Japan+Health+Sector+Report

Japan Health Sector Report //"Japan"// **Executive Team:** **MOH:** //Marybel Zabel// **Deputy Minister:** //Christine Patton-Mitchell// =**A. Health Sector Profile **= **1. Background Information:** __ **//1.1 Demographics; Education; Economic; Socio-cultural//** __ The 2010 Japanese census estimates about 128 million people living in the country. The population is currently projected to have reached its peak and is now declining slowly: it is projected that the population will be 95 million by 2050. The demographic trend is showing an aging population and a decreasing birth rate (Statistics Bureau, 2011). The educational system consists of six years in elementary, three years in lower secondary, and three years in higher secondary. Social sciences degrees are earned the most at the undergraduate level and engineering degrees (41%) at the graduate level with medical degrees (6%) being not so popular (Statistics Bureau, 2011). The economy of Japan has been in a recession since the beginning of the 1990s where many financial institutions collapsed due to declining land values and a decrease in stock prices. To stabilize the economy, the Japanese government bailed out many financial institutions but the economy was heavily dependent on foreign demand. It has been very difficult for the Japanese economy to recover due to the current state of the global economy such as the rising oil prices and the global financial crisis. The most current economic shock was the earthquake that resulted in tsunami damage to the Miyagi and Fukushima regions as well as an energy crisis due to the affected damage to the nearby nuclear plants (Statistics Bureau, 2011). __ **//Health Needs and Problems; Health Reforms or Initiatives//** __ The health needs are increasingly becoming focused on disease prevention. The greatest area of concern is the increase of the aging population. This intensifies the needs for long-term care services and geriatric health needs. Japan has a universal healthcare insurance scheme but due to the long-time recession, there will problems with financing healthcare for the population in the future. Japan is facing higher death rates due to communicable diseases such as malignant neoplasms, heart disease, cerebral vascular diseases, and mental health disorders. Deep depression has been a major problem due to the suicides among Japan’s men. In an effort to reduce suicides, the Japanese government instituted the Comprehensive Suicide Prevention Initiative and created two suicide prevention centers in the country (Kaga, 2009). Other health concerns for the Japanese population are infectious diseases such as H1N1, avian flu, TB, and AIDS (Statistics Bureau, 2011). __ **//Vital and Health Statistics//** __ Japan had 1,070,035 live births in 2009 (1.37 fertility rate); one baby was born every 29 seconds. The mean mother’s age at the time of first child increased to 29.7 years in 2009 from 27.9 years in 1999 (MHLW, 2011). There was 1,141,865 deaths in Japan in 2009 (9.1 death rate) with an individual dying at the rate of every 28 seconds. Most deaths occur in individuals over the age of 80. The leading causes of death include cancer, heart disease, and cerebral vascular disease (MHLW, 2011). The infant mortality rate was 2.4 and in 2009, there were 2,556 infant deaths with a death occurring every 3 hours and 25 minutes. The early neonatal rate was 0.8 while the neonatal rate was 1.2. The leading cause of death was congenital malformations (MHLW, 2011). Fetal deaths numbered 27,005 with a miscarriage occurring every 19 minutes. The fetal death rate was 24.6 with most of the miscarriages occurring from 12-19 weeks gestational age (MHLW, 2011). The marriage rate, in 2009, was approximately 5.8 with a marriage occurring every 45 seconds. Japan’s divorce rate is 2.01. There were 253,353 divorces in 2009 with one occurring every two minutes (MHLW, 2011). **2. Organization and Management:** The Ministry of Health, Labor, and Welfare (MHLW) is responsible for the five social insurance systems in Japan: long-term care insurance, employment insurance, work-related accident insurance, public pension, and healthcare insurance. The Cabinet Office develops all the policies relating to any of the social insurance systems. The prefectures and municipalities are responsible for administrating the social insurance systems locally such as welfare offices and public health centers. The public health centers provide services such as cancer screening, maternity related health services, and preventative services for the public (immunizations). All of the hospitals are under the jurisdiction of MHLW. __**//2.1 Public-Private Mix//** __ Japanese citizens are required to enroll in the public pension program and a health insurance program. The public pension was established to help protect vulnerable citizens (disabled and elderly) against poverty. The universal health insurance system enables all Japanese citizens to have access to care regardless of their ability to pay (Tatara, Okamoto, & Allin, 2009). The health insurance system is supported by all the insured individuals and health risks are shared between all of insured individuals. The public pension scheme, long-term care, employment, and work-related insurances are also financed by paying premiums. Other programs, such as public assistance or welfare programs, are financed through government taxes. There are private providers of healthcare including hospitals, long-term care facilities, and rehabilitation facilities but they are all still regulated through the MHLW, the prefectures, and municipalities of Japan. __ **//2.2 Health Sector Organization//** __ The MHLW was established in 1938. There are various departments within the MHLW that have an important part in the health sector (Tatara, Okamoto, & Allin, 2009) such as the Health Policy Bureau, Health Service Bureau, Pharmaceutical and Food Service Bureau, Health and Welfare Bureau for the Elderly, Health Insurance Bureau, and Ministry of Finance. All of the departments are divided into different divisions that are responsible for a specific component of the universal healthcare system.

__**//2.3 Regulation//** __ The Medical Care Act regulates the human and capital healthcare resources. Inspections are performed by the local prefectures and municipalities. Areas of responsibility include physician services, hospitals, and clinics. The Health Insurance Act regulates all financial aspects of the various health insurance systems. The MHLW is responsible for regulating many aspects of the health insurance system with the most important health related ones listed in the prior section.

__**//2.4 Financing//** __ Japan spends 8.3% of their GDP on healthcare related expenses (WHO, 2011). The funding sources for the healthcare system includes premiums paid by the enrollees, government subsidies that come from taxes, and co-payments from patients that are set at different levels depending on the type of health insurance program he/she is enrolled in. The five main categories of health insurance schemes that cover the Japanese population are as follows:

<span style="color: #000000; font-family: 'Times New Roman',Times,serif; font-size: 12pt;">**3. Health Resources:** <span style="font-family: 'Times New Roman',Times,serif; font-size: 12pt;">__ **//Human Resources//** __ <span style="display: block; font-family: 'Times New Roman',Times,serif; font-size: 12pt; text-align: justify;">The Japanese benefit from a highly educated and disciplined workforce. Job-hopping is generally frowned upon, but can be common during the early years of a professional career. Absenteeism is generally not a problem in the workplace, but turnover is on the rise mainly due to a long-term trend towards more job mobility (Economist Intelligence Unit, 2010). Overall, Japan is facing a shortage in many areas of their health care workforce, and an even higher shortage of obstetricians/gynecologists and pediatricians (Koike et al., 2009, p. 248). <span style="display: block; font-family: 'Times New Roman',Times,serif; font-size: 12pt; text-align: justify;">There has been a considerable change in the career patterns of Japanese physicians in recent years. There is currently a trend occurring where more physicians are choosing to work in clinics. Physicians can often earn a higher income and have less stress by working in clinics. It is estimated that by the year 2016, the number of physicians working at clinics will be higher than the number working at hospitals. In 2004, there were 93,000 physicians working in clinics and by 2016 it is estimated to grow to 127,900, an increase of 37.6% (Koike et al., 2009, p. 246). <span style="display: block; font-family: 'Times New Roman',Times,serif; font-size: 12pt; text-align: justify;">Japan is also dealing with a shortage of medical personnel to care for the elderly. This is mainly due to the increasing proportion of elderly people and their need for care at nursing home facilities and private home settings. Due to the increased demand, professional caregivers who would normally only assist in household tasks such as cleaning, laundry, and bathing are now having to perform various medical care-related tasks as part of their duties. This is occurring more often in nursing homes at night due to the nursing shortage (Imaiso, Konishi, & Kamata, 2009, p. 59). <span style="font-family: 'Times New Roman',Times,serif; font-size: 12pt;">__ **//Facilities//** __ <span style="display: block; font-family: 'Times New Roman',Times,serif; font-size: 130%; text-align: justify;"><span style="font-family: 'Times New Roman',Times,serif; font-size: 12pt;">Japan is known for its well-equipped medical facilities and even the clinics and rural hospitals are well-equipped as well. As more physicians are choosing to work at clinics and with the advancement of medical technologies, clinics are able to provide more advanced services for the Japanese people. These services were previously only available to patients at hospitals (Koike, 2009, p. 248). Japan’s elderly population is exacerbating the resources in acute care facilities by having extended lengths of stay that can be three times as long compared to other countries such as the United States. These elders also prefer to use hospitals and emergency rooms as clinics for care for chronic conditions that would be less costly if managed in facilities such as nursing homes, community clinics, or private homes with they are properly equipped (Abraham, Nishihara, & Akiyama, 2011). <span style="display: block; font-family: 'Times New Roman',Times,serif; font-size: 130%; text-align: justify;"><span style="font-family: 'Times New Roman',Times,serif; font-size: 12pt;">In recent years, the number of people that require medical care in private homes or in nursing home facilities is increasing. Long-term insurance in Japan mainly focuses on in-home services. They have classified long-term care need into six classifications. As the needs of a patient increases through these six levels, they can then switch to an in-facility location such as a nursing home (Imaiso, Konishi, & Kamata, 2009, p. 60). Japan is also suffering from a shortage of child delivery facilities due to their shortage of OB/GYN practitioners. <span style="font-family: 'Times New Roman',Times,serif; font-size: 12pt;">__ **//Commodities and T//****//echnology//** __ <span style="display: block; font-family: 'Times New Roman',Times,serif; font-size: 130%; text-align: justify;"><span style="font-family: 'Times New Roman',Times,serif; font-size: 12pt;">Healthcare reform as part of the economic recovery plan in Japan is focusing its efforts on the use of healthcare information technology (HIT). The most recent goals put into place by the Japanese government regarding HIT can be found in these two policy documents: “i-Japan 2015”, and “A New Strategy in Information and Communications Technology.” They believe that by increasing the capabilities of information sharing across the continuum of care, it will ultimately improve overall quality and help in defraying costs (Abraham et al., 2011). The following is a list of the main goals that the healthcare reform strategy plans to meet by 2015: (1) patient-centric regional networks of medical institutions with electronic medical record systems in place; (2) a nation-wide on-line insurance claim system that works in conjunction with anonymized health data which supports epidemiological analysis and evidence-based medicine; (3) patient-controlled medical record database available for lifelong care; (4) promotion of distance medicine; and (5) integration of patient and administration information that will be available across medicine, elderly care, and health and welfare services, provided that they are each governed by separate national, community-based, or employer-based insurers (Abraham et al., 2011, p. 159). <span style="display: block; font-family: 'Times New Roman',Times,serif; font-size: 130%; text-align: justify;"><span style="font-family: 'Times New Roman',Times,serif; font-size: 12pt;">As HIT continues to be gradually implemented into the Japanese healthcare system, it is bringing both challenges and opportunities. HIT will help in increasing the quality of care and improve the communications among care providers and their patients. It will also help Japan in cutting costs, which will allow them to effectively handle the growing aging population and the demands on their healthcare system. As Japan moves forward, additional benefits can be achieved by an understanding that information is a necessity across all environments of care in order to ensure the best possible outcomes are achieved and that their costly inefficiencies are reduced (Abraham et al., 2011). <span style="color: #000080; font-family: 'Times New Roman',Times,serif; font-size: 12pt;">**Delivery of Health Services** <span style="display: block; font-family: 'Times New Roman',Times,serif; font-size: 12pt; text-align: justify;">The Japanese spend about half as much as Americans on health care expenses, but they live longer. Because they have one of the highest life expectancies in the world, their growing elderly population is causing a serious financial strain on their current system. Their national health care system (//kaihoken//) provides care where the government reimburses 70% of medical charges and patients cover the remaining 30% of costs (Murata et al., 2010, p. 1332). In the year 2000, Japan introduced a system called Long-Term Care Insurance System (LTCI or //Kaigo Hoken//) to deal with the accelerated aging of their society. Several studies point to various factors affecting access to healthcare for Japan’s elderly population. Although they have a universal health care system, access to health care is not assured equally to the elderly. A 2006 study showed income level (24.4% of respondents), distance to a healthcare facility (13.5%), and lack of transportation (12.6%) were the main reasons survey respondents did not seek out, or delayed their seeking medical care (Murata et al., 2010, p.1336). <span style="display: block; font-family: 'Times New Roman',Times,serif; font-size: 12pt; text-align: justify;">In addition to these socioeconomic barriers to healthcare access, a 2005 study looked at the Japanese concept of //sekentei//, which translates as social appearance in the eyes of others. In a culture where others feel they may be judged by how well they take care of their own elderly family members, //sekentei// may prevent families from using formal nursing services. Only 20% of respondents stated a willingness to use formal care versus those that believed they should take care of these family members themselves (Murayama, Taguchi, Ryu, Nagata, & Murashima, 2010). However, the rapid increase in Japan’s elderly population is forcing a change in this thought due to the rising costs and the shear number of this population. <span style="display: block; font-family: 'Times New Roman',Times,serif; font-size: 12pt; text-align: justify;">A 2011 article, reports an increasing short supply of space in nursing homes where 400,000 people are currently on waiting lists across Japan (Birt, 2011). The annual demand for these facilities has been increasing at a rate of around 2-3% per year, mainly due to longer waiting lists. It is also estimated that the long-term care expenditures for the elderly will increase rapidly and rise to around 3-4% of the GDP by the year 2050 (Olivares-Tirado, Tamiya, & Kashiwagi, 2011, p. 11). <span style="display: block; font-family: 'Times New Roman',Times,serif; font-size: 12pt; text-align: justify;">Overall quality can be a problem with their current system as well as there are very few doctors relative to their population. These shortages are more severe in rural areas and for certain specialties. Some of these shortages are due to the country’s low birth rate, low salaries for doctors, and long work hours. Although a doctor can usually see patients within the same day, they may have to wait hours for a 3-minute consultation. There is also a shortage of emergency care as there is an abundance of smaller clinics compared to big hospitals since doctors prefer working at these smaller clinics where they are able to work less hours and earn more. The Japanese are only a fourth as likely to suffer a heart attack as the Americans or French, but twice as likely to actually die if they have one (The Economist, 2011). Overall, Japan’s health care system has relatively low health care expenditures, long length of stays, large numbers of hospital beds, and small numbers of doctors and nurses compared to other developed countries. <span style="color: #000080; font-family: 'Times New Roman',Times,serif; font-size: 12pt;">**Prospects for the Future:** <span style="display: block; font-family: 'Times New Roman',Times,serif; font-size: 12pt; text-align: justify;">The Japanese healthcare system has worked very well but there are still many issues that need to be addressed. The current system utilizes the fee-for-service payment scheme. This payment system incentivizes healthcare providers to see as many patients as possible with quality issues not addressed at the patient level. Patients wait a long period before being seen and when they are seen, it is only for about 3 minutes (Imai, 2002). The quality of medical care suffers under this payment system. The MHLW and the Cabinet are working on setting up new payment schemes, such as prospective payment systems that utilize diagnosis related groups that will address this issue. <span style="display: block; font-family: 'Times New Roman',Times,serif; font-size: 12pt; text-align: justify;">Healthcare providers in the current healthcare system can prescribe and dispense pharmaceutical products. This leads to overutilization of drugs that in turn has led to the rising healthcare costs in Japan (Imai, 2002). This is an issue that will be addressed by MHLW and the Cabinet. <span style="display: block; font-family: 'Times New Roman',Times,serif; font-size: 130%; text-align: justify;"><span style="font-family: 'Times New Roman',Times,serif; font-size: 12pt;">The economic conditions that have haunted Japan have led to a healthcare system that is in financial crisis. The above-mentioned health insurance programs are increasingly having a hard time financing the Medical Care system for the elderly (Imai, 2002). MHLW and the Cabinet are seeking ways to improve the current system that will continue to face increasing health care costs due to the increasing aging population in Japan. <span style="color: #000080; display: block; font-family: 'Times New Roman',Times,serif; font-size: 130%; text-align: justify;"><span style="color: #000000; font-family: 'Times New Roman',Times,serif; font-size: 12pt;">**B. 3 Key Areas for Improvement:**
 * **The Society-Managed Health Insurance (SMHI**): All individuals and their dependents who work for large companies are enrolled in SMHI. Approximately 23.6% of Japan’s population is enrolled in this plan. SMHI is funded through premiums that are deducted from payrolls and thru co-payments.
 * **The Japan Health Insurance Association (JHIA):** Small company employees and their dependents and those who are self-employed are enrolled in. 27% of the Japanese population is enrolled in JHIA and is funded through premiums and co-payments.
 * **The Mutual Aid Society** **(MAS):** MAS is for civil servants such as police officers, seamen, and private school teachers. Only 7% of the population is enrolled in MAS: it is funded by premiums and co-payments.
 * **The National Health Insurance (NHI):** All other Japanese citizens who are not covered by SMHI, JHIA, or MAS are enrolled in a regional based national health insurance program administered by prefectures and municipalities. 27.9% of the population is enrolled in NHI and is funded by government subsidies and co-payments.
 * **The Medical Care System for the Elderly (MCSE)****:** MCSE is for individuals who are over the age of 75. It is funded by government subsidies, the other health insurance schemes, and co-payments by patients.

<span style="color: #000080; font-family: 'Times New Roman',Times,serif; font-size: 12pt;">**1) Elderly Population**
<span style="display: block; font-family: 'Times New Roman',Times,serif; font-size: 130%; text-align: justify;"><span style="font-family: 'Times New Roman',Times,serif; font-size: 12pt;">The financial health of the healthcare system in Japan is in crisis. One of the factors that contribute to this is the rising elderly population (see Figure 2). The care of elderly is five times higher for them than for the rest of the population (Imai, 2002). The Medical System for the Elderly is funded by the rest of the health insurance schemes, which in turn causes those schemes, prefectures, and municipalities to run deficits jeopardizing the entire universal health system. Another contributing factor to the increasing healthcare costs stems from the fact that providers are paid by the fee-for-service payment scheme. This increases the length-of-stay of elderly patients who utilize hospital beds as nursing home care and has been termed “//social hospitalization”.// Although long-term care insurance has been introduced, many hospital providers up-code their elderly patients to keep at the hospital for long periods due to this type of medical service being very profitable. Along with this problem, many of the providers of care for the elderly are the children of the elderly whom are usually older as well. The MHLW estimated that half of the family members who cared for elderly individuals were 60 years or older with 25% of them being 70 years or older (Imai, 2002).

<span style="color: #000080; font-family: 'Times New Roman',Times,serif; font-size: 12pt;">**2) Declining Fertility Rate**
<span style="font-family: 'Times New Roman',Times,serif; font-size: 12pt;">Japan’s Fertility rate is currently at a record low. It is estimated that Japan will shrink from 127.77 million people in 2007 to only around 95.15 million people by the year 2050. In Japan, men are expected to commit very long hours at work and only around 0.5 percent take paternity leave. The corporate and social norms for men make it difficult for women to keep a career with almost no support from their husbands after childbirth. More than 30 percent of women in Japan over the age of 30 are unmarried. It is no longer an attractive lifestyle choice for many Japanese women to choose to be a housewife raising babies while their husbands are absent due to a “lifetime commitment” to their corporations they work for. The main issue with this declining fertility rate is that the pension system in Japan is one in which the present generation of workers contribute to a common pool, and this money is used to pay the benefits of the current retirees. In the year 2000, there were 3.9 active workers that supported a retiree. In 2010, there were less than 3, and by 2025, it is estimated that there will only be 2 workers for every retiree. Because it is obvious to the younger workers that their pension system is in financial trouble, many are refusing to pay their premiums as they fear that the system will be insolvent by the time they retire. If this trend continues, Japan will have to deal with tremendous economic and age-related political problems due to their declining fertility rate (Lam, 2009). <span style="color: #000080; font-family: 'Times New Roman',Times,serif; font-size: 12pt;">**3) Health Issues Related to the Recent Earthquake, Tsunami, and Nuclear Disaster** <span style="font-family: 'Times New Roman',Times,serif; font-size: 12pt;">On March 11 of this year, a devastating 9.0 Earthquake struck offshore of Japan’s northeastern coast. The earthquake created a massive tsunami and also a nuclear crisis at their Fukushima Daiichi power plant. The World Bank estimates that the total damage caused by these events to run as high as $235 billion (World Bank, 2011). Japan is the third-largest economy in the world, and this triple disaster will not only affect Japan, it will severely impact Asia and the global economy for many years to come. There are many crucial ingredients that Japan exports into the global economy including: electronics, raw materials for making semiconductors, and they also supply 8% of the world’s steel (Yew, 2011). The nuclear meltdown occurred mostly due to the tsunami that followed the earthquake when the waves created a 14-meter high wall of water that ending up washing away tanks that held diesel fuel for their backup generators and it eliminated electricity that ran the pumps which provided cooling water to maintain the temperature of its reactors. There were unknown amounts of cesium, radioactive iodine, and plutonium which are only a few of the more than 700 by-products of uranium fission that were exposed to the environment, and are expected to end up in the food chain over time. Unfortunately, it may be years before they will be able to fully understand the health and economic related effects of the radiation exposure. Due to previous effects from past nuclear disasters, it is expected that there will be a higher number of certain cancers in the exposed populations in the upcoming years (Biello, 2011). Due to this recent catastrophic event, the long debates about the safety and health risks due to potential radiation exposure have certainly been re-launched concerning all nuclear power plants around the world. <span style="color: #000000; font-family: 'Times New Roman',Times,serif; font-size: 12pt;">**C. Project for health reform:** <span style="color: #000080; font-family: 'Times New Roman',Times,serif; font-size: 12pt;">**Elderly Population** <span style="font-family: 'Times New Roman',Times,serif; font-size: 12pt;">Although the three key areas for improvement listed above are all very important problems that Japan will need to address for many years, the most pressing issue that will be the objective of this grant project will be the strain to Japan’s health care system due to the growing elderly population. This one issue alone has the potential of forcing Japan to go from the 3rd largest economy in the world, to extreme economic decline and a possibility of an erosion of their international influence. With a shrinking birthrate, the elderly population of Japan is currently on track to hit 40% of the population by the year 2050 (Jackson & Nakashima, 2008). With the change in demographics, and fewer younger workers helping to pay into the nationally supported health care system where payment obligations shrink with age, this shift will present a serious cost impact if not accounted for. Compounding the issue is a growing trend in utilization of adult care facilities. Where previous generations took care of their elderly relatives inside their homes, changing family and marriage dynamics make this no longer the case. Additionally, not only is utilization on the rise, but longer length of stays within care facilities is also presenting cost ramifications. This issue must be addressed with long-term plans to address these issues and provide for sustainability within the country’s health care system. <span style="font-family: 'Times New Roman',Times,serif; font-size: 12pt;">Abraham, C., Nishihara, E., & Akiyama, M. (2011). Transforming healthcare with information technology in Japan: A review of policy, people, and progress. //International Journal of Medical Informatics//, 80(3), 157-170. Retrieved October 12, 2011 from EBSCO//host// database.
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<span style="font-family: 'Times New Roman',Times,serif; font-size: 12pt;">Economist Intelligence Unit. (2010). Human resources. //Country Commerce. Japan//, 30-40. Retrieved October 4, 2011 from EBSCO//host// database.

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<span style="font-family: 'Times New Roman',Times,serif; font-size: 12pt;">The World Bank. (2011). The recent eathquake and tsunami in Japan: implications for EastAsia. Retrieved October 23, 2011 from http://siteresources.worldbank.org/INTEAPHALFYEARLYUPDATE/Resources/5501921300567391916/EAP_Update_March2011_japan.pdf <span style="font-family: 'Times New Roman',Times,serif; font-size: 130%;">World Health Organization (WHO). (2011). Japan statistics. Retrieved October 18, 2011 from <span style="display: block; font-family: 'Times New Roman',Times,serif; font-size: 130%; text-align: left;">http://www.who.int/countries/jpn/en/ <span style="font-family: 'Times New Roman',Times,serif; font-size: 12pt;">Yew, L. (2011). Under extreme stress: Japan's dignity and grace. //Forbes//, 187(8), 18. Retrieved October 25, 2011 from EBSCO//host// database.