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4 Afterword: Costs—The Macro Perspective
- University of Michigan Press
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CHAPTER 4 Afterword: Costs-The Macro Perspective William C. Hsiao In assessing the financial resources spent on health care, three questions should be answered: (I) How much did Japan spend on health care? (2) How does the total expenditure compare with that ofthe United States? (3) What are the trends in cost inflation and their underlying causes? The common analytical tool used to answer these questions is a National Health Expenditure (NHE) account. It shows how much was spent for health care, the amounts spent for different services, and who paid for these services. This information reveals how resources were allocated and whether the financial burden was shared equitably. International comparisons can provide broad indications about the efficiency ofa nation's health care system and adequacy of its health care financing. In short, NHE is essential data to have. Traditionally, physicians have been appointed as health policy makers, and they usually have had little awareness of the need for economic analysis. Consequently , economic and social information about the health sector are often inadequate . Most nations do not have a complete and accurate account of their total health expenditures; Japan is no exception. Nonetheless, the formulation of sound health policy requires the information that can be provided by an NHE. Further, in conducting international comparative analyses, the NHE has to be compiled on a consistent basis. Katsumata makes a significant contribution in developing a reliable NHE for Japan. Compiling a national health account is not a simple matter. There are three basic issues: First, what is the definition of national health expenditure? In recent years, the Health Statistics Office of the Organization for Economic Cooperation and Development (OECD) established a common definition ofhealth expenditure that defines it as final consumption by the government, quasi-governmental organizations , and households for health care. Final consumption is defined as expenditure paid by these bodies. Second, what are the boundaries of health care-what services and programs should be considered health care? Prevention programs, primary care, and curative services are usually considered health care. However, nations differ in their treatment of other issues, such as over-the-counter drugs, spending for medical research and education, and community and social services for the elderly and disabled. Finally, what methods should be used to compile the national health expenditure account? Different methods can produce different results. For example, the United States derives its NHE from the production side 45 CHAPTER 4 Afterword: Costs-The Macro Perspective William C. Hsiao In assessing the financial resources spent on health care, three questions should be answered: (1) How much did Japan spend on health care? (2) How does the total expenditure compare with that ofthe United States? (3) What are the trends in cost inflation and their underlying causes? The common analytical tool used to answer these questions is a National Health Expenditure (NHE) account. It shows how much was spent for health care, the amounts spent for different services, and who paid for these services. This information reveals how resources were allocated and whether the financial burden was shared equitably. International comparisons can provide broad indications about the efficiency ofa nation's health care system and adequacy of its health care financing. ln short, NHE is essential data to have. Traditionally, physicians have been appointed as health policy makers, and they usually have had little awareness of the need for economic analysis. Consequently , economic and social information about the health sector are often inadequate . Most nations do not have a complete and accurate account of their total health expenditures; Japan is no exception. Nonetheless, the formulation ofsound health policy requires the information that can be provided by an NHE. Further, in conducting international comparative analyses, the NHE has to be compiled on a consistent basis. Katsumata makes a significant contribution in developing a reliable NHE for Japan. Compiling a national health account is not a simple maUer. There are three basic issues: First, what is the definition of national health expenditure? In recent years, the Health Statistics Office of the Organization for Economic Cooperation and Development (OECD) established a common definition ofhealth expenditure that defines it as final consumption by the government, quasi-governmental organizations , and households for health care. Final consumption is defined as expenditure paid by these bodies. Second, what are the boundaries of health care-what services and programs should be considered health care? Prevention programs, primary care, and curative services are usually considered health care. However, nations differ in their treatment of other issues, such...