Primary care: Primary care is provided at most clinics and some hospital outpatient departments. Approximately one-third of physicians are salaried employees of clinics, and nearly all others are self-employed. Clinics are often owned by physicians or by medical corporations (special legal entities for health care management, usually controlled by physicians, that own medical institutions), but sometimes by local governments or public agencies.
Primary care practices typically include teams with a physician and a few employed nurses. In 2014, the average clinic had 6.8 full-time-equivalent workers, including 1.3 physicians, 2.0 nurses, and 1.8 clerks.10Clinics can dispense medication (which doctors can provide directly to patients). Use of pharmacists, however, has been growing; 67 percent of prescriptions were filled at pharmacies in 2013.11 Patients are not required to register with a practice, and there is no strict gatekeeping, although government encourages patients to choose their preferred doctors, and there are patient disincentives for self-referral including extra charges for initial consultations at large hospitals with many specialties. Patients can choose and drop in at any clinic, except those requiring reservations. An entity managing many clinics can share their resources. A scheme for cross-entity resource sharing will start in 2017 as described below.
Payments for primary care are based principally on a complex national fee-for-service schedule, which includes financial incentives for coordinating the care of patients with chronic diseases, and for team ambulatory and home care. The schedule, set by the government (described below), includes both primary and specialist services, which have common prices for defined services such as consultations, examinations, laboratory tests, imaging tests, and defined chronic disease management. Per-case payments can be chosen by providers in select cases, such as daily payments for pediatrics care and monthly payments for treating patients with diabetes. Bundled payments are not used. Providers can charge for designated services as exceptions to the rule of prohibiting balance billing.
Outpatient specialist care: Most outpatient specialist care is provided in hospital outpatient departments, but some is also available at clinics, where patients can visit without referral. Fees are determined by the same schedule that applies to primary care, as they do not usually vary by provider type, although some services must be provided by specialists in order to be covered by the SHIS. There are no collective regulations on payments for specialists. At hospitals, specialists are usually salaried, with additional payments such as night duty allowance. Those working at public hospitals can work at other health care institutions and privately with the approval of their employers, but in such cases they usually provide services covered by the public system. The employment status of specialists at clinics varies similarly to that of primary care physicians.
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Administrative mechanisms for paying primary care doctors and specialists: Legal entities managing clinics and hospitals send insurance claims, mostly online, to financing bodies in the SHIS, which pay a major part of the fees directly to providers; patients pay liable copayments at the point of service. Using the payments they receive for services, self-employed, clinic-based primary care physicians and specialists pay for employees and other inputs, allocate funds for investments, and retain surpluses. There are no direct payments from the SHIS financing bodies to salaried physicians.
After-hours care: After-hours care is provided by hospital outpatient departments, where on-call physicians are available, and by some regular clinics and after-hours care clinics owned by local governments and staffed by physicians and nurses that local medical societies provide. Hospitals and clinics are paid “top-up” fees for after-hours care, including fees for telephone consultations. There is no strict formal requirement for clinics to provide such services, although physicians have a general obligation to consult with patients when requested. Patients can walk in at most hospitals and clinics. The national government gives subsidies to local governments for these clinics. Patient information from after-hours clinics is provided to family physicians if necessary (such information is often handed to patients to show to family physicians). There is a national pediatric medical advice telephone line available after hours.
Hospitals: As of 2014, 15 percent of hospitals are owned by national or local governments or closely related agencies; most of the rest are private and nonprofit, some of which receive subsidies because they are designated as having partly public roles.12 More than 20 percent of all beds are in government hospitals; the rest are mostly in nonprofit hospitals. Some of them are designated as public-interest medical institutions.13 The private sector has not been allowed to manage a hospital, except in the case of existing hospitals established by for-profit companies for their own employees (e.g., Toyota). Payments to hospitals from the SHIS include costs for physicians’ salaries.
Consultation fees for large hospitals and academic medical centers are lower than those for small hospitals and clinics. More than half of all acute-care hospital beds are paid for using the Diagnosis Procedure Combination (DPC) system, a case-mix classification similar to diagnosis-related groups.14 The rest are paid for solely on a fee-for-service basis. Hospitals choose whether to receive the DPC payments or to remain under traditional fee-for-service. The DPC payment consists of a fee-for-service and a DPC component in the form of a per diem payment determined by the DPC grouping, which includes basic hospital services and less expensive treatments; the fee-for-service component includes surgical procedures, rehabilitative services, and other specified expensive services.15 Episode-based payments involving both inpatient and outpatient care are not used.
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Mental health care: Mental health care is provided in outpatient, inpatient, and home care settings, with patients charged the standard 30 percent coinsurance (although there is reduced cost-sharing and other financial protections for patients in the community). Covered services include psychological tests and therapies, pharmaceuticals, and rehabilitative activities. Specialized mental clinics and hospitals exist, but services for depression, dementia, and other common conditions are also provided by primary care. Most psychiatric beds are in private hospitals owned by medical corporations.
Long-term care and social supports: National compulsory long-term care insurance (LTCI), administered by municipalities, covers those age 65 and older and some disabled people ages 40 to 64. It covers home care, respite care, domiciliary care, disability equipment, assistive devices, and home modification. Palliative care and hospice care in hospitals and medical services provided in home palliative care are covered by the SHIS, while nursing services and home help services are covered by the LTCI. Long-term home care services can be considered a part of home hospice services as dying patients become eligible.
Roughly half of long-term care financing comes through taxation and half through premiums. Citizens age 40 and over pay income-related premiums along with SHIS premiums. Employers and employees each contribute 50 percent of the premium. Premiums for those age 65 and older are also income-based (including pensions) and set by municipalities based on estimated expenditures; they are paid only by the beneficiaries. A 20 percent coinsurance rate applies to all covered services, up to an income-related ceiling. For low-income people age 65 and older, the coinsurance rate is reduced to 10 percent. There is an additional copayment for bed and board in institutional care, but it is waived or reduced for those with low income (all costs for those with means-tested social assistance are paid from local and national tax revenue).
Eligible people are entitled to use long-term services up to needs-based ceilings (called “care levels”) set by local LTCI boards, according to assessment of physical and mental conditions. People are not allowed to buy unlisted services with the budget provided, but they can purchase such services with their own money. Care management—covered by the LTCI and offered by public, nonprofit, and for-profit providers—is available to help people arrange long-term care services.
The majority of LTCI home care providers are private. In 2014, 64 percent of home help providers, 40 percent of home nursing providers, and 58 percent of elderly day care service providers were for-profit, while most of the rest were nonprofit. Meanwhile, LTCI nursing homes, whose services are nearly fully covered, are either public or nonprofit. Costs for long-term care services in non-LTCI private nursing homes and group homes are partly covered by LTCI.16
Family care leave benefits (part of employment insurance) are paid for up to three months when employees take leave to care for their families. Additionally, more than half of the municipalities have established marginal financial supports, mostly limited to those with lower incomes, with their own financial capacities and legislations.17