August 28, 2014 7:00 pm JST

Consistently healthy? Collect 10,000 yen

Aiming to cut medical insurance payouts, the city of Soja in Okayama Prefecture has introduced cash incentives for residents who stay healthy.

TOKYO -- Like many industrialized countries, Japan is in a social security bind. Somehow, it needs to stem the relentless rise of medical costs without jeopardizing the quality of care. The situation has prompted a scramble for solutions, with one city even doling out cash in an attempt to save on public insurance payouts.

   In fiscal 2011, the year through March 2012, public health insurance reimbursements to medical institutions totaled some 38.6 trillion yen (about $470 billion at the time). In a decade, the figure rose by roughly 7.5 trillion yen. There are no signs that the uptrend is slowing.

     The government estimates that in fiscal 2025, when baby boomers will be 75 and older, total health care spending will reach 54 trillion yen -- excluding out-of-pocket payments by patients. "If things do not change, Japan's health care system will become unsustainable," warned Hitoshi Suzuki, a senior researcher at Daiwa Institute of Research.

     What can be done? Some believe that the answer, at least in part, is to encourage citizens to take better care of themselves.

Cash carrots

The city of Soja in Okayama Prefecture, in western Japan, has caught the attention of municipal governments nationwide.

     The segment of the national health insurance program run by Soja's government is bleeding red ink. Subscribers are mainly self-employed workers, elderly citizens and low-income earners, and as care costs rise, the city is being forced to draw on reserves to keep the program financed. Those reserves will not last forever.

     To prevent the program from collapsing, Soja officials have adopted an unusual strategy.

     It works like this: Subscribers who undergo an exam for metabolic syndrome and do not require a doctor's services for a year are eligible to receive 10,000 yen ($95). Individuals who take part in special health-related events, such as sports meets, three times are entered into a lottery for up to 100,000 yen. 

     Some might question the wisdom of dangling cash in an effort to cut costs. But Soichi Kataoka, Soja's mayor, insists this approach has potential. "Even if we spend several millions of yen on the handouts, we can call the program a success if it reduces, even by one, the number of patients who have to undergo regular dialysis," Kataoka said. Dialysis, he continued, "costs 5 million yen annually per patient."

Don't forget to brush

IBM Japan, meanwhile, has been spreading the word about the importance of proper oral hygiene. Walk into the washrooms at IBM Japan's headquarters in Tokyo at lunchtime and, sure enough, they will be crowded with employees dutifully brushing their teeth.

     The company's health insurance association bet that reducing cases of periodontal disease would help to bring down overall medical costs. In eight years, some 22,000 IBM Japan employees -- two-thirds of the workforce -- have received guidance on oral care.

     The association says the estimated cumulative savings on dental treatments have surpassed the expense of providing the guidance by 32 million yen by 2011.

     Gen Kato, a dentist, noted that oral health is closely connected with lifestyle-related illnesses. Gum disease, for example, has been shown to worsen diabetes. Preventive dentistry is thus an important factor in general health management, Kato said.

     More broadly, the Ministry of Health, Labor and Welfare estimates that efforts to prevent lifestyle-linked diseases and promote the use of cheaper generic drugs could slash medical outlays by 4.4 trillion yen by fiscal 2025. The ministry plans to set prefecture-by-prefecture targets for cutting medical costs as early as fiscal 2015.

Reining in the payouts

Still, there is no surefire way to stop the growth of health care costs. Prevention is important for individuals, but it is merely conjecture that it will reduce cumulative expenditures over the long term. Generic drugs can only be relied upon to a certain extent.

     Hiroyuki Sakamaki, a professor at Meijo University, argues that the only hope is to change the way the public system pays medical institutions. The professor suggested that rather than reimbursing doctors for each service they perform -- which gives them an incentive to carry out more procedures -- the system should pay doctors only a limited amount.

     Ikuko Yamaguchi of the Consumer Organization for Medicine & Law said patients should not leave everything to the government, businesses and medical institutions to improve the situation, but help them deal with the crunch. Yamaguchi suggested individuals can contribute by educating themselves about hospitals and treatments, thereby limiting expensive and unnecessary care.

     A new mindset about medical care may be essential for healthier national finances. 

(Nikkei)