Quick Facts:

• Population (2009): 127,078,679
• GDP per capita (2008): $34,200
• Life expectancy (years): M 79, F 86, longest in the world
• Infant Mortality: 2.8 deaths/1,000 births
• Physicians per 10,000 people (2000-2009): 21
• Government health expenditures as percent of total government expenditures (2007): 17.9%
• Mandatory universal coverage to all residents: national, employer-based, elderly insurance
• Medical care has cost sharing, but is free for those on welfare support and living below the poverty line
• Long term care for everyone over 65 covers home care, respite care, or institutional care
• Financed by public and private buyers, with premiums based on income and ability to pay
• Cash payments to mothers to cover pregnancy care; no maternity care coverage

Sources: CIA World Fact Book  and WHO World Health Statistics 2010; more statistics can be found at http://www.globalhealthfacts.org

Background Brief

 Japan provides universal coverage to all residents through three broad categories of insurance: employer-based insurance, national insurance and insurance for the elderly. [1] These programs are financed primarily by the national government, private employers, and individual coinsurance payments, but the services are delivered through a mostly privately-operated hospital and clinic system. All programs cover a broad range of services, including in- and out-patient care, dental care, some pharmaceuticals and some cash benefits, but the programs cover little in the way of preventive care. Also notable is the fact that insurance does not cover maternity care, as it is not considered an “illness,” but rather offers cash payments for midwifery and general expenses. [2] Although the extent of coverage and payment regulation mechanisms varies little between the programs, there are differences in cost-sharing. All programs have a cap on the amount of out-of-pocket spending health consumers may incur in a year.

It is often noted that the Japanese enjoy the longest life expectancy at birth and one of the lowest infant mortality rates in the world, [3] despite the lack of emphasis on preventative health care. Indeed, smoking is the number one preventable cause of death in Japan, yet the country has 500,000 cigarette vending machines, weak anti-tobacco laws and few smoke-free public areas. [4] Some analysts have suggested that low levels of income inequality and shared levels of economic growth in Japan are to thank for the country’s relatively positive health outcomes. [5]

Preventive care services are typically provided by the country’s public health system, and not covered by insurance. Through the “First-Phase Measures for National Health Promotion” program, started in 1978, pregnant women, new mothers, infants, housewives and the elderly are provided a series of prevention and health checks. Additionally, citizens receive health check-ups at school and workforce entry through guidelines set by the 2002 “Health Promotion Law,” administered as a primary prevention program through the Ministry of Health, Labour and Welfare. [6]

Access
The Japanese health insurance system is comprised of more than 5,000 health insurers, which can be classified into employer-based insurance, national health insurance, and health insurance provided to the elderly. Patients may choose their own general practitioners and specialists and have the freedom to visit the doctor whenever they feel they need care; there is no gatekeeper system. Additionally, everyone in Japan is required to sign up with a health insurance plan.

Employer-based insurance
Employer-based health insurance provides coverage for employees of companies with more than five but fewer than 300 workers and covers almost 30% of the population. Premium contributions are set at a fixed rate and evenly split between employees and employers. Cost-sharing includes a 20% coinsurance for hospital costs and 30% coinsurance for outpatient care. Employer-based insurance is further subdivided into society-managed plans, government-managed plans and mutual aid associations.

Society managed plans cover employees at large companies and are paid for by the employers and employees, who combine to form “health insurance societies,” leading to the name. This type of insurance is not subsidized by the government.

Government-managed health insurance offers coverage to employees of small to medium sized companies. However, because many of those insured through government-managed health insurance earn less than those covered by society-managed health insurance, the government subsidizes the benefit costs and fully covers the administrative costs. In total the government covers about 14% of the insurance cost.[7] There is only one package offered through government-managed health insurance.

Mutual aid associations, which receive no subsidies from the government, cover civil servants and teachers, or about 8% of the population.

National health insurance
The national health insurance offers coverage to those not eligible for employee-based insurance, such as farmers, self-employed individuals, the unemployed, retirees, and expectant mothers, all of whom comprise about 34% of the population. Here too, premiums are fixed and evenly split between employees and employers; in the absence of an employer, the government pays a portion of the plan’s premium, which is dependent on the insured’s ability to pay. There is a 30% coinsurance for all health care costs.

Health Insurance for the Elderly
This plan covers the elderly and disabled and provides additional benefits to individuals who are 65 years or older or who are age 40-64 but suffer from disabilities. This long-term care insurance offers home care, respite care, or institutional care based on the needs of the elderly individual. The majority of the costs of treatment are covered by the insurance, with a 10% coinsurance rate required from the individual. In Japan, due to longer life expectancy and lower birth rates, the population is aging at one of the fastest rates in history. This system has been created to compensate for the older population and move the responsibility of care from the family to the state.

Finally, any household below the poverty line determined by the government is eligible for welfare support. Under this system, medical services are free; no cost-sharing is required.

Under all of these insurance plans, individuals receive similar benefits, including hospital care, physician care, dental care, and pharmaceutical costs. None of the health insurance plans cover pregnancy; the government instead provides cash payment to expectant mothers.[8]

Financing
Like the United States, the health system in Japan is financed by both public and private payers. Fees paid by the government to the health care workers and institutions are standardized nationwide by the Medical Fee Table and, for drugs, by the National Health Insurance Price List.

Since all individuals are covered by one of Japan’s health insurance programs, all of the plans are virtually the same in terms of benefits. Therefore, although an individual’s coinsurance may vary in amount – ranging from 10%-30% – the services offered do not. For all plans, if the monthly coinsurance exceeds a selected amount (roughly $720), [9] then the coinsurance above that amount is limited to 1%. Premiums are based on income and ability to pay. The national expenditure on health care has been rising in Japan for several years. In 2007, the national expenditure on health was roughly 8% of GDP, or $2,696 per capita, up from 7.7% of GDP in 2000; As a result, Japan spends less on health care than most other developed nations.[10]

Health costs are very low and controlled by the Japanese Health Ministry after annual negotiation with the health care industry. This, in turn, enables Japanese patients to take advantage of medical technological advances at higher rates than most; for example, they have twice as many MRI scans per capita than Americans.[11]

Service Delivery
All hospitals and physician’s offices are not-for-profit although 80% of hospitals and 94% of physician’s offices are privately operated.[12] Japan has 15.8 inpatient hospital beds per 1,000 persons, the highest number among OECD countries. In contrast to the high number of hospital beds, the country has only 21 physicians per 10,000 people. In 2007, Japan had 95 nurses per 10,000 people.[13]

Additionally, Japan has a low rate of hospital admissions, but once hospitalized, patients tend to spend comparatively long periods of time in the hospital, notwithstanding low hospital staffing ratios. In Japan, the average hospital stay is 36 nights compared to just six nights in the United States.[14] Hospitals are reimbursed on a per diem basis, which may contribute to the trend of lengthy hospital stays.

Finally, Japan’s health care system utilizes the latest advances in technology to provide care: more than 70% of the country’s hospitals have whole-body computerized tomography (CT) scanners;[15] around 30% also have magnetic resonance imaging (MRI) scanners. In 2005, Japan had the highest number of MRI scanners than any other industrialized country, with 40.1 units per million, versus the OECD average of 10.2 per million in 2006.[16]

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Resources

Campbell, J.C. and N. Ikegami. (January 2010). Lessons from Public Long-Term Care Insurance in Germany and Japan. Health Affairs, 29.1:87-95.
This article explores social insurance programs in Germany and Japan as they relate to health care. It attempts to draw conclusions applicable to health care reform in the United States.

Campbell, J.C., and N. Ikegami. (May/June 2000). Long-term Care Insurance Comes to Japan. Health Affairs, 19(3): 26-39.
This article explains Japan’s long-term care insurance program initiated in 2000. The program provides insurance for the elderly and frail and is a unique characteristic of the Japanese health care system.

Fukawa, T. (2002). Public Health Insurance in Japan. World Bank Institute.
This report provides information on the health insurance system in Japan including an explanation of the development, an outline of the current system, and a comparison of the system to other industrialized nations.

Kaiser Family Foundation. Globalhealthfacts.org, Global data on HIV/AIDS, TB, Malaria & More.
Provides health data by country and topic; side-by-side comparisons of health outcomes in various countries is possible.

Ikegami, N. (2007). The Japanese Health Care System – Achieving Equity and Containing Costs Through a Single Payment System. American Heart Hospital Journal, 5: 27-31.
This piece discusses the aspects of the Japanese health care system that differentiate it from systems in other developed nations.

Ikegami, N. and J.C. Campbell. (May/June 2004). Japan’s Health Care System: Containing Costs and Attempting Reform. Health Affairs, 23.3: 26-36.
This article explains recent efforts made by the Japanese government to reform and contain costs in the national health care system.

Japan International Cooperation Agency, (2005). Japan’s Experiences in Public Health and Medical Systems: Towards Improving Public Health and Medical Systems in Developing Countries.
This document provides a comprehensive look at the evolution of Japan’s public health and medical systems, with a focus on applying lessons learned from Japan’s experience to developing countries.

Jeong, H. and J. Hurst. (2001). An Assessment of the Performance of the Japanese Health Care System, OECD Labour Market and Social Policy Occasional Papers, No. 56, OECD Publishing. doi:10.1787/445332508603
This paper describes how the Japanese health system works and compares it to other OECD countries.

Matsuda, S. (August 2002). The Health and Social System for the Aged in Japan. Aging Clinical and Experimental Research, 14(4): 265-70.
This article discusses the long-term care insurance system in Japan and explains its impact and influence on Japanese society.

Nomura, H. and T. Nakayama. (2005). The Japanese healthcare system. British Medical Journal, 331: 648-649.
This editorial makes the case that unless the recent explosion of health care costs is contained, there will be a crisis in the Japanese health care system.

Regional Office for the Western Pacific. Japan: Country Health Information Profile. World Health Organization.
This World Health Organization webpage gives a brief explanation of Japan’s health system and national health trends.

Reid, T.R. (2009). The Healing of America: a Global Quest for Better, Cheaper, and Fairer Health Care. "Japan: Bismarck on Rice." New York: Penguin.
This chapter in Reid's book discusses a paradox of the Japanese health care system: The Japanse are some of the most avid consumers of health care in the developed world despite having very low expenditure on health as a share of GDP.

World Health Organization. World Health Statistics 2010.
A publication of health indicators for all the members of the World Health Organization.

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