Sustainability of Long-term care system in Japan

DR. HISAKAZU KATO (MEIJI UNIVERSITY) 2015.6.10

Two Sustainability Problems for Long-term Care in Japan 1. Fiscal Sustainability The expenditure of Long-term care insurance is expanding rapidly compared to pension or medical cost.

In future, the expenditure of Long-term care will be burden more for fiscal conditions.

2. Shortage of Labor Supply for Long-term Care Service It would be almost impossible to increase care service supply in order to satisfy rapidly increasing demand of elderly.

The mismatch between demand and supply in regional base would enlarge in near future.

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Outline of Long-Term Care Insurance System Purpose:

Long-term care insurance is founded to support the elderly who needs long-term care on a social level.

History:

Implementation in 2000 year.

Partial Revision in 2005 and 2013 year.

Features:

1) Support for independence

2) User Oriented

3) Social insurance system

Certified Persons:

The elderly who has certification of long-term care insurance are classified 7 classes, those are care level 1-5 and support level 1-2.

From HP of Ministry of Health, Labour, and Welfare. Data in the figure is in 2010.

This social insurance system is financed by both premium and tax.

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Aging in Future in Japan

In 2010

In 2025

In 2040

Ratio of 75 years old and over to total population by prefectures

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Trends in Persons Certified As Requiring Long-term Care & their Appearance Ratio

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Social Security Expenditure and Government Deficits & Trends in Expenditure of Long-term Care

The amount of increase of public debt is about 603 trillion yen from 1990FY to 2014FY.

The increase deficit is mainly due to increase of expenditure, and the amounts of increase of expenditure are decomposed to social security expenditure and public works. In recent years, aging increased the social security spending.

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Rapid Growth of Long-term care Expenditure

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Source: HP at MHLW “Future projection of costs required for social security“

Projection of Long-term Care Expenditure and Cost

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Mismatch between Supply and demand of Long-term care

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Assuming that an appearance ratio of certificated persons to population over 75 years old, the number of certificated persons over 75 years old will increase from 4.77 million in 2012 year to 6.96 million in 2040 year.

Shortage of human resources in Long-term care Demand for human resources in Long-term care

From trend projection by MHLW, human resources in Long-term care shortage will be around 300 thousand in 2025. In Tokyo metropolitan area, the shortage will be about 36 thousand persons by projection of Tokyo metropolitan government.

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The share of care industry workers is small. Supply of care worker is limited compared with demand of certificated persons.

Many of the care industry workers are women. Care industry workers from abroad is very limited.

Characteristics of Human Resources in Long-term Care from the View of International Comparison

Source：Colombo, F. et al. (2011), Help Wanted? Providing and Paying for Long-Term Care, OECD Health Policy Studies, OECD Publishing.

The Future Direction for Sustainability of Long-term Care System(1) (1)Fiscal issues

Restriction for certificated condition of beneficiary of long-term care insurance.

-> For example, the insurance would cover elderly persons who would be over care level 2.

A co-payment would be increased to reduce burden of public expenditure. -> It should be considered for low-income elder.

Enlargement of the secondary insured persons. -> However, the insurance benefit is not accompanied in principle for them.

Strengthening the Insurer's function -> Insurer: from municipalities to prefectures

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The Future Direction for Sustainability of Long-term Care System(2) (2)Shortage of care workers

Improvement of labor conditions for care industry workers.

Expansion of private insurance.

Introduce foreign workers.

(3)Enhanced collaboration between healthcare and long-term care

Promotion the integrated community care system.

The “integrated community care system” is a system that provides [1] housing, [2] medical care, [3] long-term care, [4] prevention services, and [5] livelihood support in an integrated manner in communities (by MHLW ” Health and Welfare Bureau for the Elderly”).

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