Action 35. Health Insurance – Apply a Flat 30% Co-payment for Everyone, including the Elderly!

The universal health insurance system is one that Japan can be proud of. It is estimated, however, that national healthcare expenditures will increase on the scale of one trillion yen every year to reach 54 trillion yen in 2025. In a society with a low-growth economy and a decreasing population, maintaining the current level of welfare constitutes nothing less than the exploitation of future generations. To achieve a sustainable healthcare system, it is necessary to incorporate incentives into the system to reduce medical costs and maintain our collective health.

1. Apply a Flat 30% Co-payment!
At present, of the some 40 trillion yen we spend on healthcare, about 16 trillion yen is public spending. Ideally, it is desirable to have a health insurance system that is sustained by insurance premiums alone. The only way to realize this kind of system is to reform the current system in such a way as to prevent the excessive use by individuals of medical services. The user co-payment should be a flat 30%, regardless of age. Currently, while the medical costs of those aged 65+ account for just under 60% of the country’s total medical costs, the co-payment for those aged 70+ is only 10-20%.
Under the current system, due to the low co-payment for elderly people, finite medical resources are concentrated in geriatric medicine, with the result that medical costs increase. The co-payment rate for the elderly should be set initially at 20% and eventually increased to 30%, making it the same as that of the working-age population. This will help reduce the excessive dependence of elderly people on healthcare services.
2. Make the Use of Generics Mandatory!
Of our medical costs of some 40 trillion yen, about nine trillion is spent on drugs. Generics only account for about 40% of all the drugs used in Japan. If all the drugs used in Japan were replaced with generics, it is estimated that a total of 1.53 trillion yen would be saved. In France, the reimbursement amounts for some drugs are determined based on the prices of generics and patients are required to pay any excess themselves. This system should be adopted in Japan.
3. Adopt an Insurance Premium System based on the Amount of Healthcare Services Used!
With automobile insurance, if you have no accidents, you are moved up a class and your premium decreases the following year. If you have an accident, on the other hand, the premium increases. We therefore drive carefully so as to avoid accidents and maintain a low premium. For national health insurance, a similar incentive should be offered whereby if you claim a large amount of medical expenses your premium increases the following year and if you do not use any medical services the premium decreases. Such an incentive would be expected to help reduce medical expenditures.
4. Shift from Curative to Preventive and Health Investment-oriented Healthcare!
In today’s Japan, healthcare begins only after you become sick. This is because benefits are largely provided for the diagnosis and treatment of injury and illness. In other words, we have a system of troubleshooting-type care.
However, medical technology has advanced and healthcare has evolved into a tool for preventing disease and supporting good health. If we use such advanced technology to shift the focus of healthcare to disease prevention and investment in public health, it will be possible to halt the increase in national medical expenditures. In this context, it is necessary to offer incentives to medical institutions to promote disease prevention and health investment. Under the current Japanese health insurance scheme, the prices of medical services are calculated on a piecework basis, meaning that the more treatments offered to patients, the more money medical institutions can make. This creates a system whereby if medical institutions work hard to increase the number of healthy people and decrease the number of patients, their efforts will not be rewarded. This system should be changed into one where efforts by medical institutions to promote disease prevention and health investment are rewarded by payment for their services. This will give them an incentive to reduce the number of patients. More specifically, this incentive system may include payments for appropriate preventive care services as well as seminars and educational activities to raise public health awareness.