The Roles of the Government and Private Insurances in Healthcare Systems – The Theoretical Framework and the Overseas Case Studies（Eiji Tajika, Jun Kikuchi）
The Challenges of Japan’s Public Healthcare System and the Potential of Private Medical Insurance（Eiji Tajika, Jun Kikuchi）
Unique mixtures of public and private funding in Japan－The ban on billing for mixed medical care service – （Hiroyuki Kawaguchi）
Managed competition in the Dutch Health Care System: Preconditions and experiences so far （Richard C. van Kleef）
The Relationship between the Public and Private Medical Insurances – The Changes and Prospects in Germany （Katsuaki Matsumoto）
Private Medical Insurance in France(Eri Kasagi)
Canada’s Approach to the Public/Private Divide and the Perils of Reform via Court Challenge （Colleen M. Flood）
| By Eiji Tajika | （Professor, Graduate School of International and Public Policy, Hitotsubashi University） |
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| By Jun Kikuchi | （Senior Researcher, National Institute of Population and Social Security Research） |
(Abstract)
It is a common challenge among the developed countries how to improve the sustainability of the public healthcare systems. Here we focus on both the public and private health insurances and conduct conceptual and practical studies about the roles those two insurances have to play to improve the sustainability of the systems. We draw up the following conclusions.
First, there is asymmetry of information between individuals and insurers and between patients and doctors. Therefore we cannot entirely leave medical insurance and services to the market mechanism. Many developed countries adopt universal insurance systems, with the public healthcare systems guaranteeing people’s access to basic medical treatment, while private insurance playing a supplementary role to the functions of the public systems.
Second, the relationships between the two insurances in the developed nations have been shaped in their own historical contexts, and are not the results of explorations of an optimal balance between them. And the utilization of private medical insurance does not necessarily contribute to efficient medical services. What is important is to demarcate the domains of the public healthcare systems with the cost-benefit analysis included in this search. Because many types of healthcare services are covered by the public healthcare system in Japan, we should make optional some of the medical services covered by the public system and let individual choice play a bigger role. It is there that private insurance is expected to take on a new role, in addition to the present one of flat-sum cash payment, of compensating the costs of the services not covered by the public system.
Third, based upon the experiences of other countries, Japan should make clear the objectives of the public financial support to the social insurance system and the present retrospective payment to insurers should be changed into a prospective one. Those revisions are expected to raise the cost-consciousness of insurers, leading to enhanced insurer functions.
| By Eiji Tajika | （Professor, Graduate School of International and Public Policy, Hitotsubashi University） |
|---|---|
| By Jun Kikuchi | （Senior Researcher, National Institute of Population and Social Security Research） |
(Abstract)
Tajika and Kikuchi (2012), the first paper in this special volume, conduct a conceptual overview about the functions of the public and private health insurances, and present some results of our field studies about the roles of the two insurances in the developed countries. Here we build on those arguments and move on to consider the roles that the two insurances are playing in Japan and the challenges they are facing, and finally present a desirable direction for the reforms of Japan’s healthcare system.
We should note the following two challenges Japan’s healthcare system is facing. The first one, derived from the public system’ nature itself, is that the insurers have degenerated into organizations just for payment, lacking the functions of agencies on behalf of individuals or patients. Second, Japan’s public healthcare system covers such huge areas that it forces private insurers to play only limited roles. In fact many of Japan’s private insurers only provide flat-sum cash payment plans, with few providing services of compensating the financial costs of medical treatment not covered by the public system, although these services are popular among some of the countries.
Our response to those challenges should be conducted in the following ways. First, in order to enhance the functions of insurers, we should make clear the obejectives of the public financial support to the social insurance and rectify the attitude of overly depending upon the tax resources. In addition, the present retrospective payment system to insurers should be changed into a prospective one in order to raise the cost awareness of insurers.
As for the areas covered by the public healthcare system, the reduction in the scope of benefits should be taken into consideration. The cost-benefit analysis should be introduced into this search as well as medical appropriateness and safety considerations in order to avoid the swelling of the public system. For example some of the services now covered by the public healthcare system should be made “optional” and left to individual choice so that the reforms should be pushed forward while individual choice is respected. And it is there that private medical insurance is expected to take on a new role of compensating the real costs of the medical services not covered by the public system.
| By Hiroyuki Kawaguchi | (Professor, Faculty of Economics, Seijo University) |
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(Abstract)
The purpose of this research is to consider theoretically the influence which the lifting the ban on billing of mixed medical care services on Japanese health care system from a viewpoint of both "equity" and "efficiency."
As a result, about equity, it was suggested that the access gap by an income bracket actualizes, while access to new medical technology improved by lifting of the ban. Although this gap will improved by use of private health insurance, it turned out that assistance should be considered for low income earners by the government, such as regulation of imposing the community rating system to the private insurances.
About efficiency, it was shown that fear of both the supplier induced demand by asymmetric information and the ex-post moral hazard by use of the private health insurance concerned is also strong.
At the same time, in the case where the "Specified Mixed Medical Care Coverage System" which is the government-controlled version of mixed medical care service, is expanded, the risks of the gap of accessibility and ex-post moral hazard are considered to be limited. However, the risk of the expansion of medical care expense in the uncovered treatment caused by supplier-induced demand would be held to the same level as in the case of the covered medical care services in public health care insurance.
| By Richard C. van Kleef | （Erasmus University Rotterdam） |
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(Abstract)
In the early 1990’s the Dutch government started to replace supply-side regulation in health care by managed competition. The idea of managed competition is that insurers and providers of care compete on price and quality while the government establishes certain rules to guarantee public objectives. The ultimate goal of the reforms is to achieve a health care system in which incentives for efficiency are combined with universal access to good-quality care. For successful application of managed competition, however, some important preconditions need to be fulfilled. This paper describes these preconditions and discusses how and to what extent they are fulfilled in the Netherlands. Special attention will be paid to the corner stone of managed competition: risk equalization. An important lesson from the Netherlands is that fulfilling these preconditions is a long process. The experiences so far reveal some positive effects as well as some serious issues that need to be solved.
| By Katsuaki Matsumoto | (Professor, Graduate School of Public Policy, Hokkaido University) |
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(Abstract)
In Germany the private medical insurance sector not only supplements the public medical insurance system but also sometimes replaces it. Various reforms have been going on recently with regard to the relationship between the public and private medical insurances, such as the introduction of the system obliging the population not covered by the public medical insurance to join private medical insurance policies. In the argument about the future medical insurance reforms there are some radical proposals for a drastic change to the relationship between the two insurances.
Here we clarify the following facts by studying those revisions and proposals. There is a proposal for the introduction of the national universal healthcare system that covers the entire population, but there has been so far no such reform as brings about a crucial change to the relationship between the two insurances. Or the reduction in the scale of the coverage of benefits by the public medical insurance system and the transfer of some of its coverage to the private medical insurance sector has shown little progress. Rather they aim at the policy of introducing the elements of private insurance into the public insurance system thus enhancing the effectiveness and efficiency of the public system.
| By Eri Kasagi | （Associate Professor, Faculty of Law, Kyushu University） |
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(Abstract)
In French health care system, private insurance that individuals join voluntarily in principle is widespread in addition to the public and universal health insurance system. The French public healthcare system asks patients to bear a relatively large self-pay burden, and thus it is indispensable for the public to join private and supplementary insurance schemes. In this context, there are various special legal regulations, not necessarily compatible with the usual logic of private insurance, imposed upon these supplementary insurances. Recently a system of using tax revenues to let low-income population join supplementary medical insurance without having to pay premiums and a mechanism in which the insurers of supplementary medical insurance participate in the control of the social insurance benefits were introduced. This can be interpreted as a trend along which not only private insurance is converging towards the public insurance system but also the two insurances are merging. The French system provides an interesting research field that tells us that there can be various types of private medical insurance according to each country’s social and historical context. It also gives us an example of social and private insurances influencing each other’s development as well as a clue as to the problems that may be introduced into the national healthcare system when using private insurance that supplements the public system.
| By Colleen M. Flood | (Canada Research Chair in Health Law & Policy, University of Toronto) |
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(Abstract)
In both Canada and Japan court challenges are underway to allow a greater role for private payment.
This article explains how Canadian courts to date have misunderstood the very different roles private payment (specifically private health insurance) plays across different health care systems. I illustrate this by situating Canada in a typology of health cares systems vis-à-vis the role for private health insurance. I argue that striking down existing laws restricting private payment in Canada’s system is not likely to result, as some argue, in Canada transforming into a “superior” European heath care system such as exists in France, the Netherlands, Germany, etc. Instead, the Canadian system will shift closer to a“Duplicate Private Health Insurance” model such as seen in New Zealand and England which is not likely to result in improvements in either equity or efficiency.
I conclude that with the evidence base as complicated as it is, inevitably governments must exercise discretion in choosing how to organize and regulate a health care system, and courts – whether in Canada or Japan - should be extremely cautious of wading in to circumvent a government’s choices.
Any article in the Review reflects the writer's own opinion, and has nothing to do with any statement issued by the Ministry of Finance or the Policy Research Institute.
