Look to Asia for a health-care policy for Canada
Japan spends proportionately less on health care, say Ito Peng and James Tiessen.
Policy makers in North America are paying a lot of attention to Asia these days. Japanese Prime Minister Shinzo Abe recently became the first Japanese PM to address a joint meeting of the U.S. Congress. More broadly, U.S. and Canadian negotiators are deeply involved in moving the proposed Trans-Pacific Partnership (TPP) trade agreement forward. As 2015 began, the CanadaKorea Free Trade Agreement came into force. And a Canada-Japan Economic Partnership is beginning to take shape.
With Canada’s pursuit of stronger Asia-Pacific economic links, we should look also to increasing the flow of policy ideas from the region, particularly those that can help us address important problems we share. One such issue is how to deliver health care services effectively and efficiently in the face of growing demands driven by new technologies, increased patient expectations, and population aging.
Three countries we have written about in a new paper for the Macdonald-Laurier Institute — Japan, Korea and Taiwan — are not typically where Canadians look for public policy solutions. They are far away and have very different cultures and histories. But they, like other developed countries, face similar health care challenges.
Japan, Korea and Taiwan are leading users of health-care technologies. Their overall health outcomes are comparable to, if not better than, those in Canada, and they do this spending a lower percentage of their GDP on health care than we do. These countries have universal public health care — something Canadians are justifiably proud of — though Japan achieved this about a decade before Canada. These countries’ plans cover physician visits and hospitalization, but also dental care and outpatient prescription drugs. What are the lessons for Canada? First, the countries’ policy-makers actively learned from abroad. Japan looked to Germany as it started modernizing nearly 150 years ago; recently Korea and Taiwan studied what worked, or not, elsewhere as they developed their systems.
More importantly, politicians and bureaucrats had the fortitude to implement necessary reforms. Changes were made often in the face of protests by entrenched stakeholders, including physicians. And programs were reviewed soon after implementation, making modifications when problems arose. This is in stark contrast to Canada’s embrace of the status quo.
More specifically, the systems in Japan, Korea and Taiwan suggest that copayments may be useful to help moderate demand and help fund care. They can be applied and properly designed to recognize income disparities. In Canada’s case, they could increase equity if used to help extend coverage to drugs and dental care for more people.
Unlike in Canada, where most hospitals are de facto public, in these countries privately-owned hospitals, many of them non-profit, compete with public hospitals, creating dynamism in the sector.
Finally, and most significantly, these proactive governments have moved to introduce LongTerm Care Insurance (LTCI) to address a very predictable problem. Very few people buy LTCI on their own, mostly because they can’t predict their future needs and expect long-term care be covered by public funds.
However, estimates suggest that about 70 per cent of people who reach 65 will need LTC at some time. In Japan and Korea, and likely soon in Taiwan, LTCI creates distinct insurance funds devoted to supporting appropriate care at home and in institutions.
Asia deserves the attention it is getting. As we build economic links, we should also look for the good ideas of our new partners that can make our health and long-term-care systems better.