Health Care System in Japan - Cost

Cost

In 2008, Japan spent about 8·5% of the nation’s gross domestic product(GDP), or US$2,873 per capita, on health, ranking 20th among Organisation for Economic Co-operation and Development (OECD) countries. That amount was less than the average of 9.6% across OECD countries in 2009, and about half as much as that in the US. The government has well controlled cost over decades by using the nationally uniform fee schedule for reimbursement. The government is also able to reduce fees when the economy stagnates. In the 1980s, health care spending was rapidly increasing as was the case with many industrialized nations. While some countries like the US allowed costs to rise, Japan tightly regulated the health industry to rein in costs. Fees for all health care services are set every two years by negotiations between the health ministry and physicians. The negotiations determine the fee for every medical procedure and medication, and fees are identical across the country. If physicians attempt to game the system by ordering more procedures to generate income, the government may lower the fees for those procedures at the next round of fee setting. This was the case when the fee for an MRI was lowered by 35% in 2002 by the government. Thus, as of 2009, in the US an MRI of the neck region cost $US 1,500, but in Japan it cost $US 98. Japan has had "catastrophic coverage" since 1973. Once a patient's monthly copayment reaches a cap, no further copayment is required. The threshold for the monthly copayment amount is tiered into three levels according to income and age.