Messages from Keidanren Executives and Contributed articles to Keidanren Journals February, 2024 Need for future-oriented social security system reform
More than 65 years have passed since the universal health insurance system was implemented based on the 1958 National Health Insurance Act. Since then, on a national scale, the average life expectancy at birth has increased, and the diseases causing death have changed greatly.
However, the National Health Insurance Act has not been drastically reformed, and system fatigue has become conspicuous in the 21st century. The public (the patient) has little awareness of how to use finite medical resources effectively and little consciousness of how they can help themselves to prevent disease (detailed explanations are omitted here for reasons of space). Regarding physicians and hospitals, small-scale healthcare facilities in Japan are concentrated in urban areas compared with Western countries, management costs are high and data utilization, including digital transformation (DX), is lagging behind. A remote cause of this is the continuation of Japan's medical fee system and its system that allows practitioners to set up and run practices anywhere with little intervention from authorities. In the face of continually increasing medical expenses, the burden on the working-age population, which bears the healthcare costs of the elderly, in particular, will inevitably increase.
As its principal measure to curb rising social security costs, the government has lowered drug prices. However, since pharmaceuticals account for only 20% of total medical costs, curbing drug prices is of only limited benefit, and the problem has not been fundamentally resolved. In addition, losing attractiveness of the Japanese pharmaceutical market has led to "drug lag" and "drug loss" (i.e., delayed development or non-development of drugs already developed and approved in the United States and/or European Union (US/EU)), preventing innovative new drugs from reaching the public, as well as having an adverse impact on the stable supply of pharmaceuticals.
Is this the kind of society that people really want?
Now is the time for all stakeholders, including industry, the public, and the government, to move toward reform. To make effective use of limited medical resources, industry should promote not only the creation of innovative drugs and a stable supply of pharmaceuticals but also new solutions that contribute to efficient medical care.
The public needs to have a proper understanding of the universal health insurance system, which is a mutual aid system that was originally intended to protect against large risks, and be aware of how to self-help by actively engaging in self-medication.
We hope that the government will undertake radical systemic reform to accelerate the efficiency of medical care and will seek to formulate and implement industrial policies that foster the healthcare industry as an industry that attracts foreign currency, rather than down scale reproduction.
By implementing these reforms in an integrated manner, we should be able to secure the future sustainability of social security, and achieve better health and economic growth.