Innovation & Sustainability


Challenges in Japan and Abroad

Current Situation

The healthcare system is one facet of the social infrastructure that brings stability to people’s lives. Since Japan established a universal health insurance system and achieved universal health coverage in 1961, the Japanese healthcare system has supported a world-class society known for its health and longevity. However, the sustainability of the current healthcare system is threatened by various issues, such as an increase in the elderly population, which consumes relatively large amounts of the healthcare budget, a decrease in the working-age population due to a declining birthrate, and a burden on the healthcare system caused by emergencies.

The challenge of promoting innovation, ensuring equitable access, and providing quality healthcare while keeping costs low is common throughout the world.

Challenges

Three ways to solve the challenge of balancing the promotion of innovation with equitable access are (1) value-based pricing, (2) utilization of big data, and (3) introducing cutting-edge technology.

In properly assessing the value of innovative medical technology, devices, and drugs, it is important to balance both cost and public health value.

In addition to drug evaluation, standardization of the quality of medical care is also important under a system such as Japan’s that focuses on equitable access.

Finally, since the development of a sustainable healthcare system involves a financial burden, it is necessary to build consensus through public participation in the decision-making process.


Policy Trends

The Health at a Glance 2019 OECD Indicators[1] point out the following:

  • A continuing problem is that the poorest people in society are less likely to have access to healthcare.
    • It is estimated that one out of five adults who needed medical attention did not receive it, with poorer populations having less access to healthcare. Despite the fact that free cancer screening programs are offered in most OECD countries, the poorer the population, the lower the uptake rate.
    • Despite the fact that most OECD countries have universal or near-universal coverage for core health services, there are problems that impede access to care. Reasons for this include high cost sharing and the exclusion of services from benefit packages. Lack of understanding of health information, flawed communication strategies, and poor quality of medical care are also contributing factors.
  • Quality of care is improving in terms of safety and effectiveness, but more attention should be paid to patient-reported outcomes and experiences.
    • To understand more about the quality of healthcare, we need to assess what is important to people. However, few healthcare systems regularly ask patients about their outcomes and experiences with treatment.
  • Countries are spending heavily on healthcare, but not always in the most effective ways.
    • The average per capita health expenditure in OECD countries is about USD 4,000 (purchasing power adjusted).
    • Healthcare costs have increased much faster than economic growth so far. Although the increase in healthcare costs has slowed down over the past few years, costs are expected to continue to grow in the future. According to new estimates, health spending across OECD countries is expected to reach 10.2% of GDP in 2030, up from 8.8% in 2018. Concerns about sustainability have arisen because most countries are using mainly public funds.
    • Reforms to improve economic efficiency are crucial. Although increased use of generic drugs has led to cost savings, they account for only about half of the volume of drugs sold in OECD countries.
    • In OECD countries, the number of people working in health and social systems-related jobs is at an all-time high, with about one in ten jobs in health or social welfare. Shifting work from doctors to nurses and other medical professionals can reduce cost pressures and increase efficiency.

[1] Health at a Glance 2019 OECD Indicators (English): https://www.oecd-ilibrary.org/docserver/4dd50c09-en.pdf?expires=1608886951&id=id&accname=guest&checksum=93A0753C6F32C9F1E848BE62915C3E39

  • Basic Policy on Economic and Fiscal Management and Reform 2019: A New Era of Reiwa—Challenges toward Society 5.0
    • The government has indicated its intention to compile policies to be addressed in its Basic Policy on Economic and Fiscal Management and Reform 2020: Overcoming the Crisis and Moving Toward a New Future (“Honebuto Policy 2020”), addressing concerns relating to payment and cost burdens.
    • The following initiatives were presented for the reform of the medical and long-term care systems.
      • Increase productivity of medical and welfare sector services by at least 5% by 2040, and by at least 7% for physicians.
      • Comprehensive reform of the medical care delivery system: regional medical care planning, measures to deal with uneven distribution of physicians, and reform of the working styles of physicians.
      • Strengthening of insurer functions: systematic increase in the percentage of evaluations based on outcome indicators, elimination of non-statutory transfers to the national health insurance system, nationwide deployment of advanced and good practices such as unification of insurance premium levels within prefectures, etc.
      • Transformation of the pharmaceutical industry into one with high drug development capabilities and promotion of fundamental reform of the drug pricing system.
      • Medical fees: study for appropriate evaluation of dispensing fees, etc.
    • Basic Policies for Economic and Fiscal Management and Reform 2020: Overcoming the Crisis and Moving Toward a New Future.
      • This plan responds to the spread of infectious diseases and looks at a gradual increase in economic activity. As part of the “With Corona” economic strategy, the government has indicated its intention to strengthen the medical care delivery system (expansion of testing capacity, acceleration and securing of vaccine development, etc.).
      • In order to realize an inclusive society that supports the “New Normal Lifestyle”—a society in which no one is left behind—the government is aiming for a health data reform, including the expansion of the Personal Health Record (PHR) and promotion of the development of a high-quality, efficient, and sustainable medical care delivery system, as part of the establishment of a healthcare delivery system that works in the “New Normal Lifestyle”. The government has indicated that it would promote precautionary health measures, healthy lives, and serious disease prevention in response to the “New Normal Lifestyle”.
    • Meeting on a Social Security System Oriented to All Generations
      • In September 2019, the Planning Meeting on a Social Security System Oriented to All Generations was established. It aims at broadly ensuring peace of mind not only for the elderly, but also for children, the child-rearing generation, and working-age population with sights set on the arrival of the 100-year life society. Sustainable reforms across the entire social security spectrum, including pensions, labor, healthcare, long-term care, and measures to counter the declining birthrate are currently under review.
      • In terms of the proportion of copayments for latter-stage elderly patients, the government is considering the following policy: “For latter-stage elderly patients (75 years old or older, excluding those with incomes equivalent to those of working-age people) with incomes above a certain level, the proportion of copayments at the counter for medical expenses shall be 20%, while for other patients the proportion shall be 10%.”
    • Dealing with High-Cost Drugs
      • Respond by combining systems such as market expansion recalculation, dosage and administration change recalculation, optimal use promotion guidelines, and cost-effectiveness evaluation.

HGPI's Initiatives

HGPI has been planning the project “Rebalancing Healthcare Systems: Innovation and Sustainability” from 2016 to 2020, and has been conducting transparent discussions with multiple stakeholders.


  • Health Policy Summit 2016, Session 1: Sustainability in Healthcare (February 23)
  • The 33rd Special Breakfast Meeting: Can we maintain a universal public insurance system? The future of healthcare reform, Mr. Keizo Takemi (September 23)
  • Lecture at the Embassy of the Netherlands: Amidst the ever-changing landscape of health ICT~ achieving sustainability in the realization of comprehensive healthcare system (October 21)
  • Special Breakfast Meeting: The 4th Health Technology Policy Action Series: Involvement of Citizens and Patients in Healthcare Information Systems (December 16)
  • Symposium for the Establishment of Kanagawa Medical Innovation School: Development of Global Public Health Experts (February 3)
  • Health Policy Summit 2017, Session 1: Sustainability of the Japanese Health System
  • The 35th Special Breakfast Meeting: Kanagawa Medical Innovation School (MIS), Mr. Yasuo Ohtani (March 2)
  • The 37th Special Breakfast Meeting:  J. Stephen Morrison (April 14)
  • Netherlands Embassy-HGPI Joint Forum: Medical Ethics in the Era of Technology and Aging (April 25)
  • Joint Global Expert Meeting Convened by the CSIS and HGPI: Rebalancing Healthcare Systems: Innovation and Sustainability (April 14)
  • The 2nd Global Expert Meeting of the “Rebalancing Healthcare Systems: Innovation and Sustainability” Series—The Current Status, Challenges, and Opportunities of Health Technology Assessment (HTA) in Japan (October 5)
  • Health Policy Summit 2018, Session 2: Special Dialogue to Discuss “Sustainable Healthcare Systems” with Dr. Yokokura, President of Japan Medical Association (February 24)
  • Preparatory Meeting: Rebalancing Healthcare Systems: Innovation and Sustainability Series, Issues Identified from the Trial Introduction of Cost-Effectiveness Assessment
  • 1st Forum: Technical Issues-Analysis and Appraisal Issues Identified through the Trial Introduction of Cost-Effectiveness Assessment (July 19)
  • Global Expert Meeting: The Future of Health Technology Assessment (September 12)
  • 2nd Forum: The Introduction of Cost-Effectiveness Assessment, Its Impact, and Compatibility with Other Systems (September 13)
  • The 71st Breakfast Meeting: Rebalancing Healthcare Systems: Innovation and Sustainability Series, The Challenges Facing Health Technology Assessment (HTA) and the Promise it Holds (August 22)
  • 3rd Forum: Public Understanding—Increasing Public Awareness and Understanding on the Impacts and Benefits of Cost-Effectiveness Assessment (November 12)
  • Expert Meeting: The Future of Healthcare in Japan and Cost-Effectiveness Assessment (December 14)
  • The 42nd Special Breakfast Meeting: Sustainable Social Security Systems—Current Challenges and Future Visions (January 18)
  • Health Policy Summit 2019, Session 3: Setting a Vision for Social Security Toward 2040 (February 23)
  • The 79th Breakfast Meeting: Rebalancing Healthcare Systems: Innovation and Sustainability Series, Expectations and Concerns from the Perspectives of People Receiving Healthcare (August 20)
  • First Meeting of the “Rebalancing Healthcare Systems: Innovation and Sustainability” Taskforce: Measures to Increase Spending Efficiency (October 16)
  • Expert Forum: Rethinking Social Security—Ensuring an Ideal Balance between Health Insurance Benefits and Premiums (November 5)
  • 2nd Meeting of the “Rebalancing Healthcare Systems: Innovation and Sustainability” Taskforce: Measures to Effectively Control Costs for Research and Development and to Improve Market Access (November 18)
  • 2019 Survey on Healthcare in Japan (September 17)
  • 3rd Meeting of the “Rebalancing Healthcare Systems: Innovation and Sustainability” Taskforce: The Further Development of Push and Pull Incentives for Innovation (December 12)
  • 4th Meeting of the “Rebalancing Healthcare Systems: Innovation and Sustainability” Taskforce: Measures to Strengthen the Information Base/Data Infrastructure to Better Inform Policy Debates (January 16)
  • 5th Meeting of the “Rebalancing Healthcare Systems: Innovation and Sustainability” Taskforce: Innovative Financing Mechanisms to Help Fund New Treatments and Health Interventions (February 17)
  • 6th Meeting of the “Rebalancing Healthcare Systems: Innovation and Sustainability” Taskforce: Value Based Medicine—Philosophy and Methods (March 16)
  • 1st Expert Roundtable: Eliminating Waste While Ensuring Access to the Highest Quality of Medical Care
  • 2nd Expert Roundtable: Investments Needed to Improve the Health of the Public (June 4)
  • The 86th HGPI Seminar: What Is Needed to Rebalance Innovation and Sustainability in the Healthcare System? A New Philosophy and Policy Options for Rebuilding the Japanese Economy (June 17)
  • Policy Recommendations on Health System Reform Toward the Creation of a Social Security System Oriented to All Generations (July 17)

HGPI's Areas of Focus and Mission

In order to make the future healthcare system sustainable and continue being innovative, the 2019 expert taskforce suggested the need for a paradigm shift in line with the following three concepts:

  1. The provision of effective healthcare must be sustained and further improved in regards to efficiency.
  2. The cost of healthcare system reform is not a burden but an investment in the future that can improve the health of the people.
  3. It is essential to build a healthcare system that not only cures disease, but one that also contributes to extending healthy life expectancy.

In order to accomplish this paradigm shift, public understanding and consensus building is necessary, in addition to discussions and information dissemination by experts. Therefore, it is important to identify the value of healthcare that patients and citizens seek and to promote their participation in the policy-making process so that they can take ownership of the healthcare system.


Plan for HGPI's Future Activities

In 2020, we are working to elevate the above-mentioned three concepts, which have been discussed by multi-stakeholders and summarized in policy proposals, to national discussions and consensus building forums. Specifically, phase 1 of the project will look at expanding professional discussions on the healthcare system into national discussions. In phase 2, we will explore and consolidate parties’ views on healthcare system reform and the value of healthcare, and in phase 3, develop recommendations for promoting public debate and reforming the healthcare system with support and participation of the parties involved in the policy-making process.

Through these efforts, we will promote a national debate that is supported by the relevant parties and advocate for reforms to the healthcare system that will bring to life healthcare innovation based on the values of the population it serves.


Last Modified: March 2021