From the Japanese Association of Medical Sciences Japanese Society of Public Health Five Decades of Universal Health Insurance Coverage in Japan: Lessons and future challenges JMAJ 52(4): 263–268, 2009 Yasuki KOBAYASHI*1 Abstract Japan was able to establish a universal health insurance system in 1961 because of several advantageous conditions that existed at this time. Furthermore, this was precisely the right time for Japan to implement a universal health insurance system, due to the convergence of these conditions. There were at least three such conditions when Japan established this system, in addition to a strong political will and an incremental approach toward universal coverage. First, the costs of health care were low. Second, Japan was achieving high economic growth. Third, the people shared a sense of solidarity during this difficult post-war period. All these conditions facilitated the smooth implementation of universal health insurance in Japan. At present, however, conditions have changed; health care expenditures are large and still growing, the population is aging, and economic growth is currently stagnant and uncertain going forward. Moreover, people are becoming diversified, income disparities are increasing, and their sense of solidarity may be deteriorating. This paper examines the conditions that enabled the establishment of universal health insurance coverage about five decades ago and discusses the conditions that sustain the system under the current changing conditions in Japan. These analyses will not only facilitate informed decisions for future reforms in Japan, they will also provide insights for those countries that are interested in such a system. Key words Universal coverage, Health insurance, Economic growth, Access, Solidarity enabled the establishment of universal health Introduction insurance coverage about five decades ago and to discuss the conditions that sustain the system For the last two decades, universal health insur- under the current changing conditions in Japan. ance systems have been established throughout These analyses will not only facilitate informed Asia. Korea, Taiwan, and Thailand, for example, decisions for future reforms in Japan, they will established universal coverage in 1989, 1995, and also provide insights for those countries that are 2001, respectively.1–3 These successes were the interested in such a system. result of both high economic growth and strong political will toward universal coverage. Japan Brief History established its universal health insurance system under such conditions in 1961: specifically, con- Japan’s health insurance system increased the ditions resulting from high economic growth in number of its participants by providing several the 1950’s and 1960’s, and the people’s solidarity types of insurance in a progressive fashion to each of the postwar revival age. Some additional fac- group of people in Japan,4,5 as shown in Table 1. tors facilitated the introduction and implementa- In 1922, the government first introduced Health tion of universal health care as well. The purpose Insurance (Kenko Hoken) (hereinafter, HI) for of this paper is to examine the conditions that industrial workers. At the beginning, participation *1 Professor, Department of Public Health, Graduate School of Medicine, University of Tokyo, Tokyo, Japan ([email protected]). JMAJ, July/ August 2009 — Vol. 52, No. 4 263 Kobayashi Y Table 1 Brief history of Japan’s health insurance system 1922 Introduction of Health Insurance (HI) 1927 Nationwide Enforcement of HI 1938 Introduction of National Health Insurance (NHI) 1939–45 World War II 1950s Encouragement of the Merger of Towns and Villages 1958 Revision of NHI 1961 Establishment of Universal Coverage 1983 Introduction of Health Services Law for the Aged 2000 Introduction of Long-term Care Insurance for the Elderly 2008 Introduction of Health Care Program for the Elderly aged 75 and over was not mandatory and the number of its par- even after universal coverage was established, ticipants was modest. Several years later, the reforms were needed in the health insurance government enforced compliance with the law system, and in fact several were implemented, such on employers of certain kinds of companies in as changes in the copayment rate.5 As a result, the Japan. In 1938, the National Health Insurance differences in benefits between HI and NHI have (Kokumin Kenko Hoken) (hereinafter, NHI) been reduced, while the financial burden of the was introduced for health insurance coverage of national government has increased. farmers and self-employed people. Again, the Second, there had been no effective or efficient number of participants was small in its initial system of handling claims and payments between stage since participation was voluntary. health insurance organizations and medical After World War II, establishing universal providers. The numbers of both parties were health insurance coverage was one of the highest enormous, and such transactions were indeed priorities in the national government. In fact, troublesome and time-consuming. Establishing the national government financially supported the review and payment organizations was a solu- municipalities in managing their own NHI funds. tion, though not a perfect one. This issue has been During the same period, the national government discussed elsewhere.6 also encouraged the merger of small municipalities Third, in the 1960s, both physicians and medi- because some villages and towns were too small cal facilities were insufficient and geographically to maintain independence in several respects. As maldistributed.7 As a result, some people had a result, between 1950 and 1960, the total number difficulties in access to physicians even if they were of municipalities in Japan decreased from 10,500 insured. Such a situation was called “insured, but to 3,574. These nationwide mergers strengthened with no services.” Such a problem might be a fun- both the financial and manpower capacities of damental drawback to health insurance, because small municipalities. In 1958, the National Health insurance itself does not assure provision of ser- Insurance Law was revised and participation in vices, especially in rural and depopulated areas.1,8 the NHI became mandatory. Three years later, the health insurance system finally covered The Health Insurance System nearly all people who lived in Japan. Although universal health insurance coverage An outline of the health insurance system of was established in Japan in 1961, several prob- Japan is shown in Table 2. There are numerous lems remained. First, there were some differ- public/non-profit insurance organizations which ences in benefits and premiums between HI and are categorized into several different types. NHI, because the latter was not able to receive Whether one person belongs to a particular type any financial contribution from employers. The of insurance mainly depends on his/her job or on national and local governments incurred a con- the job of the primary earner in the family. The siderable financial burden to maintain NHI funds amounts of the premiums differ according to the for each municipality. Because of this problem, type of insurance. Because the participant rate of 264 JMAJ, July/August 2009 — Vol. 52, No. 4 FIVE DECADES OF UNIVERSAL HEALTH INSURANCE COVERAGE IN JAPAN Table 2 Outline of Japan’s health insurance systems (as of 2008) Insured persons, Number of Category of including familyInsurer subscribers Copayment b,c insurance organization members (million) a Health Insurance (HI) JHIA managed HI Employees at small- Japan Health Insurance 36 million 30% and medium-size Association (JHIA) companies Society-managed HI Employees at Health insurance societies 30 million large-size companies (company-based) (about 1,500) Mutual Aid Association Public employees Mutual aid associations 10 million Seamen’s Insurance Seamen Government 0.2 million National Health Insurance (NHI) Retired persons, Municipalities (about 1,800) 51 million 30% self-employed, farmers, etc. Health Care Program for All those aged 75 Municipality union Not yet 10% the Elderly aged 75 and over and over (prefecture-based) available except wealthy (New system) (estimated as elderly aged 75 13 million) and over a: The total population in Japan is 127 million. These numbers still include those who are supposed to be designated as covered by the new system (Health Care Program for the Elderly Aged 75 and Over) because such separate statistics are not yet available. b: For the elderly or small children, copayment rates were set lower, specifically at 10% or 20%. c: There is a monthly cap on the amount of patient copayments. In other words, the costs of catastrophic illnesses are almost fully covered by the health insurance systems. the elderly has been higher in NHI than that of and Labor. The medical fee-schedules are revised the other types of insurance, NHI has faced finan- every other year. The fee-schedules have some- cial difficulties and received considerable sub- times encouraged certain types of medical services sidies from the national and local governments. and discouraged other types of medical services. From April 2008, because of these difficulties, the These have been the conventional government government has introduced a new health care policies on health services, and worked for con- program for the elderly aged 75 and over, in which trolling health care expenditures.9 all those covered are required to make an income- based contribution to the program, while the Establishment of the Universal Health entire insurance system and the government con- Care System tribute to the program as well (Table 2). In principle, the insured can go to see a doctor Overall, the establishment of a universal health at any clinic or hospital in Japan. The costs of care system in Japan has achieved positive results.10 medical services are borne both by the patient First, the system has ensured that people have and the insurer. Patients have to pay a certain universal access to health care, through which percentage of their medical costs (a copayment) they can receive health services with relatively at the point of service.