Road to UHC and Beyond:
Japan’s 50-year Experience
10th Anniversary Conference
Towards Universal Health Coverage:
Increasing Enrolment Whilst Ensuring Sustainability
Tomoko Ono
OECD Health Division
Accra, 5th November, 2013
Tokyo Station
Tokyo Tower
Sky Tree
1961:
2011:50th
Achievement
Year Anniversary
of
Achieving
Health Coverage
UHC
1920s:
Introduction
of Universal
Health of
Insurance
Scheme
UHC helped Japan to achieve good health
results with relatively low health expenditures
Outline of Presentation
• Health system of Japan at a glance
• Financing: Multiple insurances schemes
• Payment: FFS with unified fee-schedule
• Current challenges
Health System of Japan at a
Glance
Recap historical development
1958:Nation
al insurance
law
(mandate)
1956:30%
not covered
1922: Health
insurance
law
1938:
National
Insurance
law
1945: End
of WWII
Universal Health Coverage
Source: WHO, World Health Report 2013
Population coverage:
• 100% achieved in 1961
Cost coverage:
• 82% by government or
social security in 2011
Service coverage:
• Outpatient, Inpatient,
Dental, Pharmaceuticals
Key Feature of Health Systems
• Financing:
• Multiple health insurance schemes, contribution + general tax +
co-payment (with ceiling and exemption for low-income group)
• Payment:
• Managed FFS system through unified fee-schedule for all
providers/insurance schemes in Japan
• Service delivery:
• Predominantly private providers (although public providers
exists)
• Roles of hospitals/clinics and GPs/specialists functions are not
well defined in practice
• Access:
• Free choice of provider by patients (no gate keeping)
Health Insurance Schemes
4 Different Insurance Schemes
• Over 3,000 insurance plans in Japan, grouped into
• Citizens’ Health Insurance (CHI): farmers, selfemployed, unemployed and elderly (later separated)
• National Health Insurance Associations (NHIA):
mainly small and medium enterprise employees and
their dependent
• Society Managed Health Insurance (SMHI): mainly
employees of large firms and their dependent
• Mutual Aid Association (MAA): mainly public sector
employees and their dependent
• Limited role for private insurance
Achieving Universal Coverage
UHC
in
1961
Source: Takagi 1994, World Bank 2013 (forthcoming)
UHC: Citizen’s Health Insurance’s Role
• Historical Development of CHI
• Build upon the existing community-based health
insurance scheme: voluntary participation and
expanded through government subsidies
• Participation was mandated in 1961 for all
residents, management moved to municipalities
• Current financial sources: contribution from
beneficiary, cross-subsidy from other schemes,
subsidies from national and local government and
copayment
Revenues for Social Health Insurance
cross-subsidies
Elderly
CHI
NHIA
Individual
MAA
Employee
Government
Individual
SMHI
Individual
Individual
Individual
Financial Sources for Health Services
UHC
Managed FFS System with
Unified Fee-Schedule
Single Payment System: Fee-Schedule
• Fee-schedule
• Sets prices for each services, pharmaceuticals and
devices for virtually all providers
• Defines the benefits and conditions for reimbursement
• Auditing for these conditions
• For most providers, these are the only sources of revenue
• Fee schedule revisions (every 2 years)
• Managed by national government
• Institutionalized process of negotiating benefits and
resource allocation among key stake holders
• Continuous process of adaptation and adjustment
Biennial Fee-Schedule Revisions
Government
Ministry of Health,
Labour and Welfare
Ministry of Finance
Macro: Global Revision Rate
Central Social Insurance Medical Council
Micro: Fee negotiation for item-by-item
Medical services
Medical devises
Pharmaceuticals
Pharmaceuticals Pricing Mechanisms
• In 1982, 39% of national medical expenditure was spent on
pharmaceuticals.
• It went down to 27% in 1988 and 21% in 1998, then went up
again to 25% in 2009
• We set a price in fee schedule, but providers purchase
products for which bigger discounts can be negotiated and
earned.
• Government conduct survey of pharmaceutical prices of each
products and set new fee schedule price at a certain
percentile.
Cost Containment Mechanism
• Cost containment tools
• Price control via negotiation, by monitoring volume
• New technology - setting the initial price low, restriction
to patients with specific conditions
• Other restrictions
• Balanced-billing (charging more than the fees set in the
fee schedule): banned
• Extra-billing (billing services and pharmaceuticals not
listed in the fee schedule with those listed): only allowed
for amenity and a few new technologies still being
evaluated
Current Challenges
Slow economic growth and increasing
social security expenditure
Real GDP Growth Rate and Social Security
Expenditures
Real GDP Growth Rate
8
14
%
%
22
Real GDP growth (left)
%
Social security expenditures / GDP (right)
average 9.6% in 1955-70
6
20
4
18
2
16
0
14
-2
12
-4
10
12
10
8
average 4.5% in 1970-90
6
4
2
0
-2
-4
average 0.9% in 1990-2011
-6
1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
Source: Cabinet Office of Japan
1990
1995
2000
2005
2010
Ageing Population and Inequality
between Insurance Schemes
Age structure of CHI beneficiary, 1975, 2001 and 2007
Take Home Message
UHC in Japan was achieved through...
• Long-term political commitment for UHC, supported by
political groups with different ideologies
• Democratic movements and commitment to social
solidarity in post-war Japan provided impetus to
expand coverage
• Incremental expansion of health insurance coverage
• Harmonization of benefits and established
redistribution schemes
Cost Containment despite FFS system
• Institutionalized fee-schedule revision process
• Global revision rate
• Item-by-item fee negotiation: mitigate increase in
expenditure, maintain appropriate solvency for
providers, and reflect government priority
• Stringent and disciplined payment system
• Unified fee-schedule for all health services and
conditions of its use
• Ban on balanced-billing and restriction on extrabilling
Acknowledgement:
Ghana Health Insurance Authority
Prof. Naoki Ikegami, Keio University School of Medicine
Japan-World Bank Partnership Program on UHC
Kyoto, Japan
Japan
Kagoshima,
Niigata,
Acknowledgement for picture
• Slide 2
• Tokyo Station
http://www.oldphotosjapan.com/ja/photos/78/tokyo-eki
• Tokyo Tower http://showa.mainichi.jp/photo/2008/12/post-1b55-23.html
• Sky Tree
• Slide
• Niigata, http://uonuma.biz/blog/9927
• Kyoto, http://futuretihing.net/futurething/wpcontent/uploads/2013/08/63bf16f29e082d9d510aac6e4fd47ea6.jpg
Total Health Expenditure (% of GDP)
Source: OECD, Health at a Glance 2011
Total Expenditure on Health in 2011
by type of financing
Japan attained UHC while still a middle income country, and at
the start of its rapid economic growth period
Real GDP and GDP per Capita
(in 1990 Geary-Khamis Dollar)
Billions of $
GDP per capita (right)
Real GDP (left)
$ per capita
Attainment of
Universal Health Coverage
(1961)
($420B, $4291per capita)
1955
1960
1965
1970
1975
1980
1985
Source: Angus Maddison (2001) “The World Economy – A Millennial Perspective”
30