evaluating the comprehensive value andeffectiveness of all healthcare expenditures. Furthermore, in addition to reassessing currentexpenditures from a system-wide perspective, weshould consider measures by which Japan canachieve greater efficiency in care delivery.Specifically, we should more broadly focus on therole of value-based healthcare practices, whileestablishing a stronger primary care system,strengthening the role of family physicians inproviding efficient and appropriate care. RECOMMENDATION 6 FURTHER EXPLORE OPPORTUNITIES TO ACCELERATE INNOVATION IN HEALTHCARE BY BETTERUNDERSTANDING AND OPTIMIZING EXPENDITURES FROM A SYSTEM-WIDE PERSPECTIVESocial security benefit costs (e.g., medical care, long-term care, andpensions), which are covered by taxes and insurance premiums,currently total around ¥120 trillion. According to estimates by theCabinet Office and others, this will increase by 1.5 times to about¥190 trillion in 2040 (e.g., the current ratio of GDP is 21.5% in 2018,but will increase by about 24% in 2040).In terms of national health care costs per capita by age group(based on data from 2014), of the 554,000 yen per capita cost ofmedical care for the elderly (65-74 years old) the public cost to thegovernment is about 78,000 yen, but out of the 907,000 yen percapita medical costs for the elderly in the latter stages of life (overthe age of 75), the amount of public expenditure to be borne by thegovernment is about five times as much, at 356,000 yen annually.In the case of inpatient care the Diagnosis Procedure Combination(DPC) system was introduced in April 2003. However, it is a mixtureof flat payment and fee for service, which is different from thediagnostic group classification (DRG) system in the United States.Under the DPC system, health care costs could be inflated in thefee for service portion of the system.In outpatient medical care, payment is largely pay-as-you-go fee forservices. More comprehensive mechanisms for payment have notprogressed, and a family doctor system has not yet beenestablished.With regard to the medical care system for the elderly in the latter-stage of life (over the age of 75), Japan should consider a system (amedical care version of macroeconomic indexing) that gentlyadjusts the growth of medical fees based on the macroeconomicindexing introduced in the 2004 pension reform in order toequalize the burden across generations while increasing thesustainability of medical care finances, taking into account thecapacity of the working-age population which is expected tocontinue to decline.In doing so, in order to ensure that the level of insurance premiumsfor the working-age population does not increase alone with theincrease in support payments for the elderly in the latter-stage oflife, measures such as raising the level of premiums for the elderlyin the latter stages of life (75+) and increasing the number ofpeople eligible for insurance for the elderly in the latter stages oflife with a co-payment ratio of 20 percent or more will beimplemented automatically, instead of having decisions made on acase-by-case basis.Comprehensive reimbursement of medical fees should bepromoted not only for inpatient treatment but also for outpatienttreatment. To achieve this, we need further analysis to make thecompensation system more evidence-based, relying on analyses ofclaims data and other evidence.In outpatient medicine, reform is needed to establish a strongfamily doctor system.CURRENT ISSUES RECOMMENDED DIRECTIONPAGE | 10| ACTION 2
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