Social Security and Social Network in Japan...Working Paper No. 6 Social Security and Social Network...
Transcript of Social Security and Social Network in Japan...Working Paper No. 6 Social Security and Social Network...
Working Paper No. 6
Social Security and Social Network in Japan
by
Shuzo Nishimura
Faculty of Economics
Kyoto University
April 1992
Department of Research Cooperation
Economic Research Institute
Economic Planning Agency
Tokyo, Japan
Any opinions expressed here are those of the author and not those of the institution to which
the author belongs.
SOCIAL SECURITY AND SOCIAL NETWORK IN JAPAN
Shuzo Nishimura
Faculty of Economics
Kyoto University
Table of Contents
Page
I. Introduction: the Scope of this Paper 1
II. Macroeconomic Aspects of Social Security in Japan 2
III. Pension Schemes in Japan 3
IV. Social Health Insurance and the Health Care System in Japan 5
(1) almost equal access to health care and low out-of-pocket expenses 6
(2) rapid increase of the health care expenditures for the elderly 8
(3) the system of point fees which are set by the government 9
(4) the unique role of profits which private hospitals pursued for 10
(5) no quality assurance 11
V. Care for the Elderly in Japan 12
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I. Introduction: the Scope of this Paper
The purpose of this paper is to give a brief overview on the Japanese social security
system. However, here I do not try this to be extensive. Rather, I will discuss the issue from the
following viewpoint, that is, how differently does her system work from those of other Western
industrialized countries. And how does her system share the common problems with those of
other countries.
According to the international standard classification, social security programme are
sometimes classified into three categories: (1) income security, (2) health and medical care, and
(3) housing and unemployment allowances. 1 However, among these, housing and
unemployment allowances seem to have different character. In order to explain these
allowances, I have to show broader backgrounds such as land issues and industrial relations
which relate to the Japanese economy as a whole. Therefore, here, I confine to the first two
categories only.
Instead, in-kind provision of welfare services such as sending home helpers to the
disabled elderly at home now seems to play an important role as a social security programme
in most developed countries. Therefore, in this paper, I will describe social security in Japan as
consisting of the first two categories shown above and also as consisting of the welfare services
for the elderly. The reason why I think such welfare services in Japan to be important is as
follows.
The first reason lies in a changing demographic structure in Japan, speed of aging of
which is the fastest in coming 30 years among the developed countries. Secondly, though, at
least until recently, care for the elderly has been considered to belong to family's responsibility,
drastic change of family structure urges it to be treated as a social security programme.
Although family tie is still strong in Japan, increase of the nuclear family, which were mainly
brought from urbanization, is making family to take care of the elderly difficult.
In what follows, at first, I briefly sketch the macroeconomic data on social security in
Japan. The volume of contributions and the benefits of social security in relation to national
income is shown. Secondly, in section III, I will consider the public pension system. And in
section IV, health care systems in Japan are characterized.
Finally in section V, I will examine the present status and future prospects of the welfare
policy for the elderly. Here I will also show the people's ambivalent attitude towards the
changing pattern of the role of the family.
1 See for instance, International Labour Office, The Cost of Social Security, 1981 - 1983.
International Labour Office, 1986.
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II. Macroeconomic Aspects of Social Security in Japan
People's contributions for social security in relation to national income in Japan is not so
high. I showed those figure with those of other main developed countries in Table 1. As of 1988,
it amounts to 11.3 per cent. As far as we take its ratio to national income, Japan ranks second
from the bottom among five major countries, where the United States ranks lowest.
Since some social security benefits are financed not only from social security
contributions but from general tax revenue, I showed the share of social security contributions
by sources in Table 2.
The reason why the U.K.'s social security benefits are relatively lower is because the share of
tax financing is relatively higher. These rough estimates might be enough to show that
Japanese social security contributions are relatively lower with those of other developed
countries except for those of the United States. As a result of this, social security benefits also
are lower in Japan. This is shown in Table 3.
One reason why the burden of social security contributions is still low for Japan is
because she, as well as the United States, is still young in her age distribution. However, this
factor cannot explain the whole difference of contributions and benefits among different
countries. (See Table 3.)
The important difference lies in the fact that benefits other than public pensions are
significantly different, because expenditures for pension seem to reflect the difference of age
structure in main developed countries which were taken in Tables 1 and 2. We can see in Table
3, that the difference of 'others' is significant among these countries. In section V, I will inquire
why this is so different.
There are different views on whether the coverage of social security be broadened or not.
One politically influential Commission which were directed by the government, recommended
that at least until the beginning of 2000s, total burdens of taxations and social security
contributions in relation to National Income should not exceed 50 per cent.2
While it is uncertain whether this recommendation is achieved or not, in my view, one of
the most important factors which will determine the amount of social security benefits is the
future of the saving ratio. Because if savings as a source of economic growth is not enough,
burdens as a ratio of National Income will necessarily become higher.
Though the personal savings in relation to disposable income is quite high in Japan,
there is much controversy about the future trends of saving ratio. More than half of people,
when asked why do they save, respond that it is because they feel uneasy when they get older.
2 This Commission is called as 'The Second Ad Hoc Commission on the Governmental Administrative Reform,
(Daini Rinji Gyousei Kaikaku Chousakai), the Purpose of which is to make the government to work more
efficiently.
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Therefore, on one hand, some analysts consider that the increase of the social security
benefits will reduce the saving ratio. However, on the other hand, some analysts observe that
bequest motives are more significant.
III. Pension Schemes in Japan
In any developed country, public pension benefits are paid, to a larger extent, from
workers' contribution for social security, that is, those are only partly financed by general tax
revenue. In terms of inter-generational distribution, the systems are classified into two kinds
of financing. One system is full-funding system, which each generation prepare for their own
generation by saving their contributions. The other system is pay-as-you-go system, which
implies that benefits of pensioners are financed by the contributions of the present working
generation.
In each system, in order for the financial soundness to be pursued for, precise prediction
on such as the increase of wage rate, rate of economic growth, the consumer price increase, and
the future prospect of interest rate is necessary.
One of the most general ways to do this is as follows: at first targeted so called
'replacement rate' is set aside. Replacement rate means the ratio of the mean amount of the
benefits for pensioners to the mean amount of wages for the present workers. Once this targeted
ratio is set, it seems easy to calculate the required amount of the ratio of contributions to wages
(contribution rate).
In reality, however, the story was not easier than what has been done as a paper work.
In most countries, as is the case in Japan and also in the United states, public pension benefits
were slide by consumer price index.
When targeted replacement rate is fixed, since pension benefits are slide by the consumer
price index, and since the rate of increase of workers' wages does not necessarily coincide with
the increase of the consumer price index, sound financial management of pension scheme was
a difficult task. This way of sliding is often called as double-indexing, which means that the
benefits are slide both by consumer price and the workers' wages.
Needless to say, if tax-financed resources are enough, the double-indexing system would
not result difficulty in the management of the scheme. Just before the oil shock had come, both
the Japanese economy and the fiscal budget of the central government could afford to finance
this double-indexing pension scheme.
More precisely, though the pension provision by law did only secure the consumer price
indexing, it did actually index to wages of workers, in order to raise the replacement rate to the
standard of main developed countries. (See Table 4.)
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Since many developed countries faced this kind of problem after the lower economic
growth of post oil-shock era, most of experts warned this scheme to be revised. Another issue,
however, was an obstacle to the prompt reform. That was an equity issue. Especially, how to
secure equality between wage earners and the self-employed was the issue.
There are at least two kinds of difficulty in treating different status of the self-employed
and the wage earners. One problem lies in the difficulty to obtain the income of self-employed
precisely.
According to several researches, their incomes are underscored at the taxation office. It
is commonly understood that on the average only one third of their incomes are grasped
compared with the income of wage earners.
Another problem is that, on one hand, half of social security contributions by wage
earners are paid by the employer, on the other hand, the self-employed have to pay their
contributions both as the employer and the employed.
These problems make it difficult to treat them as having the same income basis. After
the long controversy, the reform was enacted in 1985 and put into operation in 1986.
Prior to reform, the elderly, survivors, and disabled were protected by three main
schemes: the Employees’ Pension Insurance(EPI); the National Pension Scheme(NPS) covering
mainly the self-employed, some workers in industry, agriculture, forestry, and fishing; and
smaller group of Mutual Aid Associations(MAAs) of which the most important are those
covering public employees.
All of these schemes are of social insurance type, with benefits related to the amount and
the period of contributions. However, only the NPS is based on flat-rate contributions, because
of the difficulty of estimating precise income as described above.
The reform has three main features: unification, basic provision and adjustment of the
benefit level. In order to avoid complication, here I only explain two features, basic provision
and adjustment of the benefit level.
The reform promised that the NPS will provide a universal flat-rate basic amount to all
elderly in the country in the near future. Even people who are covered by EPI and MAAs will
be covered by this NPS. Since the NPS have been established in 1961, and since those are with
contribution span of 40 years, they were immature at the time of reform. Therefore, full
provision was supposed to be achieved in 1991.
The amount of basic universal flat-rate was fixed at 50,000 yen in 1984 prices for those
with 40 years of contribution. Dependent wives are covered by the contributions of their
husbands.
Under this approach, independent pension eligibility were established for all women,
including the wives of salaried workers. Consequently, if they become disabled, dependent
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women will receive their own basic disability benefits, and in the event of divorce, they will be
given their own old age basic benefits at retirement age.
However, a problem still lies in the case of divorced women. Since their contributions
start at the time of divorce, though their contributions of pre-marriage time are counted, their
benefits tend to be lower than those of pre-husbands, if they quit from working as housewives.
Thus, the universal flat-rate benefits were introduced. For salaried workers, the EPI and
MAAs will provide a further earnings-related part, creating a two-tie public system for most
employed.
Another striking feature of the reform was the benefit level adjustment. Under the old
EPI, replacement rate would have increased further, giving a rate of 83 per cent for an average
worker with a dependent wife and 40 years of contributions. The reform aimed to retain roughly
the current rate, despite further increase in the required period.
Therefore, in spite of this reform, actual average benefits did not decreased. As of 1988,
replacement rate is almost the same with those of other developed countries. (See Table 4.)
In a political sense, the reform seemed to be made successful by taking advantage of
immaturity of the scheme, because benefits depend not only upon the rate of contributions to
salaries but also depend upon the period of which contributions were done.
Political implication of this can be explained by a following example. Suppose that Mr. A
were born in December 31, 1930 and Mr. B were born in January 1, 1931. And then suppose
that both Mr. A and Mr. B earned almost same salaries. If reform is applied only for the people
who were born after 1931, Mr. B will complain about the reform, because only one day difference
of the birth date will result significant amount of the reduction of the benefits.
On the other hand, overall reduction of the benefits would cause social problem, because
the present pensioners do not get enough benefits to sustain their living, although they did not
contributed much. One politically reconcilable way to make reform was to change the formula,
in which the payment bases of period were to be changed. Thus, the rate of return for pension
contributions became unfavorable to younger generation, benefits themselves did not decreased.
This reform, though politically successful, did not solve the problem of the heavy burden
of future generations. Realizing this problem, the government tried to postpone the time of
paying benefits from the age 60 to 65. However, as of 1992, this proposal is not still accepted at
the congress.
IV. Social Health Insurance and the Health Care System in Japan
Japanese health care system consists of a mixture of the system of several Western
countries and of the product of her own historical experiences. On the demand side, all the
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Japanese residents, except for illegally immigrant workers, are covered by compulsory health
insurance system.
Though they are covered universally, all are not treated equally, because they, depending
on their occupational status, belong to different types of insurance systems. In this sense it is
similar with those of France and Germany.
On the supply side, more than 80 per cent of hospital are owned and managed by private
sector. At least legally, some similarities are found in the management of hospitals with those
of the United States, because after the World War II, Japan tried to follow the way of
management in American community hospitals. It should be kept in mind, however, that
difference of historical origin of hospitals produced them quite different features.
Total health care expenditures in Japan is not so high, in so far as this figure as a
percentage of National Income or GDP is compared with those of other developed countries.
(See Table 5.) One of the important tasks here in this paper might be to explain the reason of
this, because policy makers of most developed countries are interested in the way to reduce the
increase of health care costs.
The question posed, however, should be whether it is cost-effective or not. In what follows,
I will show five features which characterize the Japanese health care system. Most of these
features are discussed from the viewpoint of cost-effectiveness: (1) almost equal access to health
care and low out-of-pocket expenses, (2) rapid increase of the health care expenditures for the
elderly, (3) the system of point fees which are set by the government, (4) the unique role of
profits which private hospitals pursued for, (5) no quality assurance.
(1) almost equal access to health care and low out-of-pocket expenses
It was the year 1961 when universal health insurance system was achieved in Japan.
Since 1961, thanks to higher economic growth, patients' out-of-pocket payments for health care
gradually decreased in relation to the total health care expenditures.
According to the formal statistics, total out-of-pocket payments amount to only about 12
per cent of total expenditures as of 1990.3 However, this data should be discounted to some
extent, since the coverage of social insurance is limited.
It does not cover following items: (1) normal delivery, (2) special room charge (Under the
social insurance coverage, patients usually have to share one room with other 5 to 7 patients.)
(3) mass examination, (4) OTC Drugs, (5) eyeglasses, (6) expenses to pay for care workers at
some hospitals. However, even if we include these expenses, according to my estimates, less
than 15 per cent of total expenditures are paid out-of-pocket of patients.
3 See Ministry of Health and Welfare, Kokumin Iryouhi Suikei (Estimates on the National Health
Expenditures, 1991.
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Out-of-pocket expenses for items covered by insurance also differs depending on what
kind of insurance schemes with which they are affiliated. And people cannot choose from
alternative insurance schemes. Employees who are hired at relatively larger companies are
automatically belonged to their companies' mutual employees’ insurance schemes. And
employees who are hired at relatively smaller companies are automatically belonged to
government managed employees insurance schemes. This different from employees’ pension
insurance (EPI) schemes in the sense that EPI is managed under the universal scheme.
Workers who are covered by these kinds of employees insurance schemes only have to
pay 10 per cent of expenditures for health care. Their dependents have to pay either 20 per cent
or 30 per cent of expenditures as an inpatient care or as an outpatient care respectively.
The self-employed and the unemployed who are covered by National Health Insurance
have to pay 30 per cent both for inpatient care and outpatient care. However, for any different
scheme, there is a kind of catastrophic insurance coverage. Expenses which are over 60,000 yen
per month are refunded.4
For the elderly with more than 70 years of age and for the disabled who are 65 to 69
years of age, there is a separate system. This is not called as an insurance system, but is called
as the 'Elderly Health Services', though they still have to pay social insurance contributions.
Because this services provide also several health maintenance services such as mass
examinations.
Under the coverage of the 'Elderly Health Services', they have to pay only 900 yen per
month for outpatient visit and have to pay 500 yen per day for hospitalization as of 1992. The
result of this policy will be discussed below.
Workers who are employed at larger companies and their dependents sometimes obtain
the refund of their expenses according to the financial conditions of their insurance scheme.
Total amount refunded is estimated to be half of their out-of-pocket expenses.
Moreover, several allowances such as those for normal delivery are provided. Though
National Health Insurance scheme also pays allowances for normal delivery, amounts paid are
different from those paid from Employees Insurance Associations.
As a whole, there are several unequal benefits among different insurance schemes.
Surely, it is partly because incomes of self-employed are estimated lower. And it might be true
that, if the self-employed pay more contributions according to their precise incomes, benefits
for those can be improved. However, we can say that the present fragmented schemes obscure
the way to achieve reasonable function of income redistribution as a social insurance system.
In spite of these kinds of inequality, I would like to mention that, financial obstacles to
access health care are almost removed. After the number of visits to the clinic and to the
4 This amount is as of 1991, and to be revised approximately depending upon the consumer price index.
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hospital per population have drastically increased since the enactment of compulsory health
insurance, these figures are quite stable and similar in present day, irrespectively of which
insurance schemes they belong to. (As for the elderly, story is quite different, of which is
discussed next.)
(2) rapid increase of the health care expenditures for the elderly
As was shown in Table 5, total health expenditures as a percentage of GDP in Japan has
been stable and lower than those of major industrialized countries. However, their expenditures
for the elderly of age 70 and over increased remarkably in last 15 years. Figure 1 shows the
significant difference of the increase of those compared with those of total expenditures.
Here I consider the main causes of such increases. Health expenditures for some age
group i can be divided into three factors:
total expenditures for group i (H) =
number of population for group i (P)
× number of cases treated for group i (T)
× number of days per case for group i (L)
× amount of expenditures per day for group i (C).
Since the beginning of 1980s, number of cases treated per population (T) was stable with
the only exception for the care of the elderly. When we compare the number of cases treated per
100,000 people for each age group between 1970 and 1987, for those of age group 5-54, both
the number of inpatients and outpatients decreased. (See Table 6.) On the contrary, the number
of inpatient per population for age group of more than 70 years, doubled.
Since other factors such as L and C in the formula shown above indicate the almost same
trends in any age group, we can conclude that main causes of the rising health expenditures
for the elderly is because of the rapid increase of T in the formula above.
What is the main cause of the rapid increase of T? We can indicate two reasons, of which,
the drastic reduction of out-of-pocket expenses crucial. Until the year 1976 and around, the
elderly had to pay at the same amount of money with younger generations as I described earlier.
Since around 1976, some of local governments started to adopt the policy to make the
elderly to visit and to be hospitalized at free of charge. This policy diffused over many local
governments and finally in 1978 the central government was urged to adopt this policy at the
national level.
Because of the financial problem, in 1982, the elderly have had to pay 400 yen per month
for outpatient visit and had to pay 300 yen per month (up until two months) for hospitalization.
However, this policy was not effective to contain the costs. The negative increase of
expenditures was shown only for one year. And interestingly, it was mainly because the
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reduction of the number of patient visit and the reduction of the number of cases hospitalized
(T). Both average day treated per outpatient visit and the average length of stay (L) jumped up,
just three months after the increase of the copayment. Supplier-induced nature of health care
was clear for this experiment.
After five years later, in 1986, the law was amended to increase from 400 yen to 800 yen
per month for outpatient visit and from 300 yen per day to 400 yen per day for hospitalization.
This time, both the number of visit and the number of hospitalization per population did not
decrease at all.
Since average income of the elderly households (which consist of only the elderly) was
200, 000 yen per month, at least for the average household, these copayments seem to be almost
negligible.5 In 1991, these amounts of copayments were again increased from 800 yen to 900
yen per month for hospitalization and from 400 yen to 500 yen per day for outpatient visit.6
Though the result of this policy is not still clear, it would not be an effective measure to contain
the costs.
Another reason for the increase of the health expenditures of the elderly, which seems to
be more important now, is that they cannot find suitable nonmedical-oriented facilities which
take care of them. Because of the decrease of the extended family, it is not easy for the elderly
to be taken care at home. This point will be discussed in section V.
(3) the system of point fees which are set by the government
One of the most unique devices which Japanese health insurance system has developed
might be so-called 'point fee system'. Though it can be classified into fee-for-services system in
a broader term, Japanese way to remunerate doctors and hospitals is quite different from that
of the United States.
Japanese point-fee schedules are set and regulated by the government authority, and
physicians and hospitals have to claim on this schedules, if those are to be reimbursed from the
social insurance.
Fee for each service does not necessarily reflect the actual cost both in terms of average
cost and in terms of marginal cost. And the government, in order to allocate health resources,
implicitly took advantage of fee schedules as a measure to give incentive to doctors and
hospitals.
Though the history of point fee system goes back to pre-World War II, the main skeleton
of the present fees has been developed just before the universal health insurance system was
5 This estimate is based on the following source: Ministry of Health and Welfare, Kokuminn Seikatsu Jittai
Chousa, (Annual Survey of People's Life) 1991.
6 These amounts will be raised from 900 yen to 1,000 yen and from 500 yen to 600 yen in the 1992.
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achieved. At that time, main goal in health care system was to satisfy the drastically increasing
demand. Quantity provided rather than quality provided was the urgent consideration for the
policy makers.
Ministry of Health and Welfare and the Japan Medical Association had common interest
in making physicians to treat patients as many as possible. (Hereafter I abbreviate Ministry of
Health and Welfare as MHW.) Thus fee schedules like followings were set. Since at that time,
because of the historical tradition, there was no functional separation of medical and
pharmaceutical services, fees for the services of drug prescription was set higher and other fees
such as consultation fee was set lower.
This policy was successful in the sense that doctors and hospitals have tried to purchase
medicine cheaper, and because of low consultation fee, they have tried to consult patients as
many as possible.
The side effect of this policy in changing overall delivery system in Japan is interesting.
As a result of fee setting described above, the income of general practitioners became quite
higher than those of physicians who work at the hospital. It is quite interesting that now only
in Japan, GPs' income is higher than those of salaried physicians. (See Figure 2. Though in this
Figure, relative ratio of GPs' income to salaried physicians' income is not shown in case of Japan,
we can indicate that this ratio for Japan is at least more than 1.5.)
Once this kind of policy was settled, it is not easy to change it drastically, because
political power of physicians is quite strong in any country. Still now physicians and hospitals
can earn profits by prescribing medicine, while consultation fee is low. As a result, general
practitioners consult as many patients as those in other countries. (See Table 7 and Figure 3.)
(4) the unique role of profits which private hospitals pursued for
As I mentioned earlier, and as shown in Table 8, more than 80 per cent of hospitals are
privately owned in Japan. Roughly classified, there are three kinds of private entities; one
owned by individuals, one owned by medical juridical persons, and others.
Historically, in the pre-World War period, only the public entities and individuals owned
the hospitals. Under the influence of American system, hospitals which would follow the type
of community hospitals in the United States were established. This is the hospitals of which
are called to be owned by medical juridical persons.
As an ideal, those should have been owned by each community. People in the community
should have contributed their own funds to establish their own hospitals. This idea, however,
did not come into reality without few exception. Instead, many of individually-owned clinics
with their retained profits were converted into hospitals.
This was made possible, in terms of financial conditions, because the government favored
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the clinics of earning profits, of which I explained in (3) above. Another cause, however, was
more important, that is, physicians' motive.
Since, educational system of medical students did not aim to make clear provision
between general practitioners and specialists, most of physicians who practice at the clinic have
been educated as specialists. It was the natural consequence that they wanted to practice at
the hospital, where the growing tendency of physicians' specialization was prevailing.
Here, it might be suitable to discuss about the meaning of 'for-profit'. The law, which is
effective now in Japan, prohibits private hospitals to pursue for profits. However, this is only
effective in the sense that it prohibits to distribute earnings to whom 'invested'.
Thus most private hospitals retained their profits and put them to enlarge their facilities
such as number of beds and as highly technological equipment in order to attract patients. Here
we should again keep in mind that point fee system did not favor to enhance the quality in
general.
Another reason why such increase of beds were made possible was due to the free access
of the elderly, of which I described in (2). Though average length of stay in the general hospital
is relatively high in Japan, as is 49 days for all age group, that figure for the elderly amounts
to about 80 days.
(5) no quality assurance
One of the most important and difficult issues which medical society in the world have
to do with, is the way to evaluate the quality of health care. If there is an appropriate and
efficient method to evaluate quality from outside body, Japanese way to commit hospitals to be
managed by the private entities might have been successful. Because, in general, organizations
managed by public entity have defects in several respects.
Though, in my personal judgment, it is quite difficult to evaluate quality which should
be a joint product of scientifically objective performance and of patients' subjective sentiments,
we can judge at least in the following sense that Japanese hospitals are far less-developed in
attaining quality assurance.
One of the most important factors why their quality is not assured is that patients are
accustomed to be silent in the hospital. Because of the long-run policy to make emphasis on the
quantity of care which I explained earlier, most physicians do not take much time to consult
with patients. Therefore, even if physicians are competent in performing scientifically objective
diagnosis and treatment, patients cannot judge them.
In case of acute care, since most of the results tend to become clear in the short period,
evaluation for those might be easier. However, growing concerns are being placed on the chronic
care especially for the growing number of the elderly.
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V. Care for the Elderly in Japan
As of 1991, the number of bed-ridden elderly are estimated to amount to 700,000 who
come as approximately 5 per cent of the total elderly. Though I indicated that the number of
the elderly who are hospitalized is quite high, that was judged from the viewpoint of
international comparison. Among 700 thousands bed-ridden elderly, more than half of them are
taken care at home. Others who are estimated to be 160 thousands are taken care at
nonmedical oriented facilities.
Of those who are taken care at home, only about 5,000 are mainly taken care by other
home helpers than their family members. Spouses and daughters-in-law are main helpers for
the disabled elderly.
Since the composition of extended family, is gradually decreasing, though this kind of
family is still dominating especially in rural area, the issue 'who will care of the elderly' is a
serious social problem. Figure 4 shows the gradual decrease of the percentage of the elderly
who live with their children.
In 1990, MHW proposed the new strategy to tackle with this problem. This strategy,
which is called 'a Gold Plan' aims to spend about 5,000 billion yen for social services for the
elderly in ten years beginning at 1991.
Though this strategy is placed more on the home care than noninstitutional care, the
government expects that both the increase of medically oriented and nonmedical oriented long-
term care facilities. 'Medically oriented facilities' are newly devised facilities which would be
intermediate facilities where patients who were discharged from hospitals stay in the short run.
As for medically oriented facilities, number of inhabitants is expected to increase from
27,811 as of 1989 to 280,000 at 1999. And as for nonmedical oriented facilities which affiliate
with clinic, number of inhabitants is expected to increase from 162,019 as of 1989 to 240,000 at
1999.
In order for this strategy be successful, at least two problems should be solved. First of
all, the difference of financial burdens for the elderly should be pointed out. While out-of-pocket
expenses are only 36,000 yen per month when they are hospitalized, they have to pay 55,000
yen for the medically oriented long-term care facilities.
Opportunity costs of the family, when they care the elderly at home, might exceed far
more than those expenses. The government has not yet shown the guideline for the amount to
be paid by the care beneficiaries. It is committed to the discretionary decisions of the local
government. At any rate, how to equalize the burden of the beneficiaries among different
facilities and home help services is an urgent task.
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Secondly, how to secure the quantity and the quality of care workers is a serious problem.
Japanese economy herself now faces serious shortage of younger labor force even in the period
of depression. And because of the recent cost containment policy for health care, it is more
serious to obtain health-related workers such as nurses.
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Care," Kyoto University Economic Review. Vol.51, no.1/2.
5. Nishimura Shuzo [1987] "A Test of Physician-induced Demand Hypothesis in Japan," Kyoto
University Economic Review. Vol.57, No.2.
6. Nishimura Shuzo [1991] "Financing the Delivery of Health Care for the Elderly in Japan -
A History of Piecemeal Revision and the Lack of Long-term Solution," Paper Presented at the
International Conference on Health Economics and Medical Systems: A Japan-U.S.
Comparison, Held at Tokyo, November 19-20, 1991.
7. Scheiber, George H. [1990] "Health Expenditures in Major Industrialized Countries, 1960-
87," Health Care Financing Review, (Summer) pp. 159-167.
-14
-
Tab1e 1
Ratio of Tax Burden and Ratio of Social Security Burden to National Income (as of 1986)
Country Tax Burden
Social Security
Contribution Age 65 and Over
National Income National Income Total Population
Japan
United Stated
United Kingdom
Germany (West)
France
Sweden
%
25.0
25.7
41.5
30.0
33.6
53.2
%
10.7
10.1
11.4
22.4
27.8
19.0
%
10.6
12.1
15.3
15.1
13.1
18.1
Source: Social Security Research Council
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Table 2
Share of Social Security Contributions by Sources
Social Insurance Tax Others
Employee Employer Social Central Others
Security Govern't
Tax
Germany 1983 35.7% 34.2% - 27.4% 0.7% 2.0
France 1983 21.5 50.4 2.7% 21.4 1.3 2.7
Italy 1983 15.4 48.3 - 32.7 1.3 2.2
U.K. 1982-83 17.9 23.9 - 49.8 5.8 2.6
Sweden 1983 1.0 43.8 19.6 26.4 9.3
New Zealand 1982-83 2.2 4.4 91.6 - 2.8
Canada 1982-83 11.3 15.3 44.0 19.7 9.7
U.S. 1982-83 22.6 34.3 28.6 6.3 8.3
Japan 1982-83 26.3 28.9 26.2 3.0 15.6
Source: I.L.O. The Cost of Social Security, 1981-1983.
-16
-
Table 3
International Comparison of Social Security Benefits as a Ratio of National Income and its Component
Country
Health Care Benefits Pension Benefits Other Benefits Total Benefits
National Income National Income National Income National Income
Japan
(1989)
%
5.5
%
7.1
%
1.4
%
14.0
United States
(1986) 4.1 8.5 2.6 15.2
United Kingdom
(1986) 5.9 10.0 9.1 25.0
Germany
(West,1986) 7.9 14.0 7.3 29.1
France
(1986) 8.7 27.4 36.1
Sweden 9.7 14.2 15.7 39.7
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-
Table 4
International Comparison of Public Pension Schemes
Countries Germany Sweden United Kingdom United States Japan
Age when Benefits are Paid 65 65 male 65
female 60 65
male 60
female 56
Monthly ¥81,062 ¥43,158
(KN2,064)
¥37,714
(£165.2)
¥65,920
($514.4)
¥132,308
Benefits(a) (DM1,110.9) (Single)
¥70,582
(With Spouse)
(Single)
¥63,556
(With Spouse)
(Single)
¥99,931
(With Spouse)
Mean Monthly Wages of
Active Workers(b) ¥222,887 ¥233,901 ¥176,948 ¥226,249 ¥318,663
(a) / (b) 36.4% 57.5% 40.8% 44.2% 41.5%
Ratio of Contributions to
Renumerations 0.187 0.0945 0.01-0.1945 0.1212 0.110-0.143
share of Tax-Financed 17% 15% 0% 0% 1/3
-18
-
Table 5
Total and public health expenditure as a percent of gross domestic product: Organization for Economic Cooperation and Development countries, 1975-87
Total expenditure Public expenditure
Country 1975 1980 1985 1987 1975 1980 1985 1987
Percent
Australia Austria Belgium Canada Denmark Finland France Germany Greece Iceland Ireland Italy Japan Luxembourg Netherlands New Zealand Norway Portugal Spain Sweden Switzerland Turkey United Kingdom United States Mean
5.7 7.3 5.8 7.3 6.5 6.3 6.8 7.8 4.1 5.9 7.7 5.8 5.5 5.7 7.7 6.4 6.7 6.4 5.1 8.0 7.0 - 5.5 8.4
6.5
6.5 7.9 6.6 7.4 6.8 6.5 7.6 7.9 4.3 6.4 8.5 6.8 6.4 6.8 8.2 7.2 6.6 5.9 5.9 9.5 7.3 - 5.8 9.2
7.0
7.0 8.1 7.2 8.4 6.2 7.2 8.6 8.2 4.9 7.3 8.0 6.7 6.6 6.7 8.3 6.6 6.4 7.0 6.0 9.4 7.7 -
6.0 10.6
7.4
7.1 8.4 7.2 8.6 6.0 7.4 8.6 8.2 5.3 7.8 7.4 6.9 6.8 7.5 8.5 6.9 7.5 6.4 6.0 9.0 7.7 3.5 6.1
11.2
17.3
3.6 5.1 4.6 5.6 6.0 5.0 5.2 6.2 2.5 5.3 6.4 5.0 4.0 5.2 5.9 5.4 6.4 3.8 3.6 7.2 4.8 - 5.0 3.6
5.0
4.0 5.5 5.4 5.6 5.8 5.1 6.2 6.2 3.5 5.7 7.8 5.6 4.5 6.3 6.5 6.0 6.5 4.2 4.4 8.7 5.0 - 5.2 3.9
5.5
5.0 5.4 5.5 6.4 5.3 5.7 6.9 6.4 4.0 6.4 7.1 5.4 4.8 6.0 6.6 5.6 6.1 4.0 4.3 8.6 5.2 - 5.2 4.5
5.7
5.1 5.7 5.5 6.5 5.2 5.8 6.7 6.3 4.0 6.9 6.4 5.4 5.0 6.9 6.6 5.7 7.4 3.9 4.3 8.2 5.2 1.4 5.3 4.6
15.6
1 Includes Turkey. 1987 means excluding Turkey are 7.5 percent for total expenditure and 5.8 percent for public expenditure. SOURCE: Organization for Economic Cooperation and Development: Health Data File, 1989.
-19-
Table 6
Comparison of the Number of Cases per 100,000 People by Age Group in 1970 and
1987
(a) Number of Cases Hospitalized per 100,000 People by Age Group
(One day survey)
age Inpatients(1970) (A) Inpatients(1987) (B) (B)/(A)
Total 935 1174 1.26
0 530 1372 2.59
1-4 149 205 1.38
5-9 205 184 .90
10-14 222 176 .79
15-19 484 258 .53
20-24 827 468 .57
25-34 1014 650 .64
35-44 1065 776 .73
45-54 1294 1204 .93
55-64 1759 1753 1.00
65-69 2208 2475 1.12
70-74 2280 3834 1.68
75-79 2132 5664 2.66
80- 1686 5668 3.36
-(b) Number of Cases of Outpatient Visit per 100,000 People by Age Group
(One day survey)
age Outpatients(1970) (A) Outpatients(1987)(B) (B)/(A)
Total 6042 5426 .90
0 8429 5575 .66
1-4 7952 5704 .72
5-9 6303 4444 .71
10-14 3367 2457 .73
15-19 3077 2265 .74
20-24 4572 3013 .66
25-34 5299 3522 .66
35-44 6069 3762 .62
45-54 7232 5602 .77
55-64 8574 8271 .96
65-69 9394 11345 1.21
70-74 9518 14630 1.54
75-79 8644 15344 1.78
80- 7111 13620 1.92
Source: Ministry of Health and Welfare, Patient Survey.
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Table 7
Number of Patient Visits per General Practitioner per Year, and Average Duration of Visits:
Selected Countries, Selected Years 1979-89
Country No. of Patient visits per G.P. Average Duration of Visits
Netherlands (1986)
United Kingdom (1987)
Germany (1981-82)
United States (1985)
France (1979)
Quebec(1985)
Japan(1989)
8,200
7,656
-
6,723
5,101
4,513
11,000
5minites
8.2
9
14
14
15
4
Sources: See Reference
Japan. Patient Statistics, 1989
-21-
Figure 1
Trends of National Health Expenditures and those for the Elderly
By Outpatient Expenditures and Inpatient Expenditures
Source: Ministry of Health and Welfare
Estimates on National Health Expenditures
-
-22
-
Figure 2
Utilization of physician services: Selected countries, selected years 1981-86
-23-
Figure 3
Gross Income per physician and ratio of net Income per physician to national average wage
for general practitioners and all physicians: Selected countries, selected years 1983-85