of Finance
Ban against selection, extra charge, and limited private practice beyond fee schedule (95% of hospital revenue from NHI)
Political negotiation b/w providers and payers under the cap
Fee-for-service based payment provides financial incentive for physicians (dominantly private sector) to do more
Japanese Medical Association stands for office-based private physicians who were major providers for chronic care outpatient services under free-access policy.
13
Cost containment while keeping physicians incentives (Ikegami, 2014 World Bank report)
School of Public Health
Extension of coverage first, supported by economic growth and increased tax revenue (1950-1961)
1957 general election between liberal vs. socialism parties
Tax subsidy to extend coverage of poor informal sectors
Matured welfarism era supported by economic boom (1961-1973)
New economy policy (“Retto Kaizo ron”)
Social security as economic policy, redistribution of welfare across the nation
Expansion of benefit coverage for community plans (50->70%)
Subsidy to protect from catastrophic copayment
Free care for the elderly
-> reduced copayment since 1983 to prevent moral hazard
Redistribution from formal to informal sector, from young to old generation, from metropolitan to rural
14
Policies under post-war democratic government
School of Public Health
Decreased economic growth & subsequent decrease in tax revenue while continually increasing medical demand due to population ageing
Current re-distributional system through transfer to medical expenditure became a major threat to national economy even under tightest price control
Compensatory increase in copayment rate while increasing income gap under economic stagnation results in declining horizontal equity in healthcare access.
15
Challenge since late 90s
School of Public Health
Healthcare system as a political lever for resource redistribution and equity
Achieved high equity in service access and utilization through build-in re-distributional system across plans, especially for older people
Population ageing and economic stagnation threatens horizontal equity and sustainability of current risk redistribution mechanism across people with different socioeconomic risks.
Reframed risk adjustment structure is required to address emerging economic disparity WITHIN age strata, genders, and work sectors.
Recent policy change towards balanced equity for all generations needs to address fairness in welfare, and avoid inter-generational conflicts.
16
Japan’s healthcare system and welfare policies