January 2003 Reform proposal of the Public Health Insurance in 2003
Reform proposal of the Public Health Insurance in 2003
Ministry of Health, Labor and Welfare
It is a part of on-going reforms and funding mechanism as it applies to the public health insurance, applies.
The proposal is to be finalized during 2003. The duration is permanent.
This is a broad attempt to overhaul the public health insurance system, but the discussions regarding a part that most needs a radical reform, what to do with rising health care cost for the elderly, has not reached an consensus.
Japan managed to construct a public health care system which covers (nearly) the entire population by providing two major health insurance systems: one for the employees (Employees' Health Insurance) and the other for the self-employed (Natinoal Health Insurance). For details of the two systems, please refer to "Social Security in Japan" (https://www.ipss.go.jp/English/Jasos2002/Jasos2002.html).
There has been a long on-going discussion on what to do with the financial crisis of the public health care system. Japan's health care cost per GDP is not striking high compared to other countries, but since the outlay is more than the revenue in the public health insurance system, (and the public is unwilling to raise the premium rate) there always is a shortage of funds. The long recession has caused a downfall of the revenue (premium collected from subscribers in the case of the National Health Insurance, and from buscribers and employers in the case of the Employees' Health Insurance). At the same time, the rapid aging of the population has skyrocketed the health care expenditure for the elderly, since the elderly are treated preferencially (lower out-of-pocket expense, i.e. co-payment, lower insurance premium). A number of reforms have been implemented up to now, from creation of the Long-Term Care Insurance to increase of co-payment. One of the causes of the increase of the health care cost is the fee structure for doctors and for medecine. Up to now, the insurer paid according to the amount of health care provided, and thus, there has been no incentive for medical personnel to cut down the cost. Further, it did not reflect the performance of the medical personnel and facilities.
The reform proposal, which will be finalized during 2003, tries to implement 4 changes: 1. It tries to restructure the insurers and thus pool the financial risk. Specifically, the insurers of the National Health Insurance, which are municipalities, and insurers of Government Managed Employees' Health Insurance, will be merged based on their location (prefectures). 2. It tries to abolish the current Health Care System for the Elderly (for information, please see the above web page) which is a adjustment mechanism to share the health care cost for the elderly between different insurers, and create a new system for the elderly (there are currently two plans for this, and I will report on the outcome in the next issue of the Reform Monitor). In any case, 50% of the health care outlay for persons on and above 75 years old will be borne by the government's general budget (not out of the premiums).3. The fee structure for the medical personnel and facilities will incorporate evaluation of medical performance, and reflection of running cost of medical facilities. Further, measures will be taken to provide performance evaluation of medical facilities to patients and to allow patients free selection. Specifically, the fee structure will incorporate the Diagnostic based system (a system like DRG), at least partically. The model cases were already under way.
All of Japan.
It is mostly mentioned in 9. More concrete changes will be reported in the next issue of the Reform Monitor.
The major overhaul of the health insurance system has been under discussion for a long time, however, the strong political bodies (medical associations, elderly groups, the Employers' associations, for example) have opposed any measure to cut down the health care. Thus, the final outcome of the reform is likely to be a compromise, and the success of it will depend on how the political consensus is reached.
It is expected that health care cost will be under control, and more equitable share of burdens.
Not implemented yet.
Long-term care will be influenced by the reform.
Some claim that the reform proposal is an attempt by the Ministry to hang-on to the insurance system which is proven to be unsustainable. Yet others claim that this reform does not pay considerations to equalizing the burden between insurers of different systems.
It is too early to give a judgement on the reform, but it seems that the raising of the burden by the young generation (whether by the increase of premiums or by increase of tax) is inevitable. A strong and convincing argument must be given by the government to the young generation (and Employers' who will have to pay equally), if the reform is to be accepted. On the other hand, the restructuring of the fee structure is a step forward in curtailing the health care cost without putting additional burden on the insured, and shoule be encouraged.
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