【Aging, safety net and fiscal crisis in Japan】No.6: Share of Healthcare Expenditures to GDP

In this column series, Yukihiro Matsuyama, Research Director at CIGS introduces the latest information about aging, safety net and fiscal crisis in Japan with data of international comparison.

The share of healthcare expenditures to GDP is an important indicator for comparing healthcare systems internationally and is therefore included in the OECD database every year. Healthcare expenditures include medical care fees at hospitals/clinics and prescription drug costs (healthcare expense in a narrow sense), as well as long-term care expenses.

Since 2000, the healthcare expenditure share in Japan has been relatively low, along with the UK and the Netherlands. Therefore, medical facility managers have insisted on greater public expenditures in healthcare. Consequently, as of 2016, Japan rose to fifth rank after the US, Switzerland, Germany, and France. This is largely due to the introduction of the public long-term care insurance system in 2000 to respond to rapidly increasing elderly care needs.

As mentioned in column No.1, healthcare expenses in a narrow sense will continue to increase even under the declining population, and long-term care expenses will also continue to expand at a pace that exceeds the rate until approximately 2040. It is expected that Japan's share will surpass that of Switzerland to rank second, following the US, around 2025.

Table 1: Share of healthcare expenditures to GDP


Source: OECD Health Statistics 2017

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