Do Japanese Elderly Consume too much Health Care Resources

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Do Japanese Elderly Consume too much Health Care
Resources?

• Nobuyuki IZUMIDA
• National Institute of the Population
• and Social Security

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Introduction

• Some say that the government Deficit / GDP ratio
  in Japan thought to be too high.
• Many policies for the health sector reform was
  employed with the financial view point.
• Health care expenditure / GDP ratio in Japan is
  the lower group in OECD countries.
• Some say that the cost containment policies are
  breaking the public health care system itself.

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Problems in Japanese health care sector

• It is the matter of value judgment whether we
  should raise the government expenditure on the
  health care sector or not.
• However, whether the resources are efficiently
  used or not is the different problem from the low
  government expenditure.
• There are a lot of efficiency problems in the
  health care sector in Japan.
• Matter treated here is large(?) disparity in
  health care cost between young and elderly.
• The reason why I chose this

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Purpose of the analysis

• To clarify that there really exists the disparity
  between young and elderly in the health care use.
  If any, to clarify why.
• Through the analysis, the utilization of the
  services in Japan will be made much clear.
• With the support of the characteristics of the
  Japanese health care system, by using the
  information on the price index, we can measure
  the effect of the technology progress on the
  health care costs growth and on the disparity.

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Previous researches

• Newhouse(1992)
• IHEP(2001) international comparisons on the
  disparity in the health care cost (use)

IHEP Institute for Health Economics and Policy
(in Japan)
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SOME BACKGROUNDS
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History of the health care sector reform in Japan
Note This is the excerptions of the major
reforms from numerous ones.
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Cont.
Note This is the excerptions of the major
reforms from numerous ones.
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Prices of the health care services in public
health system in Japan

• They are determined by the MHLW.
• All services used in the public health care
  system must be priced.
• The newly introduced health care technologies
  also have the prices.
• Price are not necessarily determined according to
  the economic evaluation of the technology.
• But the price shows the supreme of the amount of
  monetary evaluation for that technology.

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METHODS
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Decomposition of the medical care cost

• per capita nominal medical care cost m will be
  focused on.
• m is defined as
• C is the total number of contacts to physician or
  medical care institutions.
• N is the sum of the enrollees of the health
  insurance.
• p is the price index of the medical care
  services.
• M is the demand for medical care services in real
  term.

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Transitions of the medical care cost

• Transitions of m in time, ?m can be decomposed
  into three factors
• ?(C/N) transitions of the per capita contacts
  to physician for inpatient care and outpatient
  care.
• ?(M/C) transitions of the care intensity per
  case
• ?p transitions of the prices of the medical care

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Data source-1

• (For the number of enrollees)
• the survey of the national health insurance
• This is complement for the survey below.
• (For the costs of the health care and number of
  contacts to physicians)
• the survey of the medical care activities for the
  enrollees in the national health insurance
• surveys on the medical claim data in the national
  health insurance.

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Data source-2

• (for the information on the price index)
• the survey of the medical care Activities in
  Public Health Insurance published by the
  Ministry of Health, Labour and Welfare every
  year.
• It collects the number of units of utilized
  services from the medical claim data (377
  thousand claims from ten thousand hospitals and
  clinics 2005)
• We will use the results of the surveys in the
  every 5 years in recent 25 years (from 1980 to
  2005).

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Disparity in medical care costs between young and
elderly
The elderly consumes 4 times as much inpatient
care costs as the younger does in a year.
Note1) Values presented in cells in columns
total, Age 0-69, Age 70-, are calculated
by dividing the medical care costs by
number of enrollees in the national
health insurance. 2) Medical care costs
are measured with 10 yens. 3)The ratio
means the disparity in health care costs between
young and elderly, defined as the
values by dividing the costs for age 70- by costs
for age 0-69.
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CONTACT TO THE PHYSICIAN
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Note if an individual have two contacts in one
month, then it counts as two outpatients.
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Transitions of contacts to physicians
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variations of contacts to physicians
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COSTS PER CASE
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Transitions of average costs
Note these values are in nominal term.
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variations of average costs
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PRICE EFFECTS
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Inquiry on the price effects

• Government determines the reimbursement prices in
  Japanese health care system.
• Hence the reimbursement tariff itself directly
  reflects the direction of the health care policy.
  
• The cost of the health care service utilization
  depends on the prices.
• Disparity in health care cost between
  young-elderly also depends on them.
• If the prices in specific group of services are
  raised relatively larger than the ones in other
  groups, then the policy itself affects the
  disparity in health care costs between
  young-elderly .
• the Laspeyres price index is used to catch the
  variations of the medical care prices.

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Laspeyres price index

• Definition
• pi prices of services by categories of services
• xi demand for services by service categories
• 0 denotes base year,
• 1 reference year,
• i 1,,I categories of services.
• Chain index is also used.
• t 0,T-1

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Categories of services
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Calculated price indices
These disparities comes from the large variations
of the weights by the services.
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Variations of prices and demand on services

• We should check the relation between prices for
  unit of services and demand.
• Prices are policy variable (determined by the
  Ministry) in the Japanese system
• they may be used for the cost containment policy.
• Technologies in higher level will be priced
  higher than the existing ones.
• We can see the results of the policies in the
  realized prices and shares of the expenditures.

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Decomposition of the Laspeyres index

• This variation in weight may have an effect on
  the disparity.
• Ex.) if the medical care for elders relies more
  on the pharmaceuticals than for younger.
• We should decompose the Laspeyres price index
  into sub-indices by age-class
• where j1,,J age-class.
• the overall Laspeyres index is the weighted sum
  of the sub-Laspeyres index for each age class.

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Base year 2000
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Base year 2000
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Summaries on the price effects

• (Inpatient services)
• the overall prices have grown by 40 for
  1995-2005.
• For age-class 0-14, the prices have grown by 60
• (Outpatient services)
• the overall prices have grown by 20.
• For age-class 0-4, the prices have grown by 40.
• For age-class 50-69, the prices have grown by
  30.
• Reason?
• Children younger than 3 years old enjoy 0
  coinsurance.
• Reimbursement price to the utilization of NICU
  facilities are raised in 1996.
• Cost containment was successful for the
  outpatient utilization by age 70 or more.

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Increments in prices
Unit
1)In almost all cases above, the rises of prices
push up the costs more than 10 in five years.
2)The extent of the rises of the prices in
2000-2005 are smaller than those in 1995-2000.
Note the monetary evaluation of the newly
introduced technology must be contained
in the increments of the price index.
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SYNTHESIS
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Decomposition of the increments of the health
care costs into the components
Unit
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Decomposition of the disparity in the health care
costs between young and elderly

• Disparity was defined as
• From above definition, we have
• Thanks to the equation in page 11, disparity
  change can be decomposed into the young-elderly
  differences in each components as in next page.

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Cont.
Note each cell shows the difference of the
increments of the relevant components between
the young and the elderly.
Results 1)Price effects necessary increased the
health care costs in any cases in
pp.57. 2)Disparity in the health care costs
decreases when the price of the care for the
young grows faster than the one of the care for
the elderly. 3)Price effects decreased the
disparity in outpatients health care costs
between young and elderly by 10 in 2000-2005.
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SOME REMARKS
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On disparity

• The elderly consumes 4 times as much inpatient
  care costs as the younger does in a year.
• The elderly consumes 2.7 times as much inpatient
  care costs as the younger does in a year.
• Is this large disparity?
• or
• Does the existence of disparity itself matter?
• The existence of the large disparity might be a
  matter in the view point of cost containment.

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On price effects

• The rises of prices push up the costs more than
  10 in five years.
• Policy through setting the reimbursement prices
  plays no role in the cost containment aspects?
• Policy induced the higher priced services used?
  Inducement for the utilization of the higher
  level technologies by policy?
• The younger confronts the higher price than the
  elderly does. Why?
• The extent of the rise in prices in 2000-2005 are
  smaller than that in 1995-2000.
• Inducement for the higher level technologies
  ended?

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On disparity changes

• Price change decreases the disparity in some
  cases.
• Should this be welcomed?
• Rise in price pushed up the health care costs for
  the younger more.
• Does this mean the younger consume more high-tech
  services than the elderly?
• The answer lies in the analysis of the
  micro-data the survey of the medical care
  Activities in Public Health Insurance.

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