Medical expenditure in Japan: an
analysis with administrative data
from a Citizen s Health Insurance
plan
Medical Spending across Developed World
Institute for Fiscal Studies
March 27 & 28 2015
Yoko Ibuka, Tohoku University
Stacey Chen, Academia Sinica
1
Overview
1.  Institutional Background 2.  Basic trend in healthcare expenditure 3.  Medical expenditure with data from a Citizen’s Health Insurance plan 2
INSTITUTIONAL BACKGROUND : JAPANESE HEALTH INSURANCE SYSTEM
3
Overview
•  The national universal health insurance program(the national health insurance, NHI) started in 1961 –  The first government-­‐involved health insurance was introduced in 1922 and gradually expanded in both its eligibilities and benefits •  There are about 3500 plans –  Having different risk structures and financial status –  Roughly half employee-­‐based and half community-­‐based 4
Healthcare financing
•  Insurance Premiums: 48.6% ( in 2011) –  Employee-­‐based plans A set percentage of wages, with the employer contributing at least half (55% on average) –  Community-­‐based plans Each municipality has its own method of setting contributions, which are roughly based half on income (sometimes also assets), and half on a flat amount per enrollee (sometimes also per household) Subsidies: 38.4% –  Subsidies from the government –  Cross-­‐subsidizations across health insurance plans exist •  Patients’ out of pocket: 12.3% •
5
Money flows in payment system
Patients
Medical care services
Coinsurance
Healthcare Providers
Health insurance premium
Insurers
Medical claim bills
Payment for services
Review & Reimburse
ment Services Medical claim bills after review Payment for bills
Source: Ministry of Finance, Labour and Welfare, Japanese Health Insurance System
http://www.mhlw.go.jp/stf/seisakunitsuite/bunya/kenkou_iryou/iryouhoken/iryouhoken01/index.html6
Health insurers 1
•  Individuals have no choice of plans –  All aged 75 years or above are covered by Late Elders’ Health Insurance (LEHI) –  Employers have to enroll their employees: Society-­‐
Managed Health Insurance (SMHI) and National Health Insurance Associations (NHIA) –  Dependents (except those older than 75 years) are covered by the plan of the head of the household –  All others are covered by Citizen’s Health Insurance (CHI) 7
Health insurers 2
Employee-based
insurance
SMHI
NHIA
Community-based
insurance
CHI
LEHI
SocietyNational Health Citizen's Health
managed Health Insurance
Insurance
Insurance
Associations
Eligibility
Employees at
Employees at
Self-employed,
large firms,
small and
part-time
government
medium
workers, those
officers, their
enterprises, their retired
dependents
dependents
Enrollment (thousand)
31,000
35,000
38,000
(proportion)
26%
29%
32%
Number of health plans
1500
1
1900
Medical
(proportion)
15%
15%
29%
spending
Late Elders’
Health Insurance
All aged 75
years or older
16,000
13%
47
41%
Source: Ministry of Finance, Labour and Welfare, Japanese Health Insurance System (in Japanese)
http://www.mhlw.go.jp/stf/seisakunitsuite/bunya/kenkou_iryou/iryouhoken/iryouhoken01/index.html
8
Insurance benefits
•  Services covered include prescription drugs and dentistry •  Single fee schedule is applied to all plans –  The government committee revises the fee schedule every two years •  Coinsurance are age-­‐dependent and the same across plans •  Extra coverage for catastrophic expenses: those with monthly out-­‐of-­‐pocket payment of 40,000 JPY (=400 USD) for 70+ and 80,100 JPY (= 810 USD) for those under 70 –  For many, 1% coinsurance for medical costs above the payment values –  Can be more or less generous depending on income level 9
Coinsurance as of 2015
Age 75 or over
70 - 75
6 - 70
0 - 6
Those with income
above a threshold
value*
All other
10% 20%§
30%** 30%
20% * Monthly salary earnings excluding bonus payments more than 280
thousand JPY. Adjustments are made for those who have income other
than salary.
** 20% until October 2006
§ 10% until April 2014
10
Other financial sources for medical
care for patients
•  Municipal government can provide subsidies for medical care for infants and children to reduce out-­‐of-­‐pocket payment –  Eligibility and coverage are determined by each municipal government •  Some purchase a voluntary private health insurance on top of the NHI •  Both are independent of the NHI and individuals who qualify the subsidies or who purchase insurance receive reimbursement after they make payment –  They do not appear as the source of medical spending in NHI statistics and counted as a part of out-­‐of-­‐pocket payment 11
Long-term care insurance
•  Long-­‐term care insurance (LTCI) started in 2000 •  The insurance is independent of NHI •  Spending for long-­‐term care accounts for 7.7% of the total social security payment while spending for medical care accounts for 32.1% in 2011 12
BASIC TREND IN HEALTHCARE EXPENDITURE: NATIONAL STATISTICS
13
2011
2008
(%)
2.45
2005
262
2002
3.45
1999
762
1996
4.45
1993
1262
1990
5.45
1987
1762
1984
6.45
1981
2262
1978
7.45
1975
2762
1972
8.45
1969
3262
1966
9.45
1963
3762
1960
Spending per person(2010 USD)
Per capita medical spending and
medical spending as percentage of
GDP, 1960-2012
Year
Spending per person in 2010 USD
Percent of GDP
14
Per capita medical spending by age group
population vs. study sample
all
14000
12000
2010 US dollar
10000
8000
2000
6000
2010
2012
4000
Sample
2000
0
0~9
10~19 20~29 30~39 40~49 50~59 60~69 70~79
80 or
beyond
Age ( years)
Note: Medical spending in 2000, 2010 and 2012 are from the national
statistics.
15
Per capita medical spending by age group
population vs. study sample
Men
16000
14000
2010 US dollar
12000
10000
8000
2010
2012
6000
Sample
4000
2000
0
0~9
10~19 20~29 30~39 40~49 50~59 60~69 70~79
80 or
beyond
Age (years)
Note: Medical spending in 2000, 2010 and 2012 are from the national
statistics.
16
Per capita medical spending by age group
population vs. study sample
Women
12000
2010 US dollar
10000
8000
6000
2010
2012
4000
Sample
2000
0
0~9
10~19 20~29 30~39 40~49 50~59 60~69 70~79
80 or
beyond
Age (years)
Note: Medical spending in 2000, 2010 and 2012 are from the national
statistics.
17
Share of medical spending, by source
of funding, 1960-2012
100
90
80
(%)
70
60
50
40
30
20
10
0
1960
1970
1980
1990
2000
2010
2012
Central govt
Local govt
Employers & Insurers
Insured
Out-of-pocket
Other
18
Share of medical spending, by the type
of care, 1970-2012
100
90
80
70
(%)
60
50
40
30
20
10
0
1970
Inpatient care
1980
Outpatient care
1990
2000
Dental care
2010
Prescription drugs
2012
Other
Note: Prescription drugs are included as a part of outpatient care in 1970.
19
MEDICAL SPENDING WITH DATA FROM A CITIZEN’S HEALTH INSURANCE PLAN
20
Study sample 1
•  Study period: 2006-­‐2011 •  Coverage: All CHI beneficiaries who resides in city X during the sample period •  Medical claim records are obtained from a CHI plan of municipality X in the north-­‐east region of Japan –  All medical claim records during the sample period are compiled into the individual level and summed over 12 months to produce a yearly panel dataset on medical spending –  The dataset is matched with the list of all beneficiaries and thus it includes those who did not seek for care •  The panel data on medical spending is merged with household income data from tax records
21
Study sample 2
•  Medical spending –  Include: Inpatient and outpatient services, prescription medicine, dental care –  Exclude: •  long term care, over-­‐the-­‐counter drugs •  A part of out-­‐of-­‐pocket expenditure may be reimbursed by voluntary private health insurance or municipal-­‐level government subsidies (for children) •  Year is defined as the fiscal year (April to March next year) 22
Discontinuity in eligibility
•  In April 2008, the late elders’ health insurance (LEHI) was introduced •  Data includes only those under 75 after 2008 Age
0-­‐74
75 +
2006, 2007 2008-­‐2011
CHI
CHI
CHI
LEHI
23
Comparison 1: Mean expenditure
Population, CHI(all), CHI(City X)
Population
Mean
expenditure
Enrollment
Thousand
persons
2006
2007
2008
2009
2010
2011
127,747
127,687
127,566
127,445
127,708
127,567
CHI, all
Mean
expenditure
Enrollment
Thousand
2010 USD persons
2,937
3,023
3,036
3,192
3,329
3,450
51,268
50,724
39,492
39,098
38,769
38,313
CHI, city X
Enrollment
Thousand
2010 USD persons
2,811
2,984
3,036
3,172
3,297
3,419
12.71
13.12
9.69
9.63
10.17
10.61
Mean expenditure
All
<74 years
>75 years
2010 USD
2010 USD
2010 USD
6,217
6,145
3,728
3,810
3,837
3,854
4,441
4,273
3,728
3,810
3,837
3,854
11,020
11,003
NA
NA
NA
NA
Note: CHI covered all the age group until 2008, and only individuals aged under 75
years as the Late Elders’ Health Insurance started in 2008.
24
Comparison 2: Age distribution
Population, CHI(all), CHI(city X) 100
(%)
90
80
80 or above
70
70-79
60
60-69
50
50-59
40-49
40
30-39
30
20-29
20
10-19
10
0-9
0
Population
(2011)
CHI (2011)
CHI, City X
(2009-2011)
CHI, City X
(2006-2008)
25
Medical spending, by payers (%)
(A) All period
All
21.9
78.2
Men
22.7
76.9
Women
21.1
78.9
All
16.8
83.1
Men
17.4
82.8
Women
16.2
83.6
(C) 2008-2011 (Under 75)
All
Out-of-pocket payment
27.5
National Health Insurance
72.5
Men
28.2
71.8
Women
26.8
73.1
Out-of-pocket payment
National Health Insurance
(B) 2006, 2007 (All age)
Out-of-pocket payment
National Health Insurance
Note: CHI covered all the age group until 2008, and only individuals aged under 75
years as the Late Elders’ Health Insurance started in 2008.
26
Medical care spending, by type of care (%)
(A) All period
Medical care
Inpatient care
Outpatient care
Dental care
Prescription drugs
All
Men
50.2
26.8
4.2
18.8
(B) 2006, 2007 (All age)
All
Men Women
Medical care
Inpatient care
55.1
59.7
51.4
Outpatient care 25.0
23.3
26.1
Dental care
3.3
3.0
3.5
Prescription drugs
16.8
13.9
18.9
54.9
25.6
3.8
15.8
Women
46.1
27.8
4.6
21.2
(C) 2008-2011 (Under 75)
All
Men Women
Medical care
Inpatient care 45.1
50.1
40.5
Outpatient care 28.9
27.6
29.9
Dental care
5.3
4.6
5.8
Prescription drugs
21.1
17.7
23.8
Note: CHI covered all the age group until 2008, and only individuals aged under 75
years as the Late Elders’ Health Insurance started in 2008.
27
Concentration of spending
(A) All period
Spending Percentile
Percentage of the
enrollees
Percentage of
spending
Average spending per
enrollee (in 2010
USD)
100%
5%
5%
20%
20%
50%
100%
51%
14%
22%
9%
4%
4,738
48,470
13,491
5,205
2,156
334
Everyone
95%-100%
90-95%
70-90%
50-70%
0-50%
(B) 2006, 2007 (All age)
Spending
Percentile
Everyone
95%-100%
90-95%
70-90%
50-70%
0-50%
Percentage Percentage of Average
of the
spending
spending per
enrollees
enrollee in 2010
USD)
100%
100%
6,181
5%
46%
57,328
5%
16%
20,369
20%
23%
7,193
20%
10%
2,998
50%
4%
512
(C) 2008-2011 (Under 75)
Spending
Percentile
Everyone
95%-100%
90-95%
70-90%
50-70%
0-50%
Percentage Percentage
Average
of the
of spending spending per
enrollees
enrollee in
2010 USD)
100%
5%
5%
20%
20%
50%
100%
53%
12%
22%
9%
3%
3,809
40,637
9,479
4,128
1,738
259
28
Mean income, by income quintile
50000
45000
2010 US dollar
40000
35000
30000
All
25000
Men
20000
Women
15000
10000
5000
0
Everyone
Bottom
Fourth
Third
Second
Top
29
Mean medical expenditure, by
expenditure quintile
16000
14000
2010 US dollar
12000
10000
All
8000
Men
Women
6000
4000
2000
0
Everyone
Bottom
Fourth
Third
Second
Top
30
Mean medical expenditure, by income
quintile
4500 4000 2010 US dollar
3500 3000 2500 All 2000 Men Women 1500 1000 500 0 Everyone Bo<om Fourth Third Second Top 31
Correlation in medical spending, over
time
(A) Spending in Levels
All
Men
Women
t
1
1
1
t+1
0.58
0.58
0.57
t+2
0.49
0.49
0.49
(B) Spending in Logs
All
Men
Women
t
1
1
1
t+1
0.73
0.76
0.69
t+2
0.62
0.67
0.59
32
Total medical expenditure transition matrix
(A) One year transition
Quintile
Current Year
Bottom
Fourth
Third
Second
Top
Bottom
60.4
25.0
7.7
2.2
5.0
Fourth
26.9
44.6
24.3
4.7
2.6
Next year
Third
8.2
21.7
40.0
22.8
6.4
Second
2.3
5.2
21.2
46.9
22.1
Top
2.1
3.5
6.8
23.4
63.9
(B) Two year transition
Quintile
Two years time
Current Year
Bottom
Fourth
Third
Second
Top
Bottom
54.1
24.9
11.4
5.5
4.1
Fourth
27.5
38.8
20.3
8.4
5.0
Third
10.9
24.1
34.1
20.4
10.6
Second
3.9
5.4
19.1
43.2
28.4
Top
9.7
3.8
7.3
16.5
62.7
Note: Panel A is produced with data limited to those who remained at least for three
periods to keep consistency in sample in the two panels.
33
Concentration over 1, 2, and 3 years
Gini coefficient on medical spending
Percentage spent by top 1% of spenders
Percentage spent by top 10% of spenders
Total medical spending averaged over:
1 year
2 years
3 years
0.77
0.73
0.71
19%
17%
17%
65%
61%
59%
34
.6
.4
.2
0
Probability
.8
1
Average medical spending over 1, 2, and 3
years
100
500 1000
10000
100000 300000
Average Medical Spending (2010 USD)
1 year
2 year
3 year
35
Identifying the last year of life 1
•  The data does not show the reason why they left the CHI •  Possible reasons 1.  Death 2.  Move to the Late Elders’ Health Insurance 3.  Move to other health insurance plan •  Our Strategy 1.  Identify those who left the CHI during the study period 2.  We dropped those who moved to the Late Elders’ Health Insurance based on the timing (in 2008 April) or their age (after April 2008) 3.  We dropped those who left the CHI at the same timing as their dependents (i.e. those who are likely to change health insurance plan) 36
Identifying the last year of life 2
•  Two types of errors 1.  Those who are actually not dead are treated as the dead •  Individuals who changed a health insurance plan by him/herself alone, including those who are single, are treated as being dead 2.  Those who are dead are treated as those alive •  Individuals who died at the age of 75 are treated as those are alive •  Approximately 10% of the total sample fall in the definition of death •  Higher number compared to the mortality rate •  Error 1 is more serious? à Underestimate of medical spending in the last year of life 37
Medical spending in three groups
Death
Exit other
No exit
3000
2010 USD
2500
2000
1500
1000
500
0
-36 -34 -32 -30 -28 -26 -24 -22 -20 -18 -16 -14 -12 -10 -8
Months before the last month -6
-4
-2
Note: “Death” are defined in the way explained in the text. “Exit other” showed those
who left the CHI for presumably different reasons other than death. “No exit” are those
38
who remained CHI throughout the study period.
Medical spending in the last year of life
(A) Aggregate medical spending and mortality
Personal Health Care Expenditure
Mean spending per person (2010 USD)
Aggregate spending (billions)
Mortality
Deaths (millions)
Popoulation
Over 65 population
3,503
489
8,250
252
1.19
1.07
Sources: Vital Statistics of Japan 2010 for the number of deaths; National Medical Care
Expenditure 2010 for mean and aggregate spending.
39
Medical spending in the last year of life
(B) Medical spending in the last year of life
All age
Over 65
As a
percentage of
Mean
Mean
As a percentage
spending,
of aggregate Hashimoto
aggregate
Last years of life spending ,
from data
et al., 2010
study sample spending study sample
spending
Year of death
16,974
4.59
28,095
11.94
22,354
2nd to last
11,084
3.00
13,902
5.91
NA
3rd to last
9,338
2.53
11,853
5.04
NA
Sum of last 3
years
37,396
10.12 53,850
22.88
NA
Note: The share of medical spending in the last year of life was calculated by multiplying
the mean spending from the data by the number of deaths per year divided by the total
medical spending. The number of deaths and total medical spending were from the
national statistics. Hashimoto et al., 2010 does not include medical spending for dentistry.40
Cumulative spending in 2010 USD
Cumulative spending in the last year of
life
20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
0
41
Concluding remarks
•  We demonstrated macro and micro structure of medical spending using an administrative data from a Citizen’s Health Insurance plan in Japan •  The study sample –  represents a greater proportion of those aged 60 years or above than the population and the entire CHI –  demonstrates consistent age-­‐specific mean medical spending as the national statistics –  shows a greater average expenditure per person than the national statistics, largely attributed to the age distribution of the sample •  Medical spending is –  disproportionately distributed with top 5% individuals accounting for 50% of total spending –  not strongly associated with household income level –  highly persistent overtime •  Medical spending in the last year of life shows concentration in the last years of life (although caution should be taken to interpret the results)
42
Acknowledgements
•  We acknowledge financial support from the Japan Society for the Promotion of Science #24330097 (PI: Nobuyuki Izumida) and #26780168 (PI: Yoko Ibuka) •  We are grateful to Dr. Yui Otsu for discussion
43