Healthcare Sustainability in Japan

On April 22, 2015, HGPI hosted a Breakfast Meeting to discuss healthcare sustainability. The featured speaker was Professor Yoshinori Hiroi from Chiba University’s Faculty of Law, Politics and Economics. The following is a summary of Professor Horoi’s discussion.


Perspectives on Sustainable Healthcare

Two opposing viewpoints exist regarding the scale of healthcare expenditures. The first looks at healthcare as the largest growth industry and views increasing healthcare expenses as a means to promote employment and global competitiveness. The second considers healthcare expenses, unlike expenses of other sectors, to be undesired expenses that should be kept at a minimum. Each of these viewpoints offers important points. The lens through which you view healthcare sustainability is critical to this debate. The scale of healthcare expenditures is not simply small versus large. Instead, it is about how resources are used.


Questions Regarding Healthcare Sustainability

Healthcare sustainability encompasses a variety of issues, including the scale of expenditures, the allocation of financial resources, costs associated with technology and innovation, ageing communities, and environmental health issues.
1. The allocation of financial resources: Which healthcare fields should receive priority when allocating financial resources?
Financial resources for healthcare are allocated at two levels: the core level and the peripheral level. In the future, more resources should be allocated to activities at the peripheral level, such as R&D, prevention and health promotion, nursing care and social welfare. In response, we will see decreased burden on core healthcare services, such as diagnosis and treatment, enabling us to increase the cost-effectiveness of the entire healthcare system.
However, at the same time, cost-sharing between the public and private sectors is another issue. The majors sectors related to diagnosis and treatment should, with a focus on neutrality and efficiency, provide the public with the proper level of assurance. In this context, there is a risk of market failures and it is necessary to take actions to avoid these.
And, it must be noted that statistical analysis using national healthcare expenditures fails to include costs related to services not covered by insurance. This is a major discrepancy and requires that international comparisons be handled very carefully.

2. The allocation of financial resources: Distribution of hospitals and clinics
Earnings differ between hospitals and clinics, and even amongst hospitals there are differences among hospitals. This variation does not correlate with evaluation of fees. To better understand this, it is helpful to understand the structure from which the current system has emerged. The current healthcare service system is based on a framework established in 1958 when healthcare services were mainly providers by practitioners in clinics and care was provided based on an acute disease model.
Given this, the Japanese medical fee system faces four structural challenges:
・Weak evaluation of hospitals and divided hospitalizations
・Weak evaluation of high-level medical care
・Weak approach to the evaluation of team-based healthcare, including social and mental health support for patients
・Weak approach to the evaluation of healthcare quality

Moving forward, it will be important to adequately evaluate high-level hospitals and the expansions of medical fees that follow. It will also be necessary to actively address the needs of those who receive healthcare. And given that healthcare expenses cannot be expanded limitlessly, there may need the need to impose general regulations.


Healthcare Innovation and Healthcare Expenses

The question of whether innovation increases or decreases healthcare expenses has two different answers. The first response is referred to as the Inverted U-shaped Curve Hypothesis. This hypothesis basically states that expenses for basics healthcare services (non-technology based services) are low, while expenses for developing technologies rise increasingly throughout the development stage. When the innovation reaches a level referred to as “pure technology,” the expense curve reverts down. The second response is called the Effect Recession Theory. This theory states that innovations for early stage healthcare issues, such as vaccines for infectious diseases, are highly cost-effective. On the other hand, innovative technologies for long-term healthcare issues, such as chronic diseases do not enjoy the same levels of cost-effectiveness.
The differences of the two opinions are the differences between seeds implanted in emerging technology from the provider standpoint and the needs from the patient standpoint. The provider perspective of “seeds” prioritizes the high potential of breakthroughs in life science. In contrast, the patient perspective of “needs” prioritizes the need to address existing diseases, which could decline if too much focus is placed on innovation, making this as debate with deep roots in social and cultural patterns. Given this, the transition from a conventional healthcare model to a biomedical framework will be a challenge.

Recently, social epidemiology and social determinants of heath (SDH) have been popular discussion topics worldwide. Therefore, it is crucial for us to consider such inclusive models based on sustainability.
(The above is based on a quote from Prof. Yoshinori Hiroi’s book 「持続可能な福祉社会」(2006) (Shizoku Kanouna Fukushi Shakai, 2006) (written in Japanese).


Ageing and Communities, Cities, and Regions

According to a national survey in 2010, Nagano Prefecture has the highest average life expectancy in Japan. And per capita costs for late-stage healthcare for older persons in Nagano is the fourth lowest in Japan. Nagano’s success has come to be known as the Nagano Model, which encompasses factors such as a high employment rate of older persons, persons enjoying a sense of life purpose, the highest vegetable intake in the nation, a health promotion program guided by volunteer health workers, and prevention activities led by healthcare professionals. This model can be applied in other areas or can be applied more broadly.
In Japan, where the number of older persons who live alone is increasing, social capital and community can be used to address various issues. One such issue is that many older persons who live alone find themselves without a place to go and where they feel comfortable. From this point of view, Japan can learn from European models and incorporate social welfare and healthcare policy into urban planning and community policy.


The Environment and Healthcare

The concept of sustainability first gained attention in a report by the United Nations World Commission on Environment and Development (WCED) published in 1987 called, “Our Common Future.”
With limited resources, the way in which we achieve development that addresses the needs of the current generation without impairing our ability to meet the needs of future generations can be applied to healthcare. It is important to consider perspectives from evolutionary medicine that state that the fundamental causes of disease lay in society and one’s surrounding environment.

See the full report on HGPI’s webpage.