The Political Economy of the Fee Schedule in Japan
How did these three factors affect outcomes in Japan? First, economic: shifts in the overall economy and the fiscal situation and in the supply, demand, and costs of various items, fed pretty directly into price decisions. In figure 6.1, we observed that prices grew more slowly in the second half of the period after 1990, a trend partially caused by tougher constraints on expenditures overall due to the economy and stringent fiscal policies. Second, policy: the preferences of the main actors in the “normal” process are too stable to account for much change in spending patterns, but when the political leadership wants change and is willing to push for it, as with Prime Minister Koizumi for less spending in general and the DPJ administration for more outlays (particularly on hospitals), they can have a big impact at macro level. At micro level, there is always a lot of back and forth on policy issues, as for example when the government decided it wanted to increase home visits, or improve acute inpatient care. Third, politics: fee scale revision is a conflictual negotiation process where power matters. Changes in power relationships can bring change in price decisions, as when the JMA lost influence (at least for a time) in 2010, and when the government changes hands (it remains to be seen what the return of the LDP to power will mean for the fee schedule). However, the biggest impact of politics has been to prevent rather than cause change. The careful attention to “balance” in the income going to various sorts of providers avoids a sense of relative deprivation that could lead to protest. Careful adjustment to preserve the status quo is the norm. It takes exceptional effort to disturb the equilibrium, though, as seen in 1998, 2002, and 2010, it can happen. A key is the routine. Every two years all the main participants in health care financing and delivery are drawn into a highly structured review process. Current problems are identified via formal surveys and informal assessments. Priorities emerge from long negotiations; firm deadlines force compromises. At the end of each cycle, there is a new fee schedule that strikes a balance in the many long-standing conflicts of interest that pervade health care. The changes are not very great, so that the system remains relatively stable, but in the aggregate and over time new problems have been managed and shifts in policy priorities accomplished. No doubt results are far from optimal, but then the process starts again two years later and the problems can be addressed once more. Are there lessons for other nations? Obviously, the system as a whole cannot just be transplanted: health care is too embedded in broader society and past experience for that. But three aspects of the Japanese approach are worthy of attention. First, controlling prices can be an important key to controlling how the overall health care system works. Second is the usefulness of a regular review cycle that can realign all the moving parts incrementally without turning the system upside down. The third is that a structured and iterative process for negotiations among the key participants should be developed—or, more likely, allowed to emerge.
Universal Health Coverage for Inclusive and Sustainable Development http://dx.doi.org/10.1596/978-1-4648-0408-3
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