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.

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

AtoZ OKAMOTO, MD, MPH

National Institute of Public Health

BackgroundDevelopmentImplementationOutcomeConclusions

Why was the LTCI developed?Why was the LTCI developed?Rapidly aging population and growing

need for LTC–Elderly population >65 will be 25%

of the populationStructural overhaul of the fragmented

health insurance systemEffective integration of medical and

non-medical services

Structural flaws of Japan’s heStructural flaws of Japan’s health insurance systemalth insurance system

Age distribution and health insurance stAge distribution and health insurance statusatus

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

Medical vs. Non-medical Services bMedical vs. Non-medical Services before the LTCIefore 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)

BackgroundDevelopmentImplementationOutcomeConclusions

Tax vs. PremiumTax vs. PremiumAgreement: 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 LTCICampaign for the LTCI

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

Technical Development(1)Technical Development(1)-Need Assessment Tool-Need Assessment Tool

Evidence-based development (one-minute time study)

Methodologically similar to the U.S. MDS and RUG

Technical Development (2)Technical Development (2)-Care Management-Care Management

British Community Care Act 1990

Coordination between medical and non-medical services

BackgroundDevelopmentImplementationOutcomeConclusions

Administrative StructureAdministrative StructureAdministered 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

BeneficiariesBeneficiariesCovers half of the population ( as opp

osed to health insurance)Beneficiaries category I: aged 65 or o

lder (17% of population)Beneficiaries category II: aged 40-64

(33% of population)Originally planned to cover 20 years

or older

Beneficiaries and FinancingBeneficiaries and Financing

Need AssessmentNeed AssessmentApplication (a sharp contrast to health

insurance)On-site survey by qualified care managers

using a uniform assessment tool (73 items)Attending doctor’s professional opinionPreliminary assessment by computer

(dismiss, borderline, level 1-5)The need assessment review committee

makes final judgment

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

assessmentassessment

BenefitBenefitInstitutional 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 Integration of Medical and Non-medical Services under the LTCIServices under the LTCI

Benefit in monetary terms according to Benefit in monetary terms according to the level of care needthe level of care need

(unit 10-10.72 yen, subject to 10% copayment) (unit 10-10.72 yen, subject to 10% copayment)

Monthly “cap” for home care

Per diem cost for SNF

Borderline 6150 Not permitted

Level1 16580 880

Level2 19480 930

Level3 26750 980

Level4 30600 1030

Level5 35830 1080

Double Talk in Home CareDouble 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 benefitControversy over cash benefitWhether cash benefit should awarded

to family care givers who do not use external services–No!—women citizen group–Yes—economists, medical

associationDecision---NO

BackgroundDevelopmentImplementationOutcomeConclusions

Boom and BustBoom and BustGovernment’s worry about shortage o

f servicesDeregulation to encourage for-profit c

orporations into home care “industry”Kaigohoken BoomLess than expected demand -> Bubble

Burst

Saga of Nichii Gakkan (TSE quotes)Saga of Nichii Gakkan (TSE quotes)

Service UtilizationService Utilization in the first year in the first year

Total reimbursement:3.2 trillion yen (84% of expected)

Home care vs Institutional care = 1:2Gradual but steady increase of services

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

Service Utilization [2]Service Utilization [2]Institutional CareInstitutional Care

Service UtilizatiService Utilization[3]on[3]

Home careHome care

Growth of Elderly eligible for benefitGrowth of Elderly eligible for benefit

Plight of Visiting NursesPlight of Visiting Nurses

Price Competition between Home Help Price Competition between Home Help and Visiting Nursingand Visiting Nursing

(price for 30min to 1 hr, unit 10-10.72 yen, subje(price for 30min to 1 hr, unit 10-10.72 yen, subject to 10% copayment)ct 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:Care Managers: to whom they report? 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

BackgroundDevelopmentImplementationOutcomeConclusions

What have we learned?What have we learned?Increased awareness of people about

welfare and social servicesPrompted a national debate over the

goal to which we achieveA great social experiment to create and

implement a new systemA model for Asian countries to cope

with aging population?