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

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  • Adam Wagstaff

    (The World Bank, Washington, DC, USA)

Abstract

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.

Suggested Citation

  • Adam Wagstaff, 2007. "Health systems in East Asia: what can developing countries learn from Japan and the Asian Tigers?," Health Economics, John Wiley & Sons, Ltd., vol. 16(5), pages 441-456.
  • Handle: RePEc:wly:hlthec:v:16:y:2007:i:5:p:441-456
    DOI: 10.1002/hec.1180
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    Cited by:

    1. Adam Wagstaff, 2010. "Social health insurance reexamined," Health Economics, John Wiley & Sons, Ltd., vol. 19(5), pages 503-517.
    2. Ramesh, M. & Wu, Xun, 2009. "Health policy reform in China: Lessons from Asia," Social Science & Medicine, Elsevier, vol. 68(12), pages 2256-2262, June.
    3. Peter S. Heller, 2006. "Is Asia Prepared for an Aging Population?," IMF Working Papers 06/272, International Monetary Fund.
    4. David Bardey & Ramón Castaño, 2007. "La regulación de tarifas en el sector de la salud en Colombia," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 9(17), pages 347-357, July-Dece.
    5. Haruko Noguchi, 2015. "How does the Price Regulation Policy Impact on Patient–Nurse Ratios and the Length of Hospital Stays in Japanese Hospitals?," Asian Economic Policy Review, Japan Center for Economic Research, vol. 10(2), pages 301-323, July.
    6. Abdul Karim, Syahirah & Eikemo, Terje A. & Bambra, Clare, 2010. "Welfare state regimes and population health: Integrating the East Asian welfare states," Health Policy, Elsevier, vol. 94(1), pages 45-53, January.
    7. Makoto Kakinaka & Ryuta Kato, 2013. "Regulated medical fee schedule of the Japanese health care system," International Journal of Health Economics and Management, Springer, vol. 13(3), pages 301-317, December.
    8. Alexandra A. Sidorenko & James R.G. Butler, 2007. "Financing Health Insurance in Asia Pacific Countries," Asian-Pacific Economic Literature, Asia Pacific School of Economics and Government, The Australian National University, vol. 21(1), pages 34-54, May.
    9. Johar, Meliyanni, 2009. "The impact of the Indonesian health card program: A matching estimator approach," Journal of Health Economics, Elsevier, vol. 28(1), pages 35-53, January.
    10. Chen, Brian K. & Gertler, Paul J. & Yang, Chun-Yuh, 2016. "Physician ownership of complementary medical services," Journal of Public Economics, Elsevier, vol. 144(C), pages 27-39.

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