The Prospects for Reform of the Japanese Healthcare System

Abstract

It is widely recognised that the Japanese healthcare system has been ranked as one of the best in the world because of its excellent efficiency and equity. The longevity and low infant mortality of the Japanese population have been achieved with a relatively low ratio of health expenditure to gross domestic product. All Japanese are covered by universal medical care insurance and all are provided with completely free access to the same medical care.

Nevertheless, it should be pointed out that the medical care service is not as good as it looks. Owing to lack of competition between both hospitals and powerless insurers — the outcome of too many regulations — there is only a small incentive to improve the efficiency and quality of medical service. Furthermore, because of Japan’s rapidly aging society and low birth rate, together with the long depression the economy has experienced, it is very difficult to maintain the ‘pay-as-you-go’ health system.

For health system reform, our proposals are as follows: deregulating health markets, including pharmaceutical markets; strengthening the role of insurers; introducing information technology; and restructuring the healthcare of the elderly. We are expecting the new cabinet, which enjoys much popularity, to have the courage to initiate health reform along these lines, in spite of opposition from powerful interest groups, bureaucrats, and even members of ruling parties.