Healthcare

GLOBAL INVESTOR 2.12 — 35
Paying for healthcare
Japanese
lessons
Just who pays for healthcare, and how much, depends on varying views of what
constitutes “appropriate” treatment, the amount of income that providers
expect to earn and patients’ expectations of healthcare. Consequently, healthcare
expenditures have a built-in (albeit unsustainable) mechanism for escalation.
Japan’s single-payment system provides one approach to containing costs.
Naoki Ikegami, health economist, Keio University, Tokyo
There are several key issues in paying for healthcare. The first is: what
constitutes “appropriate treatment”? Patients tend to think that this
is a black-and-white issue. In other words, for any given condition,
there is only one course of treatment that is the most appropriate.
However, most healthcare falls in a gray area referred to by physicians
as “it depends” (on the patient). What they do not say is that it also
depends on the resources available, their personal inclinations based
on where they have been trained and how they are paid. If their income
is linked to their activities, the white “appropriate” area will expand.
On the other hand, if income and activities are not linked, this area
will contract, and there will be waiting lists of patients who have
conditions not needing immediate treatment.
The second issue is that healthcare expenditures for the patient,
insurance plans and government represent income for physicians and
hospitals. Personnel costs in high-income countries are typically about
half of the total. So when healthcare providers talk of “costs,” they are
really talking about their income. Should physicians earn about the
same as the average worker or ten times more? How much should they
earn relative to nurses? In many middle-income countries, and among
some specialties in the USA, physicians earn ten times more than
nurses. Limiting delivery to specialists and limiting entry only to those
well trained are said to be prerequisites for maintaining quality. >
Sometimes
appropriate
Physician
Always inappropriate
Always appropriate
Always inappropriate
Patient
01_What is “appropriate” treatment ?
Patients frequently see appropriate healthcare interventions as a
black-and-white issue, whereas for physicians, the question of whether
or not to treat falls into a gray area. Source: N. Ikegami