The hefty pension payments and healthcare expenditure that benefit Japan’s retiree aging population has started to raise red flags among the Japanese. Japan is burdened with swelling government debt that, in 2017, approached 250 percent of GDP. The working population is increasingly pressurizing the Health, Labor and Welfare Ministry to increase social welfare services and income for the working productive generation that is suffering from declining household income due to the financial meltdown and the ensuing wage restraints. Human development experts also argue that the nation should spend more on healthcare and education of the younger and the working generations who are the future of Japan.

Among the core elements of income redistribution and human development expenses was the government reducing the citizens’ co-payment share to 10–30 percent of total medical costs. A daunting question facing the government is whether healthcare for the youth has actually had a positive impact on their health. A recent study used a differenceindifferences approach in order to investigate the impact of an increase in the cost sharing rate on medical service utilization among young school pupils with chronic medical conditions.¹

To receive valid results, the study compares 2,896 students, who are divided into two groups. The first group comprises second and third grade beneficiaries of the government- sponsored National Health Insurance. The second consists of the counter factual group of fourth grade children who were not allowed to receive healthcare benefits. The study was conducted for 24 consecutive months from 2012 to 2014. There was no major change in health conditions for both groups. The results reveal that the group that benefited from the cost-sharing rate increased its inpatient service utilization and reduced its outpatient service. Mild and chronic conditions for the other group showed a sharp drop-in outpatient service. The study of the behavioral trends will aid policymakers and medical practitioners. But as helpful as the difference indifference statistical approach is, it is imperative that more specialized medical studies are conducted before deciding on public expenditure on medical services.

Questions

How can a non-governmental organization (NGO) that offers a cash support program to the poor use the difference-in-difference approach to assess the effectiveness of its poverty reduction program?