Containing Health Care Costs in Japan

26 The Japan Medical Association and Private Practitioners' Income

CHAPTER 26 The Japan Medical Association and Private Practitioners' Income Yasuo Takagi SUM MAR Y ( I) Medical fees have favored private practitioners (office-based physicians) who provide primary care. For this reason, hospitals have come to rely on revenue from outpatient care rather than for inpatient care, and the functional separation of hospitals and offices has not progressed. (2) Consultation fees have been relatively high in Japan compared with surgery fees. However, the hospitals' share has increased because of their growing role in long-term care and the preference of patients for hospital outpatient care. (3) The new fees resulting from demands by the Japan Medical Association (JMA) have added 15% to the total medical costs for office-based physicians. However, their effect has been less than expected because hospitals have also benefited to a certain extent. Introduction Since universal health insurance was instituted in 1961, the point-fee system has been used for remuneration of medical care in Japan. In this system, fees are determined for individual medical procedures, such as examinations, drug dispensing, injections, tests, and surgery. The medical services provided by physicians and medical care facilities are reimbursed according to this point-fee system , and claims arc submitted for payment. This point-fee system has acted as the primary mechanism to contain health care costs. Over this fee schedule, there has been a latent conflict in the allocation of resources between hospitals and offices (private practitioners) and between internal medicine and surgery. In negotiations over the fee schedule, hospitals are not represented, and the JMA, which has traditionally backed private practitioners , has taken the leading role. As a result, outpatient treatment carried out by private practitioners has been given greater weight, while the facilities, nursing staff, and advanced medical technology of hospitals have not been fairly remunerated . Faced with this situation, hospitals, which should be concentrating on inpatient treatment, have had to rely on outpatient treatment. CHAPTER 26 The Japan Medical Association and Private Practitioners' Income Yasuo Takagi SUM MAR Y ( I) Medical fees have favored private practitioners (office-based physicians) who provide primary care. For this reason, hospitals have come to rely on revenue from outpatient care rather than for inpatient care, and the functional separation of hospitals and offices has not progressed. (2) Consultation fees have been relatively high in Japan compared with surgery fees. However, the hospitals' share has increased because of their growing role in long-term care and the preference of patients for hospital outpatient care. (3) The new fees resulting from demands by the Japan Medical Association (.JMA) have added 15% to the total medical costs for office-based physicians. However, their effect has been less than expected because hospitals have also benefited to a certain extent. Introduction Since universal health insurance was instituted in 1961, the point-fee system has been used for remuneration of medical care in Japan. In this system, fees are determined for individual medical procedures, such as examinations, drug dispensing, injections, tests, and surgery. The medical services provided by physicians and medical care facilities are reimbursed according to this point-fee system , and claims are submitted for payment. This point-fee system has acted as the primary mechanism to contain health care costs. Over this fee schedule, there has been a latent conflict in the allocation of resources between hospitals and offices (private practitioners) and between internal medicine and surgery. In negotiations over the fee schedule, hospitals are not represented, and the JMA, which has traditionally backed private practitioners , has taken the leading role. As a result, outpatient treatment carried out by private practitioners has been given greater weight, while the facilities, nursing staff, and advanced medical technology of hospitals have not been fairly remunerated . Faced with this situation, hospitals, which should be concentrating on inpatient treatment, have had to rely on outpatient treatment. 27R The Japan Medical Association and Private Practitioners' Income 279 In this report, we will take a historical review of the point-fee system since 1960 and analyze how the weight given to outpatient treatment has caused changes in the structure of cost allocation between hospitals and clinics. In addition , we will examine the extent to which the political influence of the JMA has increased the income of private practitioners. In particular, consultation fees, which constitute a larger share of the revenue for practitioners, have come to be given greater weight. While these favorable revisions were made partly to compensate for the reduction in drug prices (the remuneration for drugs constitutes 50...