December 2001 Health Reform of FY2002 (Proposal)
Health Reform of FY2002 (Proposal)
Government
Its purpose is to reduce the costs, and thus no additional funding required
Timing of implementation is still being debated
The reform was an attempt to control the rising cost of health care system by asking both patients and doctors to share the costs. However, many feel the burden of the reform is unproportionally on the patients side.
Japan's public health insurance systems are supported by two pillars: Health Insurance for Employees (Kenko Hoken), and National Health Insurance (Kokumin Kenko Hoken) for self-employed , students, farmers, etc. However, this placed too much financial burden on the National Health Insurance because it covered a large portion of the elderly population who were unable to pay insurance premiums. Thus, a special arrangement was created where the cost for the health care for the elderly over 70 was split between the government (out of general budget), the Health Insurance for Employees and the National Health Insuarnce.
As reported earlier, Japan's public health insurance is going through a financial crisis. The cost of health care for the elderly has been rising steadily as a consequence of ageing of the society. The underlying problem is structural: the "arrangement" mentioned in 7. has become a too much burden on the Health Insurance for Employees, as the number of their subscribers decreased because of recession at the same time the "share" of the health care costs for the elderly rose. To eradicate this problem entirely, the public health insurance system has to be overhauled completely. Some have suggested getting rid of the above "arrangement" entirely. However, such a radical reform could not get the political consensus at the moment. Thus the reforms up to now have been marginal changes in the system: increase in the co-payment of the non-elderly and a marginal increase of co-payment for the elderly. To this, there was a public outrage towards the medical industry that all the rise in the costs were met by patients while doctors and pharmatheutical companies continued to gain from the rising costs. The new Koizumi government made a political commitment that any further reform would be implemented in a way that " the pain will be shared" by all parties involved: the elderly and the non-elderly patients, the medical industry and insurers.
The objective of the reform is to avoid the financial break-down of the public health insurance system. The reform is one of the first reforms where medical fee schedule was cut-down.
All public health insurance subscribers and medical personnel
For those under 69 years old:1. Basically the co-payment rate will be increased to 30% from 20% for all people below 69 years old. The subscribers of the National Health Insurance already faced the 30% co-payment, but now the subscribers of the Health Insurance for Employees also face 30%. The monthly upper limit of co-payment (the maximum the patient has to pay out of pocket within a month) was also increased fo all, except those below a certain income level2. The premium rate is now applied to the "entire" annual salary, including end-of-the-year bonuses. Previously, the rate was applied to monthly salary only, and the lower rate was applied to bonuses. However, this created differencials between those received higher share of their pay as bonus and those receiving their income mostly as monthly salaries. Put it together, the annual premium that an average person has to pay will increase.For those above 70 years old:3. Previously, the co-payment rate for the elderly was 10%, but with a rather low monthly upper limit (3,000yen), the actual co-payment rate was lower than 10%. After the reform, the montly upper limit will be raised substantially so that now the limit will be 12,000 yen for middle-income elderly, and 8,000 for low-income elderly. For upper-income elderly (those whose annual income is above 6,300,000yen for a couple, -- about 10% of all elderly), the co-payment rate will be 20% and the upper monthly limit will be 40,200yen plus a flat-rate addition. For in-patient service, the upper monthly limit is also increased according to their income-level.For medical industry:4. The medical (doctors') fee will be decreased for the first time in Japan's history. The decrease is rather small (1.3%, 2.7% including cut-down of drug prices), but is a significant step considering how hard the medical association fought against this reform.
It is expected that the reform will influence the patients' behavior by suppressing unnecessary medical visits and thus reducing the health care costs. Thus, the success depends on how price-sensitive is the elderly in the health care demand.
Financial balance of the public health insurance system
Not yet implemented
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Elderly and Non-elderly patients: The increase in the out-of-pocket medical expense is too much burden in the current economic situation. Medical Industry: The cut-down of the medical fee schedule is going to push many hospitals to closure.
It is noteworthy that the Koizumi government has managed to cut-down the medical fee schedule, which was termed by many political analysits as the "sacred and untouchable area". However, many feel the 2.7% cut is not enough, and the co-payment rate of non-elderly is already pushed to the limit. My personal feeling is that the burden of working families has increased beyond the limitation.
I am afraid none are available in English.