Global Perspectives of Different Healthcare Systems and Health: Income, Education, Health Disparity, Health Behaviors and Public Health in China, Japan and USA

The recent, steady increase in healthcare spending is a notable phenomenon in all countries. The phenomena in China [a national health insurance system], Japan [a universal health insurance system] and the US [a mixed health insurance system] are no exception. Despite an increasing Gross Domestic Product, the steady increase in total expenditures on health as a percentage of GDP for the past two decades is remarkably evident in table 3. A rapid upsurge in the share of public health expenditures to national total health expenditures in Japan is a far larger share than those in China and the US. Higher spending appeared to be largely driven by the universal healthcare structure and the cost-based fee-for-service healthcare system in Japan. For the US, the relatively small share of public health expenditures as percentage of total health expenditures is due to the mixed healthcare system with a swift shift from the traditional fee-for-service of cost based to the managed care structure. The low government healthcare expenditures are due to an early stage of the national health insurance system with the cost-based fee-for-service system in China. Despite a large increase in healthcare expenditures and longevity in China, Japan and the US, health disparity among people and among nations persists [1-3].

Surprisingly however, the healthcare expenditures per capita illustrate similar trends in China, Japan and the US in table 1. The large per capita expenditures of the US are due to the high cost of medical innovation with technology and higher healthcare prices without the government intervention in the healthcare industry. Under the national healthcare system in China, a small amount of per capita healthcare expenditures is anticipated in its future expansion.

Table 1:Health Expenditure Per Capita: US, Japan, and China.

Note: PPP stands for purchase power parity. The healthcare expenditures per capita illustrate similar trends in China, Japan and the US in table 1.
Sources:
http://wdi.worldbank.org/table/2.1
https://www.cdc.gov/hepatitis/statistics/incidencearchive.htms
http://data.worldbank.org/indicator/SP.DYN.IMRT.IN?name_desc=true
http://www.mhlw.go.jp/english/database/db-hw/populate/dl/03.pdf
https://www.cdc.gov/heartdisease/docs/consumered_heartdisease.pdf
https://data.oecd.org/healthstat/deaths-from-cancer.htm
http://www.stats.gov.cn/english/statisticaldata/AnnualData/

Increases in healthcare spending due to an aging society are an urgent issue to be resolved. The rapid increase of aging in three countries has seen a rise in the dependent elderly, population age 65 and over in table 2. This will especially cause a shortage of labor supply, a weakening of the national pension system, and expansion of the use for healthcare resources. Japan has almost 27% of its population age 65 and over in table 2. China demographically still has a young population structure and has had one for the past two decades. It has increased about 5 percentage points in China, while it is about 12 percentage points Japan. The US growth rate has been slow.

Table 2:Aging Population and Life Expectancy: US, Japan, and China.

Note: The rapid increase of aging in three countries has seen a rise in the dependent elderly, population age 65 and over in table 2.
Source:
http://data.worldbank.org/indicator/SP.POP.65UP.TO.ZS?name_desc=false
https://www.cdc.gov/nchs/data/databriefs/db88.pdf
https://www.cdc.gov/nchs/products/databriefs/db267.htm
http://data.worldbank.org/indicator/SP.DYN.LE00.IN
http://stats.oecd.org/viewhtml.aspx?datasetcode=HEALTH_STAT&lang=en#
http://apps.who.int/gho/data/node.country.country-CHN
http://www.stats.gov.cn/english/statisticaldata/AnnualData/
http://www.mhlw.go.jp/english/database/db-hw/populate/dl/03.pdf

In aging, people are affected by chronic disease, and aging causes a loss of health stock. The loss of health stock includes losing physical strength and durability, a fast health depreciation of health, and a resultant loss of immunity. Older people in the US are the most likely to report one or more chronic condition. There are 31.5% of Americans with multiple chronic conditions. In addition, 68% of US adults age 65 or older have at least two chronic conditions [4]. China has also had similar experiences. Diabetes has been increasing in China and leads to heart related diseases. About 533 out of every 100,000 residents died from chronic disease in China and chronic disease caused 86.6% of death by cardio-cerebrovascular disease, cancer, and chronic respiratory disease [5,6]. Wang et.al, also proved the aforementioned general evidence by the survey with 1480 people (59.4% women and 40.6% men living in a rural community) aged 60 and over in Shandong Province. The overall prevalence of chronic multimorbid disease is 90.5% [7]. It reveals a great prevalence of chronic conditions among the population in China.

Despite spending more on health care with advanced medical technology relative to China and Japan (Table 1), the US shows poor health outcomes with a relatively short life expectancy (Table 2). Healthcare expenditure in the US far exceeds that of China and Japan for the past decades (Table 1). Regarding the healthcare system, the US has a mixed health insurance system and the US people spend more money on healthcare than China with the National Health Insurance system (NHI) and Japan with the Universal Health Insurance system (UHI) in table 1. In contrast, China dedicates a relatively small share of public health expenditure to total healthcare expenditures compared with the US and Japan (Table 3). 

Table 3: Health Expenditures: US, Japan and China.

Note: GDP stands for gross domestic product. A rapid upsurge in the share of public health expenditures to national total health expenditures in Japan is a far larger share than those in China and the US in table 3.
Sources:
http://wdi.worldbank.org/table/2.1
https://www.cdc.gov/hepatitis/statistics/incidencearchive.htm
http://data.worldbank.org/indicator/SP.DYN.IMRT.IN?name_desc=true
http://www.mhlw.go.jp/english/database/db-hw/populate/dl/03.pdf
http://data.worldbank.org/indicator/SP.DYN.LE00.IN
https://data.oecd.org/healthstat/deaths-from-cancer.htm
http://www.stats.gov.cn/english/statisticaldata/AnnualData/
http://www.mhlw.go.jp/english/database/db-hw/populate/dl/03.pdf

It is interesting to do cross-national comparisons to evaluate the performance of the US, Japanese, and Chinese healthcare systems, and to assess health behaviors and health outcomes among different health insurance programs, especially issues related to health disparity. But little is known about how the free-competitive economic system has sustained health and produced income disparity. Under the free-competitive economic system, the socio-economic system has generating an expansion of socio-economic disparity with economic development. The economic disparity, in turn, causes and/or creates health disparity in different healthcare systems [8]. 

Objectives of this study are threefold. (1) How is it possible to develop a sustainable health with in different healthcare scheme? (2) What are influential factors of health behaviors, i.e. preventive care in different healthcare systems among the US, Japan, and China? (3) How can we explain health disparity among people? A cross-national research is needed to better understand the relationship between healthcare systems, health behaviors, and socio-economic factors, as well as other health determinants such as healthy lifestyles and health literacy. It is imperative to profile health, to sustain good health, and to mitigate ever-increasing health disparities among countries and their population.

USA Healthcare System

Medicare and Medicaid

The BCBS insurers offer some form of health insurance coverage’s in every state in the USA (Chart 1). They also serve as administrators of Medicare health insurance for retired people. The BCBS delivers coverage for employees of state and federal governments. Medicare enrollee premiums are only for Parts A and B. Medicare Part A is for hospital services and Medicare Part B is for physician services. Consumer and employer taxes fund Medicare, including the payroll tax, which is paid into the Hospital Insurance Trust Fund (part of the federal government). Medicaid program is the federal government transfer of funds to state governments for the federal share of the combined state-federal program. Beneficiaries pay no premiums, and direct consumer payments are minimal.

Chart 1: Healthcare Services and Insurance Markets in the USA.
[Mixed Health Insurance System]

Note: The above figure presents health care services and insurance markets with the employer-provided health insurance. Employers and employees typically share premiums. Health insurance premiums are a tax-free benefit to the employee. Medicaid is the federal share of the combined state-federal program. Beneficiaries pay no premium and the direct consumer payments are minimal. 

Japan Healthcare System

Chart 2: Flowchart of Healthcare System in Japan.
[Universal Health Insurance System]

China Healthcare System

Chart 3: Flowchart of Healthcare Services in China.
[National Health Insurances System]

How do we integrate healthcare to have better health outcomes to improve effectiveness, efficiency, accessibility, and equity?

Figure 1: Behavioral Health Economics and Integration of Healthcare.

Effectiveness of care, (2) and (4), in “4-Quality of care” in figure 1 is organized into ten clinical areas: cancer, diabetes, heart disease, infectious disease, end stage renal disease, maternal and child health, respiratory disease, disparity in access, the disparity in quality, and disparity in health outcomes. The US healthcare system is largely fragmented into different organizations. Thus, the integrated system is of fundamental importance. Figure 1 presents an integration of healthcare while accounting for behavioral health economic features. Furthermore, there are three healthcare services in (B) in Effectiveness section (4): functional status preservation and rehabilitation; supportive and palliative care; and patient safety.

Efficiency as illustrated in (A) of (3) of “5-Efficiency” in Figure 1, represents quantitative efficiency, such as unnecessary healthcare services; preventable emergency visits and hospitalization; and harmful preventive services with no benefits. This study also notes that information technology; medical technology; and biotechnology are other types of vehicles which increase qualitative efficiency. For the cost-effective point of view, efficiency includes the overuse of healthcare services, preventable emergency visits and excess hospitalization, and harmful preventive services where the benefits have not materialized. 

Accessibility causes disparities in healthcare access and outcomes, which can be found in (1) in "4-quality of care” and “3-Outcomes and Health Disparities" in figure 1. Disparity in health among the population and disparity of outcomes remain a significant issue. Disparities caused by external factors in healthcare are related to financial barriers, the usual source of healthcare, and health insurance status that often cause unmet needs and delayed healthcare. As a result, quality of access of external factors stems from financial barriers [e.g. out-of-pocket expenses]; unable to get or delayed in getting needed healthcare services; usual and specific source of healthcare; and health insurance status. For internal factors in “4 Quality of care” in 4, the supply side of healthcare is: patient-centered care; timeliness of healthcare; and lifestyle modification in (2) and are sources of health disparities. If services are available and there is an adequate supply of services, then the opportunity to obtain healthcare exists. Accessibility also depends on financial, organizational, and social or cultural barriers that limit the utilization of services. Utilization is also dependent on the affordability, physical accessibility and acceptability of services in figure 1.

Health equity is affected by two significant aspects as a minimum: (1) an individual’s ability to produce or sustain his or her health and (2) accessibility of healthcare services [18,19]. Accessibility of healthcare services, for example the relationship between a healthcare provider and a patient, is a vital factor that affects individual health equity. Financial and time costs are factors that have an influence on the amount of healthcare service used [20]. Accessibility of healthcare services is defined as an availability of private and public health insurance, and the ability to obtain and use health and healthcare knowledge, and other socio-economic and demographic characteristics. Differences in these factors create and enlarge the gap of health disparity [21].

Empirical Framework and a Model

Figure 2: Application of PRECEDE-PROCEED model to examine health behaviors [preventive care and lifestyle], health disparity and health outcomes.

Note: 1. Green & Kreuter, Health Promotional Planning, 4th ed., Mayfield, 2005.
2. Glanz, Rimer, Lowis, Health Behavior and Health Education, 3rd ed., Jessey-Bass, 2002 @ Copyright by Tetsuji Yamada and ChiaChing Chen 

“Predisposing factors” involve the personal motivations to change behavior. These motivations are based on subjective knowledge, awareness, personal attitudes, values, attitudes, beliefs, perceived values, perceived needs, perceptions, religion, ethnicity, cultural background, etc. 

“Reinforcing factors” encompass the different types of feedback and rewards pertaining to good health behaviors and healthy life style. Reinforcing factors facilitate a person’s motivation for behavioral change and can be altered through direct communication. For example, the intensity of communication with parents and friends, peer pressure, enactment of regulations, rules or laws, are related to reinforcing factors. For government policy and regulation as a measure, this study has considered taxes, income equality, social security, and the burden of healthcare expenditures.

A model for health promotion should include three types of factors which are related to decision-making behavior: predisposing, reinforcing, and enabling factors. The conceptual model for a comparative health behavioral analysis is an application of the extended PP model on the effectiveness in different health insurance systems (a national health insurance system in China; a universal health insurance in Japan, and a mixed health insurance system in the United States), on preventative breast cancer behavior, and on assessing health disparity and outcomes by considering predisposing, enabling, and reinforcing factors. The basic structural model for this empirical analysis is: HBi=β₀+β₁PRi+β₂ENi+β₃REi+β₄SEi+e….. (Equation 1).

Equation 1 represents the relationship between the health behavioral changes of women “i” for a preventive care and the decision-making behavior a woman faces, as seen in (Figure 3). The term “e” is an unobserved error, assumed to satisfy E [e| PR, EN, RE, SE]=0. Enabling (EN), Predisposing (PR), Reinforcing (RE), and Socio-Economic (SE) factors will influence Health Behaviors (HB, i.e. preventive care for breast cancer). Similarly, health behaviors are incorporated in the extended PP model in order to observe decision-making health behavior and influential determinants [20,21]. In summary, multivariable regression analyses will be performed in order to evaluate the effectiveness of breast cancer prevention which is related to health outcomes and health disparity. A bivariate probit model is used by controlling for socio-economic, demographic and healthcare financing factors to investigate health outcomes by different healthcare programs in China, Japan and the USA.

Figure 3: Concentration curves: Health and Income.

Various components, as well as the amount of time invested in health within the family/individual, in?uence a woman’s health status. The education level, income, health literacy level, and cultural aspects are associated with health behavior. Years of education represents the health capital which is related to the health knowledge that would lead them to raise health stock. Income is an important determinant of the health of women, as higher income implies a higher stock of health.

Optimizing the health of populations is a critical issue in the United States and worldwide. It is a complex problem that requires collaboration among diverse sectors: healthcare providers, government and its policymakers, education, media, and communities, to publicize the health of people. Socioeconomic disparities are deeply associated with mental and physical health outcomes. For physical and environmental domains, this study employs Grossman’s concept [18,19] about the separable impact of the education and income on women’s health in health capital factors. This study assumes that health is measurable and interpretable as a ?ow per unit of time because women need heterogeneous healthcare. Individual healthcare needs are attributed to the physical and environmental domains that are related to preventive healthcare.

Data

Empirical Results

The rapid surge in national health care expenditures is a mounting burden on the governments of China, Japan and the US and its citizens. In addition, there are income and health disparities within and among the countries. This study addresses and evaluates behaviors of preventive care of women in different countries and under different healthcare systems (the national health insurance system in China, the universal health insurance system in Japan, and the mixed health insurance system in the US). The study identifies the importance of educational attainment for health behaviors as well as income earnings. Age-standardized breast cancer incidence and mortality rates have risen rapidly in China during the past 2 to 3 decades, making it the leading cancer among women [28]. The onset of the average age of breast cancer has recently become younger in China, Japan, and the US. Breast cancer is the number one leading cause of death among women in Japan, the 6^th in China, and the 5^th in the US.

The study proposes a diagrammatic presentation to describe how formal and informal health education is imperative to maintain a sustainable healthy life with increases in health stock. (Figure 5) presents the influences of health education on health disparity and on government healthcare spending.

Figure 5: Influence of Health Education on Health and Health Status with a Decreasein Govement Health Spendings.

Assumption of Figure 5:
The assumptions are that society consists of two identical individuals. An individual’s preference and consumption does not affect other utility functions. The individual preferences are not necessarily homothetic. The individual function is homogeneous of degree 0 in income and prices. The relative prices of goods and services affect their consumption combination through changes in production mix. The general increase in cost level does not change the consumption bundle because the relative prices remain constant. Both individuals consume health goods, services, and a composite good. Both individuals produce health service goods and a composite good. Both individuals’ health status changes by income level. The efficient production set is non-linear, and their capital labor ratios are different. Specifically, health goods are relatively more capital intensive than the composite good. Finally, there are no externalities in consumption and production.

Brief explanation of Figure 5:
The relative price of both goods raises HH (ED1) such that the unique price ratio of goods H and Q equals the marginal rate of substitution. For the EE curve in Quadrant IV, there are two ways to assess efficiency: efficient resource allocation and efficiency of technological development of delivery of healthcare services. An increase in health education attainment makes a shift in the HH line from ED1 to ED2 and raises health status from HS1 to HS2 along the health status axis. The health educational effect goes from quadrant IV through quadrant III. An increase in health status reduces healthcare costs from “a” to “b” on the vertical axis of healthcare costs. The chain reaction of this influence reduces the government subsidy for an individual from “a” to “b” on the horizontal axis of government subsidy in quadrant III.

Our empirical study shows educational attainment in a formal and informal form. The Chinese dietary government guidance, for example, generally raises women’s health knowledge and skill, as well as the promotion of breast cancer prevention. However, primary preventative care has received little attention in China, partly because of an insufficient knowledge of risk factors for breast cancer among Chinese women [24]. Although the US has the mixed healthcare financing and delivery system, there is a primary care doctor system which has a large influence on health behaviors in general. China and Japan do not have a primary physician system. It would be prudent to implement a primary physician approach to get informal health education from the primary physician who encourages patients to engage in preventive behaviors.

Another noteworthy finding about health disparity is that the concentration index study shows that income, health, and health disparity are generally exogenously determined. However, income influences health status and has a significant effect on health disparity. Health in China is disproportionately large and distributed towards the right on the horizontal axis as the form of cumulative % of population ranked by income. This result is different from Japan and the US. Improper income distribution with health exists among low income populations. However, it should be noted that China has been experiencing a rapid increase in life expectancy for the past decade. Thus, income level affects health and then health affects human stock, which is related to human productivity. If this process is disconnected, the proper process is terminated, and the result would be greater income disparity among individuals within a country and among countries in the world.

Health disparity not only stems from formal and informal health education, which are deeply interconnected to health literacy, but also from income, access to healthcare services, and a nation’s healthcare system, etc. Findings for China, Japan, and the US reveal that different types of health insurance under the different healthcare systems have a great impact on preventive health behaviors. The government financed/organized healthcare financing have a more effective influence in China and Japan than in the US. The study also discloses that risky health behaviors (addiction, alcohol intake, and smoking) and mental health aspects are negatively associated with preventive healthcare behaviors. Mental aspects are partially triggered by the globalized economy and its competitive market environment. As a result, individuals suffer from stress, depression, anxiety, and loneliness. 

Managed healthcare with a capitation-based system dominates the mixed healthcare system in the US while China, with the national healthcare system, and Japan, with the universal healthcare system, implement the cost-based fee-for-service healthcare system. Moving from the cost-based fee-for-service system to the capitation system is a viable option to mitigate ever-increasing healthcare spending and to have a sustainable welfare program.

The study is limited in that the Chinese data does not clearly state a variable for “breast cancer prevention”, the observation size is reduced by large missing values, and shows a very significant amount of negative income which we are not familiar with. The study is implemented with our very limited knowledge of China’s healthcare financing and delivery systems. We separated women from men in order to examine women’s preventive health behaviors by focusing on breast cancer. Ina behavior study such as this it might be better to include more than a one-term cross sectional evaluation data, since this study focuses on a three-country comparison analysis on health and healthcare under different healthcare systems with different socio-cultural aspects. A development of human capital, i.e. health stock, will reduce government healthcare spending. Despite these limitations, this study has identified some issues and has made contributions to the existing literature regarding differing healthcare systems, differing health and health behavior, health and income disparity, and health and education. Insurance coverage is an important factor to increase the health and longevity of the population. Future studies would improve and scrutinize the complex nature of the various aspects of health and income disparities that influence health and income disparities in different healthcare systems in socio-culturally different countries. Managed healthcare financing is an effective alternative to curb ever-increasing healthcare costs.

We are grateful to Michael Grossman and would like to thank Ling Cai Yuan and Artin Haghshenas for their research assistance at Rutgers University, the State University of New Jersey, USA. The data used are supported by the Global Centers of Excellence Program, ISER, and Osaka University. We acknowledge the research support provided by the Research Council of Rutgers University (#2-02243 and #2-02089), the State University of New Jersey, United States. The early version of the manuscript was presented at the Beijing Forum, Peking University in November 2017. Any credits, analyses, interpretations, conclusions and the views expressed in this paper are those of the authors, and do not necessarily reflect those of the institutions.

Chia Ching Chen and Tetsuji Yamada conceived the idea of this research and designed the framework. Weihong Zeng evaluated the healthcare system of China, Japan and the USA drafted the manuscript. Tetsuji Yamada and Barret Levine analyzed the data and implemented econometric analyses. Chia Ching Chen approved the final manuscript. John Carter managed model and econometric method.

The authors declare no conflict of interest. The founding institution had no role in the design of the study; in the collection, analyses, or interpretation of data; in the writing of the manuscript, and in the decision to publish the results.

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