NCPA - National Center for Policy Analysis


September 30, 2005

Japan, one of the most medically advanced nations in the world, is characterized by the overuse of tests and drugs, unconstrained demand from patients and an explosion of costs; unless changes occur, these factors will produce a medical crisis, says the British Medical Journal.

The root of the problem lies in four characteristics of the Japanese system, says BMJ:

  • Japanese citizens are covered comprehensively and exclusively by either national medical insurance or social insurance.
  • Mixed private and insurance payments are prohibited -- beneficiaries cannot pay privately for medical services that are covered by their insurance.
  • Beneficiaries have guaranteed access to any health care providers, from general practitioners to specialists, without being charged a premium fee.
  • Health care providers and institutions are reimbursed through fees for service.

Many organizations have proposals for reform, says BMJ:

  • In December 2002, the council of advisers to the Cabinet Office recommended that the ban on mixed payments be abolished and private payments be allowed for any medical services not covered by insurance at any medical institution which fulfilled certain conditions.
  • The Japan Medical Association and the Ministry of Health, Labor and Welfare (MHLW) opposed the proposal, claiming it would deprive people of necessary medical services and would infringe upon patient safety if new technologies and drugs were used prematurely.
  • Last December Prime Minister Junichiro Koizumi expanded the existing system and MHLW adopted a reimbursement system for inpatient care and promoted protocol based medicine.

But neither system will change patients' behavior; to encourage shared decision making, MHLW must popularize the concept of patient-physician partnership.

Moreover, withdrawing the ban on mixed payments is equivalent to giving up an important part of the system and could cause immense problems for patients, says BMJ.

Source: Hideki Nomura and Takeo Nakayama, "The Japanese healthcare system," British Medical Journal, vol. 331, no. 7518, September 2005.

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