Health Care Reform In Japan: The Virtues of Muddling Through

PROLOGUE: Japan's universal health care system, built on the German social insurance model and remarkably inexpensive by American standards, has nevertheless entered an era of economic stress and government calls for more radical reforms. The reasons why Japan has been able to constrain its health care spending are multiple, but some of the explanation lies in its record of much lower levels of expensive social phenomena compared with most other industrialized nations. Its rates of crime, divorce, teenage births, drug use, high-speed motor vehicle accidents, and incidence of human immunodeficiency virus (HIV) are all appreciably lower than comparative numbers in the United States. However, from a policy perspective, authors Naoki Ikegami and John Campbell believe that one of the system's most significant achievements is its record of effective cost control without first restructuring its traditional system of health care delivery. Nevertheless, as Ikegami and Campbell discuss, Japan's health insurance system faces tough challenges in three major areas: growing consumer consciousness, a rapidly aging population, and rising costs. Ikegami, who originally trained as a psychiatrist, is a professor and chair of the Department of Health Policy and Management at Keio University School of Medicine in Toyko. His research interests include health policy, long-term care, and pharmacoeconomics. He has published in the Journal of the American Medical Association and the New England Journal of Medicine . Campbell, with whom Ikegami has collaborated frequently, is a professor of political science at the University of Michigan and a long-time student of Japan. ABSTRACT: Japan's universal and egalitarian health care system helps to keep its population healthy at an exceptionally low cost. Its financing and delivery systems have been adapted over the years in a gradual way that preserves balance. In particular, its mandatory fee schedule has proved to be effective in controlling spending by manipulating prices. Today, with severe fiscal problems, pressures are mounting for more radical reforms. However, these proposals attack the wrong problems and are impractical. Real problems include inequitable health insurance financing and insufficient regard for quality of hospital care. We suggest incremental reforms that would improve these situations.