Health of Nations: Japan

It's Friday, I've got to run to the airport in an hour, and the shower beckons (actually, demands). But before all that -- Japan! Also, in response to popular demand, I've grouped the series into a separate "Health of Nations" category. Collect all five!

Da Basics: Japan's health insurance is another one of these employer-based systems, and has been since 1922. Universal insurance was achieved in 1961, through the National Health Insurance Act. Employers with 700+ employees are required to operate insurance plans for workers and their dependents. The plans are called "society-managed insurance". About 1800 of these employer-run plans exist, with 85% of them being single company programs and the balance being jointly administered by two or more companies. The boards of these plans are 50% company reps and 50% worker reps, much like in Germany. Dependents are required to enroll in the plans and the whole thing is funded through payroll taxes. These employer-based, "society-managed insurance" groups cover 26% of Japan's population.

Employees and dependents in companies with fewer than 700 workers are automatically enrolled in the small business national health plan operated by the government. This plan covers about 30% of Japan and is paid for by both payroll taxes and general fund revenue.

The third category of insurance is the "citizens insurance program", which covers the retired and the self-employed. The plan is administered by municipal governments who levy a compulsory premium on the self-employed in their districts. Further, the employer run health care and the government run small business system are both required to contribute to the citizens program in order to cover the retirees. The contributions from the other two programs cover about 40% of the citizens insurance program costs. Any further amount needed comes from general revenue.

A variety of small insurance programs exist to mop up the folks between the cracks, government workers and various other special occupations use them. The unemployed remain in their employer's program (or whichever program they were in before) with the payroll contribution waived. All plans are required to cover a range of benefits, which include dental care, maternity care, and prescription drugs.

The plans place no restriction on hospital or physician choice and have no preauthorization requirements, i.e, no gatekeepers (save in certain, rare cases). Japan has a much more independent class of physicians, with most clinics and small hospitals being family-owned and operated by independent doctors -- a far cry from our non-profit and private-based care. The government builds and operates the large medical centers, though the distinctions are size rather than care. Small clinics can have hospital beds and multiday care, the distinction between clinic to hospital is simply having 20+ beds.

Hospital stays are longer in Japan but surgery is only 1/3rd as prevalent, mostly owing to a resistance towards invasive procedures. Nevertheless, patients stick around longer -- an average of 33 days in the hospital -- and are allowed to convalesce there.

Payment for both hospitals and clinics is done on a fee-for-service basis. Government regulates the fees, as well as prescription prices, with the help of the Central Social Insurance Medical Council. In Japan, primary care services are often more expensive than specialized care services, an inversion of most countries. Physician visits are often brief, but the Japanese hit the doctor's office 2.5 times more often than do Americans, Canadians, Germans or the English.

Cost Control: Like in the UK, Japanese health care is cheap, clocking in at a mere 7.6% of GDP. Put another way, Japan spends a bit less than $2,000 per capita on health care, America spends more than $5,000 despite not covering 43 million of its citizens. Problems are cropping up, however. Japan's got one of the most long-lived populations in the world, in addition to a quickly-dropping birth rate. By 2020, the proportion of Japanese of 65 should be about 26%, up from 10% in 1986. That's trouble. Americans, by contrast, are only supposed to see a 4% increase in codgers during the same time period.

To stem riding costs, Japan raised their copay from 10% to 20%, though the elderly were exempted from copaying for prescription drugs. Copays, however, are ineffective at limiting costs, they were capped at $500 a month, and so they did nothing to help on the costs -- mainly due to catastrophic illness -- that're hurting the system. So Japan is cheap, but having cost problems.

How Do We Stack Up? Japan is 8-11 (three way tie) on fairness of cost distribution and #1(!) on attainment of health care goals. Their system's performance, overall, puts them at #10. America, to compare, is 54th in fairness(!), 15th in goal attainment, and 37th in overall performance. All that and we only have to spend a bit over twice as much to get it! What a deal!

And that just about brings this little series to an end. On Monday, I'll have some longer thoughts for you on what this says about American health care and what I think we should be fighting for, so stay tuned for that. If you ever want to refer to these posts again, they're all grouped under the "Health of Nations" category, which you can access on the sidebar. Hope you liked.