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Health systems in East Asia: what can developing countries learn from Japan and the Asian Tigers?

  • Adam Wagstaff

    (The World Bank, Washington, DC, USA)

The health systems of Japan and the Asian Tigers (Hong Kong, Korea, Singapore and Taiwan), and the recent reforms to them, provide many potentially valuable lessons to East Asia's developing countries. All five systems have managed to keep a check on health spending despite their different approaches to financing and delivery. These differences are reflected in the progressivity of health finance, but the precise degree of progressivity of individual sources and the extent to which households are vulnerable to catastrophic health payments depend on the design features of the system - the height of any ceilings on social insurance contributions, the fraction of health spending covered by the benefit package, the extent to which the poor face reduced copayments, whether there are caps on copayments, and so on. On the delivery side, too, Japan and the Tigers offer some interesting lessons. Singapore's experience with corporatizing public hospitals - rapid cost and price inflation, a race for the best technology, and so on - illustrates the difficulties of corporatization. Korea's experience with a narrow benefit package illustrates the danger of providers shifting demand from insured services with regulated prices to uninsured services with unregulated prices. Japan, in its approach to rate setting for insured services, has managed to combine careful cost control with fine-tuning of profit margins on different types of care. Experiences with DRGs in Korea and Taiwan point to cost-savings but also to possible knock-on effects on service volume and total health spending. Korea and Taiwan both offer important lessons for the separation of prescribing and dispensing, including the risks of compensation costs outweighing the cost savings caused by more 'rational' prescribing, and cost-savings never being realized because of other concessions to providers, such as allowing them to have onsite pharmacists. Copyright © 2006 John Wiley & Sons, Ltd.

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Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

Volume (Year): 16 (2007)
Issue (Month): 5 ()
Pages: 441-456

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Handle: RePEc:wly:hlthec:v:16:y:2007:i:5:p:441-456
Contact details of provider: Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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  1. Ravi P. Rannan-Eliya & Aparnaa Somanathan & Shiva Raj Adhikari & Eddy van Doorslaer & Owen O’ Donnell, 2011. "Who Pays for Health Care in Asia?," Working Papers id:3608, eSocialSciences.
    • O'Donnell, Owen & van Doorslaer, Eddy & Rannan-Eliya, Ravi P. & Somanathan, Aparnaa & Adhikari, Shiva Raj & Akkazieva, Baktygul & Harbianto, Deni & Garg, Charu C. & Hanvoravongchai, Piya & Herrin, Ale, 2008. "Who pays for health care in Asia?," Journal of Health Economics, Elsevier, vol. 27(2), pages 460-475, March.
  2. Wagstaff, Adam & van Doorslaer, Eddy, 1997. "Progressivity, horizontal equity and reranking in health care finance: a decomposition analysis for the Netherlands," Journal of Health Economics, Elsevier, vol. 16(5), pages 499-516, October.
  3. Lu, Jui-fen R. & Leung, Gabriel M. & Kwon, Soonman & Tin, Keith Y.K. & Van Doorslaer, Eddy & O'Donnell, Owen, 2007. "Horizontal equity in health care utilization evidence from three high-income Asian economies," Social Science & Medicine, Elsevier, vol. 64(1), pages 199-212, January.
  4. Lim, Meng-Kin, 2004. "Shifting the burden of health care finance: a case study of public-private partnership in Singapore," Health Policy, Elsevier, vol. 69(1), pages 83-92, July.
  5. Kwon, Soonman, 2003. "Pharmaceutical reform and physician strikes in Korea: separation of drug prescribing and dispensing," Social Science & Medicine, Elsevier, vol. 57(3), pages 529-538, August.
  6. Okamura, Shinichi & Kobayashi, Ryota & Sakamaki, Tetsuo, 2005. "Case-mix payment in Japanese medical care," Health Policy, Elsevier, vol. 74(3), pages 282-286, November.
  7. Leung, Gabriel M. & O.L. Wong, Irene & Chan, Wai-Sum & Choi, Sarah & Lo, Su-Vui, 2005. "The ecology of health care in Hong Kong," Social Science & Medicine, Elsevier, vol. 61(3), pages 577-590, August.
  8. Yutaka Imai, 2002. "Health Care Reform in Japan," OECD Economics Department Working Papers 321, OECD Publishing.
  9. Wagstaff, Adam & van Doorslaer, Eddy, 1992. "Equity in the finance of health care: Some international comparisons," Journal of Health Economics, Elsevier, vol. 11(4), pages 361-387, December.
  10. Chou, Shin-Yi & Liu, Jin-Tan & Hammitt, James K., 2003. "National Health Insurance and precautionary saving: evidence from Taiwan," Journal of Public Economics, Elsevier, vol. 87(9-10), pages 1873-1894, September.
  11. Eddy van Doorslaer & Cristina Masseria, 2004. "Income-Related Inequality in the Use of Medical Care in 21 OECD Countries," OECD Health Working Papers 14, OECD Publishing.
  12. Wagstaff, Adam & van Doorslaer, Eddy & van der Burg, Hattem & Calonge, Samuel & Christiansen, Terkel & Citoni, Guido & Gerdtham, Ulf-G & Gerfin, Mike & Gross, Lorna & Hakinnen, Unto, 1999. "Equity in the finance of health care: some further international comparisons1," Journal of Health Economics, Elsevier, vol. 18(3), pages 263-290, June.
  13. Wagstaff, Adam & van Doorslaer, Eddy & Paci, Pierella, 1989. "Equity in the Finance and Delivery of Health Care: Some Tentative Cross-country Comparisons," Oxford Review of Economic Policy, Oxford University Press, vol. 5(1), pages 89-112, Spring.
  14. Kakwani, Nanok C, 1977. "Measurement of Tax Progressivity: An International Comparison," Economic Journal, Royal Economic Society, vol. 87(345), pages 71-80, March.
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