A WORLD BANK STUDY Public Disclosure Authorized Public Disclosure Authorized Universal Health Coverage for Inclusive and Sustainable Public Disclosure Authorized Development LESSONS FROM JAPAN Public Disclosure Authorized Naoki Ikegami, Editor Universal Health Coverage for Inclusive and Sustainable Development A WORLD BANK STUDY Universal Health Coverage for Inclusive and Sustainable Development Lessons from Japan Naoki Ikegami, Editor © 2014 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved 1 2 3 4 17 16 15 14 World Bank Studies are published to communicate the results of the Bank’s work to the development com- munity with the least possible delay. The manuscript of this paper therefore has not been prepared in accordance with the procedures appropriate to formally edited texts. 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All queries on rights and licenses should be addressed to the Publishing and Knowledge Division, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: [email protected]. ISBN (paper): 978-1-4648-0408-3 ISBN (electronic): 978-1-4648-0409-0 DOI: 10.1596/978-1-4648-0408-3 Cover design: Debra Naylor, Naylor Design, Inc. Library of Congress Cataloging-in-Publication Data has been requested. Universal Health Coverage for Inclusive and Sustainable Development http://dx.doi.org/10.1596/978-1-4648-0408-3 Contents Foreword xi Acknowledgments xiii Abbreviations xv Overview 1 Overview of Current Status 1 Current Status of Health Financing 4 Current Status and Policies for Human Resources for Health 6 Sequencing of Reforms 8 Key Lessons from Japan 9 Case Studies on Japan 11 Bibliography 13 Chapter 1 The Political-Historical Context of Japanese Health Care 15 Abstract 15 Context and Objectives 15 Origins of Health Care in Japan 16 Health Insurance for All 18 Drive for Equality and Expansion 20 Switch to Spending Restraint 22 Continued Attempts to Control Public Spending 23 “Collapse of Medical Care” 24 Insights 24 Notes 25 Bibliography 26 Chapter 2 Macroeconomic Context and Challenges for Maintaining Universal Health Coverage in Japan 27 Abstract 27 Objectives 27 Decline in Economic Growth and Its Impact on Fiscal Space 28 Universal Health Coverage for Inclusive and Sustainable Development v http://dx.doi.org/10.1596/978-1-4648-0408-3 vi Contents Widening Income Disparities 30 Redistribution Effects of Taxes and Social Security 32 Changes in Funding Sources 32 Impact of Aging on Fiscal Space 34 Prospects for Improving Fiscal Space 37 Insights 38 Notes 39 Bibliography 39 Chapter 3 Fiscal Disparities among Social Health Insurance Programs in Japan 41 Abstract 41 Objectives and Context 41 Overview of SHI Programs 42 Changes in the Fiscal State of CHI 46 Effects of Fiscal Transfers to Reduce Disparities in CHI Premium Rates 47 Fiscal Disparities among CHI Programs 49 Fiscal Disparities within SMHI Programs 50 Insights 52 Notes 53 Bibliography 54 Chapter 4 Japan’s Long-Term Care Insurance Program as a Model for Middle-Income Nations 57 Abstract 57 Objective and Context 57 Current System Operations 58 Two Issues: High Expectations and Cost 59 Services, Not Cash 61 Older People Only, Not Disabled Younger People 62 Eligibility by Social Insurance Criteria, Not Case by Case 62 Mixed Provision 63 Insights 64 Notes 66 Bibliography 67 Chapter 5 Controlling Health Expenditures by Revisions to the Fee Schedule in Japan 69 Abstract 69 Objectives and Context 69 Macro: The Global Revision Rate 70 Micro: Item-by-Item Revisions 72 Recent Trends 81 Insights 82 Annex 84 Universal Health Coverage for Inclusive and Sustainable Development http://dx.doi.org/10.1596/978-1-4648-0408-3 Contents vii Notes 98 Bibliography 99 Chapter 6 The Political Economy of the Fee Schedule in Japan 101 Abstract 101 Japanese Characteristics 101 The Macro Process 102 The Micro Process 111 Insights 114 Interviews Conducted for the Chapter 116 Notes 116 References 118 Chapter 7 Factors Determining the Allocation of Physicians in Japan 119 Abstract 119 Objectives and Historical Context 119 Status of Physicians and Hospitals 123 Variations in Physician Incomes 125 Specialization versus Primary Care 125 Urban versus Rural Areas 127 Providing Services in Rural Hamlets 128 Insights 129 Notes 130 Bibliography 132 Chapter 8 Licensed Practical Nurses: One Option for Expanding the Nursing Workforce in Japan 133 Abstract 133 Objectives and Context 133 Education 136 Regulation 139 Employment 140 Insights 143 Notes 146 Bibliography 146 Chapter 9 National Hospital Reform in Japan: Results and Challenges 149 Abstract 149 Objectives and Context 149 Management Reforms 152 Financial Improvements 158 Insights 160 Notes 161 Bibliography 161 Universal Health Coverage for Inclusive and Sustainable Development http://dx.doi.org/10.1596/978-1-4648-0408-3 viii Contents Chapter 10 Improving Population Health through Public Health Centers in Japan 163 Abstract 163 Context 163 History 164 The Contributions of PUBHCs in Achieving Good Health 167 The Changing Role of PUBHCs 170 Insights 174 Notes 174 Bibliography 175 Boxes 1.1 Key Features of Japan’s Political System 16 1.2 CHI: Residence-Based Health Insurance 17 5.1 Setting the Price Low and Lowering it Further for New Procedures: The Case of MRI Scans 74 6.1 Ebb and Flow in 2004 and 2006 109 10.1 Role of Public Health Nurses (Hoken-shi) 166 10.2 Institutional Capacity to Collect Statistics for Health Policies 168 Figures I.1 Subsidies and Cross-Subsidization among Social Insurance Programs 4 B1.1 Health Insurance Programs in Japan 17 2.1 Real GDP Growth 28 2.2 Real Per Capita Employee Compensation 29 2.3 Ratio of Social Security Contributions and Taxes per GDP 29 2.4 Trends in General Account Tax Revenues and Total Expenditures 30 2.5 Ratio of General Government Gross Debt to GDP 30 2.6 Income Inequality and Other Factors Contributing to Income Redistribution 31 2.7 Gini Coefficient by Age Group, 1984 and 2011 31 2.8 Benefits and Social Security Contribution by Income Class, 1967 and 2011 33 2.9 Changes in Funding Sources of Health Expenditures, 1954–2011 34 2.10 Per Capita Health Expenditures, by Age Group, 2001 and 2010 35 2.11 Percentage of Population Aged 65 Years Old and Over, 1950–2010 35 2.12 Health Expenditures, by Age Group, 1977–2010 36 2.13 Health Insurance Premium Payments and Benefits, by Age Group, 2011 37 3.1 Flow of Money in SHI Programs, 2011 43 Universal Health Coverage for Inclusive and Sustainable Development http://dx.doi.org/10.1596/978-1-4648-0408-3 Contents ix 3.2 Age Distributions of Enrollees in CHI and SMHI, 1970 and 2010 44 3.3 Occupation Distribution of CHI Enrollees 44 3.4 Subsidies from the National Government to SHI 45 3.5 Trends in the Composition of CHI Revenue 46 3.6 CHI Premium Rates, Taxable