Health care reform in Japan: the virtues of muddling through

Japan's universal and egalitarian health care system helps to keep its population healthy at an exceptionally low cost. Its financing and delivery systems have been adapted over the years in a gradual way that preserves balance. In particular, its mandatory fee schedule has proved to be effective in controlling spending by manipulating prices. Today, with severe fiscal problems, pressures are mounting for more radical reforms. However, these proposals attack the wrong problems and are impractical. Real problems include inequitable health insurance financing and insufficient regard for quality of hospital care. We suggest incremental reforms that would improve these situations.