Long-term care insurance in Japan

- Social background, evaluation and future -

November 2013

Masahiko HAYASHI

Deputy Assistant Minister for International Affairs

Ministry of Health, Labor and Welfare Japan

Shifting Values : How should we care for older people in society

1. Why do they accept establishment of long-term

care insurance system in Japan?

2. Evaluation of the long-term care insurance system

and its challenges

3. Future of long-term care

2

Agenda for this presentation

1. Why do they accept establishment of long-term care insurance system in japan?

Social background for establishment of long-term care insurance system

Rapidly ageing society (Demographic structure change)

・ very high life expectancy ・ declining (and low) birthrate

The nuclearization of the family

Increasing participation of women

Very heavy burden a family care person is forced

Some problems with former long-term care system

Social consensus about establishment

of long-term care insurance existed

no family care person

Rapid increase in number of the elderly aged 75 and older

0

5

10

15

20

25

30

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060

Population (10,000 persons)

(%)

Population aged 14 and younger

Population aged 15 - 64

Population aged 65 - 74

Population aged 75 and older

Percentage of the population aged 65 - 74

Percentage of the population aged 75 and older Population peak (2004)

127,790 thousand people 12,806

1,529

8,174

1,684

11.9%

2012 estimation (Population Projections for Japan)

Actual values (Population Census )

11.1%

Source: Statistics Bureau of the Ministry of Internal Affairs and Communications “Population Census,” National Institute of Population and Social Security Research “Population Projections for Japan assuming medium-fertility/medium-mortality”(estimated in Jan. 2012)”, Values of 2010 are from Statistics Bureau of the Ministry of Internal Affairs and Communications “Base Population according to 2010 Population Census” (Base Population is the population that was corrected by dividing the population of unknown citizenship and age proportionally)

1,419

8,674

791

2,336

4,418

1,128

12,067

2,179

1,479

7,085

1,324

26.9%

13.0%

18.1%

12.3%

Peak of the number of elderly 38,780 thousand people (2042)

5

Percentage of population over 80 in OECD countries

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

OECD EU27 Japan Korea USA World Brazil China

Source：OECD ”Help Wanted? ”

Shocking outcomes of public opinion poll !

Difficulties in “house care”

too heavy workload (meal, bath, elimination) : 57.5% going out is impossible : 36.2% great psychological burden and stress : 32.0% lack of sleep : 25.2%

source : “Survey on Trend of Health and Welfare”

Ministry of Health and Welfare (1990)

Feel a hatred against a person who requires nursing care?

daughter in law (wives who nurse her husband's parents) : 46.2% daughter (women who nurse her parents) : 30.0% wife (women who nurse her husband) : 33.6%

source : “Survey on the actual conditions of house care person“ Japanese Trade Union Confederation (1994)

Welfare for the elderly

Covered services • Intensive care homes for the elderly, etc. • Home help services, day services, etc.

Healthcare for the elderly

Covered services • Health facilities for the elderly, convalescent wards in hospitals, general hospitals, etc. • Visiting nurses, day care, etc.

(Problems)

Because municipalities decided the types of services and their providers, the users could not choose the services.

Because income verification was required, people felt reluctant to use the services.

Because municipalities generally provided services directly or via commission, there was no competition and services tended to be uniform.

Because copayments were based on the income of the individual and persons with a duty of support (ability to pay), the burden on people with medium-level and high incomes was heavy

(Problems)

Because medical care was cheaper than the welfare services for medium- and high-income people and because the welfare services infrastructure was insufficient, extended hospital admissions for long-term care became a problem.

→ Compared with intensive care homes for the elderly, the costs were higher and healthcare expenditures increased

→Systems for the extended recuperation of persons needing long-term care were inadequate in terms of staff and the living environment in hospitals was intended for patient treatment (living spaces were small, dining rooms and bathing facilities were lacking, etc.)

There were limits on the ability of the systems for elderly welfare/healthcare to respond before the adoption of the long-term care insurance system

Problems with the system for long-term care of the elderly before the adoption of the long-term care insurance system

8

Before introduction

(1) Apply at a government office; services determined by the municipality

After introduction

(2) Apply for healthcare and welfare services separately

Users themselves choose the types of services and the vendors

A long-term care services care plan is created, and comprehensive use is made of medical and welfare services

(3) Services provided mainly by municipalities and public institutions (social welfare councils, etc.)

Services are provided by diverse vendors, including private-sector firms, agricultural and other cooperatives, non-profits, etc.

(4) Expensive and hard to use for people with medium or high incomes

Example: In the case of the head of a household

with an income of 8 million yen and an elderly parent with a monthly pension of 200,000 yen

Intensive care home for the elderly: 190,000 yen/month

Home helper: 950 yen/hour

Regardless of income, users pay 10% Example: In the case of the head of a household with an income of 8 million yen and an elderly parent with a monthly pension of 200,000 yen

Intensive care home for the elderly: 50,000 yen/month Home helper: 400 yen/30–60 minutes

Differences in the welfare system for the elderly from the user perspective before and after the introduction of the long-term care insurance system

9

2. Evaluation of the long-term care insurance system and its challenges

Approx. 60% of persons are appreciating long-term care insurance system (Greatly appreciate: 14%, somewhat appreciate: 47%)

Persons who are not appreciating account for approx. 20% (not appreciate so much: 19%, not appreciate at all: 4%)

1. Greatly appreciate

14%

2. Somewhat appreciate

47%

3. Not appreciate so

much 19%

4. Not appreciate at all

4%

5. Cannot say which 10%

No response 6%

Evaluation of long-term care insurance system

21

Evaluation of long-term care insurance system

[Family burden] Approx. 50% of persons feel family members’ burden has become lighter. On the other hand, approx. 10% of persons do not feel family members’ burden has become lighter. [Quality of services] Approx. 30% of persons feel quality of services has got better. On the other hand, approx. 10% of persons do not feel quality of services has got better. [Selection of services and service providers] Approx. 50% of persons feel it has got easier to select services and service providers. On the other hand, approx. 10% do not feel it has got easier.

1. Yes 51%

2. Yes and no 31%

3. No 13%

No respon

se 5%

Family burden becomes lighter

1. Yes 34%

2. Yes and no 47%

3. No 14%

無回答

5%

Quality of services gets better

1. Yes 46%

2. Yes and no 35%

3. No 14%

無回答

5%

Selection of services and service providers

get easier

22

Evaluation of long-term care insurance system

[If you need long-term care] The largest number of persons (46%) want to “receive long-term care at home if there are services that enable them to live at home independently of their family members.” The second largest (24%) is to “live at home receiving combination of long-term care by my family” The third largest (12%) is to receive “move into fee charging home for the aged or house for the elderly with care to receive long-term care.”

1. Live at home receiving cares by mainly my family

4%

2. Live at home receiving combination of external long-term care services and care by my

family 24%

3. Receive long-term care at home if there are services that enable me

to live at home independently of my

family members 46%

4. Move into fee charging home for the aged or house for the

elderly with care to receive long-term care.

12%

5. Stay in special nursing home or other facility for the elderly to receive long-term care

7%

6. Stay in the hospital to receive long-term care

2% 7. Others

3% 8. No response

2%

How do you want to receive long-term care if you come to need it?

Source: “Opinion collection from the citizens concerning long-term care insurance system (result outline)” by Health and Welfare Bureau for the Elderly of MHLW 13

Desire for long-term care (by their own)

[If your parents need long-term care] The largest number of persons (49%) want their parents to “receive combination of long-term care services

by external providers and cares by themselves at home.” The second largest (27%) want their parents to “receive long-term care at home if there are services that enable them to live at home independently of themselves.” The responses of the largest and second largest are inverted compared to the responses in the preceding section.

In either case, larger number of persons want to live at home. Those who want to be institutionalized or hospitalized account for only less than 10%.

1. Live at home receiving cares by mainly my family

4%

2. Live at home receiving combination of external long-term

care services and care by my family

49%

3. Receive long-term care at home if there

are services that enable me to live at home

independently of my family members

27%

4. Move into fee charging home for the aged or house for the

elderly with care to receive long-term care.

5%

5. Stay in special nursing home or other facility for the elderly to receive long-term care

6%

6. Stay in the hospital to receive long-term care

2% 7. Others

3% 8. No response

4%

How do you want your parents to receive long-term care if they come to need it?

14

Desire for long-term care (by families)

Source: “Opinion collection from the citizens concerning long-term care insurance system (result outline)” by Health and Welfare Bureau for the Elderly of MHLW

3. Future of long-term care

15

Key points for future long-term care

• We will have to manage population aging in big cities, increasing solo or couple-only family and increasing dementia.

• The key word is “comprehensive community care”.

• Long term care costs will keep increasing more than any other area of social security.

• Consequently, the insurance contributions will also increase.

• We have to make efforts to keep the system acceptable for people including people who do not use services (because insurance contributions will become higher).

16

Realization of an integrated community care system which provides housing, healthcare, long-term care, prevention, and livelihood support services in a unified manner enables the elderly to live in their community and familiar environment throughout their life even if they come to need advanced level care.

Healthcare Long-term care

Living support/ long-term care prevention

Housing

Commuting to medical facilities/care facilities

Old people’s club, residents’ association, long-term care prevention, living support, etc.

Long-term care in the future (Integrated Community Care System)

Integrated community care system in 2025

* Integrated community care system regards its unit as junior-

high school district of the population of approximately 10

thousand residents

Integrated community care support center/ care manager

[Measures based on five perspectives] Following measures based on five perspectives should be implemented comprehensively and consecutively to realize Integrated Community Care. 1. Cooperation with Healthcare Services 2. Improvement and Reinforcement of LTC Services 3. Promotion of Prevention Programmes 4. Ensuring various life support services such as watching over, meals-on-wheels and shopping, and Advocacy 5. Sufficient supply of Elderly Housings (Collaboration with MLIT)

Current cost of approx. 9 trillion yen will be approx. 20 trillion yen in 2025

2011

2025

(Current scenario)

2025

(Reformed scenario)

*Medical expenditure will be from 40 trillion yen (2012) to 61 – 62 trillion yen (2025)

8.3 trillion yen

21 trillion yen 18 trillion

yen

Source: Prepared from “Review of future estimation of social security-related expenditure” (March, 2012)

Prospect of long-term care service costs

18

2012

8.9 trillion yen

Consumption tax (national/regional) will rise in stages to 8% in April, 2014, 10% in October, 2015.

Use of consumption tax revenue will expand from three types for the elderly (basic pension, medical care for the

elderly, long-term care) to four types of social security (pension, medical care, long-term care, childrearing).

Clarification of use of consumption tax revenue (Using consumption tax revenue as social security fund resource)

All consumption tax revenue is used for the sake of the citizens, not for expansion of public sector

19

Approx. +2.7 trillion yen

Approx. +10.8 trillion yen Government share of contribution to

pension is ½ (Including fund gained by government bonds for pension) Lowering the burden passed onto the

next generation • Existing social security fund that cannot

secure stable financial resource and that is increasing due to aging

(natural increase) Increase in social security expenditure followed by rise of

consumption tax • Increase in pension, medical cost, etc. followed by price boost

Measures for children/childrearing

- Solving the issue of children waiting for admission to day-care- center (quantitative improvement in day-care services, afterschool children’s club)

Improvement in medical/long-

term care

- Intensive use of medical resources in acute phase (strengthening of hospitalization medical care), improvement of home medical care/long-term care (from hospital/facilities to community/home), etc.

Improvement of pension

system

- Additional pension to persons with low income, shortening of certification term

• Strengthening countermeasures against poverty/difference (measures against persons with low income, etc.)

• Lowering premium of persons with low income, comprehensive payment/benefit system, etc.

Approx1%

Approx4%

Approx. 2.9 trillion yen

Approx. 7.0 trillion yen

Approx. 0.8 trillion yen

Approx. 0.7 trillion yen

Up to approx. 1.6 trillion yen

Up to approx. 0.6 trillion yen

Among above, approximately up to 1.4

trillion (already mentioned above)

Improvement of social security

Stabilization of social security: maintaining current social security

system

Comprehensive Reform of Social Security and Tax

Average insurance contributions

20

2911

4972

5700

6900

8200

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

Estimation

Thank you!