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The laws passed last week by the Diet to curb the growth in the nation’s medical spending testify to the government’s determination to solve the problem. While the laws include positive elements, they are not problem-free. The government needs to continuously review the nation’s medical system. Rationalizing medical services will be important. At the same time, utmost care should be taken so that the people will be able to receive satisfactory medical services at a reasonable cost.

The reform program under the laws take a two-prong approach. One will increase the financial burden on elderly patients and on those who receive expensive medical treatments. Medical services for elderly people, usually costly, are pushing up medical expenditures.

The other prong beefs up measures aimed at curbing future rises in medical spending. Starting in April 2008, every person aged 40 or older must undergo a medical test. Those with metabolic syndromes that may lead to lifestyle-related diseases, such as some types of diabetes and cancer, will be given advice. One worry is that the compulsory medical test will push up medical expenditures. Health workers who can help people with metabolic syndromes will have to be trained.

Under the program, starting in October 2006, relatively well-off people aged 70 or older will have to pay 30 percent of their total medical fees when they receive treatments at medical institutions, up from the current 20 percent. A married elderly couple with an annual income of 5.2 million yen or more and a single elderly person with an annual income of 3.83 million yen or more will fall in that category. The payment at medical institutions by middle-income people aged 70 to 74 will rise from the current 10 percent of the total fees to 20 percent, starting in April 2008.

The reform program also aims at reducing the cost for patients who stay in medical institutions for a long period of time without requiring high-level medical treatments. In principle, they will have to pay for food, heating, water and electricity. As a result, the average monthly financial burden of middle-income elderly people staying in such institutions is expected to increase from the current 64,000 yen to 94,000 yen.

The cap for the monthly payment by people who receive expensive medical treatments will also be raised. In the case of people younger than 70 with an annual income of less than 530,000 yen, for example, the cap will be 80,100 yen plus 1 percent of the sum of the medical cost minus 267,000 yen. The cap for people in the same age group with an annual income of 530,000 yen or more will be 69,900 yen higher. The cap for middle-income people aged 70 or older will be 44,400 yen, an increase of 4,200 yen.

Taking a rather radical approach, the program has set a numerical target for reducing the number of hospital beds used by elderly people with chronic diseases because their long stays are pushing up the nation’s medical spending. The program envisages reducing the number of such beds from the current 380,000 to 150,000 by the end of fiscal 2011. Most of the patients will be sent home or moved to facilities covered by the nursing-care insurance. Forcing patients out of medical institutions without taking into consideration their family situation and other relevant factors should be avoided. The government must improve alternative services and facilities for them.

As another step to cope with the aging of the population, the current medical insurance program for elderly people will be abolished in fiscal 2008 and a new insurance scheme will be introduced to cover people aged 75 or older. Municipalities in each prefecture will form an association to administer the new insurance. The plan, however, lacks details. To ensure accountability, the government needs to work out the concrete structure of such an association as soon as possible. Another problem is that the new system will need financial assistance from the health-insurance schemes for company employees. The government needs to disclose full information on this point to gain the people’s understanding.

The reform program also assigns more responsibility to the prefectural governments to reduce the growth in medical spending. Each prefectural government will have to work out a program to reduce the average number of days that patients stay in medical institutions and the number of people suffering from lifestyle-related diseases. The central government should avoid imposing a uniform formula that ignores local situations.

Both the central and local governments need to work out reform plans that fully take into account the actual situations of medical institutions. Problems like a shortage of obstetricians and pediatricians cannot be solved by medical institutions. This is one area where both the central and local governments must rack their brains and cooperate.

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