So in talking with Marly we realized that there was no feasible way to include information on the whole universe of fallacious health care myths in a single post so please consider this the second post dedicated to analyzing a specific health care myth in an ongoing series.

Let me say straight that this post is essentially a modified summary of T.R. Reid’s article in The Washington Post in late August entitled “5 Myths About Health Care Around the World” with a few additional excerpts drawn from his book The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care.

Unlike T.R. Reid I want to focus on a single foreign system that generally fails to get significant attention – Japan. Now, by no means is the Japanese health system perfect. In fact, it’s far from it. However, given the public bugaboo about “socialized medicine” and the nature of our employer-sponsored health care, Japan presents an interesting study in how a private, employer-based health care system can run efficiently and cut costs.

5 Myths About Other Health Care Systems

The other industrialized democracies all use socialized medicine à la Canada or Great Britain

The Japanese system is based on private health insurance and private health providers primarily sponsored by private employer health benefit packages. In fact, a good number of other major industrialized nations use similar privatized systems – Switzerland, Germany, the Netherlands.

Health care is inappropriately “rationed” overseas versus in the American system

In the Japanese system, citizens primarily receive their health insurance through their employer so they have a rather limited ability to choose their health plan; but that is not much different from our own employer-sponsored system. However, patients are completely free to choose to go to any physician, anywhere, anytime.

Japan is relatively notorious for waiting times that are often more than an hour. However, a significant amount of all doctor visits are walk-in visits. In fact, many providers no longer keep traditional appointment schedules and provide appointments only on a same-day basis. This is true of Japanese hospitals, private clinics, and specialists. The patient doesn’t have to make an appointment and then wait weeks or months to get an appointment. They just have to show up at the doctor’s office and state their medical concern.

In terms of rationing of tests and procedures, Japanese patients probably have far greater access than all but the richest  Americans. The average Japanese patient goes to the doctor’s office 15 times a year. This is just about 3 times as often as the average American patient. Additionally, Japanese patients receive nearly twice as many tests (such as MRIs or X-rays) than Americans. These two metrics are often cited as high cost drivers in the American health system, but in Japan the cost of care per individual is approximately $3,400. Under half of our own $7,400 per individual.

Those socialist foreign health care systems are bloated with unnecessary bureaucracy and inefficiency

Well, across the board this is entirely fallacious, but when it comes to the Japanese system it is particularly untrue. It has been stated time and time again in our national health care debate that here in America we spend more on non-medical health care expenses than any other developed nation. This particularly applies to administrative costs where about a minimum of $0.20 of every dollar is spent on non-medical related expenses such as paperwork, claims reviews, and marketing. The comparison is extraordinary: the Japanese spend only about 5% of their total health care expenditure on these same administrative and non-medical expenses.

I know I said I was going to focus on Japan due to inherent similarities to our own health care model, however, I cannot help but add a few facts about other countries. Some of the most oft-cited “socialist” of models manage to achieve even lower administrative costs – France sits around 4%, Canada tend to flex between 5-6%, and Taiwan (modeled on the Canadian system when they passed health reform legislation in 1995) has managed an astounding 1.5%. Imagine that. A health care system run by government bureaucrats is between 15 to 20 times (depending on which statistics you go by) more efficient than our free market, private enterprise system; a good metric to ensure that money spent on health care actually goes to health related expenses….

If you “artificially” restrain costs you will also strangle innovations in the market

It is quite true that a significant portion of new designer pharmaceuticals and surgical procedures are developed in America, but we (as a nation) certainly do not have a monopoly on innovation. In fact, as T.R. Reid points out in his article, quite often cost controls actually drive particular (and important) innovations.

In Japan the incredibly strict pricing structures have forced Japanese providers to establish cutting edge methods to provide equivalent or better quality care at a fraction of the cost. The example T.R. Reid cites is that of a neck region MRI imaging test. This particular scan costs us around $1,500; in Japan it costs only $98. The same test.

Efficiency and cost control necessitates “cruel” practices

Out of all the developed nations in the world, only ours has a system that practices by the dictum that to make an omelet one has to break a few eggs. Only in this cast the omelet is cost savings and the eggs are real patients.

Rejecting applicants for health care insurance due to pre-existing conditions, denying legitimate medical claims, canceling insurance policies just as patients begin accumulating health related costs, rescinding policies, and a whole myriad of rather nasty underwriting practices are only practiced here in our system. In fact, in large part these practices are illegal in the rest of the developed world because most of the industrialized societies see basic access to health care as a right for everyone, not as a privilege for those that can afford it.

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Much of what I learned about the Japanese health care system came from Reid’s The Healing of America and supplemented with information drawn from another Washington Post article “Health Care in Japan: Low-Cost, for Now” and an academic journal publication entitled “Physician’s burning out and Human resource crisis in Japanese Hospital: Management for sustaining services in Japan” by Atsushi Koshio and Masanori Akiyama, both professors at MIT.