The hidden economics of diabetes

June 29th, 2011 by Philip Brasor & Masako Tsubuku

Last week the medical journal Lancet published the results of a study that found the number of diabetes patients rising rapidly throughout the world. Right now about 10 percent of the world’s population suffers from the disease, which is traditionally associated with countries that have higher standards of living, like the United States. However, Lancet reported that diabetes is reaching epidemic proportions in the developing world as well owing to obesity and inactivity. Since diabetes leads to all sorts of serious health problems, including kidney failure, heart attacks and blindness, the epidemic will add an insupportable burden to medical costs in the next century.

Pick-me-up: Patient delivery van outside of dialysis clinic in Chiba

Diabetes is on the increase in Japan, too, and is one of the reasons the national health insurance program is in trouble. A recent report on NHK’s “Closeup Gendai” showed how local governments are trying to reduce doctor visits among local residents. In Kure, Hiroshima Prefecture, officials have compiled a database of people who may be contributing to “wasteful medical costs.” To qualify for the database, a person has to have visited a clinic or hospital at least 15 times during the course of a single month. An official then talks to this person to learn the reason for the frequent visits.

NHK points out that these inquiries are delicate. The doctor-patient relationship is a private one, and the local government is careful not to come across as interfering with that relationship. Nevertheless, many older people, because they pay very little out-of-pocket for a doctor’s visit, go to the hospital often even if their medical complaints are very slight. Some have even confessed to going to the hospital for social reasons, to chat with friends or make new ones. In any case, the local government official often suggests other ways of dealing with health problems in order to cut costs, such as asking for generic drugs when filling prescriptions or recommending lifestyle changes that can prevent future illnesses.

Lifestyle changes are central to controlling Type 2 diabetes, which accounts for 90 percent of diabetes cases in the world. Type 2 is controllable, which means in some cases changes in diet and exercise habits can keep the disease at bay. However, the program suggested that the local governments’ efforts may not have any effect since doctors aren’t necessarily participating. One physician interviewed by NHK said he didn’t think that any of his patients “didn’t need” to make so many visits to his office; and if, in fact, the number of visits they made — each of which is charged to national health insurance — was not justified medically, frequent visits contributed to a patient’s “psychological well-being” and were, thus, better for their overall health.

The suspicion that Japanese doctors take advantage of the health insurance system to boost income is widespread, and at least one physician, an anonymous neurosurgeon, has written on his blog that diabetes has proven to be a cash cow for many clinics. Though Japan’s outlay for medical treatment, about ¥30 trillion a year, is comparable to other developed countries, the amount it spends on dialysis is conspicuously large, about ¥1 trillion a year, or one-thirtieth of total medical costs. Dialysis is an expensive treatment for people with kidney disease, a common outcome of diabetes, and most clinics prescribe in-house treatments twice a week, which adds up to a bill of ¥400,000 per patient per month. Because it is so expensive, health insurance pays a higher percentage of the cost, so patients only pay between ¥10,000 and ¥20,000 a month. According to the neurologist’s calculations, there are 280,000 people in Japan receiving dialysis treatments, which means that 0.002 percent of the Japanese population is responsible for one-thirtieth of the country’s medical costs.

Japan accounts for 16 percent of the world’s dialysis patients, second only to the U.S., but in terms of “prevalence” of dialysis patients, Japan is No. 1. This isn’t to say that people in Japan who receive dialysis treatments don’t need it, but they may not need it as much. The neurologist implies that some clinics are making a lot of money by scheduling frequent dialysis sessions and then charging the insurance administration. They usually offer their dialysis patients free rides to and from the clinic. It’s a service for regular customers.

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4 Responses

  1. Philip, I enjoy reading your column and think you come up with really interesting analysis and your research for all your articles really convinces me, as an interested generalist who doesn’t know a lot about a heck of a lot of things you write about. But I have to pick you up on a few points about dialysis in this article. First, by putting it in the same article as the old people who see the doctor over 15 times a month, you seem to be suggesting, to readers who don’t know otherwise, that people have their costly dialysis regime by choice. They don’t. If you have ESRD (end stage renal failure) you need regular dialysis, or you die, and the general prescription here is three times a week. The time you spend dialysing can vary, but 4 hours is common in Japan. This means that dialysis patients feel better and live longer than their counterparts in many other countries. Cutting it to 3 1/2 hours means a nosedive in how patients feel.
    Second, the cost. For the 13 years my husband did in centre hemodialysis, the standard method here, a bill of around 600,000 a month came. Maybe you didn’t include all the medicine, which is massively expensive. This was paid by his local authority, as ESRD patients qualify for 100% coverage of their medical bills. So it’s even more expensive than you stated, but even cheaper for the patient. My husband paid about 35,000 a year. Which is lucky because he got absolutely no other public support even though he couldn’t work.
    Third, Japanese idiosyncracy kicks in in two ways. First, it’s extremely rare for someone to do home dialysis in Japan, and important way other countries cut their dialysis bills. Here, you would be actively discouraged by clinics. The ageing demographic of dialysis patients and the lack of young enough fit enough caregivers prepared to train to look after their loved ones at home while they dialyse also make this almost unheard of. Added to which the clinics don’t want to lose custom. Clinics will justify it by saying “We Japanese like omakase”.
    The fourth point, which I’m surprised you didn’t bring up, is that dialysis clinics, which do indeed do a roaring trade in a growing market, do absolutely nothing to encourage patients to seek a transplant. My husband had to make all the running to get his, and it took him 13 years from starting dialysis. And that’s with a live donor. In his centre, everyone treated him like the one who got away. And with maybe 300,000 people in need of an organ transplant, only about 13,000 registered on the transplant list, and something like 150 cadaveric transplants in the whole country last year, maybe they’ve got a point. So the main reason for Japan’s huge dialysis population comes down to the country’s failure to seriously get the organ donation and cadaveric kidney donor laws up and running. they’re changing, but at a glacial pace, and the latest organ trafficking scandal will lead to the rules on non-related donors being tightened even further.

  2. Thank you very much for the information. It adds a great deal to our knowledge about the situation surrounding kidney patients in Japan. We did not mean to compare dialysis patients with elderly people who visit doctors out of habit. Our main point is that doctors and clinics make money off of the national health system. Dialysis was an example we found where clinics can make a lot of money, but that isn’t to say the patients don’t need the treatment. Obviously they do, and in fact your husband’s experience seems to support the article’s main point, that some clinics count on dialysis patients for their living. And thank you for bringing up the transplant issue, which we didn’t mention because we didn’t think it was related to our main thesis, though from what you revealed it is. We are curious: How did you husband finally secure a kidney?

  3. Philip,
    My husband’s brother donated his kidney in 2007. The fact it took so long to arrange was due my husband overstaying his visa, around the time he was diagnosed. He was in a Catch-22 where he had to stay in Japan for his (affordable) dialysis, and he couldn’t go out, do his 1-5 years’ penance for having overstayed in his home country and then come in on a spouse visa because we couldn’t have afforded to pay for his dialysis there. He therefore had to wait till I could apply for permanent residence, which meant thirteen years on dialysis. In the meantime we investigated alternative ways out including transplants in Peru, Argentina, Spain and the UK, but none of these worked out.
    Once he got special permission to stay, his brother came here to donate and the whole transplant process was very straightforward.
    Not a typical case! In that time, basically because of being a foreigner, he never bothered to get on the donor list. The wisdom among patients at his dialysis centre was that it was a total waste of time. Japan is a country where a dialysis patient without a live donor has such a tiny chance of getting a kidney that it’s maybe better not to even get your hopes up. He never, through his centre, came across anyone who knew anyone who had a transplant, or even knew how to go about it. We found out everything by ourselves. He was never offered any options when he was diagnosed, never counselled, and I’m sure that happens to nearly everyone in Japan who gets diagnosed.

  4. Haven’t you heard of total welfare wherein the man goes dialysis twice a week and pays nothing because he is a declared pauper? And he is a foreigner.


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