lecture 1 the performance of japan’s health system

309JMAJ, July /August 2007 — Vol. 50, No. 4

*1 This article is based on a presentation made originally in Japanese at the Japan Medical Association Research Institute 10th AnniversaryPublic Lecture hosted by the Japan Medical Association at the JMA Hall on April 13, 2007.*2 Professor, Harvard School of Public Health, Boston, USA ([email protected]).*3 The collaboration resulted in the course taught around the world jointly by the Harvard School of Public Health and the World Bank Institute,under the name “Flagship Course on Health Sector Reform and Sustainable Financing” and in the book, Getting Health Reform Right: A Guideto Improving Performance and Equity (by Marc J. Roberts, William Hsiao, Peter Berman, and Michael R. Reich, published by Oxford UniversityPress, 2004).

The Performance of Japan’s Health SystemAnalysis with the Harvard-Flagship HealthReform Approach*1

JMAJ 50(4): 309–316, 2007

Michael R. REICH*2

In this approach, we propose that five elements,Financing, Payment, Organization, Regulation andBehavior (of patients, physicians, input producers,etc.), be used as control knobs to bring aboutimproved performance. Three factors, Efficiency,Quality and Access are used as intermediateperformance measures related to them.

One example of another approach for evalu-ating health systems is the World Health Organi-zation (WHO) approach. This uses three items,“Health Status,” “Responsiveness” and “Fairnessin Financial Contribution,” as indices for assess-ment. These are similar to three final performancemeasures of the Harvard-Flagship Approach,but the Harvard-Flagship Approach differs inproviding methods and policies for attaining theperformance goals (Slide 6).

The Japanese Health System:What are its strengths?

In analyzing the Japanese health system with theHarvard-Flagship Approach, let us look first athealth status. According to the 2005 statistics ofthe Organization of Economic Cooperation andDevelopment (OECD), Japan has the longestaverage life expectancy, and its infant mortalityrate is also the lowest. According to WHO’sWorld Health Report 2000, Japan’s health statusis the best in the world and can be consideredexcellent (Slides 7–10).

What Is the Harvard-Flagship HealthReform Approach?

Today, I will give a brief presentation on thequestion: “How can we think about the perfor-mance of a health system?”

The following two points should be kept inmind when thinking about a health system. First,a health system is a means to an end, not anend in itself. In other words, a health system isintended to achieve several purposes. The secondpoint is that a health system is complex becauseit involves many actors who need to worktogether (Slide 1).

As is well known, analyzing the performanceof a health system is very difficult. There isno international consensus for the evaluationparameters that should be used. To help addressthis problem, four professors at the HarvardSchool of Public Health have collaborated todevelop the “Harvard-Flagship Health ReformApproach” (referred to below as the Harvard-Flagship Approach), in collaboration with theWorld Bank Institute (Slides 2, 3).*3

The Harvard-Flagship Approach evaluatesthree items, “Health Status,” “Customer Satis-faction,” and “Financial Risk Protection” as theultimate performance goals of a health system,from technical, ethical and political points ofview (Slides 4, 5).

Conferences and LecturesJMARI Public Lecture on the Future Image of Japan’s Healthcare

Lecture 1

310 JMAJ, July /August 2007 — Vol. 50, No. 4

Reich MR

Also from the perspective of financial riskprotection, Japan’s health system can be consid-ered very good, much higher than the UnitedStates, for example, due to its universal coverage,free access to hospitals and clinics, comprehensivebenefit, and its catastrophic coverage (for high-cost medical care) (Slides 11, 12).

The Japanese Health System:What are its challenges?

One of the major challenges for the Japanesehealth system is related to health expenditure.According to OECD’s 2005 data, Japan’s figurefor health expenditure as a portion of grossdomestic product (ratio to GDP) is approximatelyhalf that of the U.S., which is the highest, andabout as low as that of the U.K., which is thelowest among the OECD countries. Japan’s percapita expenditure is also the lowest. However,due to the fact that since the beginning of the1980s, the population structure has been rapidlyaging, and national medical expenditure has alsobeen increasing, Japan is facing challenges forfuture spending (Slides 13–15).

Japan also confronts challenges related tocustomer satisfaction. The results vary accordingto different surveys (from 19% to 82.4%), but itsranking among the major developed countries isquite low; therefore, we could say that Japan’shealth system ranks “fair to poor” on customersatisfaction. The reasons for this low rating couldbe the limited explanation and transparency indoctor-patient relations, and the lack of access tohigh-technology health services (Slides 16, 17).

What Can Be Done?

As mentioned above, one characteristic of theHarvard-Flagship Approach is that it proposesspecific methods for designing and introducingsolutions.

Let me briefly mention two such methods.First, the approach uses adjustments of the fivecontrol knobs in order to improve performanceand equity. Second, the approach uses a diagnostictree to move from problems to interventionsusing the control knobs.

Now, let us briefly examine two examples:Low Public Satisfaction and Growing ChronicDiseases. Please note these are only partialanalyses for illustrative purposes (Slide 18).

First, one needs to construct a diagnostic treefor Low Public Satisfaction. Inadequate quality,limited access to high-tech services, and risingcosts are all factors that contribute to the lowrating on public satisfaction. Japan’s aging popu-lation is an important factor that contributes tothe rising medical costs. All of these causes areaffected by the five control knobs (financing,payment, organization, regulation, and behavior)(Slide 19).

In the case of adjusting the financing controlknob to improve public satisfaction, one specificexample that could be proposed is to considerpartial introduction of private health insurancein Japan. As a result, one could anticipate thefollowing consequences: (1) greater choice onprocedures, (2) better quality for patients, and(3) better satisfaction for patients. However, fromthe ethical point of view, one must also beconcerned about possible equity effects and thepolitical role of private insurers. By introducingprivate health insurance, the political balancecould change. For example, the private insuranceindustry in the U.S. exerts huge political influenceover domestic health policy decisions (Slides20, 21).

For the next example, one begins again by con-structing a diagnostic tree for Growing ChronicDiseases. Inadequate exercise, changing nutrition,and changing family structure are all factors thatcontribute to the increase of chronic diseases inJapan. Aging again is an important factor in thechanging family structure. All of these causesare affected by the five control knobs (financing,payment, organization, regulation, and behavior)(Slide 22).

Here, let us consider how adjustments of theBehavior control knob could affect chronic dis-eases in Japan. We mentioned that many chronicdisease problems in Japan (and elsewhere) arerelated to two behavior changes: individualnutritional consumption, and individual habitsof physical exercise (Slides 23, 24).

Recently, in Japan, two Vice Ministers of theMinistry of Health, Labor, and Welfare began apublic diet. This is a specific example of adjustingthe behavior control knob. One of the ViceMinisters, Professor Keizo Takemi, succeeded inlosing 4 kg in 4 months, demonstrating a success-ful change in his personal health status and alsoraising the issue of personal behavior as a matterof public debate. However, it will not be easy


THE PERFORMANCE OF JAPAN’S HEALTH SYSTEM ANALYSIS WITH THE HARVARD-FLAGSHIP HEALTH REFORM APPROACH

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to expand his personal success to change thebehavior of other people in Japan (Slide 25). Thiswill require more efforts, including the possibleuse of other control knobs to affect Japan’shealth system performance.

The Harvard-Flagship Approach as aTool for Health Reform in Japan

I would like to suggest three conclusions fromthis brief presentation. First, health reform is noteasy. It is a complex process that involves techni-cal, ethical, and political decisions. For Japan, wemust think about who and how this process canbe made to work effectively (Slide 26).

Second, my presentation suggests that theHarvard-Flagship Approach of five control knobscan help guide analysis and decisions abouthealth reform in Japan. The Harvard-Flagship

Approach is effective for systematically orga-nizing ideas about health system reform, suchas which of the three performance goals shouldbe prioritized and what kind of society one hopesto create. The approach can also be used to helpstructure public debate and deliberation aboutthese critical decisions for Japan’s future healthsystem (Slide 27).

Third, my presentation suggests that healthreform at the individual level may not be easy—but that it is possible. This can be seen in Profes-sor Takemi’s example of remarkable success inbecoming more healthy (Slide 28). His exampleprovides an inspiration for all of us and for Japan.

Acknowledgements

The author appreciates the assistance provided by Mr.Satoshi Ezoe of Harvard University and by ProfessorKeizo Takemi and the Japan Medical Association.


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lecture 1 the performance of japan’s health system

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