Universal Health Coverageand Japan’s Experience
Keizo Takemi

Member, House of Councillors, JapanChairman, Special Mission Committee on Global Health Strategy, LDP
JCIE Chair, Global Health Working Group for the 2016 G7 Summit

1Create and Promulgate a Future Visionfor Society
1. Evidence-based policy making
and goal setting
2. Lessons from Japan’s experience21. Historical Role of Abe Cabinet
1-1. Historical Role of Kishi & Ikeda Cabinet
1-1-2. Post-War Japan: growth strategy, tax
system and social security created a healthy
middle class3

1-1-3.Post-War Japan: growth strategy, tax system andsocial security created a healthy middle class

Expansion of a
Healthy Middle Class
Growth Strategy(income-doubling plan)

Social Security Net
ProgressiveTaxation(pension, unemploymentinsurance, public(incomeassistance etc.)
redistribution)

Universal
HealthCoverage

Decrease of the
Low-IncomePopulation (throughpublic assistance)

4

A Comprehensive Policy Package
to Expand the Middle Class in 1960s
 “Income Doubling Plan”（1960）: alleviating the dual structure of
the economy (producing income disparities) and ensuring social
stability as key challenges.
 Enhancing social security to overcome these key challenges.
Under high economic growth and with favorable demographic
dividend, the comprehensive policy package achieved income
redistribution and established a social safety net.
 The priority of the social security system shifted from poverty
alleviation to poverty prevention. This included the establishmentof Universal Health Coverage in 1961.
Main Elements of the Comprehensive Policy Package
Employment

The dissemination and embedding of a Japanese employment model(lifetime employment, seniority-based wages, low unemployment rate)
Support for the unemployed to achieve full employment

Healthcare

Universal Health Coverage, Universal Pension Coverage (1961)

Tax

Progressive Income Tax (maximum tax rate of 75％ <1961-1974>)

5

History of Public Health Insurance in Japan 1• 1922 Health Insurance Law (implemented in 1927).
• 1934 Revision of the Health Insurance Law.
• – Expansion to cover companies with five employees ormore• 1938 Establishment of the Ministry of Health andWelfare.
• National Health Insurance Law.
• 1941–45 World War II.
• 1958 Revision of the National Health Insurance Law.
• – 50 percent benefit provision for the insured.
Sources: White Paper on Health and Welfare 1998 Edition; Japan International
6Corporation of Welfare Services (1995).

History of Public Health Insurance in Japan 2•••••••••••••

1961 Universal Health Coverage.
1962 Establishment of the Social Insurance Agency.
1972 Revision of the Welfare Law for the Elderly (implemented in 1973).
– Free medical care for the elderly1973 Revision of the Health Insurance Law (so-called 1st year of the WelfareState).
– Improvement of the benefit level for families of the insured from 50
percent to 70 percent.
– Introduction of an upper ceiling for patients’ cost-sharing.
– National subsidy of 10 percent of health expenditure for governmentmanaged Health Insurance.
1982 Law of Health and Medical Services for the Elderly (implemented in1983).
1984 Revision of the Health Insurance Law.
– Ten percent cost-sharing by the insured.
– Relaxation of regulations on high-technology health care.
– Introduction of the health care program for retired persons.
Sources: White Paper on Health and Welfare 1998 Edition; Japan International
7
Corporation of Welfare Services (1995).

History of Public Health Insurance in Japan 3• 1985 Revision of the Medical Service Law.
• – Medical plan by prefecture.
• 1989 Ten-Year Strategy for the Promotion of Health and Welfare for theElderly (the so-called Gold Plan)• 1991 Revision of the Law of Health and Medical Services for the Elderly.
• – Visiting nurse care service for the elderly.
• – Increase in public funds for nursing care from 30 to 50 percent.
• 1992 Revision of the Medical Service Law.
• – Classification of hospitals by function: high-tech hospital, long-term carebeds.
• 1994 New Gold Plan.
• 1997 Revision of the Health Insurance Law.
• – Twenty percent cost-sharing by the insured.
• – Introduction of the patient charge on pharmaceutical costs for outpatientservices.
Sources: White Paper on Health and Welfare 1998 Edition; Japan International
8
Corporation of Welfare Services (1995).

1-1-4.Historical Trends in Japan’s GDP(Chart 1) Real GDP and GDP per Capita(in 1990 Geary-Khamis Dollar)

Billions of $GDP per capita (right)
Real GDP (left)Achievement ofUniversal Health Coverage (1961)(GDP $420bn; $4291 per capita)$ per capita

Income-Doubling Plan(1960)

1955

1960

1965

1970

1975

Source: Angus Maddison (2001) “The World Economy – A Millennial Perspective”

91980

1985

9

1-1-4. Trends in the first dividend in Japan, 1925-2025

Adopt UHC at the early stage of demographic dividend
10Population and Population Growth
in Japan (1920-2006)
140000

4.5

Universal healthinsurance wasachieved in 1961.

12000043.5

10000080000

Health Insurance
Law was enacted
in 1922.

32.5
260000Population (thousands)
Annual rate of growth (%)

1.5
40000
1200000.5001920 1925 1930 1935 1940 1945 1947 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2006

Source: Statistics Bureau, Ministry of Public Management, Home Affairs, Posts and Telecommunications11

1-1-5.Trends in life expectancy at birth,1900—2008

12

Source: Figure 1, What has made the population of Japan healthy?, Lancet Special Series on Japan12

Trends in the probability of death at age 15-60
years in Japan and selected countries during
1950-2008

1950

1960

1970

1980

1990

2000

2008

1950

1960

1970

Year

1980

1990

2000

2008

Year

13

Source: Figure 2, What has made the population of Japan healthy?, Lancet Special Series on Japan

13

14

1-1-6. Trends in Men’s Mortality due toStroke in Japan and Selected Countries

15

Source: Webfigure 4, What has made the population of Japan healthy?, Lancet Special Series on Japan15

Estimated Contributions of Explanatory Variables to Changes
in Mean Predicted SBP in Men between 1986 and 2002
based on data from the National Nutrition Survey, Japan, 1986–2002

Source: Bulletin of the WHO 2008;86:978-988.

1616

Trends in Japan’s Gini Coefficient and IncomeRedistribution(Columns denote the Gini coefficient <left>, lines denote the impact of income disparity improvement)

0.600

0.526

0.500

当初所得
Initial Gini
Coefficientの格差

Improvement by
再分配によincomeる改善度
redistribution

0.375

0.300

0.472
0.439

0.375
0.354

0.349
0.346

0.328

Redistribu再配分
tion rate

0.200

係数

0.100

12.6%

11.4%

0.381

16.5%

0.376

29.3%

26.4%
Gini
Coefficient
再分配
after redistribution

15.9%

0.387

0.361

0.338
0.314

0.314

0.365

0.381

23.5%

所得の格差

11.8%

40%

0.441

35%

0.364
0.344

45%

0.498

0.405

0.390

0.400

0.433

0.532

50%

17.0%

10.0%
7.8%
税による改善度

18.3%

30%
25%
20%

19.2%

15%
社会保障に
Improvementratebysocial security
よる改善度

Improvement
税による
rate
by tax
改善度

0.000

10%
5%
0%

1962 1967 1972 1975 1981 1987 1990 1993 1996 1999 2002 2005 2008
Notes: The in-kind benefits until 1999 were only healthcare services and after 2002 they include health care, long-term care, and child care services.
Source: Ministry of Health, Labour and Welfare “Survey of Income Redistribution”

17Middle Class Consciousness
Social Class Identification(percentage of respondents answering the question “which social class do you feel that you belong to?”)Upper Class

87.1

87.4

87.0

89.5

89.3

90.5

90.5

89.8

89.3

89.0

89.6

8.5

7.4

7.6

6.6

6.5

5.7

5.6

5.8

6.7

6.9

6.6

1964

1966

1968

1970

1972

1974

1976

1978

1980

1982

1984

Source: Cabinet Office “Survey of Public Opinion”

18

Middle ClassLower Class
N/A18

1-2. THE LIFECYCLE OF PUBLIC POLICY

191-2-1.Dynamism of Demographic Transition: Case of Japan
Japan’s population has hit the point at which it started to decline.
In 2060, the total population will fall below 90 million and the aging rate will be almost 40%.
Population:
10,000

Actual data

14000

Estimates as of 2012

127.3 million ※1

Proportion of working-age
population (WAP: 15-64 years)

11,662

12000

10000
62.1%
※1

8000

25.1%
※1

15-64 years old
6000

8,674

3,685

65 years and over

WAP rate
50.9%

3,464

Agingrate
39.9%

6,773

Proportion of 65 years of age orolder

4000

Total fertility rate(TFR)

2000

4,418

TFR
1.35

Below 14 years
1.43(2013)

0
1950

1960

1970

1980

1990

2000

2010 2013 2015

1,204

2025

791

2035

2045

2055

Source: Ministry of Internal Affairs and Communications (MIC), National Population Census, and Population Estimation; National Institute of Population and Social
Security Research, Population Projection for Japan (2012) : Estimated medians of live births and death (Oct. 1 for every year); Ministry of Health, Labor and Welfare,Population Survey Report20※1 Source: MIC, Population Estimation 2013

1-2-2. Trends in Life Expectancy and Healthy Life Expectancy in JapanMale2010

9.1years

2013

9.0 years
Female2010

12.7 years

2013

12.4 years
life expectancy

healthy life expectancy

21

1-3. ACTIVE HEALTHY AGEING

22

1-3-1. 21st Century System: Growth Strategy and Social
Security Reform for Active and Healthy Ageing

Economically and Socially Active
Healthy Ageing
Economic Growth
Strategy-

Monetary easing
Fiscal stimulus
Growth strategy

Reform for Sustainable
Social Security System-

Close the intergenerational
gapExpand healthy life
expectancy
Reduce dependency on
pensions with labor policy
for the elderly

Tax Reform-

Expanding the tax
base (increasingconsumption tax)
Revitalizing theeconomy (corporatetax cut)Decrease offinancial burdens
on the younger
generation

Population Policy-

Supporting women’slabor participation- Support for childbirthand child rearing- Promoting flexible
working practices
Keep the population at
100 million after 50 years

23

1-3-2. Society in Which All Citizens are Dynamically Engaged24

1-4. ASIA’S AGING POPULATION

25

1-4. The time required from aging rate 7% to 14%
France

1980

115

1865

Sweden

1975

85

1890

Australia

2011

73

1938

United States

1944

69

Canada1944

65

Hungary

1941

Spain

1947

United Kingdom

1930

Japan

South Korea
Sri Lanka
Thailand
Vietnam

1994

45

1992
1975

1970

1996

262054

60

1994

2026

26

2000

By projection

Singapore

2009

53

45

Kazakhstan
China

2013

2000

19

2019

2000

18

2018

2002

24

2026

2002

222024

2016

182034

India

2023

282051Indonesia

2025

252050

1850

1900

1950
Year

2000

2050

Note : The number of the left of the bar designated the year when the aging rate attained 7%; the number on the right of the bar designated the year whenthe aging rate attained 14%. The number in the middle of the bar designates the years required that the aging rate changed from 7% to 14%.
26
Source : Kinsella and Wan He (2009), for Kazakhstan, Vietnam, India and Indonesia calculated using UN (2015)

1-4-1. Proportion living independently,
alone or with the spouse
60 years or over (%)
MaleFemale

Germany

91.5

88.7

USA

76.8

73.8

Japan

51.5

46.9

China

39.7

34.1

Vietnam

29.8

26.8

Indonesia

24.1

24.1

Thailand

21.3

16.8

India

17.3

15.8

Sources : Japan by Population Census 2010, all other countries by “Population Ageing and Development 2012”,
27
United Nations, DESA, Population Division

1-4-2. Dependency ratio
Some AFPPD countries
110
100

Dependency ratio = Pop Aged 0-14+65～
Pop Aged 15-64
AFPPD

90

China

80

India

70

Japan

Indonesia
Philippines

60

VietnamThailand50

South Korea
Kazakhstan

40
301950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100

Source : United Nations, Department of Economic and Social Affairs, Population Division (2015). World Population
28
Prospects: The 2015 Revision, DVD Edition.

1-4-2. Dependency ratio
AFPPD region total
90807060

AFPPD

5040301950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100
Source : United Nations, Department of Economic and Social Affairs, Population Division (2015). World Population
29Prospects: The 2015 Revision, DVD Edition.

Lessons from Japan ①
 UHC is part of a comprehensive policy package
including economic growth and the establishment ofasocial safety net, contributing to income redistribution
and the stabilization of society and politics
 Once the health insurance system was established, thestakeholders became interest groups which would
hamper the reforms.
 In designing insurance systems, political risks for thefuture should be considered.

 It can be introduced at the economic level of around
US$4000 per capita
 LTCI should be introduced as early as possible, and it
should be aimed at increasing healthy elderly30Lessons from Japan ②• Health policy should not be designed separately fromother policies such as economic growth, labor, andsocial welfare.
• Countries need to design UHC based on a long-term
perspective of population cycles and demographic
change over 50 to 100 years.
 Adopting UHC early in the demographic dividend, andexpanding the financial pool as the population grows. At
the same time, based on the estimates of demographic
change, the way of sharing the financial burden and healthrisks across the generations should be adjusted.
31

1-5. ASIA HUMAN WELL-BEING INITIATIVE

32