Rising cost for elderly a problem for Japan’s universal health care system

by Hao-Hua Wu

With close to 40% of its population projected to reach the ages of 65 and older by 2050, Japan faces the problem of financing the rising health care costs of the elderly through its universal health care system.[1] [1] According to Ministry of Health, Labour, and Welfare in Japan.

Source: http://www.ncpa.org/images/392.gif

Due to the high medical costs associated with the elderly and to the loss of tax revenue from a shrinking worker population, Japan’s health care system is at risk for bankruptcy, said Hisakazu Kato, a professor at the School of Political Science and Economics, Meiji University in Tokyo.

“It takes a heavy cost to maintain such a comprehensive service system, and we need to make changes to keep the system from collapsing,” said Kato, a health care specialist.

One solution Kato proposes is for the Japanese government to allocate health care funds more selectively.

“I think one method is to provide more financial support to heavy diseases. We need to place more of a premium on life-threatening diseases, and pay for operations that save lives,” he said.

Kato also states that the Japanese government can generate revenue from increasing the consumption tax to help fund health insurance.

“I think that it is necessary to construct a fiscal system for medical service based on the revenue from the consumption tax,” Kato said.

According to USC professor Saori Katada, a Japanese citizen, if the matter of increasing the consumption tax came to a vote, she would support it.

“There’s not much choice,” Katada said. “Generally people would not like to do that but where else is the money going to come from?”

Since Japanese citizens collectively share in the cost of their insurance, Katada also believes that a sliding scale system for premium payment, in which participants with higher incomes pay a higher share of the total premium cost, is another option to finance Japan’s medical system.

“Universal health care is viable if we had a slide scale system,” Katada said. “There are quite a few older, wealthy people who don’t need to be subsidized by the government.”

According to Kato, despite the rising cost of Japan’s universal health care system, it would be great to keep the current system intact because it provides Japanese citizens with easily accessible medical care.

“The access to the medical service is very easy for the patient, and the personal payment for the medical examination and treatment is not expensive,” Kato said.

“I am personally satisfied with our medical system,” he said.

Like Kato, Katada believes that the current system adequately covers Japanese citizens for health care costs, and she also adds that patients enjoy a satisfactory standard of medical care.

“In Japan, you tend to go to smaller clinics and to go see doctors that you’ve known since you were a baby,” she said. “Your doctors know you personally, know your parents, and know your history.”

Katada cites doctor familiarity with their patients as a reason for why a patient is more likely to receive a correct diagnosis and higher quality medical care.

Japan’s demographic shift towards a disproportionately high elderly population and the difficulty of reversing the current demographic trend, however, means that the easily accessible universal health care Japanese citizens enjoy is in serious jeopardy, Kato said.

“It is very difficult to raise fertility rate and to increase young population such that [we can maintain the health care cost] for the aged persons,” he said.

“The problem is that we will not have enough young people [in the future] to help support our social security systems through taxes.”

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