STRENGTHS & WEAKNESSES OFJAPANS' HEALTH CARE SYSTEM

JAPANESE HEALTH CARE SYSTEM
Naeem Ahmed Rasheed
1

Healthcare System
• Highest life expectancy & lowest
Infant Mortality rates in the world
• Some of the worlds’ best disease
outcome indicators
• Universal access to low cost
health care
• Lowest expenditures on Health amongst OECD countries
Consider these facts:

Healthcare System
• HOW DO THEY DO IT
• IS IT ALL DUE TO THEIR HEALTH
CARE DELIVERY SYSTEM
• IF ITS’SUCH A PERFECT SYSTEM
WHY DOES NOT EVERYONE ADOPT IT
Qs which come straight to the mind are:

Healthcare System
• The answeris yes its a good sys but not a perfect one
• It has got some majorflaws
• One majorfactorforthese fantastic figures are the
obsession of the Japanese forhealth life-styles ( health
food; regularexercise)
• Anothermajorfactoris Japan’s excellent and very
effective Public Health sys
Qs which come straight to the mind are:

Healthcare System
Work-place Morning exc
Healthy life Style ( exc, food)
Excellent & effective
Public Health

Healthcare System
Japanese have 75% less chance
of suffering a MI than the
Americans and the French
But if they do they are TWICETWICE as
likely to die from it than the
Americans and the French
Source: Japan's health-care system in crisis
The Economist (US) September 10, 2011

STRENGTHS & WEAKNESSES OFJAPANS' HEALTH CARE SYSTEM

HCS at a Glance
• Japanese HCS model similar to German HCS
• Universal coverage through Bismarkian sys of
Employees Based Health Insurance with strong Govt fin
con (the self-employed enter the Nat health insuranceNat health insurance)
• Universal health coverage available at low cost
• Individuals on social security exempted from SHIS

HCS at a Glance
• Government tightly regulates all aspects of the HCS to
control prices e.q. consultation, exam, procedure
charges, medicine prices; premium rates etc
• Prices heavily regulated but Not Quality
• Health providers are paid by a nationally uniform
method and rate , negotiated by the stake-holders
• Main source of funding for curative svcs is insurance
while the main source of funding for public health
(promotive /preventive) is by taxes

HCS at a Glance
• Tiers of health care poorly differentiated
• Patients not required to register with a local GP (Free-
Access policy)
• No Gate-keeping (patients can visit spec without
referrals leading to overcrowding in hosp OPDs)
• Dominance of (non profit) private hospitals (80 % pvt‐
Hops)

HCS at a Glance
• By law all Hosps / clinics to be owned / managed by Drs
• A patient visits a physician 13 times a yr (more than
Double the OECD av)
• Hospitals stays are 3 times as long as OECD av
• 34% admitted patients stay longer than 30 days
• Drs are 30 % lesser than the OECD av

HCS at a Glance
• Emergency and primary care is inadequate
• Hospital have the right to refuse emergency patients
• Japan has the Fastest Growing & the Largest elderly pop
in the world
• Health expenditure 11% of GDP
(Half of US)

HCS at a Glance
• The payments doctors receive for svcs 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

HCS at a Glance
JAPANJAPAN
HC
Expenditure
% of GDP
Source:Source:
OECD 2015OECD 2015

HCS at a Glance
JAPANJAPAN
OECDOECD
Source:Source:
PGPF.orgPGPF.org
20112011
HC
Expenditure
per capita

HCS at a Glance
JAPANJAPAN
Source:Source:
OECDOECD
20152015
No ofNo of
DrDr
ConsultationsConsultations
per personper person
per yrper yr
(OECD)(OECD)

HCS at a Glance
Rate of Aging in Japan
Source: Health Care Delivery System in Japan. (Osaka University Graduate School of Medicine,)
Division of Health Sciences 2005

Healthcare Delivery System
• The premise in Japan is simple: healthcare is an
OBLIGATION of the Government, the same as national
defense and picking up the trash
• Health care not considered a privilege but the right of all
citizens
• People pay for their health care via Taxes and
Insurance, and the government takes responsibility for
regulating costs

• The foundation of Japan’s HCS is its’ Universal Health
Insurance System (SHIS) called “KAIHOKEN"
• Its mandatory to be insured
• Free-access; no gate-keeping
in Hosps
• Patients report to Hosps for minor & chronic issues thus
leading to overcrowding

• The Govt thru its Ministry of Health, Labour and Welfare
(MHLW) is responsible for making health policies
• Govt sets the Public Insurance fee schedule and gives
subsidies to local governments, insurers, and providers
• Every 2 yrs prices of all med svcs and medicines is
reviewed (a balance is sought between reasonable cost
& reasonable profit)

• Japan’s 47 prefectures (districts) implement these
regulations and develop own health care plans with their
own budgets and funds allocated by the national
government

• More than 1,700 municipalities are responsible for
promotive & preventive aspects of health
• Each prefectural Govt revises its health plans every 5 yrs
based on the national plans
• Prefectures are responsible for annual inspections of
Hosps (sanctions incl reduced imbursement)

• On av a doctor sees 100 patients a day i.e. 3 min for
each patient
• No strict differentiation between generalist and specialist
Drs
• Hosps have the option to receive payments by the
traditional Fee-for-svc payment or a mix of traditional
and DRG type payment

• Emergency svcs are Inadequate & Insufficient as
most Drs prefer to open their own pvt clinics (as
then can work lesser and earn more)
• Clinics much more in Japan than the req no. of
Hosps leading to inadequate emergency svcs (as
A&E svc aval only in Hops)
• Emergency patients REFUSED by 3.4 Hops on av
before being accepted

Source:Source:
MHLWMHLW
20112011

HOSP /
CLINIC
CENTRALCENTRAL
GOVTGOVT
PUBLICPUBLIC
INSTITUTIONINSTITUTION
SOCIALSOCIAL
HEALTHHEALTH
INSURANCEINSURANCE
MEDMED
CORPORATIONCORPORATION
INDIVIDUALINDIVIDUAL OTHEROTHER TOTALTOTAL
HOSPSHOSPS 274274 12781278 121121 57195719 409409 869869 8670
3.2 %3.2 % 14.7 %14.7 % 1.4 %1.4 % 66 %66 % 4.7 %4.7 % 10 %10 %
CLINICSCLINICS 596596 36763676 621621 3596735967 4750347503 1146111461 99824
0.6 %0.6 % 3.7 %3.7 % 0.6 %0.6 % 36 %36 % 47.6 %47.6 % 11.5 %11.5 %
DENTALDENTAL
CLINICSCLINICS
33 285285 1212 1067010670 5708257082 332332 68384
0 %0 % 0.4 %0.4 % 0 %0 % 15.6 %15.6 % 83.5 %83.5 % 0.5 %0.5 %
HOPS / CLINICS
Source:Source:
MHLWMHLW
20102010

Source:Source:
OECDOECD
20142014
HospHosp
beds perbeds per
10001000
poppop

Source:Source:
KDI School of
Public Policy
and Management,
The World Bank,
Tokyo Development
Learning Center 20142014
Hosps usedHosps used
asas NursingNursing
HomesHomes

JAPANJAPAN
Source:Source:
OECDOECD
20152015
ProportionProportion
ofof
Hosp bedsHosp beds
forfor
LTCLTC
patientspatients

JAPAN
JAPAN
Source:Source:
OECDOECD
20152015
Av lengthAv length
of stayof stay
InIn
HospHosp

Healthcare Manpower
Source:Source:
OECDOECD
20152015
Source:Source:
MHLWMHLW
20102010

Healthcare Manpower
JAPANJAPAN
Source:Source:
OECDOECD
20152015
Drs perDrs per
100,000100,000
OECDOECD

Healthcare Manpower
JAPANJAPAN
Source:Source:
OECDOECD
20152015
Rate ofRate of
incinc
of Drsof Drs
in Japanin Japan

Healthcare Manpower
JAPAN
JAPAN
Source:Source:
OECDOECD
20132013
NursesNurses
perper
1000010000

Health Insurance
Health Care Expenditure %
Source:
Health Service Deliver Profile, Japan,
WHO & MLHW-2012

Health Insurance
History
• Japan's first national policy for health insurance was
introduced in 1923, motivated in part by imperial visions
for a strong and healthy workforce for war
• In 1961 Japan achieved full health insurance coverage
(the 1st non-Western country to do so)
• Called Kaihoken in Japanese

Health Insurance
• Japan has got a very complex insurance system
• There are 8 Health insurance systems & 35,000 insurers
• On an average one pays 30% copayment for medical
treatment and Govt pays the remaining 70%
• Around 3 to 9% of wages are used to pay the premiums
(average $ 280 approx)
• Those on Social Security benefits are exempt

Health Insurance
• There are two types of insurances: Public health
Insurance called Social Health Insurance system (SHIS)
& Private Health Insurance
• Public Insurances are of three types :
o Employees Health Insurance Sys (EHIS)
o National Health Insurance Sys (NHIS)
o Long-Term Care Health Insurance Sys (LTCHIS)
Source ;Health Svc Del Profile Japan 2012

Health Insurance
PRIVATE HEALTH INSURANCE SYS
• Developed historically as a supplement to life insurance
• It plays only a supplementary role as a way to pay
copayments of medical treatment
• Provides additional income in case of sickness, mainly in
the form of lump-sum payments or daily payments
during hospitalization over a defined period
• Majority hold some form of private health insurance

Health Insurance
Employees Health Insurance Sys (EHIS)
• All eligible who are employed by someone (both Govt &
pvt)
• Half premium paid by the employer and half by the
employee
National Health Insurance Sys (NHIS)
The following are eligible:
o Self-employed
o Unemployed
o Retirees
o Students

Health Insurance
• Premiums based on age & monthly salary
• On av 30% copayment for med treatment; Govt pays the
remaining 70%
• Depending on income and age patients’ copayments
may be reduced:
o Age less than 6yrs------20% copayment
o Age between 65 & 74 yrs --------20% copayment (if high income
then 30%)
o Age 75 and above------10% copayment (if high income then
30%)

Health Insurance
• Monthly thresholds are set for each household
(depending on income and age)
• Medical fees exceeding the threshold are
waived or reimbursed by the government
• This is called "Catastrophic Coverage" and was
introduced in Japan in1973
• Management of RTA not covered (need compulsory
Automobile insurance)

Health Insurance
What Is Covered ?
- Indoor and outdoor patient care
- Hosp based LTC
- Dental care
- Prescription drugs
- Prosthetics
- Cash benefits for childbirth
- Death

Health Insurance
What Is NOT Covered ?
- Over the counter drugs
- Daily expenses (such as for food) incurred in health
facilities for the elderly
- Some prosthetics such as eyeglasses
- Orthodontic work
- Cosmetic surgery
- Abortions
- Injuries incurred while drunk or fighting

Health Insurance
Long-term Care Insurance
• Since Kaihoken was estb in 1961 the elderly pop has
quadrupled to 23% of the pop (it was 7% previously)
• There was an increasing gap between the health
expenditures and the income by insurance hence, in
2000 Govt introduced a mandatory new insurance the
Long Term Care Health Insurance Sys (LTCHIS)

Health Insurance
Gap bet Health/SocialGap bet Health/Social
ExpenditureExpenditure
and Premium Incomeand Premium Income
Source:Source:
Min ofMin of
FinanceFinance
20122012

Health Insurance
• Every one has to pay (during their working life) a mandatory
2% of their salaries/income
• This is in addition to SHIS premiums
• 50% of LTC financed by Insurance and
50% by Taxes
• Employer & employee each contribute 50% of the premium

Health Insurance
• To become eligible for the benefits of LTCHIS you have to be
aged 65 yrs or above
• LTHCIS is Administered by the municipalities
• Covers only home LTC ( Hosp LTC
covered by SHIS)

Health Insurance
What is Covered
• Home care
• Disability equipment
• Assistive devices
• Home modification expenditures
• Nursing services

Imp Misc Aspects
Traditional Medicine
• Called Kampo have unique theories and therapeutic
methods (originally based on traditional Chinese
medicine)
• The underlying idea is that the human body and mind
are inseparable thus a balance between them is
essential for human health

Imp Misc Aspects
Traditional Medicine
• Kampo medicine is widely practiced in Japan, and is fully
integrated into the modern health care system
• 148 different formulations (mainly herbal extracts) are
covered by SHIS

Imp Misc Aspects
Med Edn
• Med edn in Japan is a six-yr course
enrolling high school graduates
• It typically consists of four years of preclinical
education and then two years of clinical education
• A nationwide common achievement test was instituted
in 2005 (students must pass this test to qualify for
preclinical medical education)
• There are 79 medical schools in Japan

Imp Misc Aspects
Med Edn
• Primary care is not recog as an academic discp in Japan
and med schools have no estb dept of primary care
• Many med schools have set up a dept of gen
comprehensive care, where doctors learn to
treat patients from a gen diagnostic pt of view
• PG trg has been poorly dev in Japan (from 2003, two yrs
of PG trg has become mandatory)

Imp Misc Aspects
Quality Assurance
• Prefecture Govts responsible for annual inspections of
Hosps (sanctions incl reduced imbursement)
• Hosp accreditation is done by the Japan Council For
Quality Health Care (JCQHC), a non-profit org
• Hosp accreditation is voluntary
• No disclosure of names of Hosps which fail to get
accredited by JCQHC

Imp Misc Aspects
Quality Assurance
• As of 2015 only 26.7% hops were accredited by the
council
• The council develops guidelines
for provision of quality health care
but has no regulatory power
to penalize poorly performing Hosps
• Drs and nurses are licensed for life with no requirement
for license renewal, CME or peer review of performance

Military Health Care
• After Japans’ defeat in WW II and is occupation by the
Allied Forces its entire military set up was disbanded
• Its’ constitution stated that Japan will never again
maintain "land, sea, or air forces or other war potential“
• Allied Forces were responsible for Japans’ defence
• In 1952 was allowed to have Self Defence Forces (SDF)

In 1954 SDF was reorganised as :
• Japan Ground Self-Defense Force (JGSDF)
(de facto post-war Japanese Army)
• Japan Maritime Self-Defense Force (JMSDF)
(de facto post-war Japanese Navy)
• Japan Air Self-Defense Force (JASDF)
(de facto post-war Japanese Air-Force)

• Japanese military is still in the process of evolution
• As late as 2006 a proper Ministry of Defence was incl in
the cabinet
• Presently it has 247,150 personnel (2015)
• Military units
o Five armies
o Five maritime districts
o Three air defense forces

• Health care only covers physical examinations and the
treatment of illness and injury suffered in the course of duty
• Health care is provided at the SDF Central Hospital (Tokyo)
• 14 regional hospitals
• 165 clinics in military facilities
and on board ships
• Medical Battalions

• SDF has 1 x medical college called the National Defense
Medical College
• It was estb in 1973 and offers a 6 yrs course
• After graduation the graduates are posted to an Officer
Candidate Training School in one of the three forces
• After passing the National Medical Doctor Examination
they take a two-year internship and are posted to Self-
Defense Force hospitals and the battalions

Challenges
• Aging and shrinking pop
• Lack of a distinct 3 tier health del structure
• No preferred family/ General physician (free-access
policy)
• No gate-keeping
• Hosps being used for LTC

Challenges
• Insufficient nursing homes for LTC
• Weak emergency svcs
• Law allowing Hosps to refuse emergency patients
• Deficiency of physicians
• Inadequate quality control in Hops/ clinics

Govt
reps
PrefecturesPrefectures
MHLWMHLW
The CabinetThe Cabinet
Home CareHome Care
ProvidersProviders
LTCLTC
ProvidersProviders
InsuranceInsurance
ClaimsClaims
assessmentassessment
HospHosp
Social security CouncilSocial security Council
Pharma & MedPharma & Med
DevicesDevices
AgencyAgency
MunicipalitiesMunicipalities
NationalNational
GovtGovt
PayersPayers
RepsReps
Health Science CouncilHealth Science Council
Council forCouncil for
Qlty CareQlty Care
Fair TradeFair Trade
CommissionCommission
Central Social InsuranceCentral Social Insurance
Med CouncilMed Council
ClinicsClinics
MoFinMoFin
HealthHealth
ProvidersProviders
Gen health care
policies
Public health policies
fee schedule
Implementation of fair
competition policy on
providers
Source: R. Matsuda, College of Social Sciences, Ritsumeikan University, 2014.
Checking invoices from
providers
Implementation
of regsPlanning& dev health care del
Funds for developing HCD
Estb of Reg
Also, serving as statutory health insurers
Structure of Japanese HCSStructure of Japanese HCS

STRENGTHS & WEAKNESSES OFJAPANS' HEALTH CARE SYSTEM

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