Fraser Forum Lessons from Japan s Health Care System L by Nadeem Esmail Sabrina Yeudall ast August The Fraser Institute published How Good is Canadian Health Care a document comparing Canada s health care system with other health care systems in the OECD Health systems were only included in the comparison if they adhered to the principle that access to health services is based on need not on ability to pay In the comparison four countries consistently outperformed Canada on three measures of health outcomes thus standing out as possible models for health care reform in this country Each of the four employs financial incentives and permits competition in the supply of health care Canadian Senate commissions the CBC and private policy organizations have exhaustively examined three of these four countries Sweden France and Australia over the last year The fourth country Japan garnered little attention from these groups or the media in general Surprisingly it might be Japan that holds the most promise of the four since in 1999 Japan spent less on health care age adjusted than all Nadeem Esmail nadeeme fraserinstitute ca has an MA in Economics He is a Health Policy Analyst at The Fraser Institute Sabrina Yeudall is completing a Bachelor of Arts degree at Simon Fraser University She is currently an intern at The Fraser Institute 34 Fraser Forum but one OECD country Luxembourg while offering top ranked health outcomes and access to technology table 1 This astounding performance warrants a closer look The health care system in Japan is a multi payer model it has nearly 5 000 insurers most of whom are quasi autonomous non government bodies These insurers pay providers directly according to a government fee schedule and make no other payments to providers providers are expected to pay for capital investments through fee receipts The state acts as an intermediary between insurers and providers through the Social Insurance Medical Fee Payment Fund which screens bills from providers to ensure that only appropriate medical services are fully reimbursed Insurers pay only the portion of the fee that has not already been covered by the patient Cost sharing exists at all levels of care in Japan Physicians specialists and hospi tals all require co payments of between 20 and 30 percent Reimbursement rates for pharmaceuticals vary depending on the nature of the drug provided and the patients needs Maximums do apply to cost sharing however which in 1998 reduced the effective cost sharing rate to approximately 11 7 percent of total health expenditure Universal access to health care services in Japan is maintained through automatic enrolment in the health insurance scheme Individuals are assigned to a specific insurer on the basis of employment status residential location or age Income based contributions for health insurance are collected from both employers and individuals Central and local governments provide insurance for the very poor those who would otherwise have difficulty affording co payments in the insurance system through the Medical Aid program Though Japanese citizens have no choice in their health insurance provider they may choose any health care provider they desire The health delivery system in Japan is largely privately operated 79 9 percent of hospitals and 93 8 percent of doctors clinics are privately owned Doctors clinics and hospitals work both in a complimentary manner and in a com Table 1 Relative Rankings on Health Spending Access and Outcomes Indicators Indicator sample size Age Adjusted Health Expenditure of GDP 26 Japan Canada 24 tie 1 Access to MRI machines per million population 23 1 18 Access to CT scanners per million population 22 1 17 4 tie 10 Potential Years of Life Lost 26 2 7 Breast Cancer Mortality 27 4 6 Disability Free Life Expectancy 24 Source Esmail and Walker 2002 Health Care petitive manner Doctors in the clinics are not permitted to treat patients in hospitals patients must be transferred to the hospital s own salaried physicians while they are permitted to provide ambulatory inpatient surgeries and advanced diagnostic care as would a hospital Waiting times for inpatient surgeries and outpatient visits in Japan are virtually non existent system wide Larger hospitals in big cities which are seen as having a better reputation than their smaller counterparts sometimes have long waits and queuing The smaller less prestigious hospitals have a surplus of beds with hardly any waiting lists and are equally accessible under health insurance in Japan Jeong and Hurst 2001 The Japanese health care system appears to be both more efficient and more effective than Canada s Japan spends less than Canada does yet produces better access to high tech diagnostic imaging and manages better health outcomes Japan has accomplished all of this while incorporating the very health policies that opponents of change in Canada label as an Americanization of the health care system These policies have been incorporated in a successful universal health care system in Japan Perhaps it is time that we try them here Sources Esmail Nadeem and Michael Walker 2002 How Good is Canadian Health Care Fraser Forum Special Issue August Vancouver The Fraser Institute Imai Yutaka 2002 Health Care Reform in Japan Economics Department Working Papers No 321 Paris OECD Jeong Hyoung Sun and Jeremy Hurst 2001 An Assessment of the Performance of the Japanese Health Care System Labour Market and Social Policy Occasional Papers No 56 Paris OECD Reforming the Patent Act Follow the Linkage continued from page 33 versions of their mousetraps for the benefit of a regulator before the patent expires In return for all this the research based drug maker gets one privilege the right to be informed when a generic competitor is planning to take advantage of these loopholes Notice of Allegation and to delay Health Canada from giving the generic competitor permission to sell its copy of the medicine in question for up to 24 months or until a hearing has determined if the inventor s patent or patents which are registered at Health Canada are still valid This is called linkage because it links patents to the TPD licensing authority Without linkage it would be as if the government let someone wander through your house at will but did not let you inspect him before he walked out Well the House of Commons Standing Committee on Industry Science and Technology has just completed a re examination of linkage with a view to getting
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