At What Cost

Universal health care can transform a country. In Japan, the kokumin kaihoken insurance system has led to the world’s highest life expectancies, equal access to affordable health care, and extensive long-term care for the elderly. Japan is not alone. Other than the United States, every country in the Organization for Economic Cooperation and Development—a collection of mostly developed countries—has some form of universal health care. These systems help support healthier populations, ensure access to medical treatment for low-income citizens, and promote general economic equality. However, the extended lifespans made possible by these successful health care policies, combined with falling birth rates, have put increasing economic strain on these countries’ hospitals and clinics. Growing elderly populations not only threaten the financial basis of universal health care, but also force us to confront how we approach end-of-life care.

For every elderly person receiving extensive health care, a large number of young healthy taxpayers and insurance premiums are required. A low ratio of dependents per worker—known as the dependency ratio—sustains robust health care systems without redirecting large amounts of government expenditure to cover costs. Although Japan’s health care system cost only 10.2 percent of its GDP in 2013, the nation has a rapidly increasing dependency ratio, which puts great stress on its health care infrastructure. By 2050, a projected two-fifths of Japan’s overall population will be above the age of 65. As a result, health care spending is expected to double in proportion to Japan’s GDP. So long as birth rates remain low and health care policy remains unchanged, Japan’s insurance system will put too great a burden on the government’s coffers for its current health care model to remain sustainable.

Funding is not the only issue facing kokumin kaihoken. The types of health care problems faced by the elderly require different specialists and facilities from those designed for the majority of the population.  In order to pre-empt this problem, Japanese Prime Minister Shinzo Abe has increased spending on the research and development of biomedical technologies that target the needs of the elderly. But the country still suffers from a shortage of geriatric doctors and general surgeons, and it lacks the resources to support terminally-ill patients, forcing many out of their homes and into hospital wards. The lack of geriatricians exacerbates the financial burden on Japan’s health care system, and means the country’s growing elderly population does not receive adequate care.

"Governments around the world have a duty to start incentivizing specialization in geriatric care now in preparation for their aging populations"

In the past, the benefits of universal health care systems have been taken for granted in developed countries. But no current system of universal health care seems well-prepared to meet the inevitable demographic changes occurring as medical advances outpace human reproduction. One solution could be to increase co-pays or insurance premiums. Yet this would create issues in terms of accessibility for low-income individuals and for the elderly who are paying with pensions and savings, threatening the very universality that defines universal health care. Instead of simply increasing the average citizen’s healthcare costs, long-term structural changes are needed.

Bureaucratically, structural health care reform may be easier in countries where the government controls subsidies and provides health care, such as the United Kingdom. In countries such as Japan, however, health care providers are predominantly private, so policymakers must find ways to incentivize private companies to increase efficiency and reduce costs. To this end, the most promising proposal is a value-based or outcome-based system of health care, which aims to reduce unnecessary health care spending. Instead of the current fee-based system in which payment is levied on a per service basis, a value-based system would base payments upon final health care results. A value-based system would be exceptionally effective in Japan, where hospitals often employ excessive testing to increase their profit margins. This practice takes a heavy financial and emotional toll on families and can inflict great discomfort on the patient. A value-based model would curb these issues and save on general health care spending, freeing up more funding to be directed towards elderly care. Although value-based models have not yet been implemented on a large scale, significant research has been done to confirm their economic benefits and to determine the value of health outcomes. Recognizing the potential for systematic improvement, Japanese Health Minister Yasuhisa Shiozaki proposed a value-based system in his report titled Japan Vision: Health Care 2035.

Another approach is to raise the quality of geriatric care. All-inclusive geriatric care units, developed by Taipei Veterans General Hospital, specifically address the needs of the elderly. These units aim to cut costs by providing comprehensive overall outpatient care, integrating services specifically required by the elderly, and preventing the need for repeat visits to specialists in different hospitals. The program has seen promising results: the number of physician visits by elderly patients has gone down by 30 percent since it was first implemented. Nevertheless, this kind of program requires a large number of geriatric-care specialists, which many countries currently lack. Governments around the world have a duty to start incentivizing specialization in geriatric care now in preparation for their aging populations. To begin, countries can make specializing in geriatrics more appealing by raising geriatric salaries to be comparable to other more attractive specialties such as neurosurgery. And in countries such as Japan and Singapore, where the government has a degree of control over the number of people trained as doctors, governments can create quotas on each specialty within medical schools based on the number of doctors needed.

The massive potential of modern medicine can only be realized within a system of universal access to health care, and elderly care must be reorganized if universal health care is to endure. But it could be that the problem lies most in our perception of what good end-of-life care looks like. As of now, doctors, driven by a fee-for-service pay scheme and an incentive to prolong life at all costs, eschew communication with their patients in favor of a battery of tests until their deaths. A value-based approach to medicine would not only help reduce frivolous tests but also give physicians an incentive to inform their patients about all available options and discuss difficult topics such as palliative care. Exploring a variety of medical care options gives patients more agency in their end-of-life care. Indeed, the quality of life is just as important as its length.

Photo: Elderly Japanese Women

About the Author

Kavya Nayak '22 is a Staff Writer for the Culture Section of the Brown Political Review. Kavya can be reached at kavya_nayak@brown.edu

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