What Can Canada Learn from Health-care Policies in Developed Asia?

Policymakers in North America are paying a lot of attention to Asia these days. On April 29, Japanese Prime Minister Shinzo Abe became the first Japanese Prime Minister to address a joint meeting of US Congress. In his speech he emphasized the importance of trans-Pacific policy collaborations on not only trade and economy but also on international issues such as human security, education, health, women's issues, and climate change.

As 2015 began, the Canada-Korea Free Trade Agreement came into force. A Canada-Japan Economic Partnership has not yet been completed, but after seven rounds of bargaining that too is taking shape. The visit by the Prime Minister of the Philippines to Canada earlier this month will have no doubt further helped push forward the proposed Trans Pacific Partnership (TPP).

As a mid-size global power, economic matters will dominate Canada's TPP negotiations. It is important, as Canada pursues stronger Asia-Pacific links, to look also to increasing the flow of policy ideas, 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 aging populations.

Health care policy reforms in Japan, Korea and Taiwan can provide useful policy learning for Canadian policymakers. These countries are not typically where Canadians look for public policy solutions. They are far away and have very different cultures and histories. But they share many similar health care challenges in common with Canada, and they have much to teach us.

For example, 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. Korea and Taiwan universalized their health-care systems in the 1990s.

As in Canada, their plans cover doctors' visits and hospitalization, but also dental care and prescription drugs. Japan and Korea have, and Taiwan is planning the introduction of, Long-Term Care Insurance (LTCI) to address the overlap between health and social care, as often needed by the chronically ill and/or elderly. Other key differences from Canada include the use of regulated co-payments by end users, and more generally, the ability of the systems to adapt, and control costs.

In our new report for the Macdonald-Laurier Institute entitled, An Asian Flavour For Medicare: Learning from Experiments in Japan, Korea and Taiwan, co-author Prof. James H. Tiessen and I note other key lessons Canadian policymakers can draw from these three countries:

• Policy-makers must actively learn from abroad: Japan, Korea and Taiwan wasted little time in searching other jurisdictions for solutions.

• Identifying new health policy ideas isn't enough: Entrenched interests are often the biggest barrier to change. Politicians in Asia were willing to make difficult but necessary decisions to rein in health-care costs, even if they are unpopular with some.

• User fees can improve equity and coverage: Japan, Korea and Taiwan have all employed user fees to raise funds and discourage frivolous use without reducing access to care.

• Competition among private hospitals can help improve quality of services: Japan, Korea and Taiwan have all introduced market processes that encourage providers to compete for patients.

• Hospital specialists on salary: Paying primary care physicians for each time they treat a patient (a "fee-for-service" model) incentivizes seeing more patients, but it also encourages delivering expensive services to those who may not need them. Japan, Korea and Taiwan have curbed this by putting some specialists on a salary.

• Long-term care insurance could help mitigate the effects of population aging: Canadian provinces should look at introducing a long-term care insurance program on a social-insurance model, funded by mandatory payments and government subsidies for those with low incomes, that would divert aging patients away from expensive hospital stays. Long-term care is not covered by the Canada Health Act, so there is room for provinces to experiment with sustainable funding models.

• Improve the use of information technology: Japan, Taiwan and Korea have all benefited from adopting digital records that have been shared between providers and funders.

Ito Peng is a Professor of Sociology and Public Policy at the Department of Sociology and the School of Public Policy and Governance and the Director of the Centre for Global Social Policy at the University of Toronto, and a Senior Fellow with the Asia Pacific Foundation of Canada.

 

The views expressed here are those of the author, and do not necessarily represent the views of the Asia Pacific Foundation of Canada.

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