Japanese Health System Overview
Health System Rankings
Health System Outcomes
Health System Coverage
Consumer Costs
Japan’s COVID-19 Strategy
Health System Expenditures
Health System Financing
Medical Personnel
System Resources and Utilization
Long-Term Care
Medical Training
Pharmaceuticals
Political System
Economic System
Population Demographics
People With Disabilities
Aging
Social Determinants & Health Equity
Health System History and Challenges
Total Health Spending, USD PPP Per Capita (2020): $4,665.64
(Note: “Health spending measures the final consumption of health care goods and services (i.e. current health expenditure) including personal health care (curative care, rehabilitative care, long-term care, ancillary services and medical goods) and collective services (prevention and public health services as well as health administration), but excluding spending on investments. Health care is financed through a mix of financing arrangements including government spending and compulsory health insurance (“Government/compulsory”) as well as voluntary health insurance and private funds such as households’ out-of-pocket payments, NGOs and private corporations (“Voluntary”). This indicator is presented as a total and by type of financing (“Government/compulsory”, “Voluntary”, “Out-of-pocket”) and is measured as a share of GDP, as a share of total health spending and in USD per capita (using economy-wide PPPs).”
Source: OECD (2023), Health spending (indicator). doi: 10.1787/8643de7e-en (Accessed on 14 May 2023).
Current Health Expenditure As Percentage Of Gross Domestic Product, 2020: 10.9%
Source: Global Health Observatory. Current health expenditure (CHE) as percentage of gross domestic product (GDP) (%). Geneva: World Health Organization. Last accessed May 14, 2023.
Current Health Expenditure Per Capita in USD, 2020: $4,388
Source: Global Health Observatory. Current health expenditure (CHE) per capita in US$. Geneva: World Health Organization. Last accessed May 13, 2023.
Out-Of-Pocket Expenditure As Percentage Of Current Health Expenditure, 2020: 12.57%
Source: Global Health Observatory. Out-of-pocket expenditure as percentage of current health expenditure (CHE) (%). Geneva: World Health Organization. Last accessed May 13, 2023.
Out-Of-Pocket Expenditure Per Capita in USD, 2020: $551.6
Source: Global Health Observatory. Out-of-pocket expenditure (OOP) per capita in US$. Geneva: World Health Organization. Last accessed May 13, 2023.
Current Health Expenditure Per Capita (USD) (2016): $4,233
Current Health Expenditure as Percentage of Gross Domestic Product (%) (2016): 10.9%
Domestic General Government Health Expenditure as Percentage of General Government Expenditure (%) (2016): 23.4%
Population with household expenditures on health greater than 10% of total household expenditure or income (2009-2015) (%): NA
Population with household expenditures on health greater than 25% of total household expenditure or income (2009-2015) (%): NA
Source: World health statistics 2019: monitoring health for the SDGs, sustainable development goals. Geneva: World Health Organization; 2019. Licence: CC BY-NC-SA 3.0 IGO.
Annual household out-of-pocket payment in current USD per capita, 2020: $552
Source: Global Health Expenditure Database. Health expenditure series. Geneva: World Health Organization. Last accessed May 13, 2023.
Out-of-Pocket Spending as Share of Final Household Consumption (%) (2019): 2.6%
Source: OECD (2021), Health at a Glance 2021: OECD Indicators, OECD Publishing, Paris, https://doi.org/10.1787/ae3016b9-en.
“Japan’s health-care system is based on a social insurance system with tax subsidies and some amount of out-of-pocket (OOP) payment. According to OECD data, total health expenditure increased substantially and accounted for 10.9% of the GDP in Japan in 2015 (ranked 3 among 34 countries), about two percentage points above the OECD average of 9%. Healthcare in Japan is predominantly financed by publicly sourced funding. In 2015, 85% of health spending came from public sources, well above the average of 76% in OECD countries. Direct OOP payments contributed only 11.7% of total health financing. The health insurance coverage rate was nearly 100% while the share of household consumption spent on OOP payments was only 2.2%, 0.6% less than the OECD average of 2.8%. Despite the relatively low OOP payments, the key challenges in Japan are population ageing, rapid increases in chronic illness, escalating medical expenditure, contracting fiscal space, and pressures on the health-care workforce. Reforms of the financing system and greater efficiencies in health systems will be necessary to sustain good health at low cost with equity in the future.”
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 proportion of health expenditure paid by the public sector in Japan in 2015 was higher than that of many other high-income countries. Government expenditure as a percentage of total national expenditure ranged from 49.4% (USA) to 85.4% (Norway) in 2015. The OECD average has been around 70–75%, while that of Japan has been around 80–85% consistently sits higher than the OECD average.
“Japan’s NHCE [National Health-Care Expenditure] by type of sector from 1995 to 2014 is presented in Table 3.5. Almost all categories have slightly increased since 1995. Most significantly, pharmacy dispensing expenditure has rapidly increased. According to NHCE, pharmacy dispensing expenditure increased about six times from 1995 to 2014, reflecting an increased “out-sourcing” of dispensing to pharmacies (before 1995, it was common for general clinics to directly dispense drugs to patients). The share of pharmacy dispensing expenditure to total health expenditure was 9.4% in 2003 and gradually increased to 18.0% in 2013, and remains almost the same at around 18.0%. Recently, expenditure for home-visit nursing care has also been increasing substantially compared to the period between 1995–2005, reflecting a rapidly ageing society and the government’s strong emphasis on home care (note that the NHCE does not include home-visit health care and nursing expenditure financed from the LTCI [Long-Term Care Insurance]).”
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 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. More than 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.
“The courts have allowed these restrictions on the grounds that because health care is a public service similar to education, the government may regulate it. 10 Commercial insurance plans are not allowed to become insurance carriers in the social health insurance system. Commercial plans generally provide a cash benefit—for example, $100 per day while a patient is hospitalized, or a one-time payment of $5,000 when a person is diagnosed with cancer—that stays the same no matter how much the patient pays 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.
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 May 14, 2023 by Doug McVay, Editor.
