The Effect of Universal Health Insurance on Malpractice Claims: The Japanese Experience

Japanese patients file relatively few medical malpractice claims. Most scholars try to explain this phenomenon by identifying ‘‘faults’’ in the Japanese judicial system. Largely, the faults they identify do not exist. Instead, a substantial part of the reason for the malpractice claiming patterns may lie in the national health insurance system. In order to contain the cost of this system, the government suppresses the price it pays for the technologically most sophisticated procedures. Predictably as a result, Japanese doctors have focused instead on more rudimentary care. Yet, for reasons common to many societies, Japanese patients are less apt to sue over rudimentary care. They are more likely to sue over sophisticated care. In part, Japanese patients may bring relatively few malpractice suits because the government has (for reasons of cost) suppressed the volume of the services (namely, highly sophisticated services) that would otherwise generate the most malpractice claims. I explore this issue with a dataset covering all malpractice suits that generated a published district court opinion from 1995 to 2004. 1 Potentially, universal health insurance programs do not just alter the supply and distribution of medical services; potentially, they also shape claiming and litigating behavior in malpractice disputes. After all, the programs reduce the direct cost of medical services to patients. The lower costs boost demand, and—to prevent the drain on the public fisc—the government could (and usually does) respond by suppressing the amounts it pays suppliers.