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Canada could learn from Japan, Korea and Taiwan as it seeks to reform health care

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Asian countries could provide insights for improving Canada’s under-performing health care system, according to a new paper co-written by University of Toronto sociologist Ito Peng.

Greater competition between hospitals, introducing user fees and putting hospital specialists on salary are some of the ways that Japan, Taiwan and Korea have been able to control health-care spending while still offering top-quality services. Further, those countries have a lower infant mortality rate than Canada, better pharmaceutical coverage and the latest technologies for hospitals.

The findings are reported in “An Asian Flavour For Medicare: Learning from experiments in Japan, Korea and Taiwan” by Ryerson University’s James Tiessen and Peng. The report was commissioned by the Macdonald Laurier Institute, a non-partisan, independent national public policy think tank in Ottawa.

Reform is necessary in Canada as medical services are accounting for larger portions of the country’s provincial budgets, reducing resources in other important areas such as education and infrastructure. At the same time, an aging population threatens to further drive up costs in the years to come.

While Canada is different from Japan, Korea and Taiwan, the authors note that these countries have faced similar challenges to Canada in financing and delivering health care and long-term care to populations that are aging at a very rapid rate.

The report notes several potential lessons for Canada:

  • 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.

“It is unfortunate that Canada is not more familiar with how health care is funded and delivered in Asia, particularly considering that Japan’s universal access system predates Canada’s by a decade,” said Peng.

Peng is director of U of T’s Centre for Global Social Policy and holds appointments with the Department of Sociology and the School of Public Policy & Governance. Tiessen is director of the School of Health Services Management at the Ted Rogers School of Management, Ryerson University.

With files from Macdonald Laurier Institute.

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