HEALTHCARE AROUND THE WORLD: PART 5 JAPAN
HEALTHCARE AROUND THE WORLD
PART 5: JAPAN
Japan has a healthcare system that is tightly controlled, “that favors the patient at the expense of doctors and hospitals.” The system in Japan is predominately private. Japan relies on private doctors and hospitals with bills paid by insurance companies. In fact, Japanese doctors and clinics regularly advertise on buses, subways, and billboards. “The Japanese are the most prodigious consumers of health care on the planet. The average Japanese visits a doctor about 14.5 times per year, three times as often as the U.S. average and twice as often as any nation in Europe.” It is not surprising that the Japanese love technology, getting twice the CAT scans and three times the MRIs per capita as done in America. The average hospital stay is 36 nights! Women consistently stay in the hospital for 8 -10 days. By most measures, Japan leads the world in life expectancy: 85.5 years for women and 78.7 for men.
“Despite universal coverage and prodigious consumption, Japan spends a lot less on healthcare than many developed nations; with costs running at about 10.2% of GDP.” That compares with over 17% of GDP for the U.S. How is this possible in a country which utilizes an incredible amount of health care? The answer is simple. Japan puts extreme limitations on the income of doctors, nurses, hospitals, labs and drug makers.
The Japanese model yet should be familiar to all Americans. Insurance plans pay for healthcare. The patient generally pays a 30% copay with insurance picking up the balance. Children and the elderly pay less. Most importantly there is a monthly limit of about $650. So, let’s assume that we need a very specialized surgery that cost $10,000. Your maximum out of pocket expense is $650.
France has about 14 insurance plans. Germany has over 299 sickness funds. Japan has about 3500 insurance plans! All plans must accept everyone including those with preexisting conditions. They must pay all bills submitted by providers. There is no claim denial. So, it is a variation of the Bismarck Model with private, though nonprofit insurance plans paying private practitioners. Japan requires everyone to sign up. As in the U.S., it’s called an “individual mandate.” The local government pays for the elderly or the impoverished. Most importantly, Japanese insurance companies are nonprofit. Though patients can pick any doctor or hospital, they are not free to pick any insurance plan.
In Japan, the Ministry of Health and Welfare negotiates prices for hospitals and doctors. The fee schedule applies to all from the big cities to the remote islands. As Reid noted, “The system shafts doctors and hospitals, paying some of the lowest fees on earth for medical treatment.” In general, prices for health care services in Japan are far below those in other developed countries. Reid noted that Japanese physicians earn as much as midlevel corporate executives. Fortunately, there is little student debt as tuition is very low and local governments in many instances assist in payment. It is important to note that there is no doctor shortage in Japan. “There is a strong cultural pattern of doctors following their parents to medical school.” Furthermore, doctors enjoy significant status in Japanese society.
It is significant that these tight cost controls seemed to have driven innovation. For example, the cost for an MRI is only a bit over $100. Because the price was so low doctors approached MRI makers requesting compact, inexpensive machines. The companies such as Toshiba and Hitachi responded by developing scanners costing only about $150,000, much less than we pay in the U.S.
Tight cost controls, however, have left many of the hospitals and clinics are painfully underfunded. Many are near bankruptcy. Reid notes that the one saving grace is that large Japanese corporations built and have maintained many hospitals for their employees. And these hospitals are open to all. It is notable that the insurance plans do not cover pregnancy and childbirth! It is fortunate that almost all expectant mothers receive a “maternity grant” for local governments. A recent article in the 2018 Japanese Times voices great concern over the “buckling” Japanese system. It notes that the downside of this long-running system is that, while the government controls the cost of medical goods and services, it doesn’t control the volume of services provided. It suggests that Japan needs to step back from an “all you can eat system” where there’s a lot of waste. This has fostered a culture in Japan of patients seeking more care than necessary because access is unlimited. Yet it also noted that Japan has a lot to learn from the U.S., especially its superb and standardized education and training systems for doctors; whereas Japanese medical education focuses too much on nurturing specialists.
Ultimately, Japan has a multipayer system, that because of a single national fee schedule, works like a single-payer system. It has extremely tight cost controls which may have adversely impacted the longterm wellbeing of its own healthcare system.