The Japanese healthcare system

The issue is to solve the “tragedy of the commons” without making another T he Japanese medical insurance system has a unique combination of characteristics that has led to the overuse of tests and drugs, unconstrained demand from patients, and an explosion of costs. Unless the system of medical insurance and reimbursement of healthcare providers changes, the combination of increasing technological advances, an ageing population, and unconstrained demand will produce a crisis in Japanese health care. Japan is only belatedly waking up to this crisis. The Japanese medical insurance system has four characteristics that lie at the root of the problem. Firstly, Japanese citizens are covered comprehensively and exclusively by either national medical insurance (for the self employed) or social insurance (for employees). Beneficiaries have to make some co-payments, which are capped depending on income.1 Secondly, mixed private and insurance payments are prohibited—that is, beneficiaries cannot pay privately for medical services that are covered by their medical insurance. Thirdly, beneficiaries have guaranteed access to any healthcare providers, from general practitioners to specialists, without being charged a premium fee. Finally, healthcare providers and institutions are reimbursed through fees for service. Fuelled by economic growth after the second world war and facilitated by the healthcare system, Japan has become one of the most medically advanced nations in the world, especially in its service quantity. Compared with other developed countries in the Organisation for Economic Cooperation and Development (OECD), Japan is the runaway leader in the number of magnetic resonance imaging and computed tomography …