[\/et_pb_text][et_pb_text admin_label=”TEXT – BLOCK 0″ _builder_version=”4.21.0″ _module_preset=”default” custom_padding=”||1em||false|false” global_colors_info=”{}”]<\/p>\n
Japan contains its health care expenditures through a fee\u00a0schedule\u00a0that\u00a0sets\u00a0prices\u00a0and conditions of billing\u00a0every item listed. Doctor and hospital fees are revised biennially to nudge doctors to deliver services in line with policy goals. The prices of pharmaceuticals\u00a0and devices are reduced annually and provide the fiscal space to allow small increases in priority areas. The way fees and prices are revised in Japan may provide a model for other countries.<\/p>\n
[\/et_pb_text][et_pb_text admin_label=”TEXT – BLOCK 1 ” _builder_version=”4.21.0″ _module_preset=”default” custom_padding=”||1em||false|false” global_colors_info=”{}”]<\/p>\n
Based on their\u00a0professional code of ethics to provide the best for their patients, doctors prescribe medication, order tests, decide if and when patients are\u00a0admitted or discharged from hospitals. These decisions can have an inflationary effect on\u00a0health care expenditures.\u00a0Thus, a middle ground must be found between the\u00a0professional duty\u00a0to\u00a0provide the best care for patients\u00a0and the amount the government budgets for health care.\u00a0This challenge has led to long waiting lists\u00a0for publicly funded services which, in turn, has led to the development of privately\u00a0funded health services.\u00a0However, Japan<\/a> has managed to contain health expenditures to the amount the government has budgeted without waiting lists becoming a policy issue.<\/p>\n [\/et_pb_text][et_pb_text admin_label=”TEXT – BLOCK 2 ” _builder_version=”4.21.0″ _module_preset=”default” custom_padding=”||1em||false|false” global_colors_info=”{}”]<\/p>\n This has been achieved by applying the government fee schedule to cover not only doctor and hospital services, but also pharmaceuticals and devices.<\/p>\n<\/blockquote>\n Every year, pharmaceutical and device prices are lowered. Every two years, Japan revises the fee schedule to contain\u00a0costs and\u00a0to nudge\u00a0doctors\u00a0to provide services in line with policy goals. For example, to\u00a0meet the needs of a rapidly aging society\u00a0(people 65 and over currently comprise\u00a030% of Japan\u2019s population), Japan has introduced new fees such as for providing end-of-life care in the community and for primary care doctors to consult with care managers in long-term care.\u00a0Although hospital doctors\u00a0are paid\u00a0fixed salaries, most aspire to or currently hold senior management positions, including that of hospital director so that\u00a0they strive to increase revenue and decrease costs.<\/p>\n [\/et_pb_text][ba_gradient_heading title=”Revision of the fee schedule ” html_tag=”h3″ primary_color=”#455A64″ secondary_color=”#455A64″ admin_label=”HEADING (50-60 characters)” _builder_version=”4.21.0″ _module_preset=”default” title_font=”||||||||” title_font_size=”26px” title_line_height=”1em” custom_padding=”15px||10px||false|false” global_colors_info=”{}”][\/ba_gradient_heading][et_pb_text admin_label=”TEXT – BLOCK 3″ _builder_version=”4.21.0″ _module_preset=”default” custom_padding=”||1em||false|false” global_colors_info=”{}”]<\/p>\n Revising the fee schedule begins with the\u00a0setting of the\u00a0global revision rate.\u00a0This is decided by the prime minister because the rate determines the next fiscal year\u2019s health care expenditures, of which the national government subsidizes one-quarter. This one quarter composes one tenth of the government\u2019s budget. The global revision rate\u00a0reflects the volume-weighted\u00a0revision rate of all doctor and hospital fees\u00a0and\u00a0prices of all\u00a0pharmaceuticals\u00a0for which social health insurance plans reimburse pharmacies and hospitals.\u00a0Nonprice factors \u2013 population aging and COVID-19, for example \u2013 also increase expenditures\u00a0and are factored into the calculation.<\/p>\n [\/et_pb_text][et_pb_text admin_label=”TEXT – BLOCK 4 ” _builder_version=”4.21.0″ _module_preset=”default” custom_padding=”||1em||false|false” global_colors_info=”{}”]<\/p>\n The\u00a0most significant impact on the global revision rate is the extent to which\u00a0pharmaceutical prices are lowered. Their reductions\u00a0provide the fiscal space to\u00a0allow small increases in service fees.<\/p>\n<\/blockquote>\n Pharmaceutical prices are\u00a0decreased by the following process.<\/p>\n [\/et_pb_text][et_pb_text admin_label=”TEXT – BLOCK 5″ _builder_version=”4.21.0″ _module_preset=”default” custom_padding=”||1em||false|false” global_colors_info=”{}”]<\/p>\n Pharmacies and hospitals demand discounts from wholesalers. Pharmaceutical companies agree to discounts to increase sales. The government conducts a survey of the price and volume of sales of each product that is sold by wholesalers to pharmacies and hospitals prior to the revision. Based on the volume-weighted market price of each product, the fee schedule price is lowered. In addition, the fee schedule price of a newly launched product is decreased if its actual sales exceed the amount estimated by the manufacturer. These revisions have led to a downward spiral in the fee schedule prices of pharmaceuticals. Device prices are similarly reduced except that prices are set by functional group, such as stents. This is because device improvement could be a continuing process, which would make it difficult to track their market price.<\/p>\n [\/et_pb_text][et_pb_text admin_label=”TEXT – BLOCK 6″ _builder_version=”4.21.0″ _module_preset=”default” custom_padding=”||1em||false|false” global_colors_info=”{}”]<\/p>\n In parallel with setting the fee schedule\u2019s global\u00a0revision rate, the health ministry will have\u00a0discussions with doctor and hospital organizations on revising the fees and conditions of billing fees. The conditions determine the sales volume of each item. The impact of revising the fee for each item on total expenditures is calculated from the number of units reimbursed for such item. These data are available from\u00a0the government\u2019s claims dataset. In general, if\u00a0the data show that the\u00a0volume of sales of an item increased\u00a0more than the level expected, then the item\u2019s fee would be lowered,\u00a0and\u00a0the conditions of billing could be made more restrictive. In making these revisions, the health ministry in Japan discusses the details with provider organizations\u00a0which may\u00a0lead to adjusting\u00a0the fee or conditions of billing the item. While provider organizations would oppose revisions that reduce\u00a0their revenue, they do not want one group expanding its share of fee reimbursement\u00a0at another\u2019s expense. They also understand\u00a0that all item-by-item revisions must be made within the budget cap set by the global revision rate.<\/p>\n [\/et_pb_text][et_pb_text admin_label=”TEXT – BLOCK 7″ _builder_version=”4.21.0″ _module_preset=”default” custom_padding=”||1em||false|false” global_colors_info=”{}”]<\/p>\n In the\u00a0revision of the fee schedule, the fee and the conditions of\u00a0billing\u00a0are of equal importance, hence the conditions are detailed.<\/p>\n<\/blockquote>\n For example, to bill a positron emission tomography (PET)\u00a0scan, a hospital must have trained radiologists and serve as the regional referral centre. These conditions have restricted the number of PET scans. Whereas\u00a0when computed tomography (CT) scans were listed, the conditions of billing were not rigorously set. The relative high fees led to increases in\u00a0their number. However, fees have\u00a0subsequently been lowered\u00a0for low image density CT scans, forcing manufacturers to lower the price of\u00a0purchasing or leasing this type of scan. In primary care, fees have been increased and the conditions of billing refined\u00a0for delivering end-of-life care at home.<\/p>\n [\/et_pb_text][et_pb_text admin_label=”TEXT – BLOCK 8″ _builder_version=”4.21.0″ _module_preset=”default” custom_padding=”||1em||false|false” global_colors_info=”{}”]<\/p>\n Revisions\u00a0are also made of hospital fees.\u00a0The focus has been on ratios of nurse staffing to beds, with the fees staggered based on the ratio. Hospitals\u00a0with higher nurse-to-bed ratios are paid higher fees. The\u00a0staggered rate was introduced in response to reforms made by occupying forces after the Second World War. Before the reforms, nurses\u00a0were focused on assisting doctors\u00a0while families bore the responsibility of patient care. Providers\u00a0differ on this issue. The Japan Medical Association, representing the interests of smaller hospitals owned by doctors, which\u00a0face difficulties in recruiting nurses, has opposed the payment of\u00a0higher fees to hospitals with higher nurse-to-bed ratios while the Japanese Nursing Association has successfully lobbied for expanding higher fees for hospitals that have higher nurse-to-bed ratios.<\/p>\n [\/et_pb_text][ba_gradient_heading title=”Adherence to the conditions of billing” html_tag=”h3″ primary_color=”#455A64″ secondary_color=”#455A64″ admin_label=” HEADING (50-60 characters)” _builder_version=”4.21.0″ _module_preset=”default” title_font=”||||||||” title_font_size=”26px” title_line_height=”1em” custom_padding=”15px||10px||false|false” global_colors_info=”{}”][\/ba_gradient_heading][et_pb_text admin_label=”TEXT – BLOCK 9″ _builder_version=”4.21.0″ _module_preset=”default” custom_padding=”||1em||false|false” global_colors_info=”{}”]<\/p>\n The conditions of billing and monitoring of compliance are critical aspects of Japan\u2019s health care system as they control the volume of each item. Compliance is reviewed in\u00a0three steps:<\/p>\n <\/p>\n [\/et_pb_text][et_pb_text admin_label=”TEXT – BLOCK 10″ _builder_version=”4.21.0″ _module_preset=”default” custom_padding=”||1em||false|false” global_colors_info=”{}”]<\/p>\n This\u00a0multistep process is relatively inexpensive to maintain, with costs that amount to less than 1% of the total amount billed. These costs do not include the cost to providers for filing the claim\u00a0and responding to the decisions made in the review process.<\/p>\n [\/et_pb_text][ba_gradient_heading title=”Impact of the fee schedule” html_tag=”h3″ primary_color=”#455A64″ secondary_color=”#455A64″ admin_label=” HEADING (50-60 characters)” _builder_version=”4.21.0″ _module_preset=”default” title_font=”||||||||” title_font_size=”26px” title_line_height=”1em” custom_padding=”15px||10px||false|false” global_colors_info=”{}”][\/ba_gradient_heading][et_pb_text admin_label=”TEXT – BLOCK 11″ _builder_version=”4.21.0″ _module_preset=”default” custom_padding=”||1em||false|false” global_colors_info=”{}”]<\/p>\n The impact of the fee schedule has been threefold.<\/p>\n <\/p>\n [\/et_pb_text][et_pb_text admin_label=”TEXT – BLOCK 12″ _builder_version=”4.21.0″ _module_preset=”default” custom_padding=”||1em||false|false” global_colors_info=”{}”]<\/p>\n The way providers are paid in Japan may provide a\u00a0model for\u00a0high-income countries that have\u00a0growing waiting lists and increasing\u00a0enrolment in private health insurance.\u00a0Japan\u2019s approach\u00a0could also serve as an alternative for middle-income countries\u00a0to the British National Health Service model. The key issue is to restructure the payment scheme so that doctors and hospitals are paid according to the prices and conditions of billing set in the fee schedule. While this approach may be opposed on ideological and practical grounds, Japan\u2019s approach shows how funding to\u00a0increase fees in primary care could be found\u00a0by lowering pharmaceutical prices based on the volume-weighted prices\u00a0at which pharmacies and hospitals buy from wholesalers. Payment reform is a continuous process that requires vigilance to check how the reform affects\u00a0the behaviour of doctors and hospitals.<\/p>\n [\/et_pb_text][et_pb_text admin_label=”TEXT – BLOCK 13″ _builder_version=”4.21.0″ _module_preset=”default” custom_margin=”20px||||false|false” custom_padding=”||1em||false|false” global_colors_info=”{}”]<\/p>\n The author would like to acknowledge and thank Kalipso Chalkidou, H\u00e9l\u00e8ne Barroy,\u00a0Fahdi Dkhimi, Alexis Bigeard and Claude Meyer of the World Health Organization for their valuable comments.<\/em><\/p>\n [\/et_pb_text][et_pb_text admin_label=”BLOG AUTHOR BIO” _builder_version=”4.21.0″ _module_preset=”default” text_font_size=”15px” custom_margin=”20px||30px||false|false” custom_padding=”20px|25px|20px|25px|false|false” custom_css_main_element=”background:#DCE5EA;” global_colors_info=”{}”] Further reading<\/strong><\/p>\n\n
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Naoki Ikegami<\/strong> is Professor Emeritus at Keio University, Tokyo. He was Chair of the Department of Health Policy and Management at the Keio School of Medicine, from which he received his MD and PhD. He also received a Master of Arts with Distinction in health services studies from Leeds University (United Kingdom). He has been a visiting professor at the University of Pennsylvania\u2019s Wharton School and Medical School, and President of the Japan Society of Healthcare Administration and the Japan Health Economics Association.<\/em>[\/et_pb_text][et_pb_text admin_label=”TEXT – BLOCK 9 – Footnotes” _builder_version=”4.21.0″ _module_preset=”default” text_font_size=”13px” custom_margin=”20px||||false|false” custom_padding=”||||false|false” global_colors_info=”{}”]<\/p>\n