Should Providers Be Allowed to Extra Bill for Uncovered Services? Debate, Resolution, and Sequel in Japan

Abstract

Japan has managed to provide universal coverage at relatively low cost by containing prices and restricting the conditions for which services can be billed in the compulsory social health insurance (SHI) program. However, decline in Japan's economic growth ushered in new actors backed by the prime minister who proposed that the providers should be allowed to extra bill for services not covered by the SHI. In 2004 they took the strategy of drawing the attention of the public to areas where the rigidity of the current prohibition appeared to be unfair and ridiculous. They were opposed by the Ministry of Health, Labor, and Welfare and the Japan Medical Association, who strongly objected on the grounds of safety and equity. The compromise reached by the two ministers in charge led to a clarification of the services that are to be covered and of the process for extending coverage to new procedures and drugs. The prohibition on extra billing has remained essentially unchanged, but the momentum for deregulation has been lost. In 2005 an alternate proposal was made to contain SHI expenditures by introducing a global cap on health expenditures and increasing out-of-pocket payment. Although this proposal was not fully adopted, the gradual decline in SHI benefit levels could lead to a renewed move to allow extra billing.