Aging In Japan - Focusing on Long-Term Care Insurance

Aging in Japan- Focusing on Long-Term Care Insurance

Presented at “Healthy Aging Summit”April 12th, 2011Los Angeles, CA

Taichi ONOProfessor, Graduate School of Public Policy

University of Tokyo

1

April, 1989Entered Ministry of Health and Welfare(MHW)Bureau for the Health and Welfare of the Elderly,

Minister’s Secretariat (MS), MHWJuly, 1992

University of California at BerkeleyJuly, 1994

Chief, Policy Analysis Div., MS, MHWAugust, 1996

Assistant Director, Nature Conservation Bureau, Environment Agency

July, 1998Assistant Director, International Affairs Div.,

MS, MHWJune, 1999

First Secretary, Embassy of Japan, USASeptember, 2002

Deputy Director, Food Safety Bureau, Ministry of Health, Labour and Welfare (MHLW)September, 2003

Deputy Director, Health Insurance Bureau, MHLW

April, 2004Director, Long-term Care Insurance Div., Hyogo

Prefectural GovernmentApril, 2006

Director for Food Safety, Pharmaceutical and Food Safety Bureau, MHLWAugust, 2006

Director for Nurse Personnel Policy, Health Services Bureau, MHLWJuly, 2008

Director for Health Economics, Health Insurance Bureau, MHLWJuly, 2009

Senior Policy Researcher (Chief Editor of the White Paper on Health, Labour and Welfare), Office of the Counsellor for Policy Evaluation, MHLWApril, 2010

Professor, GraSPP, University of Tokyo

Education

March, 1989: B. of Laws, University of Tokyo May, 1994: MBA, University of California at Berkeley

Job History

Introduction

2

In my presentation, “social security” refers to various policy areas of health and welfare, such as public health, income security, social welfare services, medical insurance, public pension, etc..

Introduction

3

Outline

1. Demography and Socio-Economic Situation of Japanese Elderly

2. Development of Japanese Social Security System--- Development under so-called “ 1955 Regime”

3. Outline and Challenges of Long-Term Care Insurance System(1) Outline of the System(2) Development of ”Comprehensive Community Care”(3) Sustainability

4. Conclusion

4

1.Demography and Socio-Economic Situation of Japanese Elderly

5

Life expectancy at birth:

Male: 79.59Female: 86.44

Already the “Front Runner” of Aging Globe

Demography

6

0

5

10

15

20

25

30

35

40

Japan

United States of America

“Speed” of aging is another concern for policy making Demography

% of population aged 65 and over (actual figure and estimates)

7

DemographyPopulation is already starting to decrease

8

Demography

9

Gender difference widens from age 70s.

10

Demography

Due to the longer life-expectancy, elderly needing long-term care increases.

Demography

11

Elderly who lives alone increase; supporting function of the families weakened.

Living arrangements

12

13

In addition to the services provided publicly, support to various needs in daily life by mutual-aid community groups such as volunteers, NPOs or traditional citizenship groups are expected. Mere greeting, or even paying attention by the neighbor will be of great help.

Still, family members are the primary caregivers.

Caregivers themselves are aged; half of them are over 60 years old.

Living arrangements

13

14

Speed of aging is more rapid in urban areas in coming years.

Over 65 population will increase in any prefecture until 2020, then decrease in some prefectures.

Saitama, Chiba, Kanagawa and Okinawa will increase its over 65 population 75% or more between 2005 to 2035. Tokyo, Aichi and Shiga, the figure is about 50%.

Over 75 population will increase in any prefecture until 2030, then decrease in some prefectures.

Saitama, Chiba, and Kanagawa will increase its over 75 population 150% or more between 2005 to 2035. Ibaraki, Tokyo, Aichi, Shiga, Osaka, and Okinawa, the figure is about 100%.

Growth rate of the aged (65 and over) Growth rate of the

“old-old” (75 and over)

Living arrangements

Many elderly live in their empty-nested homein the suburban areas.

< Policy alternatives to be sought>- Promote to provide appropriate style of housing for the elderly (“senior residents with care/guardian services”)- Establish the network of in-home services within the community so as to support the independent life of frail elderly in need of care

Living arrangements

15

Average per capita income of the elderly is not so different compared to the younger generation.

Economic Status

16

Their main source of income is public pension.

The public pension and other social security system work to reduce distributional inequality among the elderly.

Change of “Gini-Coefficient” by income redistribution (per person, age), 2008

Equivalent income (before redistribution)

Equivalent income (after redistribution)

Economic Status

17

2. Development of Japanese Social Security System

--- Development under so-called “ 1955 Regime”

18

Development of Social Security System

19

Post-war emergent relief and the establishment of basic laws (1945-55)

※National Health Insurance Law (1938)、Labour Pension Insurance Law (1941)

1947 : Child Welfare Law, Labor Standard Law, Workers’ Compensation Law, Employment Security Law, Unemployment Insurance Law

1948: Medical Services Law, Medical Practitioner Law, Health Nurse, Midwife and Nurse Law

1949: Handicapped Welfare Law

Universal Health Care and Pension, Progress of the Social Security (1955-early 1970’s)

1958: Amendment of National Health Insurance Law (Universal Health Care)

1959: National Pension Law (Universal Pension) (*Universal Health Care and Pension stated in 1961)

1967: Establishment of Childcare Allowance

(1973: Copayment abolished for elderly’s healthcare)

Sustainability of the system(late 70–80’s)

1982: Re-introduction of copayment for elderly’s healthcare

1984: Amendement of Health Insurance Law (10% copayment for enrollee)

1985:Reform of pension system (Introduction of the Basic Pension)

1985: Equal Employment Opportunity Law for Men and Women

Post-WWII Period Legislative History Development of Social Security System

20

Establishment of the system accommodating with population change (1990’s - current)

1989: “Gold Plan” (Ten-year strategy to promote the health and welfare of the elderly)

1994: “New Gold Plan”, “Angel Plan”

1997: Long-term Care Insurance Law (enforced in April, 2000)

2002: Amendment of Health Insurance Law (30% copayment for enrollee)

2005: 1st major reform of the Long-term Care Insurance Law (enforced in April, 2006)

2006: Reform of Health care supply and finance system (Establishment of the health finance system for the “Old-Old”)

Re-establishment of the social safety net responding to the labor market change and change in the family structure (Currently)

2010: New (tax-based) Childcare Allowance Law

2011: (On Schedule) 2nd major reform of the Long-term Care Insurance Law

Post-WWII Period Legislative History Development of Social Security System

21

Post-War Period Development of Social Security System

Post-war emergent relief and the establishment of basic laws (1945-55)

Pursuing sustainability of the system (late 70–80’s)

Establishment of the system accommodating with population change (1990’s - current)

・Post-War confusion

・Emergent relief for poor and needy (Helping the poor)

・Measures for the returnees

・Nutrition improvement and sanitation

・Communicable disease prevention

・Establishment of social policy organizations

・Rapid economic growth and higher standard of living

・Establishment of basic social security system

・Social insurance-oriented system (From “Helping the poor” to “Preventing to be poor”)

・Enrichment of the benefits

・”Welfare origin year”(1973)

・Transition to stable economic growth

・Rectification of social security benefit

・Balance between benefit and burden

・Stable and effective system

・”Normalization”

・Changing economic environment

・Population aging with less children

・Universalization of social services

・Privatization

・Localization

・Enrichment of community welfare

（Reference: White Paper, MHW (1999)）

22

Re-establishment of the social safety net responding to the labor market change and change in the family structure(Currently)

simultaneous

Universal Health Care and Pension, Progress of the Social Security (1955-early 1970’s)

Development of Social Security System

22

3.Outline and Challenges of Long-Term Care Insurance System

(1)Outline of the system

23

90% of the benefit

First Insured Persons (65 and over)(27.27million)

Second Insured Persons (40 to 64)(42.76 million)

PremiumWithheld from pension

State-wide Pooling

Insurers of medical care insurance

10% Copay

Service Provision

Enrollees (insured)

Municipalities (Insurer)

２０％３０％

Tax

Insurance Premium

Muni. Prefectures State１２．５％１２．５％（※）２５％（※）

Finance Stabilization Fund

（Fy2009-2011）

Service Providers○In-home service・Home Help・Day Care ...

○Facilities・Nursing Homes・Health Service Facilities ...

Municipalities

Meals and Utilities Fee

Certification of Long-term Care Need

Claim

※For Facilities BenefitState 20%, Prefectures 17.5%

５０％

５０％Set according to population ratio

Outline of the Long-term Care Insurance System

24

Outline of the LTCI system

Introduction of “Care-Management” that enables the optimal choice of services within the benefit limit that take into account various conditions such as the physical and mental condition of the elderly and the situation of his/her family

Insured

Municipalities O

pinion of MD

Support Level 1 or 2

○Facilities Services・Nursing Homes・Health Services Facilities・Long-term Care Hospitals

○In-home Services・Home Help ・Visiting Nurse・Day Care ・Short Stay

etc.○Community-based Services

・Multifunctional Small-Sized Day Care

・Home Help (Night Care)・Group Home for the Demented

etc.

Planning for the use of services (C

are Plan)

○Services according to the need of the municipalities

Care Level

1 to 5

Not Certified

○Preventive Services・Preventive Day Care・Preventive Rehabilitation・Preventive Home Help etc.

○Community-based Preventive Services

・Preventive Multifunctional Small-Sized Day Care

・Preventive Group Home for the Demented etc.

○Prevention Services

Preventive Services Care Plan

Those who are bedridden or dementia and in need of services

Those who are at risk and in need for assistance in daily life Prevention B

enefit

Those who are at risk for becoming “Care Level” or “Support Level”

Com

munity

SupportServices

Procedure for the use of services

25

For In-home Services, volume of the services varies according to the Care (Support) LevelFor Facilities Services, fees paid to the facilities vary according to the Care (Support) Level 25

Care B

enefit

Investigation

Certification of L

ong-term C

are Need


Support Level1

C. L. 2 C. L. 3 C. L. 4 C. L. 5

■Standing ■Sitting up ■Standing on one leg

■Walking ■Washing the body ■Counting money ■Nail clipping

■Taking on and off the trouser ■Moving ■Decision making in daily life

■Washing face ■Setting Hair■Oral hygiene ■Urination／Evacuation■Seating

■Eating■Delivering wishes

■Swallowing■Remembering, Understanding

Characteristic item

s for each Care (Support)

Level

S.L 2 Care Level 1

Demarcation between S.L. 2 and C.L. 1 are decided by the difference of possibilities for maintaining and recovering the level

26

Level of Care Need (Image)

26


Care Plan (Preventive Services Care Plan)

（Case1）　C.L. 3 (Mainly using Day Care)

Mon. Tue. Wed. Thu. Fri. Sat. Sun

Home Help Visiting Nurse Home Help

Night Home HelpHome HelpHome HelpHome HelpHome Help Home HelpHome Help

Midnight

Rental Wheelchairs, Special Beds (with equipments)

Day Care

PM

AM

Day Care Day Care

• Services under LTCI are provided according to the individually-organized “Care Plan”• Care Managers at independent offices organize Care Plan for In-home Services. Care

Managers at the “Comprehensive Community Care Support Centers” organize Care Plan for Preventive Services.

(Examples of Care Plan)

(Case2) C.L. 3 (Using Short Stay)

Mon. Tue. Wed. Thu. Fri. Sat. Sun

Home HelpHome HelpHome Help Home Help

Rental Wheelchairs, Special Beds (with equipments)

ShortStay

AM

PM

Day Care

2727


Care manager coordinates the service according to the need of the elderly. Each service is priced under the fee schedule (below), and the care manager coordinate the amount of service within the maximum limit according to their care level. Both of the cases above are within such limit. The elderly has alternatives for the combination of services, as well as the choice for service provider.

Outline of the services under LTCI

Facilities

In-homeVisiting Services(Home Help, Visitng Nurse, Home Bathing Help, Care Management, etc.)

home

Commuting Services

・Day Care ・Day Rehabilitation, etc.

Short Stay Services

・Short Stay, etc.

Collective Living Services・Private Nursing Homes, “Care Houses”・Group Home for the Demented, etc.

Facilities Services

・Nursing Homes ・Health Services Facilities, etc.28

28


Fees from the insurance is paid under unified fee schedule. For each service, fees are basically fixed according to the level of care need of the service user.

Every three years, fee schedule table is revised. The rate of total revision is affected by the budget constraints, and is under huge political interest.

Long-term Care Service Plan Outline of the LTCI system

Once in every three years, each insurer (municipality) reviews and revises its “Long-term Care Plan” .

Premium rate is set so as to keep the financial balance for coming three years, taken into account the projected amount of benefit (service provision). (Fixed-amount premium rate for three years.)

Term of the plan Planning period Benefit amount Insurance Premium

(FY)

(FY)

(FY)

(FY)

1st

2n

d3

rd4

th

1st

2n

d

3rd

4th

2,911 Yen

(National Avg.)

3,293 Yen

(National Avg.)

4,090 Yen

(National Avg.)

4,160 Yen

(National Avg.)

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The insurer (municipality) can set by their own discretion “the multiplier”, “income level that demarcates 5th and 6th level” or “more “steps” for upper-income level” so as to meet the financial condition of their citizen. (i.e., they can impose more to the rich and reduce the burden of poor as far as that meet fiscal balance.)

50% of the benefit under LTCI are paid by 1st insured (65 and over) and 2nd insured (40 to 64), shared by the head-count of each category. Currently the share of the 1st is 20%. The insurer (municipality) imposes the premium to their elder citizen.The insurance premium is set by the level of residence tax in order to secure appropriate burden according to the income status of each of the elderly.

1st Insured

20%

2nd

insured30%

National Gov’t25%

Prefecture Gov’t 12.5%

Municipality Gov’t 12.5%

4,160 Yen per month (National Average)

Multiplier

Residence tax not levied for him/herself

Residence tax levied for him/herself

1st Level 2nd level 3rd level 4th Level 5th level 6th level

1st Level: Under Income Assistance Program

2nd Level: Residence tax not levied for all family member, and his/her own annual pension income is below 800,000 yen

3rd Level: Residence tax not levied for all family member, and his/her own annual pension income is above 800,000 yen

4th Level: At least one family member is residence tax levied, but the insured is not civil tax levied

5th Level: Residence tax levied for the insured. Annual income is below2,000,000 yen.

6th Level: Resicence tax levied for the insured. Annual income is above2,000,000 yen.

Income

Premium of the 1st insured (elderly) Outline of the LTCI system

30

31

Elderly care has been supplied under “medical care” services and “welfare” services.

Medical Care: Hospitals, Clinics

Welfare: Nursing homes (Special Nursing Homes, Nursing Homes for the Needy)

Elderly care should be provided jointly by “medical care” type services and “welfare” type services. However, as they are provided under different system, service provision has not been well coordinated.

Arguments in 1990’sDiscussion at the establishment stage

32

Easy access has been guaranteed for medical care services. However, medical care services (hospitalization) are more expensive compared to their counterpart welfare services, and the services provided in hospital are not necessarily appropriate for elderly care. (So-called “socially-incurred hospitalization” problem)

Characteristics of medical care servicesContract with the hospital to be institutionalized.Cost is born by universally-covered“Health Insurance”.Fixed amount of copayment (then).

Discussion at the establishment stage

14.1

17.5

45.2

79.3

84.8

0.0 50.0 100.0

70 and over

65 and over

35 to 64

15 to 34

0 to 14

¥334,000

¥260,000

¥613,000

¥44,000

¥63,000

¥125,000

Non-elderly

Elderly

Lengthy hospital stay is characteristic for Japanese medical care. For elderly patients, average lengths of stay is much longer than the younger.

Average lengths of stay by age (days) (1990)

Per person medical care expenditure is much higher for the elderly. (FY 1992)

33

Welfare services target specified category of people. Process for utilization of welfare services is complicated, and social stigma exists for the use of such services.

Characteristics of welfare services

“Designation” system by the government(The premise of such system is that the elderly are socially weak compared to other generations, as they are easier to lose mental and physical health. Therefore, government needs to enhance their welfare by designating each individual as “needy”.)

Financed by tax.

Copayment depends on the income (monthly payment varies:0 yen to 240 thousand yen)


Medical Care: Easier access, copayment according to useWelfare: “Designation” system, copayment per ability to pay

Per months institutionalization cost (then)Nursing homes : 270 thousand yenHealth Services Facilities : 330 thousand yenRegular Hospital : 500 thousand yen, Long-term Care Ward: 400 thousand yen

For higher income people, “welfare” services were more expensive than “medical” services.

By unnecessary hospitalization (socially-incurred hospitalization), inefficient and unsatisfactory elderly care services by higher cost has been provided.

34

To reduce the barrier between “medical service” and “welfare”, various new types of service were created.

“Welfare-oriented” medical care services that were newly created

1985: Health Services Facilities(“Middle-way” institution to provide rehabilitation to the elderly whose sickness condition has stabilized)1992: Long-term Care Wards, Wards with Enhanced Care Services(Hospital beds with higher per-bed number of nurses and careworkers)1992: Visiting Nursing Station(Providing medical services by nurse to elderly in need of care at home)


Governmental plan to increase the welfare services has been launched.

1989: “Gold Plan” (Nationwide development plan to increase the Nursing Homes, Health Services, Home Help, Day Care, Short Stay, among others)

1993: “Elderly Health and Welfare Plan” (Mandated to prefectures and municipalities. A plan for necessary amount of services for its own citizen. )

1994: “New Gold Plan”(Strengthened version of the Gold Plan)

Novel types of residence for the elderly has been innovated.

1989: “Care House” (For the elderly who does not need hospitalization or “designation” to the welfare facilities, but who does have concern to live at home)

1980: Private Nursing Home(Nursing homes provided by for-profit companies)(On the contrary, Hospitals, Nursing Homes, Health Service Facilities and “Care Houses” are provided by non-profit corporations.)

35

Increased demand of the public to the elderly care services

Necessity to break down the barrier between “medical care” services and “welfare” services

Enrichment of the service provision by various “Plans”

Basis for the establishment of new elderly long-term care system


2005 Reform

36

Overview of the 2005 Long-term Care Insurance Reform

Change to the Prevention-oriented System

37

2005 Reform

38

Establishment of Regional Comprehensive Support Center

Regional Comprehensive Support Center is a core body in the community, performing the following 4 functions from the perspectives of ensuring equality and fairness:1)Total counseling support2) Rights advocacy including prevention and early discovery of abuse3) Comprehensive and continuous management support4) Care management to prevent the need for care (Preventive Care Plan)

(Certified as “Support Level 1” or “Support Level 2”

Counseling, Rights Advocacy

Care Management Support

Preventive Care Plan

Certified Social Worker

Chief Care Manager

Health Nurse

Established in all municipalities around the country (one in each junior-high school district as a target)

2005 Reform


(2) Development of ”Comprehensive Community Care”

39

What is “Comprehensive Community”?

40

Implement the measures to promote “Comprehensive Community Care System” that provides medical services, long-term care services, preventive services, residential arrangements and life-support services in a seamless manner in order for the elderly to live independent life in the community.

(Objective of 2011 LTCI Law reform bill)

“Comprehensive Community Care” means ---

Regionally-organized system that provides various life-support

service, not only medical care or long-term care but welfare

services, within daily living zone to secure the safety, peace of

mind, and health in daily life, on the basis of the provision of

resident that accommodates the needs of the elderly.

Comprehensive Community Care

“Many of the bedridden elderly in Japan are artificially made”, criticized Dr. Yamaguchi about geriatric medicine in Japan. Soon two decades will pass since Dr. Yamaguchi started working on measures to eliminate bed-ridden. Town of Mitsugi (population: about 4,800), a farming area in Hiroshima Prefecture, is facing depopulation

and population aging. Of the total population , those over the age 65 occupies about 23.2%, which is well above the national average. However, the number of bedridden elderly is about twenty (around 1%). Reduced to a quarter for past ten years, the number is quite few compared to the national average of about five percent.Change from “Sit-back Medical Care" to “Delivery Medical Care" is the reason for such result. Originally, Dr. Yamaguchi is a surgeon. The first time he faced the problem of bedridden was not long

after the time he was appointed as head of the Mitsugi Hospital. He faced many patients who come back to the hospital as bedridden soon after his toil of overnight operation. Lack of nursing ability of family existed. That would lead to careless use of a diaper. But he felt the

aftercare of the hospital was not enough.In 1975, he began to send nurses to visit patients at home who have been discharged. His try and error

continued, and he established “Comprehensive Community Care System” that the wall between the medical care and welfare is eliminated and that the integration among the hospital, government and citizens has been realized. Various staffs will treat wide variety of issues from nursing and rehabilitation to home remodeling and consultation of private concerns. Citizens register “Welfare Bank” and take part-in volunteer home care.Silver bullets are understanding and motivation. “If all the people think about replacing the unfortunate reality in front to their own old age, soon they should get the answer what to do right now ." Dr. Yamaguchi has been invited around the country to lecture on the need to establish the health and welfare plan that fits the locality of each municipality.

Expression “Comprehensive Community” at earlier stage of Long-term Care debate

1994.03.03 “Face: Dr. Noboru Yamaguchi who tackles with the strategy to reduce the bedridden to zero”, Yomiuri Newspaper (Morning, Osaka edition) 41

“Comprehensive Community Care System”

Daily Living Zone (within 30 minutes distance)

LTC

Life support services

Residential Arrangements

Medical Care

Preventive Services

Five viewpoints that realizes “Comprehensive Community Care”

It is necessary for the realization of “Comprehensive Community Care” to enforce the necessary measures with five viewpoints below in a comprehensive (appropriate mixture of services from 1. to 5. to meet the needs of the users) and continuous (seamless provision of services throughout hospitalization, discharge and return to home) manner.

1. Strengthened cooperation with medical care services- Enrichment of 24-hour home medicine, visiting nurse and rehabilitation.- Allowing several medical practices (such as sputum vacuuming) to care workers

2. Enriched and strengthened long-term care services- Enhanced promotion of long-term care infrastructure (such as Special Nursing Homes) (FY 2009 Supplementary Budget: 160

thousands beds for 3 years)- Strengthening in-home services such as the establishment of “Periodical Round plus On Demand Service”

3. Promotion of preventive services- Promotion of preventive services so as not to become in need of care, as well as care services that enhance the independence of the

elderly

4. Securing various life-support services (guardianship, meal delivery, shopping, etc.) and rights advocacy- Promoting various life-support services (life support such as guardianship or meal delivery, rights advocacy services such as property

management) that accommodate the increase of elderly living alone or with spouse only or demented elderly

5. Enhancing the provision of residents for continuous living of the elderly (Collaboration with the Ministry of Land and Transport)- Amending the Elderly Residence Law to include the for-profit nursing homes etc. that meet the standard for proper regulation 42

Comprehensive Community Care

Outline of the reform bill to amend the Long-term Care (LTC) Insurance Law and other related laws to strengthen the basis for the provision of long-term care services (tentative) (2011 REFORM)

Implement the measures to promote “Comprehensive Community Care System” that provides medical services, long-term care services, preventive services, residential arrangements and life-support services in a seamless manner in order for the elderly to live independent life in the community.

1. Strengthen the cooperation of medical care services and long-term care services1) Promote “Comprehensive Community Care” that provides medical services, long-term care services, preventive

services, residential arrangements and life-support services in a cooperative manner.2) Assemble LTC Service Plan that take into account regional needs and issues in each daily living zone (ex. junior high

school zone, community center zone, etc.)3) Establish “Periodical Round plus On Demand Service” that accommodate 24 hours and “Combined Service” to meet

the need of the elderly living alone and in need of heavier care4) Combined and comprehensive provision of preventive service and life-support service at the discretion of the insurer

(municipalities)5) Temporary postponing the abolishment of Sanatorium-type Medical Ward

2. Securing the care worker and betterment of quality of services1) Allowing sputum vacuuming to Certified Care Workers and other care workers who take appropriate education2) Postponing the review of process for obtaining license of Certified Care Worker3) Complete enforcement of labor laws in care service industry. Strengthening disqualification and revocation

regulation for care service industry to add the violation of Labor Standard Laws. 4) Reform of “Disclosure of Care Service Information” system by abolishing the mandatory investigation

3. Enhancing the residents for elderly1) Adding articles that protect the residents of for-profit nursing homes2) Allowing the establishment of the Special Nursing Homes for the Elderly to “Social Medical Corporation”.* Enhancing the provision of elderly residents with services by the collaboration of the Ministry of Health, Labour and

Welfare and the Ministry of Land and Transportation (Revision of “Elderly Residence Law”)

4. Promoting measures for demented elderly1) Promote the rights advocacy of the elderly by enhanced use of Civil Guardian system2) Promote the policy measures for demented elderly by municipalities

5. Enrichment of the function of insurer1) Securing accordance between the LTC Service Plan and plans for medical care services or residential arrangements2) Enabling the designation of specified service provision corporation through public offer and selection

6. Mitigating the increase of insurance premiumAllowing the utilization of mandatory-secured fund for financial stabilization to decrease the insurance premiums

Effective Date: April 1, 2012 (Date of proclamation for “1 5)” and “2 2)”. 43

44

1. 2)Assembling LTC Service Plan that take into account regional needs and issues in each daily living zone (ex. junior high school zone, community center zone, etc.)

Promotion of “Daily Living Zone Needs Survey”

- NOT the “survey of wants” but the “survey of needs” by collecting data of the elderly in each municipality, including;

household composition, issues related to dementia, income level,housing situation, health condition such as ADL or IADL,

necessity of life support, degree of socializing, etc..

- By compiling the data and comparing with other districts,uniqueness of the life of the elderly in each district will show up, and the local government can plan the service provision in an efficient

manner (“benchmarking effect”)

- Throughout the course of such survey and the feedback of theresults, elderly him/herself will realize his/her health and lifecondition and risk. More active participation for preventivemeasures is expected.

Certification Level of Care Need

The level of care need is higher for women then men. For men, the level is significantly lower in TANO district.

SHIMONOE, Women SHIMONOE, Men

TANO, Women TANO, Men

An example of “Daily Living Zone Needs Survey”(Pilot study conducted in Usuki City, Oita)

C.L. 2C.L. 1S.L. 2S.L. 1

C.L. 2C.L. 1S.L. 2S.L. 1

C.L. 2C.L. 1S.L. 2S.L. 1

C.L. 2C.L. 1S.L. 2S.L. 1

C.L. ： Care Level S.L.: Support Level 45

Example of analysis by the results of the survey

<Point of view for analysis>Even for a small city like USUKI, differences in care level were found among the districts. We have further analyzed the reason for such differences by collecting and sorting the data by gender and district.

<Analysis 1 Share of the person with lower IADL (Instrumental activities of daily life)>For women, IADL lowers by age, but for men it is not.Compared to other towns (which conducted the pilot survey) the share of person with lower IADL is higher in USUKI, especially for men. It is possible that the senior gentlemen are not inclined to help himself for their daily life necessities, or they come to assume less social role by not going out, therefore their IADLs have lowered despite their age.

-> Necessity to promote engagement in social activities for senior gentlemen

(1) Instrumental IADL (3 or less of the items below)

Going out alone by bus or train ?Going shopping by yourself?Preparing meals by yourself?Making payment by yourself?Cashing in and out by yourself?

Instrumental IADL

SHIMONOE, MSHIMONOE, WTANO, MTANO, W

65-69 70-74 75-79 80-84 85-

46

(2) Intellectual Activeness (2 or less of the items below)

Writing claims for pension by yourself?Reading newspapers?Reading books or magazines?Interested in articles or TV programs on health?

Intellectual Activeness


(3) Social Role (2 or less of the items below)

Visiting friend’s house?Being consulted by friends or families?Visiting friend who is ill?Talking to young people from you?

Social Role


Sudden decrease for men in SHIMONOE is observed after age 75

65-69 70-74 75-79 80-84 85-

65-69 70-74 75-79 80-84 85-

47

Two multilayered aspects found in the development of Long-term Care Insurance

１．Multilayered system （Medical care, Social Welfare, Community Health・・・）<Introductory phase>

・Break the barrier between medical care and welfare. Introduction of Care Manager as coordinator.・Diversification of service provider corporations. (For profit companies, NPOs, Cooperative Associations, etc.)

＜2005 Reform＞・Establishment of (new) “Care Prevention Benefit” and “Community Support Program (Care Prevention Program)” (Enriching “Community Health” aspects such as improvements in physical function and nutrition improvement.)・Establishment of “Community-based Service” (Day Care for the Demented, Small-sized and Multifunctional Day Care, etc.) (“Long-term Care” sector evolved in an original (small-sized, more intense person to person relationship) manner from mere hybrid of medical care and welfare.)・Establishment of “Regional Comprehensive Support Center”

(Total counseling, Rights Advocacy, Care Management Support, Preventive Care Management)

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2. Multilayered actors （Hospitals, Welfare Services, Municipality Government, Citizens ---）

・Strengthened participation and responsibility of the municipality government (Authority who exercise “designation” function by tax money

-> Insurer who organizes services with balancing the cost (insurance premium) and benefit・”Cooperation and Collaboration” among various service providers with diversified license・Active participation of various social resources in the community (NPOs, Community Council of Social Welfare, Local Neighborhood-watch Volunteers, Volunteer Organizations, Township Fraternity Societies, etc.)

Two key concepts for Long-Term Care Insurance

“Comprehensive Community Care”

“Accountability”

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- - Evolution of Long-Term Care insurance has been achieved with its “Multilayered Aspects” as significant character.

- - “Comprehensive Community” -> Symbolic word of Long-Term Care Insurance

-Regarding the progress of “Comprehensive Community” concept, 2011 Reform is on the track of such evolution of Long-term Care Insurance.


(3) Sustainability

2000年 2001年 2002年 2003年 2004年 2005年 2006年 2007年 2008年 2009年

居宅サービス（介護予防を含む） 971,461 1,419,344 1,723,523 2,014,841 2,314,883 2,505,636 2,546,666 2,573,797 2,685,115 2,782,828

地域密着型サービス（介護予防を含む） 0 0 0 0 0 0 141,625 173,878 205,078 226,574

施設サービス 518,227 650,590 688,842 721,394 757,593 780,818 788,637 814,575 825,155 825,835

合計 1,489,688 2,069,934 2,412,365 2,736,235 3,072,476 3,286,454 3,476,928 3,562,250 3,715,348 3,835,237

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

介護サービス受給者数の推移（人）（各年4月サービス分）

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Number of service user increased about 2.6 times larger than the first FY.Especially, the users of in-home services are increasing rapidly.

Trends of the users of LTCI services (person) (April of each Fiscal Year)

In-home Services (including preventive services)

Community-based Preventive Services

Facilities Services

Total

Sustainability

0

10000

20000

30000

40000

50000

60000

70000

2000 2001 2002 2003 2004 2005 2006 2007 2008

32427

41143

46576

50990

5559457943 58743

6160064185

年度別給付費（単位：億円）

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Total amount of provided benefit doubled in 9 years.

Total amount of benefit (in 100 millions yen)

Sustainability

Total amount of benefit (in 100 millions yen)

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Insurance premium for the fourth term is “diluted” by subsidy.

Sustainability

FY 2000-2002 2003-2005 2006-2008 2009-20112,911 Yen (+13%) 3,293 Yen (+24%) 4,090 Yen (+1.7%) 4,160 Yen

Average monthly premium is 4,160 yen for the 1st insured (65 and over).

4,160 Yen(national avg.)

4,500 Yen (approx.)Without subsidy

+Special tax subsidy to meet the increase of fee schedule to secure appropriate salary for the careworkers

+ Cashing out of the reserve fund

Two key concepts for Long-Term Care Insurance

“Comprehensive Community Care”

“Accountability”

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-- In many aspects of Long-Term Care Insurance System, enhancement of accountability is aimed.

-- Most of the features to promote accountability also work to enhance the financial sustainability of the system.

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Significant features of the Long-Term Care Insurance system to prevent the total cost from skyrocketing

Main features from the beginning(learned from the experience of medical care insurance)

+ Introduction of 10% fixed rate copayment (rather than fixed amount copayment)+ Introduction of maximum amount of use for each care level (services exceeding that limit are financed 100% out-of-pocket)+ Introduction of “Care Management” that aims for providing only necessary services in a subjective manner

2005 reform+ Change to the prevention oriented system (so as to prevent from becoming frail)+ Restraining (not eliminating) domestic help services by home helpers for the elderly with lower care need (daily-life assistance services (such as cooking meals together) are still provided )+ Introduction of copayment for meal, rooms and utilities

Sustainability

Despite these features, due to the natural increase of the elderly population, fiscal soundness has always been of concern.

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By rapid aging and elimination of one-time effect of premium increase “dilution”, huge increase of premium in 5th period was projected. Throughout the 2011 reform debate last year, additional measures to promote financial sustainability were on the table.

Options debated to promote fiscal sustainability under “PAYG Principle”

+ Elimination of service for elderly with less care need+ Increase of rate of copayment for the elderly with less care need+ Increase of rate of copayment for elderly with higher income level+ Introduction of copayment for “care management” service

(currently no out-of pocket for “care management” to enhance its use)+ Restriction for subsidy to the poor for room and board copayment

Sustainability

All of the options above are to ask for the seniors to take “bitter pill” in some aspects. All are not employed as “being umpopular”. The only employed measure to reduce the premium increase was (again) the “dilution” by further cashing out of the reserved fund.

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Current Cabinet and the party in power agreed that the issues of funding for long-term financial stability should be discussed as a whole with other social security expenditures such as public pension or health care. In the debate, increase of the consumption tax rate is the potent alternative.

Sustainability

Debate on fiscal sustainability is still ongoing in Japan.

At first, the discussion about the comprehensive reform of tax and social security system is supposed to be concluded in June this year. However, due to the disaster, political schedule is unclear at this moment. Also, tremendous public finance needs for recovery and rebuilding have changed the premise of the discussion about tax and social security reform.

Trend of social security benefit and burden

Sustainability

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Total: 91.4 trillion yen (2007(actual))

Social Security Benefit: 91.4 tril. yen

Social Insurance Premium: 56.9 tril. yen (65%) Tax: 31.0 tril. yen (35%)

Employer: 29.7 tril. yen (34%)

Employee: 27.2 tril. yen (31%)

National Tax: 22.2 tril. yen (25%)

Local Tax: 8.8 tril. yen (10%)

Insurance premiums charged by each system

National Budget (general revenue)(27.3 tril. yen: FY 2010, 51% of total g.r.)

PrefectureCity, Town, Village (general revenue)

Interest revenue of accumulated S.S. funds

Source: Ministry of Health, Labour and Welfare(Administrative cost is not included in the Social Security Benefit)

Contribution and burden that supports the social security benefitSustainability

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Source: Ministry of Finance

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Sustainability

Source: Ministry of Finance 61

Sustainability

- Long-Term Care Insurance has been modified rapidly so as to catch up the changes of the society.

- Possible “options” are limited, due to the constraints given by the population change, economic situation, fiscal condition, etc., if you aspire to achieve long-term stability by eliminating the effect of economic fluctuation.

- In addition to the rapid aging, economic globalization and swift technological change, social security system, including long-term care insurance, needs appropriate response.

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How should we gain the understanding and consent of the people for necessary “swift change” through our the political process?

→ Biggest challenge for today

- Compared to the change in the socio-economic circumstances, people’s life consciousness and social norms tend to change more slowly.

- Taking into account the facing constraints, it is likely that all of the “options” are not so sweet for people.

4. Conclusion

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Historically, Japan has learned a lot from the United States in many aspects of society. One of them was the system for elderly care.PACE program in U.S. provided us the model to establish service system under Long-Term Care Insurance.

What are Programs of All-inclusive Care for the Elderly (PACE)?PACE is a Medicare program for older adults and people over age 55 living with disabilities. This program provides community-based care and services to people who otherwise need nursing home level of care. PACE was created as a way to provide you, your family, caregivers, and professional health care providers flexibility to meet your health care needs and to help you continue living in the community. An interdisciplinary team of professionals will give you the coordinated care you need. These professionals are also experts in working with older people. They will work together with you and your family (if appropriate) to develop your most effective plan of care. PACE provides all the care and services covered by Medicare and Medicaid, as authorized by the interdisciplinary team, as well as additional medically-necessary care and services not covered by Medicare and Medicaid. PACE provides coverage for prescription drugs, doctor care, transportation, home care, check ups, hospital visits, and even nursing home stays whenever necessary. With PACE, your ability to pay will never keep you from getting the care you need.(excerpted from CMS homepage)

“Providing community-based care and services”, “flexibility to continue living in the community”, “interdisciplinary team of professionals”, or “working together to develop most effective plan of care” are also the significant feature of the LTCI system; these are the aspects that we learned from PACE program as progressive, innovative idea for providing care services in a comprehensive manner.

-As the countries with graying population, both U.S. and Japan have enforced

various policies for the elderly. With such experiences and our common basic

value for freedom and friendship in mind, U.S. and Japan could, and should

LEAD THE WORLD TOGETHER to realize safe, healthy and content life for

the elderly people around the globe, who have enabled us to live in the world

as it is today.

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-Thank you for your attention!

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Health & Medicine

Aging In Japan - Focusing on Long-Term Care Insurance