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Road to UHC and Beyond: Japans 50-year Experience 10 th Anniversary Conference Towards Universal Health Coverage: Increasing Enrolment Whilst Ensuring.

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Presentation on theme: "Road to UHC and Beyond: Japans 50-year Experience 10 th Anniversary Conference Towards Universal Health Coverage: Increasing Enrolment Whilst Ensuring."— Presentation transcript:

1 Road to UHC and Beyond: Japans 50-year Experience 10 th Anniversary Conference Towards Universal Health Coverage: Increasing Enrolment Whilst Ensuring Sustainability Tomoko Ono OECD Health Division Accra, 5 th November, 2013

2 1920s: Introduction of Health Insurance Scheme 1961: Achievement of Universal Health Coverage2011:50th Year Anniversary of Achieving UHC Tokyo StationTokyo TowerSky Tree

3 UHC helped Japan to achieve good health results with relatively low health expenditures

4 Outline of Presentation Health system of Japan at a glance Financing: Multiple insurances schemes Payment: FFS with unified fee-schedule Current challenges

5 Health System of Japan at a Glance

6 6 Recap historical development 1922: Health insurance law 1956:30% not covered 1945: End of WWII 1938: National Insurance law 1958:Nation al insurance law (mandate)

7 Universal Health Coverage Population coverage: 100% achieved in 1961 Cost coverage: 82% by government or social security in 2011 Service coverage: Outpatient, Inpatient, Dental, Pharmaceuticals Source: WHO, World Health Report 2013

8 Key Feature of Health Systems Financing: Multiple health insurance schemes, contribution + general tax + co-payment (with ceiling and exemption for low-income group) Payment: Managed FFS system through unified fee-schedule for all providers/insurance schemes in Japan Service delivery: Predominantly private providers (although public providers exists) Roles of hospitals/clinics and GPs/specialists functions are not well defined in practice Access: Free choice of provider by patients (no gate keeping)

9 Health Insurance Schemes

10 4 Different Insurance Schemes Over 3,000 insurance plans in Japan, grouped into Citizens Health Insurance (CHI): farmers, self- employed, unemployed and elderly (later separated) National Health Insurance Associations (NHIA): mainly small and medium enterprise employees and their dependent Society Managed Health Insurance (SMHI): mainly employees of large firms and their dependent Mutual Aid Association (MAA): mainly public sector employees and their dependent Limited role for private insurance

11 Achieving Universal Coverage Source: Takagi 1994, World Bank 2013 (forthcoming) UHC in 1961

12 UHC: Citizens Health Insurances Role Historical Development of CHI Build upon the existing community-based health insurance scheme: voluntary participation and expanded through government subsidies Participation was mandated in 1961 for all residents, management moved to municipalities Current financial sources: contribution from beneficiary, cross-subsidy from other schemes, subsidies from national and local government and copayment

13 Revenues for Social Health Insurance CHINHIASMHIMAA Individual Elderly EmployeeGovernment cross-subsidies Individual

14 Financial Sources for Health Services UHC

15 Managed FFS System with Unified Fee-Schedule

16 Single Payment System: Fee-Schedule Fee-schedule Sets prices for each services, pharmaceuticals and devices for virtually all providers Defines the benefits and conditions for reimbursement Auditing for these conditions For most providers, these are the only sources of revenue Fee schedule revisions (every 2 years) Managed by national government Institutionalized process of negotiating benefits and resource allocation among key stake holders Continuous process of adaptation and adjustment

17 Biennial Fee-Schedule Revisions Ministry of Finance Ministry of Health, Labour and Welfare Macro: Global Revision Rate Medical services Pharmaceuticals Medical devises Central Social Insurance Medical Council Micro: Fee negotiation for item-by-item Government

18 Pharmaceuticals Pricing Mechanisms In 1982, 39% of national medical expenditure was spent on pharmaceuticals. It went down to 27% in 1988 and 21% in 1998, then went up again to 25% in 2009 We set a price in fee schedule, but providers purchase products for which bigger discounts can be negotiated and earned. Government conduct survey of pharmaceutical prices of each products and set new fee schedule price at a certain percentile.

19 Cost Containment Mechanism Cost containment tools Price control via negotiation, by monitoring volume New technology - setting the initial price low, restriction to patients with specific conditions Other restrictions Balanced-billing (charging more than the fees set in the fee schedule): banned Extra-billing (billing services and pharmaceuticals not listed in the fee schedule with those listed): only allowed for amenity and a few new technologies still being evaluated

20 Current Challenges

21 Slow economic growth and increasing social security expenditure Real GDP Growth Rate Real GDP Growth Rate and Social Security Expenditures Source: Cabinet Office of Japan

22 Ageing Population and Inequality between Insurance Schemes Age structure of CHI beneficiary, 1975, 2001 and 2007

23 Take Home Message

24 UHC in Japan was achieved through... Long-term political commitment for UHC, supported by political groups with different ideologies Democratic movements and commitment to social solidarity in post-war Japan provided impetus to expand coverage Incremental expansion of health insurance coverage Harmonization of benefits and established redistribution schemes

25 Cost Containment despite FFS system Institutionalized fee-schedule revision process Global revision rate Item-by-item fee negotiation: mitigate increase in expenditure, maintain appropriate solvency for providers, and reflect government priority Stringent and disciplined payment system Unified fee-schedule for all health services and conditions of its use Ban on balanced-billing and restriction on extra- billing

26 Acknowledgement: Ghana Health Insurance Authority Prof. Naoki Ikegami, Keio University School of Medicine Japan-World Bank Partnership Program on UHC Kagoshima, JapanNiigata, Japan Kyoto, Japan

27 Acknowledgement for picture Slide 2 Tokyo Station Tokyo Tower Sky Tree Slide Niigata, Kyoto, content/uploads/2013/08/63bf16f29e082d9d510aac6e4fd47ea6.jpg

28 Total Health Expenditure (% of GDP) Source: OECD, Health at a Glance 2011

29 Total Expenditure on Health in 2011 by type of financing

30 Real GDP and GDP per Capita (in 1990 Geary-Khamis Dollar) Billions of $ Attainment of Universal Health Coverage (1961) ($420B, $4291per capita) $ per capita Source: Angus Maddison (2001)The World Economy – A Millennial Perspective Real GDP (left) GDP per capita (right) Japan attained UHC while still a middle income country, and at the start of its rapid economic growth period 30

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