Medical expenditure in Japan: an analysis with

Medical expenditure in Japan: an analysis with administrative data from a Citizen’s Health Insurance

plan

Yoko Ibuka, Tohoku University Stacey Chen, Academia Sinica

1

Medical Spending across Developed World Institute for Fiscal Studies March 27 & 28 2015

Overview

1.  Institutional Background 2.  Basic trend in healthcare expenditure 3.  Medical expenditure with data from a Citizen’s Health

Insurance plan

2

INSTITUTIONAL BACKGROUND : JAPANESE HEALTH INSURANCE SYSTEM

3

Overview

•  The national universal health insurance program(the national

health insurance, NHI) started in 1961 –  The first government-‐involved health insurance was

introduced in 1922 and gradually expanded in both its eligibilities and benefits

•  There are about 3500 plans –  Having different risk structures and financial status –  Roughly half employee-‐based and half community-‐based

4

Healthcare financing

•  Insurance Premiums: 48.6% ( in 2011) –  Employee-‐based plans

A set percentage of wages, with the employer contributing at least half (55% on average)

–  Community-‐based plans Each municipality has its own method of setting contributions, which are roughly based half on income (sometimes also assets), and half on a flat amount per enrollee (sometimes also per household)

•  Subsidies: 38.4% –  Subsidies from the government –  Cross-‐subsidizations across health insurance plans exist

•  Patients’ out of pocket: 12.3%

5

Money flows in payment system

6

Patients

Insurers

Review & Reimburse

ment Services

Healthcare Providers

Coinsurance

Medical claim bills

Medical claim bills after review

Health insurance premium

Source: Ministry of Finance, Labour and Welfare, Japanese Health Insurance System http://www.mhlw.go.jp/stf/seisakunitsuite/bunya/kenkou_iryou/iryouhoken/iryouhoken01/index.html

Medical care services

Payment for services Payment for bills

Health insurers 1

•  Individuals have no choice of plans

–  All aged 75 years or above are covered by Late Elders’ Health Insurance (LEHI)

–  Employers have to enroll their employees: Society-‐Managed Health Insurance (SMHI) and National Health Insurance Associations (NHIA)

–  Dependents (except those older than 75 years) are covered by the plan of the head of the household

–  All others are covered by Citizen’s Health Insurance (CHI)

7

　　

Employee-based insurance

Community-based insurance

　　

SMHI Society-managed Health Insurance

NHIA National Health Insurance Associations

CHI Citizen's Health Insurance

LEHI Late Elders’ Health Insurance

Eligibility Employees at large firms, government officers, their dependents

Employees at small and medium enterprises, their dependents

Self-employed, part-time workers, those retired

All aged 75 years or older

Enrollment (thousand) 31,000 35,000 38,000 16,000 　 (proportion) 26% 29% 32% 13% Number of health plans 1500 1 1900 47 Medical spending

(proportion) 15% 15% 29% 41%

Health insurers 2

8

Source: Ministry of Finance, Labour and Welfare, Japanese Health Insurance System (in Japanese)http://www.mhlw.go.jp/stf/seisakunitsuite/bunya/kenkou_iryou/iryouhoken/iryouhoken01/index.html

Insurance benefits

•  Services covered include prescription drugs and dentistry •  Single fee schedule is applied to all plans

–  The government committee revises the fee schedule every two years

•  Coinsurance are age-‐dependent and the same across plans •  Extra coverage for catastrophic expenses: those with

monthly out-‐of-‐pocket payment of 40,000 JPY (=400 USD) for 70+ and 80,100 JPY (= 810 USD) for those under 70 –  For many, 1% coinsurance for medical costs above the payment values

–  Can be more or less generous depending on income level

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Coinsurance as of 2015

10

Age Those with income above a threshold

value*

All other

75 or over 30%** 10%

70 - 75 20%§

6 - 70 30%

0 - 6 20%

* Monthly salary earnings excluding bonus payments more than 280 thousand JPY. Adjustments are made for those who have income other than salary. ** 20% until October 2006 § 10% until April 2014

Other financial sources for medical care for patients

•  Municipal government can provide subsidies for medical care for infants and children to reduce out-‐of-‐pocket payment –  Eligibility and coverage are determined by each municipal government

•  Some purchase a voluntary private health insurance on top of the NHI

•  Both are independent of the NHI and individuals who qualify the subsidies or who purchase insurance receive reimbursement after they make payment –  They do not appear as the source of medical spending in

NHI statistics and counted as a part of out-‐of-‐pocket payment

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Long-term care insurance

•  Long-‐term care insurance (LTCI) started in 2000 •  The insurance is independent of NHI •  Spending for long-‐term care accounts for 7.7% of the total

social security payment while spending for medical care accounts for 32.1% in 2011

12

BASIC TREND IN HEALTHCARE EXPENDITURE: NATIONAL STATISTICS

13

Per capita medical spending and medical spending as percentage of

GDP, 1960-2012

14

2.45

3.45

4.45

5.45

6.45

7.45

8.45

9.45

262

762

1262

1762

2262

2762

3262

3762 19

60

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

2011

(%)

Spe

ndin

g pe

r per

son(

2010

US

D)

Year

Spending per person in 2010 USD Percent of GDP

Per capita medical spending by age group population vs. study sample

all

15

0

2000

4000

6000

8000

10000

12000

14000

0~9 10~19 20~29 30~39 40~49 50~59 60~69 70~79 80 or beyond

2010

US

dolla

r

Age ( years)

2000

2010

2012

Sample

Note: Medical spending in 2000, 2010 and 2012 are from the national statistics.


Men

16

0

2000

4000

6000

8000

10000

12000

14000

16000

0~9 10~19 20~29 30~39 40~49 50~59 60~69 70~79 80 or beyond

2010

US

dolla

r

Age (years)

2010

2012

Sample



Women

17

0

2000

4000

6000

8000

10000

12000

0~9 10~19 20~29 30~39 40~49 50~59 60~69 70~79 80 or beyond

2010

US

dolla

r

Age (years)

2010

2012

Sample


Share of medical spending, by source of funding, 1960-2012

0 10 20 30 40 50 60 70 80 90

100

1960 1970 1980 1990 2000 2010 2012

(%)

Central govt Local govt Employers & Insurers Insured Out-of-pocket Other

18

Share of medical spending, by the type of care, 1970-2012

0

10

20

30

40

50

60

70

80

90

100

1970 1980 1990 2000 2010 2012

(%)

Inpatient care Outpatient care Dental care Prescription drugs Other

Note: Prescription drugs are included as a part of outpatient care in 1970. 19

MEDICAL SPENDING WITH DATA FROM A CITIZEN’S HEALTH INSURANCE PLAN

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Study sample 1

21

•  Study period: 2006-‐2011 •  Coverage: All CHI beneficiaries who resides in city X during the

sample period •  Medical claim records are obtained from a CHI plan of municipality

X in the north-‐east region of Japan –  All medical claim records during the sample period are

compiled into the individual level and summed over 12 months to produce a yearly panel dataset on medical spending

–  The dataset is matched with the list of all beneficiaries and thus it includes those who did not seek for care

•  The panel data on medical spending is merged with household income data from tax records

Study sample 2

•  Medical spending –  Include:

Inpatient and outpatient services, prescription medicine, dental care

–  Exclude: •  long term care, over-‐the-‐counter drugs •  A part of out-‐of-‐pocket expenditure may be

reimbursed by voluntary private health insurance or municipal-‐level government subsidies (for children)

•  Year is defined as the fiscal year (April to March next year)

22

Discontinuity in eligibility

•  In April 2008, the late elders’ health insurance (LEHI) was

introduced •  Data includes only those under 75 after 2008

23

Age 2006, 2007 2008-‐2011 0-‐74 CHI CHI 75 + CHI LEHI

Comparison 1: Mean expenditure Population, CHI(all), CHI(City X)

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Note: CHI covered all the age group until 2008, and only individuals aged under 75 years as the Late Elders’ Health Insurance started in 2008.

　 Population 　 CHI, all 　 CHI, city X

Enrollment Mean

expenditure Enrollment Mean

expenditure Enrollment Mean expenditure 　　　　　 All <74 years >75 years

　 Thousand persons 2010 USD 　

Thousand persons 2010 USD 　

Thousand persons 2010 USD 2010 USD 2010 USD

2006 127,747 2,937 　 51,268 2,811 　 12.71 6,217 4,441 11,020 2007 127,687 3,023 50,724 2,984 13.12 6,145 4,273 11,003 2008 127,566 3,036 39,492 3,036 9.69 3,728 3,728 NA 2009 127,445 3,192 39,098 3,172 9.63 3,810 3,810 NA 2010 127,708 3,329 38,769 3,297 10.17 3,837 3,837 NA 2011 127,567 3,450 　 38,313 3,419 　 10.61 3,854 3,854 NA

Comparison 2: Age distribution Population, CHI(all), CHI(city X)

25

0

10

20

30

40

50

60

70

80

90

100

Population (2011)

CHI (2011) CHI, City X (2009-2011)

CHI, City X (2006-2008)

(%)

80 or above 70-79 60-69 50-59 40-49 30-39 20-29 10-19 0-9

Medical spending, by payers (%)

26


(A) All period

(B) 2006, 2007 (All age)

(C) 2008-2011 (Under 75)

　　 All Men Women Out-of-pocket payment 21.9 22.7 21.1 National Health Insurance 78.2 76.9 78.9



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Medical care spending, by type of care (%)


　　 All Men Women Medical care 　　　

Inpatient care 50.2 54.9 46.1 Outpatient care 26.8 25.6 27.8

Dental care 4.2 3.8 4.6 Prescription drugs 18.8 15.8 21.2







(A) All period

(B) 2006, 2007 (All age) (C) 2008-2011 (Under 75)

Concentration of spending

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Spending Percentile

Percentage of the enrollees

Percentage of spending

Average spending per enrollee in 2010 USD)

Everyone 100% 100% 6,181 95%-100% 5% 46% 57,328 90-95% 5% 16% 20,369 70-90% 20% 23% 7,193 50-70% 20% 10% 2,998 0-50% 50% 4% 512

Spending Percentile

Percentage of the

enrollees


Average spending per enrollee in 2010 USD)

Everyone 100% 100% 3,809 95%-100% 5% 53% 40,637 90-95% 5% 12% 9,479 70-90% 20% 22% 4,128 50-70% 20% 9% 1,738 0-50% 50% 3% 259

Spending Percentile Percentage of the enrollees


Average spending per enrollee (in 2010

USD) Everyone 100% 100% 4,738 95%-100% 5% 51% 48,470 90-95% 5% 14% 13,491 70-90% 20% 22% 5,205 50-70% 20% 9% 2,156 0-50% 50% 4% 334

(B) 2006, 2007 (All age) (C) 2008-2011 (Under 75)

(A) All period

Mean income, by income quintile

29

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

Everyone Bottom Fourth Third Second Top

2010

US

dolla

r

All Men Women

Mean medical expenditure, by expenditure quintile

30

0

2000

4000

6000

8000

10000

12000

14000

16000

Everyone Bottom Fourth Third Second Top

2010

US

dolla

r

All Men Women

Mean medical expenditure, by income quintile

31

0

500

1000

1500

2000

2500

3000

3500

4000

4500

Everyone Bo<om Fourth Third Second Top

2010 US do

llar

All

Men

Women

32

　 t t+1 t+2 All 1 0.58 0.49 Men 1 0.58 0.49 Women 1 0.57 0.49

　 t t+1 t+2 All 1 0.73 0.62 Men 1 0.76 0.67 Women 1 0.69 0.59

Correlation in medical spending, over time

(A) Spending in Levels

(B) Spending in Logs

Total medical expenditure transition matrix

33

Quintile Next year Current Year Bottom Fourth Third Second Top Bottom 60.4 26.9 8.2 2.3 2.1 Fourth 25.0 44.6 21.7 5.2 3.5 Third 7.7 24.3 40.0 21.2 6.8 Second 2.2 4.7 22.8 46.9 23.4 Top 5.0 2.6 6.4 22.1 63.9

Quintile Two years time Current Year Bottom Fourth Third Second Top Bottom 54.1 24.9 11.4 5.5 4.1 Fourth 27.5 38.8 20.3 8.4 5.0 Third 10.9 24.1 34.1 20.4 10.6 Second 3.9 5.4 19.1 43.2 28.4 Top 9.7 3.8 7.3 16.5 62.7

(A) One year transition

(B) Two year transition

Note: Panel A is produced with data limited to those who remained at least for three periods to keep consistency in sample in the two panels.

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　 Total medical spending averaged over: 　 1 year 2 years 3 years Gini coefficient on medical spending 0.77 0.73 0.71 Percentage spent by top 1% of spenders 19% 17% 17% Percentage spent by top 10% of spenders 65% 61% 59%

Concentration over 1, 2, and 3 years

Average medical spending over 1, 2, and 3 years

35

0.2

.4.6

.81

100 500 1000 10000 100000 300000Average Medical Spending (2010 USD)

1 year 2 year 3 year

Prob

abilit

y

Identifying the last year of life 1

•  The data does not show the reason why they left the CHI •  Possible reasons

1.  Death 2.  Move to the Late Elders’ Health Insurance 3.  Move to other health insurance plan

•  Our Strategy 1.  Identify those who left the CHI during the study period 2.  We dropped those who moved to the Late Elders’ Health

Insurance based on the timing (in 2008 April) or their age (after April 2008)

3.  We dropped those who left the CHI at the same timing as their dependents (i.e. those who are likely to change health insurance plan)

36

Identifying the last year of life 2

•  Two types of errors 1.  Those who are actually not dead are treated as the dead

•  Individuals who changed a health insurance plan by him/herself alone, including those who are single, are treated as being dead

2.  Those who are dead are treated as those alive •  Individuals who died at the age of 75 are treated as those are alive

•  Approximately 10% of the total sample fall in the definition of death

•  Higher number compared to the mortality rate •  Error 1 is more serious? à Underestimate of medical spending in

the last year of life

37

Medical spending in three groups

38

0

500

1000

1500

2000

2500

3000

-36 -34 -32 -30 -28 -26 -24 -22 -20 -18 -16 -14 -12 -10 -8 -6 -4 -2

2010

US

D

Months before the last month

Death Exit other No exit

Note: “Death” are defined in the way explained in the text. “Exit other” showed those who left the CHI for presumably different reasons other than death. “No exit” are those who remained CHI throughout the study period.

Medical spending in the last year of life

(A) Aggregate medical spending and mortality

39

　　 Popoulation Over 65 population Personal Health Care Expenditure

Mean spending per person (2010 USD) 3,503 8,250 Aggregate spending (billions) 489 252

Mortality 　 Deaths (millions) 1.19 1.07

Sources: Vital Statistics of Japan 2010 for the number of deaths; National Medical Care Expenditure 2010 for mean and aggregate spending.

Medical spending in the last year of life

40

(B) Medical spending in the last year of life

Note: The share of medical spending in the last year of life was calculated by multiplying the mean spending from the data by the number of deaths per year divided by the total medical spending. The number of deaths and total medical spending were from the national statistics. Hashimoto et al., 2010 does not include medical spending for dentistry.

　 All age 　 Over 65

Last years of life from data

Mean spending ,

study sample

As a percentage of

aggregate spending

Mean spending,

study sample

As a percentage of aggregate

spending Hashimoto et al., 2010

Year of death 16,974 4.59 28,095 11.94 22,354 2nd to last 11,084 3.00 13,902 5.91 NA 3rd to last 9,338 2.53 11,853 5.04 NA Sum of last 3 years 37,396 10.12 　 53,850 22.88 NA

Cumulative spending in the last year of life

41

0 2000 4000 6000 8000

10000 12000 14000 16000 18000 20000

Cum

ulat

ive

spen

ding

in

2010

US

D�

Concluding remarks •  We demonstrated macro and micro structure of medical spending

using an administrative data from a Citizen’s Health Insurance plan in Japan

•  The study sample –  represents a greater proportion of those aged 60 years or above than

the population and the entire CHI –  demonstrates consistent age-‐specific mean medical spending as the

national statistics –  shows a greater average expenditure per person than the national

statistics, largely attributed to the age distribution of the sample •  Medical spending is

–  disproportionately distributed with top 5% individuals accounting for 50% of total spending

–  not strongly associated with household income level –  highly persistent overtime

•  Medical spending in the last year of life shows concentration in the last years of life (although caution should be taken to interpret the results) 42

Acknowledgements

•  We acknowledge financial support from the Japan Society for the Promotion of Science #24330097 (PI: Nobuyuki Izumida) and #26780168 (PI: Yoko Ibuka)

•  We are grateful to Dr. Yui Otsu for discussion

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Documents

Medical expenditure in Japan: an analysis with