The Health Shopper

Friday’s Wall Street Journal contained a fascinating article about the Japanese health care system. Japan, like many developed countries, provides universal health insurance coverage that is funded and administered by the state. Unlike England, though, the Japanese approach is premised on a “third way” system that combines universal health coverage with private physicians (i.e. the physicians are not employed by the state). Although larger in scale, Japan’s “third way” system is similar in many respects to Governor Schwarzenneger’s recent universal health care proposal. As a result, it is worthwhile and interesting to consider some of the issues Japan is grappling with at the moment.

The central challenge in Japan—and the crux of the Journal article—involves how to improve health care while containing costs. Cancer, far more than heart disease, is the leading cause of death in Japan.

Through its universal health insurance program, Japanese bureaucrats are charged with the responsibility and power to ensure a “minimum standard of care for all.” Rules of the game, and in particular what is covered and how doctors get paid, are mainly set by the central government in Tokyo.

Sound familiar? It should, as this is the direction we would be headed in within the U.S. if recent state level universal coverage proposals and federal prescription drug purchases for Medicare beneficiaries are enabled. The Journal article lists many of the downsides to the system, particularly in light of cancer coverage:

• “Japan saves by requiring less training of doctors and paying them less”
• Japanese “doctors say they have little time for patients”
• Until recently, many Japanese cancer patients weren’t even told that they had the disease—family members “often felt it was cruel to burden the patient with information” about the cancer diagnosis.

The Journal article further indicates that new classes of chemotherapy drugs and the spread of the Internet have “spawned a new class of activist cancer patients.” This patient activist movement has grown largely in response to the central government’s reluctance to embrace and approve a new class of promising cancer drugs. The article mentions that “a movement for more drugs and better care culminated in May 2005 when 2,000 patients and family members packed a hall in Osaka for the first national convention of cancer patients.”

Now is the time to consider how this type of system would play out in the United States. People need to ask themselves how they would feel about the state or federal government telling them that a promising new cancer drug is, by law, simply not available to them or their loved one who is dying of cancer.

It is far too simple to vilify justifiably profitable companies such as Genentech that are developing new classes of innovative drugs. The reality, however, is that more government involvement in health care will result in fewer Genentechs and less innovation in health care.