NIRA Policy Review

Edited by Motoshige Itoh 2013.8

No.61

Revitalizing Medical Care:
Searching for Directions
Is Japan’s system of medical care sustainable in the face of an aging society? While various policy menus havebeen formulated to deal with the issues, little progress has been made in systemic reform, and a sense of crisis
is widespread. The experts interviewed for this issue of the NIRA Policy Review offer suggestions – we must
respect the right of self-determination for patients, and we must find ways of moving beyond an excessive
dependence on consultations with physicians. The necessities for rendering the status of medical care visible
through the use of data and for creating mechanisms for the provision of medical care based on needs are also
indicated.

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A Reform Strategy is Essential
Motoshige Itoh

President, National Institute for Research Advancement (NIRA)□ Expert Opinions □The Future of Medicine: What are the Essential Reforms?
Making the status of medical andnursing care in Japanʼs regions visible

Overcoming an excessive dependence
on medical treatment

Professor, Tokyo Medical and Dental University

Doctor/Representative, Sasaeru Iryo Kenkyujo (NPO)

Koichi Kawabuchi

Tomohiko Murakami

Uniform medical beneﬁts are a limitation

Digitalize medical data using a uniﬁed method

Professor, Faculty of Policy Management, Keio University

Professor, School of Medicine,
University of Occupational and Environmental Health

Ichiro Innami

Why donʼt doctors lose their jobs?

Masahiro Kami

Professor, the Institute of Medical Science, the University of Tokyo

Shinya Matsuda

Policy Review

NIRA Policy Review No.61

A Reform Strategy is Essential

The limitation represented by
uniform medical beneﬁts
Professor Innami points out the importance of “the right ofpatients to choose and determine their method of treatment forthemselves.” Japan’ s present medical system, bound by uniform
regulations, is distorting the nature of medical treatment.
To take as an example life-prolonging treatments at the end oflife, an area which will increase in importance in the future,
Professor Innami believes that no restrictions, based on age orother factors, should be applied by the government in this area.
But while the right of patients to such treatment should berecognized, the treatment “is the choice of the individual, andtherefore the costs involved should presumably be borne by theindividual.” The responsibility of the government “is to provide
patients with adequate information and to educate themregarding their choices.”
Uniform medical benefits may weaken the desire to exercise
choice. Clearly what is needed is not a system of medicine
bound by regulation and management, but the strengthening of
mechanisms to enable people to be more actively and flexibly
involved in the choice of medical treatment and in maintaining
their own health.
D r. M u r a k a m i a rg u e s f r o m t h e p e r s p e c t i v e o f t h e“socialization of medicine.” This is a concept focusing on hometreatment and visiting nursing care, the importance of which
many experts point out. Active efforts will be necessary: As Dr.
Murakami indicates, “medical care should not be exclusively
reliant on physicians,” meaning that we should open medicine,“previously confined in hospitals, to the wider regional
community.” Dr. Murakami further states that “[t]he presence ofaware, well-informed and independent patients will involveother members of the regional community and bring them into
proximity,” which “will also link up with community-building
initiatives involving the residents of regional areas.” This visionof the future of medical treatment in regional communities has
numerous points in common with NIRA’ s proposal of theconcentration of medical care in downtown areas.
Offering freedom of choice and more strongly reflecting theautonomous desires of patients in actual medical practice meansdemanding greater personal responsibility from physicians. As
Professor Kami asks, “Why don’t doctors lose their jobs?” Thisis a consequence of leaving unremedied a situation in which
Japan’ s number of physicians is conspicuously low among theadvanced nations. Professor Kami points out that “Increasing the
supply of medical personnel by liberalizing the establishment ofschools of medicine, and increasing the quality of medical
treatment by means of competition: If these initiatives were
promoted, physicians unable to provide the requisite quality
would lose their jobs.”
This is only natural in other areas of activity, but it does nothold in the world of medicine. However, now is the time for a
fundamental rethinking of the concept of “rationing” which has
held sway in Japan’ s medical system to date.

➡

Motoshige Itoh President, National Institute for Research Advancement (NIRA)

One thing that the experts interviewed for this issue of the
NIRA Policy Review have in common is a strong sense of crisis
in relation to medical care in Japan. Many people no doubt feelthat Japan’ s medical system is facing a severe situation, but thegravity of the problems in the system is brought home to us all
the more when explicitly pointed out by experts.
“Japan’ s population is both aging and declining … It is
impossible to optimistically assume that the existing system will
be able to hold up without change” (Professor Ichiro Innami).
Japan’ s public insurance system has “deteriorated to the extent
that it is necessary to balance the books by indebting later
generations. We no longer have time to allow the interested
parties to engage in theoretical debates” (Professor Koichi
Kawabuchi). “These oddities result from the fact that Japan does
not have a mechanism in place for the provision of medical
treatment suited to patients’ needs … [There is] a sense of
patronage and isolation from the public” (Professor MasahiroKami). “ … emotive arguments and medical necessities should
not be mixed together. We must not be swayed by our emotions
while building up debts for our children, grandchildren and later
generations” (Dr. Tomohiko Murakami).
The government is also continuing to engage in discussions
from a variety of perspectives regarding the reform of the
medical system. However, the scope of these discussions islimited to a narrow range of fields due to political interests. We
face a situation in which discussion itself is taboo. Unfortunately,
therefore, discussion of bold reforms is not allowed. However, if
we are to resolve the serious structural problems plaguing Japan’s
medical system, we have no option but to implement bold andfar-reaching reforms.
Towards this end, it will first be important for experts todiscuss bold reform proposals in public forums. The reform
proposals emerging from these discussions should then be
announced publicly, to ensure that the public shares the sense ofcrisis and an awareness of the direction that reforms should take.
The day when it will be essential to pursue such bold reforms in
the political arena, and in the arena of government
policy-making, is coming in the near future.

Correcting the allocation of medical resources
by making the status of medical treatment visible
Medical resources are limited. But at the same time, the agingof Japan’ s population will continue to increase the demands
placed upon those resources. The importance of ensuring anappropriate allocation of medical resources will therefore only
increase. The reason that so many have a sense of crisis inrelation to the medical system is because they are aware that the
distortion in the allocation of medical resources is becoming
extreme.
In order to correct the allocation of medical resources, first it
is necessary to understand the current status of medical
treatment. In the words of Professor Kawabuchi, “it will benecessary to collect data from each administrative unit
throughout the country, subject it to quantitative analysis, and onthat basis design systems suited to the characteristics ofindividual regions.” By “making the status of medical andnursing care in Japan’ s regional areas more visible,” we cansucceed in “inspiring action by involved parties and regional
residents.” Realizing increased visibility in the medical system isa means of ensuring an accurate recognition of the problems, andat the same time of sharing this recognition, creating conviction,and promoting decisions.
Professor Shinya Matsuda is one of the experts who seek toactualize methods of realizing this visibility. As he indicates,“some local administrations are creating databases ofpatients’ medical receipts for the purpose of analysis.” The useo f s u c h d a t a “ i s e x t r e m e l y e ff e c t i v e i n e n a b l i n g a n
understanding of differences in the structure of injuries anddiseases and the balance of supply and demand between
regions,” and it can help “to facilitate judgments regarding, forexample, the transfer of functions to specific hospitals or
physicians, and enable the government and local
administrations to more effectively guide hospitals andphysicians by means of policy measures.”
The method recommended by Professor Matsuda has also
been taken up by the Council on Economic and Fiscal Policy,
where it has attracted considerable interest. This is because themethod renders the system visible at a comparatively low cost,by creating databases of patients’ receipts. However, as Professor
Matsuda informs us, it will be essential to “use an integrated
method of databasing receipts throughout the country,” in orderto enable the data to be efficiently analyzed, for example byconducting comparisons between different administrative units.
The government already recognizes the importance of making
the status of medical care visible. The early adoption of a method
such as that recommended by Professor Matsuda, which can be
introduced at low cost, could be expected to act as a stimulant
towards the realization of an appropriate allocation of medical
resources.
➡

A shared sense of crisis

We must remove the taboo from bold discussion
Japan’ s population is aging rapidly. The social situation in five
years’ time or ten years’ time may be entirely different to today’ s.
This will not simply be a change in the Japanese economy as awhole. Changes will become manifest in a variety of forms, forexample as differences in major cities and regional cities.
If the reform of Japan’ s social security system continues at its
present pace, the situation will be severe in five or ten
years’ time. All experts giving consideration to the situation no
doubt feel this way, and the interviewees in this issue of the
Policy Review are no exception. Nevertheless, reforms arelagging behind. If this situation continues, and we experience a
breakdown in medical finances in the near future, it is theprovision of medical treatment which will receive the mostsignificant impact. We must not let this happen.
The public must become more aware of the gravity andurgency of the problems and participate more actively in
discussions that seek bold solutions. But it is not just discussionthat we need. Viable reforms should also be put into effect assoon as possible. Reforms such as rendering the status of
medical treatment visible can be effected immediately, andpushing ahead with reforms of this type will speed up the reform
process as a whole. What is necessary “is to devise feasible
solutions as quickly as possible” (Professor Kawabuchi).
The reform of Japan’ s medical system cannot be discussed
without consideration of the nation’ s public finances. We need
only imagine the state of the provision of medical treatment incountries experiencing financial crises, such as Greece andSpain, to realize that it is essential to prevent this situation fromoccurring in Japan.
Unless we build a sound medical system, it will be impossible
to maintain the soundness of Japanese society as a whole. And if
the Japanese economy experiences a crisis, we will face thedanger of a collapse in the nation’ s medical system. Reform of
the system based on a clear grasp of the big picture will beessential to avoiding this scenario. We must draw up a reform
strategy that will see us proceeding steadily with reforms
commencing with the most immediately viable, expanding thescope of reform, and actively engaging the public as a whole inreform efforts. I believe that the interviews conducted for thisissue of the Policy Review provide us with valuable suggestions■
towards the formulation of such a reform strategy.

Motoshige Itoh:
President, National Institute for Research Advancement (NIRA), 2006 – present.
Professor, Graduate School of Economics, The University of Tokyo.

NIRA Policy Review No.61

Why don't doctors lose their jobs?

Expert Opinions

Masahiro Kami

The Future of Medicine :What are the Essential Reforms?

Professor, the Institute of Medical Science, the University of Tokyo

As Japanʼs population ages, the danger of a collapse in the nationʼs system of medical care increases.
What vision of medical care should we aim towards, and what initiatives will be necessary for its realization?
We sought opinions from specialists in the ﬁeld of medical policy and experts at the front lines of medicine.

Interviewer: Nao Toyoda, NIRA Senior Researcher
Period of interviews: April - May, 2013

Making the status of medical andnursing care in Japan's regions visible
Koichi Kawabuchi

Uniform medical beneﬁts are a limitation

Professor, Tokyo Medical and Dental University

Professor, Faculty of Policy Management, Keio University

I believe that medical care should be fostered as a growth area,
but when one considers that the greater part of medical expenses
represent a public burden, it is clear that fiscal reconstruction is
also essential. Japan’s medical and public insurance systems,
rooted in the spirit of mutual assistance fostered by the nation’s
history and culture, have deteriorated to the extent that it is necessary to balance the books by indebting later generations. We nolonger have time to allow the interested parties to engage intheoretical debates. Our only choice is to devise feasible
solutions as quickly as possible.
In the past, the bureaucracy has taken the lead in reforms, but
the imposition of a uniform system throughout the country nolonger accords with the realities of individual regions. Given this,it will be necessary to collect data from each administrative unit
throughout the country, subject it to quantitative analysis, and onthat basis design systems suited to the characteristics ofindividual regions. For example, it would be possible to render
the status of emergency medical treatment visible by having
access to consistent data from the time that emergency transport
arrived at the scene to the time that the patient was discharged
from hospital. Taking the specificities of the particular region
into consideration, we would see more clearly what types ofimprovements need to be made, which areas they will need to bemade in, and who will need to work towards their realization.
Many experts have made proposals concerning reforms in the
medical system. However, the status quo has not changed. Now
is the time to exploit the potential of data tools such as ICT and
big data and speed up the process of making the status of medical
and nursing care in Japan’s regional areas more visible, with theaim of inspiring action by involved parties and regional residents.
■

The most important right in medical care is the right of patients
to choose and determine their method of treatment for themselves. No matter what a person’s state, that person’s right tochoose the course of their treatment based on their own value
system (i.e., create a living will) should be enshrined in law. If, in
the terminal stages of an illness, a patient desires life-prolonging
treatment, that desire should be accepted, and should not be
restricted by the government. The duty of the government is toprovide patients with adequate information and to educate themregarding their choices. However, the prolonging of life beyond
the provision of life-saving treatment is the choice of theindividual, and therefore the costs involved should presumably
be borne by the individual.
Medical care has two functions: To provide life-saving
treatment, and to assist the patient in being autonomous. Of these,
the former should be guaranteed by priority over the latter. The
current uniform rate of 70% subsidization of medical treatment,
and the scope of medical benefits, should be reexamined. Options
that might be considered would be to increase the rate of subsidization of life-saving treatment, for example emergency treatment
or cancer treatment, to 80-90%, while excluding massage andpainkillers, for example, from coverage, or increasing the burdenof cost on the individual. The adjustment of insurance finances
should be carried out in the area of medical care that assists in therealization of autonomy; financial restrictions should not be
imposed on the domain of life-saving medicine.
The purpose of medical policy is to provide the public withhigh-quality medical care. There should be no difference inbenefits based on age or income. Japan’s population is both aging
and declining. At the same time, new medical technologies willcontinue to be developed, and will be introduced to the healthinsurance system. It is impossible to optimistically assume thatthe existing system will be able to hold up without change. ■Ichiro Innami

Why is it that a world-leading country like Japan suffers froma problem of drug lag? Or that the number of physicians per
population in Kanagawa Prefecture is similar to the figure inTurkey, a middle income country? These oddities result from thefact that Japan does not have a mechanism in place for the provision of medical treatment suited to patients’ needs.
Prices for medical treatment are managed by a central committee, producing a sense of patronage and isolation from the public.
The mode of determination of prices should be the bedrock of
economic activity. The prices of the drugs and medical equipment purchased by medical institutions should be liberalized. In
addition, while insurance covers continuous treatment, there
should be free competition in the area of incidental expenses suchas treatments requiring a single visit.
Further, because schools of medicine are unevenly allocated towest Japan, there is a shortage of medical personnel in the Tokyo
area, where demand is high, and the medical system is breaking
down. Increasing the supply of medical personnel by liberalizing
the establishment of schools of medicine, and increasing thequality of medical treatment by means of competition: If these
initiatives were promoted, physicians unable to provide therequisite quality would lose their jobs.
At present, the evolution of advanced medicine is impeded inJapan because prices and the number of medical personnel are
centrally administered. The level of Japan’s private practice
medicine is world-class. What the country needs is a comprehensive mechanism that allows people to pay for the treatment thatthey wish to receive, thus circulating resources to other fields andincreasing the overall technological level and level of quality. ■Overcoming an excessive dependence on
medical treatment
Tomohiko Murakami
Doctor/Representative, Sasaeru Iryo Kenkyujo (NPO)Offering patients the ability to receive any number of consultations with a physician simply because they feel anxious about
their state of health is excessive medical treatment. Some people
will say that this is an unsympathetic attitude, but emotive
arguments and medical necessities should not be mixed together.
We must not be swayed by our emotions while building up debts
for our children, grandchildren and later generations. The medical system is a system of mutual assistance. It should be provided
to people who strictly observe the rules, but the operation of thesystem has been overly lax up to date. There is no necessity forthe public insurance system to look after people who are simply
feeling anxious or who are neglectful of their own health.
In the future, it will be necessary to maintain the medical
system amid a situation of limited resources. Home treatment andvisiting nursing care will be able to contribute to controlling
medical costs. We must make the transition to a system in which
there is cooperation between a variety of roles, including nurses,
caregivers, dental hygienists, pharmacists and volunteers, and inwhich doctors provide support for these roles by visiting thepatient as the last recourse. Medical care should not be exclusively reliant on physicians. Opening medicine, previously
confined in hospitals, to the wider regional community, willallow a division of roles, and will resolve the shortage of physicians. I call this the “socialization of medicine.”
The presence of aware, well-informed and independentpatients will involve other members of the regional communityand bring them into proximity. The transition to this type of“supportive medicine” will also link up with communitybuilding initiatives involving the residents of regional areas, andwill thus be effective in activating regional economies and creating employment. ■Digitalize medical data using a uniﬁed
methodShinya Matsuda

Professor, School of Medicine, University of Occupational andEnvironmental Health
The major problem is the imbalanced allocation of medical
resources (doctors, medical institutions, etc.) among Japan’s
regions. In Japan, doctors are free to establish businesses, and it
is not possible to compel private hospitals to transfer theirfunctions. It is therefore essential to develop a corrective mechanism enabling balanced allocation of doctors and hospitals basedon their own judgment.
The concept of Diagnosis Procedure Combination (DPC) is
effective in such cases. DPC is a method which classifies patients
based on a combination of the category of their condition and theassociated medical procedures. Some local administrations are
creating databases of patients’ medical receipts based on theseclassifications for the purpose of analysis. This is extremely
effective in enabling an understanding of differences in the structure of injuries and diseases and the balance of supply anddemand between regions. The use of data of this type will facilitate judgments regarding, for example, the transfer of functions
to specific hospitals or physicians, and enable the government
and local administrations to more effectively guide hospitals andphysicians by means of policy measures.
The immediate issue is to use an integrated method of databasing receipts throughout the country. The use of different methods
by prefectures, medical institutions, and health insurance societies will make it difficult to grasp the big picture and to conductmutual comparisons. Cooperation between the government andprivate entities in realizing a shared databasing method would
simplify a variety of analyses and promote the reflection of theresults in medical care plans. Japan’s medical data would becomea significant intellectual property, without parallel anywhere
else. ■

This is a translation of a paper originally published in Japanese. NIRA bears
full responsibility for the translation presented here.

What’s NIRA?
The National Institute for Research Advancement (NIRA) is an independent, private-sector research
institute which defines urgent policy issues and formulates bold and timely policy proposals, seeking tocontribute to the revitalization and further development of Japanese society and the Japanese economy.
Utilizing a network of scholars, researchers, and specialists in a wide range of subjects, NIRA works forthe public benefit from a fair and neutral perspective, attempting to reinvigorate policy debate and contributeto the process of policy formation in Japan. The institute focuses on domestic social and economic policy,
international relations, and regional issues in Japan as its principal areas of research.
Established in 1974 as a government-authorized independent research institution, NIRA became anincorporated foundation in 2007, and since February 2011 has been recognized as a Public Interest
Incorporated Foundation.

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