• The Japanese model for cost containment

    My recent post on Japan drew quite a few skeptical comments, in addition to some supporting Japanese health care. Japan does indeed provide universal coverage through private plans at half the cost. Plus one of the very best life expectancies in the OECD.

    How? From the latest installment in The Lancet’s six-part series on the Japanese health system:

    Japan’s premier health accomplishment in the past 50 years is the achievement of good population health at low cost with increased equity between different population groups. Shibuya K, et al. Future of Japan’s system of good health at low cost with equity: beyond universal coverage. The Lancet 2011;378:1265-1273.

    Just look at the title of that article. US health policy can only dream about being so lucky. In the US we increasingly specify how care must be delivered:

    A concern about universal coverage is how to control health expenditures in a sustainable manner. Japan’s basic policy has been a combination of tight supply-side control for the conditions of payment with the fee schedule, with a laissez-faire approach to how services are delivered.

    Some of the comments claim “Japanese exceptionalism” often with cultural or genetic explanations. Another possibility is the Japanese produce health care more efficiently, like cars.

    Are they too frugal? Consider how they reimburse for drugs (WSJ) (h/t to Brad F):

    Part of the attraction: with Japan’s rapidly aging population—23% of which is 65 years or older, more than any developed country, according to data from the country’s health ministry—demand for health care is expected to grow substantially in coming years. Tokyo also has eased some of the barriers that used to frustrate foreign drug makers trying to introduce new medicines.

    Perhaps Tokyo’s most important move has been changing the way the national health plan reimburses for brand-name drugs. The government insurer has mandated that a branded drug’s price be cut every two years, usually by an average 4% to 7%, which industry officials say discourages the introduction of many new drugs. Last year, Japan started a pilot program to exempt certain innovative medicines from that requirement.

    Finally, remember Aaron’s famous cross-national comparison posts?  For technology access, Japan rated best in some categories and worst in others:

    • Any meaningful attempt to determine the extent to which culture and health system performance explain the differences in health outcomes should *begin* with a comparison of the metrics Japanese Americans and Japan.

      • Great question. Tavia Gordon considered the Japanese-American acculturation hypothesis to be an “untested argument” as of 1967: Gordon T. Further mortality experience among Japanese Americans. Public Health Rep. 1967; 82(11):973-984. The data shows difference between the US “white” population and immigrant Japanese Americans, but doesn’t establish causation.

        A later study looking at health of immigrant Asians and Pacific Islanders in the US found statistically significant support for both the immigrant selectivity and acculturation hypotheses. Frisbie WP, Cho Y, Hummer RA. Immigration and the health of Asian and Pacific Islander Adults in the United States. Am J Epidemiology 2001; 153: 372-380.

        I didn’t find a study that estimated what portion of overall Japanese health advantages would be lost in a hypothetical US cultural environment.

    • That’s a great answer – and I really appreciate you sharing the resources that you found that address that question.

      As an outsider to the field I find it puzzling to contrast the vast amounts of time and resources that have gone into compiling transnational comparisons of health system performance with the amount of time and effort that has gone into determine the extent to which those differences can actually be attributed to the things that doctors, hospitals, and public health agencies actually do.

      Even within the US – it’s not clear the extent to which factors completely outside the purview of anyone that gets paid to worry about public health determine costs and outcomes. Anyone who roams around the high-quality, low cost zone in the intermountain West and the Pacific Northwes tcan clearly see that there are profound cultural and other differences between these regions and the deep South, west Appalachia, or the decaying urban cores of the Rust-Belt that might make folks in these bits of the West live longer, healthier lives and generally cost less to look after than there peers elsewhere – but attempting to analyze the significance of these factors in the cost/outcome story doesn’t seem to be a significant priority.

      Ready, fire, aim is a less than optimal approach to marksmanship, and I don’t think it will work any better as a means to improving the performance of our health system. My hope is that well intentioned reforms will continue to try to distinguish causation from correlation a bit more before less circumspect folks in the lay population conclude that we could transplant the entire population of Alabama into Japan’s health system and instantly achieve the same level of outcomes relative to spending.

    • Typo correction – “well intentioned reformers”