The Long Term Care Insurance [Kaigo Hoken] and its Impact on Society and Health Care System in Japan AtoZ OKAMOTO, MD, MPH National Institute of Public Health

Background Development Implementation Outcome Conclusions

Why was the LTCI developed? Rapidly aging population and growing need for LTC – Elderly population >65 will be 25% of the population Structural overhaul of the fragmented health insurance system Effective integration of medical and non-medical services

Structural flaws of Japan s health insurance system

Age distribution and health insurance status

Financial Redistribution Mechanism by the Elderly Health Care System [EHCS] since 1983

Medical vs. Non-medical Services before the LTCI Medical---health insurance and EHCS financed by premium – Not restricted by budget -> cost inflation – Dictated by doctors prescription->not need-based Non-medical---welfare system financed by tax – Restricted by budget -> frugal use of services – Restricted by income -> social stigma Result: unusual shift of LTC toward medical services – Prolonged hospital length of stay (40 days)

Background Development Implementation Outcome Conclusions

Tax vs. Premium Agreement: Create a new system rather than expanding the old one. Economists: Why not social insurance? Prime Minister Hosokawa (1994): National Welfare Tax – Ended up in fiasco and he resigned

Campaign for the LTCI German LTCI started in 1995 Opinion Poll-> 86% support the LTCI Conversion of the Nordic faction

Technical Development(1) -Need Assessment Tool Evidence-based development (one-minute time study) Methodologically similar to the U.S. MDS and RUG

Technical Development (2) -Care Management British Community Care Act 1990 Coordination between medical and non-medical services

Background Development Implementation Outcome Conclusions

Administrative Structure Administered by municipal governments (cities, townships and villages depending on population size) Advantage over fragmented health insurance system – Larger risk pool and more stale actuarial operation – Enabling municipal governments to develop regional, long range plans

Beneficiaries Covers half of the population ( as opposed to health insurance) Beneficiaries category I: aged 65 or older (17% of population) Beneficiaries category II: aged (33% of population) Originally planned to cover 20 years or older

Beneficiaries and Financing

Need Assessment Application (a sharp contrast to health insurance) On-site survey by qualified care managers using a uniform assessment tool (73 items) Attending doctors professional opinion Preliminary assessment by computer (dismiss, borderline, level 1-5) The need assessment review committee makes final judgment

How the need assessment review committee altered the preliminary assessment

Benefit Institutional care – Geriatric hospitals (medical) – Skilled Nursing Facilities (medical) – Nursing homes (non-medical) Home care – visiting nursing, day care (medical) – home help, day service (non-medical)

Integration of Medical and Non-medical Services under the LTCI

Benefit in monetary terms according to the level of care need (unit yen, subject to 10% copayment) Monthly cap for home care Per diem cost for SNF Borderline6150Not permitted Level Level Level Level Level

Double Talk in Home Care The LTCI law : same kind of home care services shall be bundled under the same budgetary limit (=monthly cap) The Medical laws: medical services shall not be rendered by non-qualified personnel. They also shall be prescribed by doctors.

Controversy over cash benefit Whether cash benefit should awarded to family care givers who do not use external services – No!women citizen group – Yeseconomists, medical association Decision---NO

Background Development Implementation Outcome Conclusions

Boom and Bust Governments worry about shortage of services Deregulation to encourage for-profit corporations into home care industry Kaigohoken Boom Less than expected demand -> Bubble Burst

Saga of Nichii Gakkan (TSE quotes)

Service Utilization in the first year Total reimbursement:3.2 trillion yen (84% of expected) Home care vs Institutional care = 1:2 Gradual but steady increase of services

Service Utilization [1] Home vs. Institutional Care

Service Utilization [2] Institutional Care

Service Utilization[3] Home care

Growth of Elderly eligible for benefit

Plight of Visiting Nurses

Price Competition between Home Help and Visiting Nursing (price for 30min to 1 hr, unit yen, subject to 10% copayment) Home Help – Chiefly domestic services->153 – Mixed->278 – Chiefly personal care->402 Visiting Nursing – Hospital or clinics->550 – Independent Visiting Nursing Stations [IVNS]->830

Care Managers: to whom they report? Care Managers are expected to act as an agent of clients Reality: majority of them are sales representatives of service providers Need to establish them as independent professionals

Background Development Implementation Outcome Conclusions

What have we learned? Increased awareness of people about welfare and social services Prompted a national debate over the goal to which we achieve A great social experiment to create and implement a new system A model for Asian countries to cope with aging population?