The Challenges and Growth of Telehealth in Japan: Is it here to stay?

Global Pandemic and Spread of Telehealth—Who Succeeded and Who Didn’t?

Similar to many other regions in the world, the COVID-19 pandemic has sparked active discussions on the dissemination of telehealth in Japan, among both the public and policymakers. In April 2020, the government temporarily allowed the use of telemedicine for the first consultation between a patient and a doctor, as well as the online prescription counseling by a pharmacist. According to a survey by the Ministry of Health, Labor and Welfare (MHLW) in January 2021, the number of medical institutions which introduced telemedicine bumped up from 10,812 (9.7% of all institutions in Japan) in April 2020 to 16,095 (14.5%) in June. However, this number nearly plateaued for the rest of the year. The use of online consultations for the first contact was less than 10,000 times nation-wide even in the peak month of May 2020 and has decreased since. Both the usage and the rate of expansion seem rather limited compared to countries like the United States, whose telehealth usage stabilized at around 38-times the pre-pandemic standard, based on a report published at the beginning of 2021.

The U.S. government successfully implemented various reforms in an agile manner soon after the onset of the pandemic, both at the federal and state levels.  This included loosening restrictions on the whereabouts of the patients, provider licensing, platforms to be used, ways to obtain patient consent and so forth. Additionally, as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the federal government announced to increase the funding to telehealth infrastructure by more than three-fold for the next five years. Topped by the commercial insurers’ quick adjustment of their reimbursement plans, the United States achieved high adoption of telemedicine during the pandemic. Similarly, according to the Health Advances’ report in May 2020, European countries which had introduced a robust regulatory framework for telehealth before the pandemic, such as France, Sweden, the United Kingdom and Germany, pulled far ahead of the other nations in the region facing the unprecedented health crisis. These countries also have public reimbursement system which compensates remote consultations at par or even above the physical hospital visits.

Existing Policy on Telehealth in Japan

The Japanese government first established the public reimbursement system for telemedicine as recently as in 2018. The reimbursement was around 60-75% of the equivalent physical visits, and the clinics were obliged to conduct regular in-person consultations alongside the online treatment. MHLW also developed a guideline to mitigate potential risks and promote telemedicine, but based on the assumption that remote care is only aimed for a limited number of conditions, such as chronic disease, and it is a supplementary tool to in-person treatment.

Low reimbursement rate despite the high initial cost for hospitals and the strict conditions for the public reimbursement were a serious constrain on the spread of telemedicine—a year after the introduction of the new system, the reimbursement requests from medical institutions averaged at around 150 per month. MHLW itself was aware of this situation and conducted a series of surveys, based on which they have made small amendments. However, the reforms were clearly not significant enough. A survey conducted in May 2020, in the midst of the pandemic, showed that 67% of small clinics and 45% of mid-sized institutions were not willing to introduce telemedicine devices in the near future.

The Way Ahead–Challenges and Opportunities

After the first decision to temporarily expand telemedicine in April 2020, the Japanese government sped up its pre-pandemic discussions on telemedicine and finally declared in June 2021 that these measures will be maintained permanently. MHLW is going to develop a detailed guideline to ensure the safety and quality of the treatment, followed by formal discussions on the reimbursement rate reform. In the most recent government meeting regarding the new guideline, a certain level of consensus was reached about its content, including detailed lists of patients and conditions that are “suitable” for telemedicine from the viewpoint of minimizing the risks, required training for doctors who offer remote care, how to secure a quick in-person care in case the doctor judges that telemedicine does not suffice, details of the system to triage if the condition in question is suitable for online consultation and so forth. It is likely that the use of telehealth for the first consultation will be limited to doctors who have an existing contact with the patient, or those who have access to the patient’s health record—the details of which will also be decided in the new guideline. Other topics in question include the need to develop security criteria for the treatment of personal data, especially as the use of personal health record spreads alongside the use of telehealth.

Even in countries with robust regulatory and reimbursement framework in place, high startup costs for clinics, need for workflow reconfiguration and the technological adaption on the part of patients pose a high level of challenge to the further dissemination of telemedicine. Technological issues could be even bigger obstacles for Japan, where the general delay in digital transformation and the aging of population stand out. The use of phone call will likely not be allowed under the new guideline, but the statistics for April- December 2020 showed that the use of voice call accounted for the average of 67% of all remote consultations. Furthermore, MHLW’s current discussion on the new guideline seems to lack a few key points, such as funding support to hospitals and policy on the medical liability. With regard to the reimbursement rate, a McKinsey report revealed that 54% of American physicians said that they would not offer virtual care at a 15% discount to in-person care. Considering the current rate in Japan, MHLW will need to achieve a significant bump, convincing the already skeptical doctors’ association.

Despite all these hurdles, the Japanese government seems determined to leverage the momentum that has been built under the on-going pandemic, at least to date. There is a clear room for the growth of telemedicine, as chronic diseases like cancer and the demand for home-based care keep increasing. Over 50% of Japanese people across generations responded that they are interested in using telemedicine, and 86% of those who have used it say they’d like to continue. Reforms that are required to spread telemedicine overlap or align with other healthcare priorities of the Japanese government: one example is the better security, integration and transfer of data for the effective use of personal health record, as well as sharing of information among hospitals and other types of care. The contribution of private businesses will also be key, not only in technological adaption and provision of safe IoT systems but also in regulatory considerations. There is ample room for leveraging their expertise on certain disease areas, patient behavioral patterns, and periphery areas such as online prescription services.

Digital HealthFuture of HealthGlobal TelemedicineJapan