The nursing care system and the role of cooperatives andNPOs in Japan
2001
Hideo ISHIZUKA,

Will the nursing care system give a good news for the elderly persons, theirfamilies and every persons over 40 year-old who must pay the obligatory
premium? National elderly nursing care system started from 2001. This
aimed ‘socialization of nursing care', 'provision of integrated service enoughto prevail users' needs' and 'introduction of social insurance system'.
So called welfare state model did not developed fully in Japan such as theScandinavian countries' experience has achieved successfully. In 1986, thewelfare policy in Japan changed from an aiming would-be welfare state to awelfare society, because of the new tendency of privatization and so called a
failure of government under the preference of new liberalism following toThatcherism and Reaganism.
Without clear cut idea and practicalexperiment for the new scheme of welfare and social services, legislators aredesigning nursing care system referring the German prototype.
Secondly, this paper argue on who the stakeholders are in the newsystem ,applying the theories on stakeholder and corporate governance andanalyzing the probability of the cost performance and social performance ofthe the system, especially in the aspects of good quality of services and costeffectiveness and making for good community system and social policy.
Thirdly, discussing about the model of good service providers in thisnursing care system, this paper claims the potential capacity and theirsocial usefulness of cooperatives and nonprofit organizations in this service
industry.
Will the nursing care system give a good news for the elderly persons,their families and every persons over 40 year-old who must pay theobligatory premium? With various pending discussion on the planned
issues of the nursing care system, the Health and Welfare Ministry declared
the kick off this new system from forthcoming April.
It seems thatJapanese will run this system before completing to draw the map andmanual for the new direction and scheme of the welfare services for theelderly persons. However, do sophisticated slogans such as 'socialization ofnursing care', 'provision of integrated service enough to prevail users' needs'
and 'introduction of social insurance system' bring a happy last life for every
Japanese who were called once a workaholic?

This medical and social caresystem is based on the obligatory
insurance system and an idea ofprivatization. So called welfare state model did not developed fully in Japansuch as the Scandinavian countries' experience has achieved successfully.
In 1986, the Health and Welfare Ministry declared to change its welfare
policy from aiming would-be welfare state to welfare society, because of thenew tendency of privatization and so called a failure of government under
the preference of new liberalism following to Thatcherism and Reaganism.
Without clear cut idea and practical experiment for the new scheme ofwelfare and social services, bureaucrats and legislators a designed nursing
care system referring the German prototype.
It is estimated that the population of elderly persons over 65 year-old willbe 33.12 millions, 27.4% of the total population by the year of 2025 inJapan, in comparison with 21.16 millions, 16.7% in 1999. Governments
explain that younger generations burden for payment to the aged throughexisting medical system will increase inevitably- at this moment fouryounger persons support one aged person, but in the future, one younger
must support financially two older persons. In this pretext, after having
separated medical and nursing services for elderly persons from medical
insurance system and increased the premium in recent years, government
decided a new nursing insurance system.
What is the Japanese nursing caresystem?

Who are the stakeholders?

Who are the stakeholder in thenew system?
First of all, Insured/potential users are divided two
categories; first category's insured are those who are 40-64 year old and willburden 33% of total budget of the system. Second category's insured arethose over 65 years old and will also burden 17% of the budget. Those two
types of insured must pay obligatory for a half of the fiance of the system.
Additionally, users must pay ten percent of the service fee when they receive
services under this system.
According the plan made by the Health and Welfare Ministry, every nation
over 40 year old must enter in the nursing care system, namely must pay
the premium with no exception; even though he/she is pensioners nothaving or is in jobless or is a receiver of income benefit through means test.
The premium is calculated in five ranks as follows:
Table.

Premium of the nursing care Insurancerank
premium
First rank
Second rank
Third rank
Fourth rank
x 1.25
Fifth rank

class
eligible poor received benefit
families exempted capital tax
persons exempted capital tax
Persons paying tax andunder 2.5 million yen income
Persons paying tax withover 2.5 million yen income

standard of
Basic fee x 0.5
Basic fee x 0.75
Basic fee x 1.0
Basic fee
Basic fee

x 1.5
Foot: Basic fee is calculated based on each individual income by each local govenment. It
is estimated more or less 2,800 yen per month.

On the other hand, beneficiary receiving the nursing care are those who areover 65 year old. But they must pay the premium accompany with otherpremium for obligatory medical insurance or reduced the premium fromtheir pensions directly.
Secondly the state/central government will manage to owe 25% of thebudget
andeach
prefecture
unittoown
12.5%,
local
governments/municipalities in each prefecture to same 12.5% of the budget.
Local governments/municipalities become a insurer in this nursing caresystem. They won't maintain to be a traditional public provider of suchsocial care and contract out these service to the various types of service
providers mainly in the field of private sectors. From this, the welfare caresystem is run by the basic principle of administrative decision system for theeligible beneficiaries (Sochi-Seido in Japanese). Authorities or public
servants of local government used to decide arbitrary degree and quality ofthe service and entrust/consign these services to welfare service facilities
both in public and private sectors.
Sochi-Seido system has been
financialized totally by tax; namely state government bear a half of thebudget following 25% by each prefectural government and same 25% bymunicipalities in the prefecture. In the contrast, under new nursing caresystem, each municipality become an insurer/contractor/ client of services
and they pay 90% of the service fee for providers. But municipalities
certificate user's degree through integrated check list with 85 items for feeble
elderly persons, namely computer judge tool designed by the Health andWelfare Ministry, next to the check by its authorizing council composed withmedical and social professionals.
Thirdly, the service providers are also an important stakeholder in thisnursing care system. In 1996, about 61,000 social welfare facilities for 2.5
million users of all generations, with 800 thousand staffs. The 45% of thefacilities, especially the 90% of the existing elderly residents belong to theprivate sector.
Many private profit firms have entered in this service
industry, even including former disco entertainment corporation because of
the market size will be very huge. Originally, the Health and Welfare
Ministry thought to promote private profit firms as service providers. About
4 years ago, consequently the fraud scandal occurred by top carriers of theMinistry and the management of the nursing residence. At this moment,even still not be enough the number of the facilities, non profit organizations,cooperatives , mutual organizations and civic associations are being
supposed as one of big potential service providers.
Who decide and supply the quality ofservice for the elderly persons?

The certification test can becategorized six degrees by the officeof the municipality based on the computerized manual planned by theMinistry. The computer judge according to the check list made by so calleda care manager who will visit applicants at their homes. When a computer
judge he/she is "Independent" (what curious expression for a feeble elderlyperson!), he/she can not receive nursing service under the system and must
to buy private service individually. Even those who are not necessary to besupplied nursing service are necessary to receive care help in their daily life.
Under the system many nursing service which they have enjoyed under theexisting social welfare system can must be quitted. This is one of problemof this new system.
It is supported in the system that users themselves can make their own
care plan after a judge by the care office. But, normally a care manages
make plan for them consulting beneficiary and its family.

Table.

Degree of the judge for elderly person wishing care supply

Degree
Content of Judgement
A. Independent:
Judged as a person who can stand up; given no service, somust personally buy services by own money.
B. Precatory degree:
No need nursing care, but need social help such asbathing.
First degree: Judged as a person who is difficult to stand up. Need partial caresuch as bathing and bowel movement.
Second degree: Judged as a person who is very difficult to stand up; needed
partial or total nursing care.
Third degree: Judged as a person who can not turn over in bed by oneself;needed total nursing care.
Forth degree: Judged as a person who is disable to do normal work for oneself;needed total nursing care.
Fifth degree: Judged a person who is very disable to do most normal work foroneself; needed very total nursing care.

Basically a care manager will decide the content of the nursing care plan
based on the manual. Formally users shall decide their service provider
among some providers according to their preference and judgement of a
fitting provider for their need. In fact, however, it is very difficult to judge forthe users which provider is best or better, because of lack of professional
knowledge and information of quality of services. Moreover it is often
insufficient numbers of the nursing care facilities in their local
administration area. There is a very few room to select facilities for them inthe local area who they live. In this context with other financial reason,
many municipalities are organizing local area consortium for the nursing
care system which associate some neighboring town and village.
Authorized providers are hospitals, nursing residences, day care centers,
quasi public welfare care institutions, private profit firms, non-profit
organizations, cooperatives and other type of organizations.
They contract
directly with users and received the 10% of fees from users directly and therest 90% of the fees from the offices of the municipalities.
Table: Standardized Contracted CostDegreevariably
Preparatory degree
First degree
Second degree
Third degree
Fourth degree
Fifth degree

Service cost (per month, yen<100 yen=US$1.1>)
Home care service
Residential Service
60,000X
170,000 315,000
200,000 315,000
260,000 339,000
310,000 339,000
350,000 461,000

Under the system, quality of services which providers supply for theelderly feeble persons is seemed to calculate by hours/time of service, eventhough categorized six degree of feeble persons. It is very difficult tocalculate cost of human services in the social and welfare services. The
human element is very important among service staffs and elderly users.
Types of services are planned mainly ranging from home help such as
cleaning, buying and bathing, nursing services at home by medical staffs,
day services, short stay in facilities, rehabilitation care service at home andfacilities and nursing services in residence and hospital.
For example, the cost of home care service including physical caretentatively is calculated basically 2,780 yen per hours. Service providerswill competing each other in the market to get more users/consumers
through supplying good services and/or cost efficiency. This will occur
labor condition problem of staff(so called a 'helper'), who are mostly parttime worker. At this moment, the number of helpers(certificated careworker) is not sufficient if the new nursing care system will run well from thebeginning. It is told ironically for this situation," Pay insurance fee but noservice".
Good chance for service cooperatives
and NPOs

Welfare system and social
policy have been also changingradically in Japan. Even though there is a critical disputue among
politicians and legislators, new insurance system for the elderly care will
prevail the principle of state responsibility for the care thrugh tax income.
People are said to be given self determination and self responsibility in orderto receive nursing care service in the eldery service market.
But is it possible to maintain self responsibility a person who
diagonosed as physical and/or mental feeble condition in order to select thecare plan and quality of services? There are information gap, inteligence
gap, supply/demand gap and decision making gap among stakeholders inthis nursing care system and market. However, the expectation for creating
god job, social value work and good comunity services are also increasing
among the public. Cooperatives such as medicare cooperatives and social

service cooperative and NPOs have advantage to giving good quality ofservices based on non profit management, democratic control and its social
mission character in this nursing care system in Japan.
end