Harvard University



"Reflections on Japan’s 50 Years of Universal CoverageMichael R. ReichHarvard School of Public HealthLecture at GHP/HSPH26 April 2012Slide #1: IntroductionIn this presentation, I review the past fifty years of Japan’s universal coverage, identify the major challenges of today, and suggest paths for the future. Japan is recognized internationally for its outstanding achievements during the second half of the twentieth century in both improving population health status and developing a strong health system. This is an opportune time to reflect on its past achievements and future challenges, especially around the theme of universal coverage, which is the current main global health theme of the day. Slide #2: ReflectionsNot a focused research presentationMore of a personal reflectionJapan has had universal coverage since 1961, kokumin kaihoken seido (国民皆保険制度) = 50 yearsJapan has had also Michael coverage since 1971 = 40 years, but not universal, just periodic.Slide #3: Talk last year at Shizuoka Prefecture University, in Sept 2011Slide #4: Research papers published in Lancet special issue on JapanThe talk is based on a special issue of the Lancet that commemorated Japan’s celebration of fifty years of kaihoken: health insurance for all. Universal health insurance was achieved in 1961, assuring access to a wide array of health services for the entire Japanese population. Slide #5: Three intellectual leaders of the special issueProf. Takemi, Prof. Ikegami, Prof. ShibuyaI had the pleasure of assisting and facilitating a number of articles.Landmark study of Japan’s health system; major achievement.Slide #5: 50 years since achieving universal coverageAt the end of World War II, life expectancy at birth was 50 for Japanese men and 54 for Japanese women.By the late 1970s, Japan overtook Sweden as the world’s leader for longest life expectancy at birth.Slide #7: Health achievements: Life expectancy for womenJapanese women have remained in the number one slot for 25 years, reaching a life expectancy of 86.4 years in 2009 (while Japanese men slipped to fifth longest that year at 79.6 years)., Slide #8: Cost containmentJapan achieved universal coverage while keeping control of health expenditures, which have remained comparatively low: 8.1% of the Gross Domestic Product and 20th among OECD countries. This is all the more remarkable since the percentage of the population 65 and over has increased nearly four-fold (from 6% to 23%) during the past fifty years. Slide #9: Medical expenditure in 2005Japan ranked 22 in 2005 Slide #10: Reasons for Japan’s successesWhat produced Japan’s impressive performance over the past half century? This question is not easily answered, as many factors have contributed: public health policies, high literacy rates and educational levels, diet and exercise, economic growth, and a stable political environment, to name some of the prominent contenders. Further, buried in the successes of the past fifty years are the roots of Japan’s healthcare challenges today.Next, I explore the broader context in which these changes have evolved—and in which Japan’s emerging challenges are situatedSlide #11: Perry opens JapanNeed to place Japan’s health achievements in the historical context of modern JapanWith the inauguration of the Emperor Meiji in 1868, the Japanese government embarked on a policy of rapid Westernization throughout society. In healthcare, the government over time succeeded in changing the basis of medical practice from Chinese to Western medicine. This transition was achieved with minimal cost and limited social disruption. However, for hospitals, Japan needed to adopt a new method of delivering care, as there were virtually no public or religious institutions that could serve this role. Japan developed hospitals for specific purposes, including teaching and research hospitals, army and navy hospitals, public hospitals for quarantining communicable and venereal diseases, and the most numerous, private hospitals expanded from clinics. In all four cases, the hospital was regarded as the doctor’s workplace, and a medical doctor served as director with both clinical and administrative responsibilities. Slide #12: Recent historical contextIn 1945, at the end of the war, Japan confronted widespread devastation.Tokyo, Osaka and other major cities were destroyed by the pounding of US warplanes and Hiroshima and Nagasaki were completely wiped out by atomic weapons.An estimated 3.2 million people had died; deep poverty and malnutrition scarred the entire country. Japan’s unconditional surrender in August 1945 was followed by seven years of US occupation that sought to restructure the healthcare system as part of its goal of democratizing the entire fabric of society. Slide #13: Recent historical context - 2These endeavours had mixed results. On the one hand, to democratize Japan and address the population’s health problems, the occupying forces restructured the health system and strengthened community health institutions, which advanced the control of infectious diseases. Astounding gains in health status occurred in the immediate postwar years. Between 1947 and 1955, average life expectancy increased nearly 14 years.These achievements have also been attributed to public health policies initiated before the war, facilitated during the occupation along with social reconstruction efforts, and expanded by the Japanese government after regaining sovereignty in 1952. Slide #14: Gradual expansion of coverage over timeImportantly, these early postwar health gains occurred before Japan’s period of rapid economic growth, but while Japan was expanding both employee-based health insurance and community health insurance, both of which already covered over 70% of the population during the war (in 1943). It is important to note that Japan began expanding its social health insurance for imperial purposes in the 1920s, to create strong bodies for strong armies.And in the postwar period, Japan continued expanding its social health insurance to universal coverage, as part of the conservative party’s political strategy of providing benefits to its rural constituents and of undermining the claims of its political opposition in the Japan Socialist and Communist parties.The prewar motives to initiate social insurance and the postwar motives to expand social insurance came from political economy objectives that are not typical public health goals. In addition to its impressive health gains in the postwar period, Japan achieved unprecedented economic growth starting in the 1960s. But Japan also saw major setbacks to health among some population groups. Disastrous pollution problems erupted in the 1960s, with serious health consequences for locally affected populations. The lessons learnt led Japan to taking a lead in environmental health. Slide #15: Japan’s Health AchievementsGood health at low cost with equityI introduced this phrase to sum up Japan’s achievements, as an echo of the Rockefeller book on “good health at low cost” – which ignored Japan’s experiences; the recent effort to revisit this idea once again ignored Japan’s experiencesAccording to the Lancet special issue, Japan’s health achievements of the past 50 years can be summarized as the following four points: Universal coverage with equity: Japan’s achievement of universal health insurance coverage in 1961 was relatively early in the world, especially given the country’s low per capita income at the time, at half the level of the UK. ADDIN EN.CITE <EndNote><Cite><Author>Ikegami</Author><Year>2011</Year><RecNum>2134</RecNum><record><rec-number>2134</rec-number><foreign-keys><key app="EN" db-id="edz5r9daaawrswevsvjxzptlx5sas5dwxfvd">2134</key></foreign-keys><ref-type name="Journal Article">17</ref-type><contributors><authors><author>Ikegami, N</author><author>Yoo, B K</author><author>Hashimoto, H</author><author>et al,</author></authors></contributors><titles><title>Japanese universal coverage: evolution, achievements, and challenges. Lancet Special Series on Japan.</title><secondary-title>Lancet</secondary-title></titles><periodical><full-title>Lancet</full-title></periodical><dates><year>2011</year></dates><urls></urls></record></Cite></EndNote>9 What is especially notable, in addition, is that Japan also reduced inequities across the different insurance plans over time, by making copayment rates uniform, except for elders and children, and by mandating cross-subsidies across plans with different proportions of elders enrolled.Cost containment and service quality: Japan has achieved universal coverage while still controlling costs and without major trade-offs in service quality. Cost containment has been achieved through the single national fee system for reimbursement, combined with a total health budget cap decided by the top political authorities. Although some structural and process dimensions of quality appear to be poor in Japan, it is primarily due to how physicians and hospitals developed, and the inadequate governance of professional organizations, not due to the cost containment policy.Policies for ageing: Japan has developed innovative policies to address the country’s rapidly ageing population. Japan implemented a public Long-term Care Insurance (LTCI) in 2000 to meet the challenges of its ageing society and to contain health expenditures. The policy is unusually generous in terms of both coverage and benefit levels, and has gained widespread public acceptance. However, issues in financial sustainability, overdependence on institutional care, and inadequate attention to the needs of informal caregivers remain to be solved. ADDIN EN.CITE <EndNote><Cite><Author>Tamiya</Author><Year>2011</Year><RecNum>2136</RecNum><record><rec-number>2136</rec-number><foreign-keys><key app="EN" db-id="edz5r9daaawrswevsvjxzptlx5sas5dwxfvd">2136</key></foreign-keys><ref-type name="Journal Article">17</ref-type><contributors><authors><author>Tamiya, N</author><author>Noguchi, H</author><author>Nishi, A</author><author>et al,</author></authors></contributors><titles><title>Population ageing and wellbeing: lessons from Japan’s long-term care insurance. Lancet Special Series on Japan.</title><secondary-title>Lancet</secondary-title></titles><periodical><full-title>Lancet</full-title></periodical><dates><year>2011</year></dates><urls></urls></record></Cite></EndNote>16 Population health: Japan’s health achievements at the population level are impressive. As I noted, life expectancy at birth for females is 86 and has ranked first in the world from 1986. Japan’s mortality decreases resulted in part from public health measures for infectious diseases, and in part from managing health risks through salt reduction and the use of hypertensive drugs. The healthcare system also contributed by assuring access to primary care for all citizens, and by regulating prices so that out-of-pocket payments by patients have been relatively low. These four achievements are not adequate appreciated internationally; the Lancet special issue was an effort to expand understanding of Japan’s achievements.Slide #16: Growing social challengesBut today Japan is confronting a number of socio-cultural changes that are challenging its health achievements. These include:the rise of part-time and temporary employment for young workers, a growing number of young women who postpone marriage and child-bearing, which contributes to a shrinking populationthe ever-expanding number of elderly, with rising health costs and social burdens,an increasing sense of widening income inequality and diversity in values that weaken the national myth of homogeneity. One manifestation of these changes is Japan’s low fertility rate. Total fertility has declined in Japan to 1.37 live births per woman—about the same rates as Italy and Germany, just above Singapore and Republic of Korea, and well below the replacement rate. Japan’s low fertility combines with its low mortality to drive the rapid ageing of the population. People aged 65 and older reached 20% of the population in 2005, and this group is expected to comprise 40% by 2050. This changing demographic structure holds profound implications for many social institutions, including the healthcare system, its financing, and how to care for older people. Slide #17: Serious problems in political economyThese social changes are occurring in the midst of major political and economic challenges for Japan. The country has somehow survived through 20 years of economic non-growth, accumulating a huge national debt. Japan’s percentage of global GDP rose steadily from 3.9% in 1960, to 18.0% in 1994, but since then has declined to 8.3% in 2008. In short, the time of “Japan as Number One”— the 1960s and 1970s—is long over. Unemployment is rising; income inequality has increased since the late 1980s; the national industrial structure is being hollowed out, with manufacturing moved to south east Asian countries and to China. The conservative Liberal Democratic Party, the country’s dominant political party that held power almost continuously for 54 years, lost heavily in the 2009 Lower House elections and is now the opposition party. This larger political economy context complicates Japan’s efforts to reform its health system today. But the current political situation also may open new opportunities for structural change in how Japan operates and may expand the potential for health policy innovation. Over the past fifty years, Japan transformed its health system through incremental changes.These incremental changes were largely successful in expanding universal coverage and containing costs while increasing fairness and reducing inequities across different health plans. The basic premise of an egalitarian and community-based health care has led to the concept of “human security”, which is now one core principle of Japanese diplomacy. But during this time Japan also postponed certain structural changes in its health insurance plans; These accumulated problems have become both harder to avoid and harder to address, due to the social changes and political economy context of Japan today. Slide #18: Japan’s challenges aheadThere are now three major challenges to the Japanese system of good health at low cost with equity: economic sustainability, political governance, and consumer responsiveness. First, the most daunting challenge facing Japan is the national fiscal situation and the way healthcare is financed. Since the bubble burst in 1991, Japan’s national debt has accumulated to twice the Gross Domestic Product. Thus, on the one hand, health care costs will become increasingly difficult to contain, while on the other, the government does not have the capacity to increase funding. This situation has been complicated by the tsunami-earthquake-nuclear disasters of March 2011, and the budgetary demands for reconstruction and compensation. Slide #19: Political Merry-go-roundSecond, Japan has serious political problems.According to the Economist? Japan is “a despondent country with a dysfunctional political system”. The chaotic national management of the last year’s nuclear power plant crisis shows the need for stronger political leadership and greater transparency in decision-making. The situation has been aggravated by mutual distrust between bureaucrats and politicians in the current government led by the Democratic Party of Japan. Third, Japan’s health system is not responding to people’s changing expectations about health and growing demands for quality services. National debates have emerged about several medical issues. For example, health hazards due to pharmaceuticals, followed by a series of lawsuits, raised questions about modernization of the drug regulatory system., These trends reflect growing tensions and conflicts among medical workers, patients and the mass media, in Japan’s health system. Persistent problems in the distribution of physicians among specialties illustrate the changes in people’s expectations. Despite continuous growth in the number of physicians, there is a relative shortage of physicians in some specialties, especially in obstetrics, pediatrics and surgery., This relative shortage of physicians in some specialties is further aggravated by changes in patient’s views about quality of service and non-medical aspects of care (e.g. respect for individuals and client orientation). ADDIN EN.CITE <EndNote><Cite><Author>Wolrd Health Organization</Author><Year>2000</Year><RecNum>1237</RecNum><record><rec-number>1237</rec-number><foreign-keys><key app="EN" db-id="edz5r9daaawrswevsvjxzptlx5sas5dwxfvd">1237</key></foreign-keys><ref-type name="Journal Article">17</ref-type><contributors><authors><author>Wolrd Health Organization,,</author></authors></contributors><titles><title>The World Health Report 2000</title></titles><pages>1-215</pages><dates><year>2000</year><pub-dates><date>May 10</date></pub-dates></dates><label>p01132</label><urls><pdf-urls><url>; Patients have become more sophisticated in their understanding about quality and physicians, while physicians have not been able to keep pace with these changes. In short, Japan’s current system may be making people healthier, but it seems unable to meet people’s rising expectations. To address these three fundamental challenges (in economics, politics, and consumer expectations), Japan needs to undertake a major restructuring of its health system.Slide #20: Reforms for the futureThere exists broad consensus in Japan today about the need for reforms in health (as in many other areas of national policy).But there is limited agreement on what to do or how to do it. Japan seems to have lost its capacity to make tough social decisions that impose costs on certain stakeholders. The Lancet Series proposed three major reforms to support the continuation of health accomplishments of the past half century.First: Clarify the national values for health reform.First, Japan needs to clarify its basic values for health, by applying the concept of human security to domestic health policy. Reform in Japan needs to start by clearly stating the shared values to be achieved through the healthcare system, and follow them consistently. Equity in human security could be proposed as the core value of Japanese health policy, but this will require new commitments from every stakeholder. The basic structure of compulsory enrolment in social health insurance plans should remain, though structural reform is needed to improve equity by consolidating plans and setting fair premiums among plans. A recent opinion poll suggests that the major sources of the dissatisfaction with the Japanese health system are not issues of quality, access or costs, but the lack of fairness and the lack of public participation in decision-making. A bold alliance of stakeholders across political parties and positions is needed, beyond the vested interests of individual groups, to catalyze structural reform of Japan’s health system. Second: Redefine the role of central and local governmentsJapan needs central policies that give more emphasis to people-centered health interactions by breaking down the Ministerial silos of authority and responsibility. To provide more independent and robust analyses of both domestic and global health policies, Japan needs to establish new national agencies such as the Centers for Disease Control and Prevention (CDC) in the U.S.the National Institute of Health (NIH) in the U.S.the Institute of Medicine (IOM) in the U.S., and the National Institute of Clinical Excellence and Public Health (NICE) in the U.K. At the same time, within the prefectures, Japan needs to empower regional and community planning entities that can expand autonomy for the regions. Implementing these changes will require new kinds of dialogue and decision making among groups that have not previously collaborated.These groups include the medical association, government bodies, private industry, and civil society groups. Prefectural governments need to take a more active role in promoting citizen participation in health policy. Japan currently has 3500 social insurance plans, with differing levels of premiums—a major source of continuing inequity. The consolidation of the social insurance plans at the prefectural level could improve fairness in each individual’s financial contribution, and also enhance the authority of the prefectural governors. The triple disasters—the earthquake, tsunami and nuclear crisis—in Tohoku reflect the major issues of the Japanese health system: ageing population, chronic disease, limited access to quality services and lack of health workforce. Reconstructing the health system in the Tohoku area is a test case for future reform of the Japanese health system, with a more bottom-up prefecture-based approach. Third: Improve the quality of healthcare. Japan lacks systematic measures and incentives to improve quality. The accreditation system of subspecialties is not well established. Physicians are free to proclaim and practice any specialty they desire.And national quotas for training subspecialists based on the expected need and the resources for meeting the required level of experience do not exist. To address Japan’s mismatch in training and practice for physicians, Japan requires a long-range reform of medical education. This could include a re-training program on general practice for subspecialty physicians as a post-graduate educational system in medical schools. This should emphasize skills in communication with patients, management of team practice, and coordination of local healthcare resources to exhibit better accountability for local health outcomes. To effectively allocate subspecialty physicians and other resources, a regional planning committee should be organized with providers, local government, and citizens. Improving quality should be a major objective of the health system at the national level and at the prefectural level. Slide #21: ConclusionsThe need for change has become even stronger after the disaster of March 2011, and the challenges for change are even more sharply defined. The issues have become too critical to rely on incremental adjustments that have characterized Japanese policy-making in the past, but there does not seem to be political and social capacity to create more than incremental adjustments. Several final reflections about Japan’s 50 years of universal coverage:First, interesting to note that Japan achieved its progress in public health without a school of public health.Second, at a more detailed level, Japan’s experience shows that fee for service reimbursement is not necessarily a cost escalator, in contrast to the general principle in health economics; it is the institutions that matter and the political economy of how those institutions work.Third, as shown in the work by historian Jesse Bump, the pursuit of universal coverage is not a one-time effort, but a long historical and political process.Table 1: Papers in the Lancet Japan SeriesThe Lancet Series on Japan addresses major achievements and challenges now confronting Japan’s health system. The first paper on population health analyses Japan’s successes in extending life expectancy and the sources of its mortality reductions. The next paper explains how Japan achieved universal coverage and reduced inequities among different health plans, to remove the risk of financial impoverishment from healthcare costs. The third paper examines areas where Japan’s health system meets international quality standards, such as surgical outcomes, as well as areas where problems remain. The fourth paper explores Japan’s policy to address rapid ageing, the public long-term care insurance program established in 2000. In the fifth paper, the Series explores Japan’s efforts to expand its role in global health, to provide policy guidance and not just funding. The final paper pulls together the main lessons for Japan and other countries.References ................
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