Healthcare System of Japan: Main Aspects

The health and medical care system that is currently operating in Japan is one of the most developed in the world, and as a result, for this reason, the costliest. Unique characteristics of the advanced medical care system in Japan are the huge unlimited demand for medical services, their high cost and a large share of drugs and tests in these costs. These factors of objective reality cause a number of both positive and negative characteristics of the medical system in Japan, which should be considered and studied in detail.

To date, the functioning of the medical system in Japan, due to the high level of its innovative orientation and technology, is forced and able to serve a huge number of people who have a significant demand for medical services. The Air Force estimates that the Okinawa region is one of the few in the world where the life expectancy of people despite urbanization and other factors remains quite long. Japan is often described as “the land of the immortals”. The expected life expectancy of Japanese men “in 2013 was 80 years”. The Japanese infant mortality rate of 2013 was the lowest in the world: less than three cases out of 1000. According to the Global Center for the Study of Longevity, today, on the southern Japanese islands there live about “four hundred centenarians”. The organization of the country’s health and medical systems is based not on the time of treating the patients, but directly on the actions and activities undertaken by doctors to treat people. They can act as an extract of various kinds of medicines, referral to tests, examinations and diagnostics of various directions, and it other ways. This basic principle of the functioning of medical institutions in Japan is possible and is profitable for individuals, medical facilities, commercial pharmaceutical organizations, but it threatens the entire health care system with crisis in the future.

Basic Aspects of Medical Services in Japan

Modern healthcare system in Japan is recognized as one of the most effective in the world. In many respects, the achievement of this status for the country became possible due to objective historical reasons and rapid economic growth of the state after the Second World War. According to unofficial “The Japan Times” surveys, the Japanese basic structure and mechanism for regulating the healthcare system “have changed little since 1961” when universal coverage was achieved for all segments of the population. Consequently, the specificity of the medical system of Japan has preserved its original set of shortcomings and advantages to these days. The specificity of Japan is that in this country, there is no “system of general practitioners or family doctors as, for example, in the UK or elsewhere”. In this state, there are two main types of medical institutions that form the country’s health care system. They are hospitals and clinics. If in the hospitals people can be treated in any cases, and these facilities rely on basic medical care, then to solve the specific problems associated with a particular area of ​​medicine, there are private specialized clinics. It is in the latter that patients receive long-term treatment, with certain doctors assigned to the patients. Managed and owned, as a rule, by doctors, clinics in Japan receive a predominant share of their income from the state insurance system, as they are managed as private companies. Such factors as the orientation toward technological progress and the constant work on the development of new technologies for diagnosis and treatment in the field of medical care led to the leadership of Japanese medical services in the world community. Today the nation ranks first in the availability of computer tomographic scanners per capita and the production of magnetic resonance scanners among the countries in the Organization for Economic Cooperation and Development (OECD). At the same time, all the highly effective innovations in the medical sphere should be paid by patients. This is due to the fact that the medical system of Japan assumes that the payment for the respective services should be made according to each prescription, diagnosis, test or examination, whether private or public, made by the particular clinic. These bases of the functioning of the medical system in Japan were legislated in the act that was published in 1999 on the basis of clinical practice. This legislation presupposed the creation of a so-called “protocol medicine” in Japan, which would be aimed at achieving a higher level of quality of medical treatment in the country by optimizing the use of limited resources. However, the system established by state regulations did not lead to the solution of the challenging task set. Within the framework of this system, doctors’ incomes are directly dependent on the number of prescribed medical procedures and pharmaceutical preparations. And, consequently, medical workers tend to artificially overestimate their number of patients as compared to the necessary. Due to the promotion of new drugs and medical technologies, medical personnel increase their income, raising, however, the cost of healthcare for its users. In addition, this causes a risk of deterioration of patients’ health. Acknowledgment of the influence of the principles of the medical system in Japan on the treatment of patients is the fact that “Japanese patients visit outpatient clinics more often and stay in hospitals longer than patients in other OECD countries”. The time of waiting for a medical procedure or the duration of a doctor’s medical consultation causes additional profits for companies that are manufacturers and suppliers of pharmaceutical devices and medical equipment. All this contributes to commercialization, but not to raising the quality level of medical services in the country. With the constant demand for medical services in Japan, it creates a situation for the population when the growth rate of their spending on health care exceeds the rate of economic growth of incomes in the state. However, according to the work of Nomura and Nakayama (2005), this situation has been happening for more than a decade.

Modern Healthcare Reform in Japan

In the early 2000s, measures were taken to further reform the existing health and medical care system of Japan. In 2003, according to Nomura and Nakayama, based on a decision that was made by business leaders and academic economists at the legislative level, it was recommended to abolish the ban on mixed payments from patients. This meant setting up a payment system for absolutely all services that were not covered by health insurance in the country’s medical institutions. Despite the fact that this decision was supported by representatives of the Japanese Surgery Society and some research clinics, it limited the vast majority of middle-income patients from obtaining a full range of medical services of appropriate quality. In addition, as a result of this reform, both the pharmaceutical and medical industries have certain complexities in international competitiveness. In contrast to Japan’s governmental institutions in the field of medicine, the Japanese Medical Association challenges the idea of “protocol medicine”, citing as a central argument the effectiveness of introducing the principles of “professional autonomy” in the medical field. According to the Association’s data, some autonomy in the principles of the activity of medical institutions would allow the introduction and effective use of a mechanism for self-regulation of the obligations to ensure the well-being of patients. This would be possible through the collection of qualitative and substantiated clinical evidence and experience. The generalized opinion of private medical practitioners represented by the Japanese Medical Association was the affirmation of the negative consequences of the reform and its inexpediency. Representatives of the Ministry of Health, Labor and Social Welfare of Japan also insisted on the health risk for patients that was potentially possible following the adoption of the reform. After all, in this case, many medical procedures and preparations were used prematurely. By 2004, the Council’s recommendations were replaced by an expansion of the system of special permits for certain orders of 2000 high-quality medical services that should not have been covered by the health insurance system and that would have to be paid for by private payments of individuals. This has also become a limiting factor for patients, however, not so severe. On the positive side of the legislative act adopted in 2004 was the approval of the guarantee for the conduct of clinical trials of new drugs and technologies of long-term and short-term nature within the medical system of Japan. Nevertheless, in general, the direction of reforming the medical sphere in the country until the beginning of the XXI century, although it was of an innovative nature, limited the possibility of using it by all patients in need. To date, the conflict of interests between patients, doctors and policyholders in Japan has not yet been resolved. The problem of the “tragedy of communities” remains unsettled today. In this regard, it is necessary to introduce an effective system of regulation of the processes of providing medical services in the state, where the priority objective should be to meet the needs of all members of society. That is why it is necessary to encourage the state to make joint decisions and to find an objective consensus by patients and doctors. It is important to provide the nation with such conditions under which systematic analyzes and examinations of the patients’ condition are systematically carried out to obtain clear reliable data on the health status of patients. This would give an opportunity to ensure comparability of assessments of patients’ health status, to eliminate the prescription of unnecessary medical procedures, tests, tests, narcotic drugs, forming trust between patients and healthcare personnel. Doctors should be fully aware of the responsibility that follows the prescription of unnecessary medical procedures. A precautionary measure for these artificial diagnoses should be the participation of the patients themselves in assessing its correctness. To this end, the Ministry of Health of Japan established a task force by 2005 to identify and assess the ability and opportunity for patients to participate in the development, dissemination and application of guidelines for clinical practice. It is assumed that this type of mutual cooperation between an informed patient and a professional medical specialist will in future be useful for effective diagnosis and treatment. In a view of objective reasons, the Council of the Cabinet of Ministers of Japan has adopted a course on improving the healthcare system and medical services of the country. Thus, the majority of Japanese hospitals that provide state-of-the-art methods of diagnosis, treatment and therapy today have adopted a reimbursement system for inpatient treatment based on a combination of diagnostic procedures (DPC). To increase the effectiveness of medical services, each medical institution, whether clinic or hospital, is paid the amount of daily fees as compensation for the costs incurred. It is worth noting that the amount of compensation is calculated in proportion to each individual treatment and the condition for the provision of medical care, regardless of actual interventions. These measures are designed to reduce the number of cases of artificially imposed procedures and medications on patients. Thus, the National Government of Japan assumes that additional sufficient funding will enable medical institutions to improve qualitatively the level of services provided and, at the same time, to reduce the number of unnecessary procedures, examinations, and drug purchases. It is expected to achieve better results in a shorter period of treatment.

The Main Aspects of the Health Insurance System in Japan

The health insurance system (SHIS) in Japan is universal in nature and is closely interrelated with medicine in general due to objective factors. An important role in this system is played by the National Government of Japan, which provides comprehensive coverage and public financing of medical insurance for about 400 insurance agents. Of the funds allocated from the state budget for state social insurance in Japan, about 84% was provided at the expense of the SHIS tax, which was collected from the incomes of able-bodied citizens. According to Matsuda (2016) the amounts of “taxes, premiums, and user charges” paid by immediate users of health insurance amounted to less than 50% of all health care costs. The universality of the health insurance system in Japan is due to the fact that it covers everyone in the country. However, one cannot call it completely “free”, because all medical expenses that are compensated by the state have all the same tax revenues from private individuals. Thus, the principles of providing the population of Japan with a complex of medical services, based on the commercialization of medical procedures but not their effectiveness as an ultimate goal, are reflected in the existing system of medical insurance. The use of medical insurance in the country combines a set of unique features that significantly increase the cost of medical services for the Japanese in conditions of unlimited demand for them. This is due to the fact that artificially provoked excessive use of tests, procedures and narcotic medicines within the framework of insurance medical policies takes place. At the same time, the government of Japan plays a decisive role in the system of medical insurance, regulating practically all its aspects. The functioning of the medical education system in the state is aimed at organizing various kinds of health promotion activities for its residents. At the same time, the country’s leadership implements not only the legislative authority for legalization of relations in the medical sphere, but also provides material support for improving the quality of health insurance services for citizens. Legally subordinate to national and local governments, Japanese health insurance system receives state support from the National Government of Japan in the form of subsidies and financial assistance, as well as from medical facilities in the country. In addition, within the national framework, regional healthcare institutions are being strengthened in 47 prefectures in Japan, which are based on their own budgets. The benefits package, which includes all SHIS plans, is invariably determined at the state level by the National Government in consultation with a state structure such as the Central Social Insurance Council. Invariably, the composition of services that are assumed by the health insurance policy in Japan covers primary, special and psychiatric medical care. In addition, drugs that can be potentially approved and released to the patient on prescription are also included in it. In Japan, home care services are covered by the insurance policy, too, as well as physiotherapy, dental care and hospice care. Optometry and other services that are not provided by employees of medical institutions with proper qualifications are not included in the social insurance system in the field of medicine. To date, Japan’s health insurance system has several key characteristics that create the basic structure of its organization. However, there are some contradictions in the Japanese health insurance system. First of all, it should be said that the system of medical insurance in the country presupposes only two ways of insurance of citizens. This happens either at the corporate level of social insurance at the place of employment of a person and is called “shakai hoken”, or in the framework of the national health insurance called “kokumin kenkō hoken” in respect of persons who are self-employed. The medical expenses of government employees are covered by the so-called mutual aid societies in the role of private insurers or certain groups of individuals engaged in private practice. In the health insurance system of Japan, only registered users are categorized by their age, sex, place of residence and status of employment. Those citizens who do not have time to make an account must pay up to two years of premiums when they return to the system. A special place is occupied by the sphere of social insurance for residents and non-residents of Japan, who have reached the age of forty. Absolutely all such persons are enrolled in the lists of insured persons requiring long-term care. This positively characterizes the organization of the health insurance system in Japan, but it also has its negative side. Such as a so-called medical “device lag” that was recognized in authority in 2008. In connection with this, the government`s issue of the “Action Programs for Speedy Review of Medical Devices” was aimed at faster implementation of the medical products and “increasing the number of reviewers and completing standard reviews in 14 months”. In Japan, beneficiaries are guaranteed access to all, without exception, providers of health services, private professionals and medical organizations of all forms of ownership. Budget compensation to the subjects of medical services by the state apparatus of Japan makes this possible. The system covers all categories of people, so that the size of each of the health insurance packages does not depend on the income of the potential patient. Private payments are not allowed for those services that are supposed to be covered by insurance. With a certain convenience of the health insurance system for the aging population of Japan, however, it is not beneficial for the able-bodied population and their employers. After all, those costs that the insurance agents are forced to bear providing the interests of the elderly population in the sphere of public health and medicine, they compensate by contributions from the current insurers of the national or corporate sector. As a result of this dissonance, there emerges a phenomenon in the health insurance system of Japan, which experts define as “the tragedy of communities”. The fact that health services are freely available to the majority of the country’s population makes demand for them unlimited. At the same time, the fact that these services are compensated by other social groups and insurance institutions creates a certain tension in society that requires a solution. Only those commercial and state organizations that control and coordinate the provision of medical services win here. In particular, these are medical institutions as well as manufacturers of medicines and medical devices. All this together gives a rise to an unlimited demand for medical services among the aging population, along with rapid technical progress in the field of medical technologies.

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