The Long Term Care Insurance [Kaigo Hoken] and its Impact on Society and Health Care System in Japan

1. 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

2. Background • Development • Implementation • Outcome • Conclusions

3. 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

4. Structural flaws of Japan’s health insurance system

5. Age distribution and health insurance status

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

7. 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)

8. Background • Development • Implementation • Outcome • Conclusions

9. 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

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

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

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

13. Background • Development • Implementation • Outcome • Conclusions

14. 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

15. 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 40-64 (33% of population) • Originally planned to cover 20 years or older

16. Beneficiaries and Financing

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

18. How the need assessment review committee altered the preliminary assessment

19. 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)

20. Integration of Medical and Non-medical Services under the LTCI

21. Benefit in monetary terms according to the level of care need (unit 10-10.72 yen, subject to 10% copayment)

22. 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.

23. Controversy over cash benefit • Whether cash benefit should awarded to family care givers who do not use external services • No!—women citizen group • Yes—economists, medical association • Decision---NO

24. Background • Development • Implementation • Outcome • Conclusions

25. Boom and Bust • Government’s worry about shortage of services • Deregulation to encourage for-profit corporations into home care “industry” • Kaigohoken Boom • Less than expected demand -> Bubble Burst

26. Saga of Nichii Gakkan (TSE quotes)

27. 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

28. Service Utilization [1]Home vs. Institutional Care

29. Service Utilization [2]Institutional Care

30. Service Utilization[3]Home care

31. Growth of Elderly eligible for benefit

32. Plight of Visiting Nurses

33. Price Competition between Home Help and Visiting Nursing(price for 30min to 1 hr, unit 10-10.72 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

34. 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

35. Background • Development • Implementation • Outcome • Conclusions

36. 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?