Population Health Insurance Coverage

Population Insurance Coverage For A Core Set Of Healthcare Services* (%) (2019):
Public Coverage: 100%; Primary Private Health Coverage: 0%; Total: 100%

*“Population coverage for health care is defined here as the share of the population eligible for a core set of health care services – whether through public programmes or primary private health insurance. The set of services is country-specific but usually includes consultations with doctors, tests and examinations, and hospital care. Public coverage includes both national health systems and social health insurance. On national health systems, most of the financing comes from general taxation, whereas in social health insurance systems, financing typically comes from a combination of payroll contributions and taxation. Financing is linked to ability-to-pay. Primary private health insurance refers to insurance coverage for a core set of services, and can be voluntary or mandatory by law (for some or all of the population.”

Source: OECD (2021), Health at a Glance 2021: OECD Indicators, OECD Publishing, Paris, https://doi.org/10.1787/ae3016b9-en.

“The health insurance coverage rate was 100% in Japan and covered more than 5000 medical procedures, dental care and drugs. Once in every two years, the MHLW reviews the scope of coverage by the national insurance scheme and the reimbursement billing conditions for procedures, drugs, medical devices. All hospitals and clinics are required to comply with the nationally uniform fee schedule set by the MHLW and cannot set their own prices for treatments under the NHI scheme.

“There are two major types of insurance schemes in Japan: Employees’ Health Insurance and NHI. Employees’ health insurance covers those who are public servants or work in companies, while NHI covers the self-employed and unemployed. Employees’ Health Insurance is further divided into four major categories as follows: JHIA, SMHI, MAS, and Seamen’s insurance (Table 3.10).”

Source: Sakamoto H, Rahman M, Nomura S, Okamoto E, Koike S, Yasunaga H et al. Japan Health System Review. Vol. 8 No. 1. New Delhi: World Health Organization, Regional Office for South-East Asia, 2018.

“Japan’s health system is distinctly characterized by universal health insurance, which provides excellent health outcomes at a relatively low cost with equity (Ikegami N et al., 2011; Murray CJL, 2011). By law, all residents of Japan (including foreign nationals with a residence card) must be enrolled in a health insurance programme.

“There are two main types of health insurance in Japan – the Employees’ Health Insurance System and National Health Insurance (NHI) (previously called Community Health Insurance). The Employees’ Health Insurance System is provided to employed workers (company employees) and their dependents, while NHI is designed for self and unemployed people (hence those not eligible to be members of Employees’ Health Insurance) and is run by municipal governments (i.e., cities, towns and villages).”

Source: Sakamoto H, Rahman M, Nomura S, Okamoto E, Koike S, Yasunaga H et al. Japan Health System Review. Vol. 8 No. 1. New Delhi: World Health Organization, Regional Office for South-East Asia, 2018.

“The fee schedule has played a critical role in achieving the UHC goals. As Fig. ​Fig.11 shows, the fee schedule links the benefits set by the multiple SHI plans with the services delivered by the providers. The fee schedule ensures that all patients are to have the same benefits and be treated equally, because providers will be paid the same amount for delivering the same item. On the provider side, the same amount is paid for delivering the same service item, regardless of whether the provider is in the public or the private sector, and regardless of its size or geographical location. This uniform structure has facilitated the work of the government in controlling the costs and the contents of the services delivered.

“Although paying the same amount for the same service item may seem unfair to big hospitals in big cities, it has been balanced by the fact that their physicians are willing to work at lower wages in Japan: average wages in large-city public-sector hospitals are 20% lower than in rural hospitals. This lower level has balanced the higher average wages paid to nurses in big-city hospitals to compensate them for the higher costs of living [11]. Paying the same amount for the same service has also helped to place the public and private sectors on an equal footing. As of 2017, the private sector had four-fifth the total number of hospitals in Japan [12]. The dominant role of the private sector has made it possible to respond to changes in priorities, while the strict fee-schedule regulations have contributed to maintaining equity.

“There are now about 4000 service items and 17,000 pharmaceuticals listed in the fee schedule. Each service item is precisely defined. For example, the “first consultation visit” concerns a visit that takes places at least 30 days after the previous visit, and has been made without the physician telling the patient when to make the next visit. All other visits are “repeat consultation visits.” The fee for the former is about four times that of the latter, because it requires much more time for the physician. In addition, the fee schedule specifies the conditions of billing so as to meet quality standards and so that services will be restricted to those patients who would benefit. For example, rehabilitation therapy may be billed only by hospitals that employ the required number of therapy staff and only for patients who have suffered the injury or stroke within the past 150 days. These conditions have effectively regulated the volume of each item. Thus, although payment is made on a fee-for-service basis, there is de facto control of the volume at the level of each item.”

Source: Ikegami N. Japan: achieving UHC by regulating payment. Global Health. 2019;15 (Suppl 1):72. Published 2019 Nov 28. doi:10.1186/s12992-019-0524-4.

“The Ministry of Health, Labor, and Welfare determines the statutory benefit package and sets the price of all services, drugs, and devices listed in the nationwide fee schedule. The schedule uses a single price without any regional adjustments, assuming the provider meets the billing conditions for payment. Expenditures for services, drugs, and devices listed in the statutory benefit package constitute about 80 percent of total health expenditures; the remaining 20 percent consists of items such as over-the-counter drugs, subsidies given to public hospitals, and health screening (for example, for hypertension and diabetes).

“The fee schedule has been the key mechanism for controlling the flow of funds from all insurers to virtually all providers. Morethan 95 percent of the revenue of most hospitals and physicians’ offices comes from delivering services listed in the statutory benefit package, whose prices are set by the national fee schedule.

“Balance billing—charging more than the price set by the fee schedule is illegal. Billing for services and drugs that are not included in the statutory benefit package is restricted to items expressly listed as exemptions. These include special amenities in hospital rooms, such as single rooms, and technologies that are still being evaluated for efficacy. Should providers wish to bill for services and drugs that are not listed, the patient must pay for everything—all services, including those that would otherwise be covered— out of pocket.”

Source: Naoki Ikegami and Gerard F. Anderson. In Japan, All-Payer Rate Setting Under Tight Government Control Has Proved To Be An Effective Approach To Containing Costs. Health Affairs 2012 31:5, 1049-1056.

“Revisions to Japan’s fee schedule are made every other year and are implemented at the start of the next fiscal year. The revision process involves three steps.

“▸▸OVERALL RATE OF INCREASE: First, the prime minister decides the global, or overall, rate of increase or decrease in price for benefits, based on an evaluation of the nation’s political and economic situation. In essence, the prime minister imposes a global ceiling on the nation’s health care spending. In the 2010 revision, for example, Prime Minister Yukio Hatoyama decided that the rate of increase would be 0.19 percent, after weighing the demands from the Ministry of Finance for a decrease and from provider groups for an increase.

“▸▸REVISED PRICES FOR DRUGS AND DEVICES: Second, revised prices for drugs and devices are decided primarily based on the result of a market price survey. The selling price is typically lower than the existing government fee schedule because of competition among distributors. Once the actual market prices are determined, the revised price for each drug is lowered so that, in aggregate, it is 2 percent higher than its volumeweighted average market price.

“Device prices are similarly reduced by the government, within the functional group to which each device belongs—such as one for drug-eluting stents. In addition, the price is lowered for any newly launched drug that has more sales than the manufacturer predicted to the Ministry of Health, Labor, and Welfare.”

Source: Naoki Ikegami and Gerard F. Anderson. In Japan, All-Payer Rate Setting Under Tight Government Control Has Proved To Be An Effective Approach To Containing Costs. Health Affairs 2012 31:5, 1049-1056.

Health Systems Facts is a project of the Real Reporting Foundation. We provide reliable statistics and other data from authoritative sources regarding health systems in the US and sixteen other nations.

Page last updated Sept. 28, 2022 by Doug McVay, Editor.