LEE, Sun-Young(Ph.D. Student , Doshisha University)
The 3rd seminar on East Asian Social Welfare
Doshisha univ. and Chung-Ang Univ.
June 25, 2011

Contents
1. Background and Purpose of the presentation
2. Definition of Quasi-Market by Le Grand3. Factors of “Quasi-Market” in Long-term Care service
4. Comparative structure of Quasi-Market, Japan andKorea
1) Regulation of suppliers’ entry to the market
2) Setting the official price table
5. Concluding remarks

2Background(1)◎ A number of reforms surrounding supply system of long-termcare for the elderly are being carried out around the world.
◎ Japan: as part of “Social Welfare Basic Structure Reform”,Long-term Care Insurance Act was legislated in 1997.
◎ Korea: introduced Long-term Care Insurance for the elderly in2008. It is well known that it was formulated based onJapan‟s Long-term Care Insurance Schemes, and it
has very similar structure to Japan‟s care service.
⇒Quasi-Market mechanism begins(expands) to function inwelfare service supply system.
4

Background(2) & Purpose◎ Great Britain first introduced Quasi-Market mechanism intowelfare supply system. The representative study of the GreatBritain on Quasi-Market is the one by J. Le Grand and W.
Bartlett in 1989.
◎ The purpose:To compare Japan‟s Long-term Care Insurance
Schemes with Korea‟s counterpart in the framework of QuasiMarket.

5What is Quasi-Market?
The final responsibility to provide the social welfare
service : The government◎ Accordingly, while service is supplied in market
principle, but perfect competition could not be expected.
◎ There exist competition in service supply and thegovernment places various limitation with laws forguaranteeing rights of users, which is called “QuasiMarket”.
7Definition of Quasi-Market
by J. Le Grand (1)◎ Definition of “Quasi-Market” was first formulated
by J. Le Grand.
◎ “Market”, because they replace monopolistic stateproviders with competitive independent ones.
◎ “Quasi”, because they differ from conventional
markets in a number of key ways. The differences
are on both supply and demand sides.
(Le Grand 1993:10) 8

Definition of Quasi-Market
by J. Le Grand (2)- On the supply side, there exist non-profit organizations
which competed against profit organizations for users.
- On the demand side, consumer‟s purchasing power is
not expressed in money terms in a quasi-market.
Instead, either it takes the form of „voucher‟ or „need‟.
Services are bought by purchasing agent and thendistributed to users.
(Le Grand 1993:10) 9

1. Factors of “Quasi”
2. Factors of “Market”

Factors of “Quasi” in Quasi-Market
ProviderRegulation of thesuppliers‟ entry tothe elderly caremarketPublicadministrator

Assessment offrailty grade,
Evaluation
Entitlement ofServices,
Maximum
amountSetting the official

ProviderAdministrative measures,
Canceledprice table by longterm Care
Remuneration

Quasi

Serviceuser

Provider11Factors of “Market” in Quasi-Market
ProviderService user
fees
Choices

Service user

ProviderProviderCompetition amongproviders forsecuring users

ProviderService user

MarketService user

Service user
Profit seeking

121. Regulation of suppliers’ entry to the market
2. Setting the official price table

Regulation of the suppliers’ entry
to the market§JapanProfit-seeking bodies areprohibited to participate.
Institutional⇒exclusively delivered by thecare service
social welfare
corporations.

Profit-seeking bodies areallowed to participate.
Residential⇒over half of the services
care service
are deliveredby such bodies.

Quasi aspect of Quasi-Market

Market aspect of Quasi-Market→ The dual structure of “monopoly by the non-profit bodies”
and “major occupation by the profit-seeking bodies”§Korea→ all area of services has allowed all types of providers including
individuals.
14

The proportion of subjects entering theoffer of the residential care service in Japan
100.0

Other

90.0
80.0

22.3

70.0

NPO

27.2

29.0

60.0

36.0 39.6
44.6

46.1

46.6 46.9

50.0
40.0

Medicalcorporation

54.656.1

30.0

Cooperation

52.8

20.0

46.2

42.5

Profit-seeking
bodies

38.1

36.7

36.1

36.4

10.0

Social welfare
corporation
Municipality

0.0

2000

2001

2002

2003

2004

2005

2006

2007

2008

Source: Ministry of Health, Labour and Welfare in Japan (2000-2008)

15

The proportion of subjects entering theoffer of the residential care service in Korea
100.0
90.0

22.1

80.0

70.0
60.0
50.0

89.7

89.0

78.6

Other

77.4

Individual
72.7

40.0
30.0

Corporation

20.0
10.0
0.0

9.8

10.6

home-visit home-visit
carebathingcare

19.1
day care21.4

Municipality

home-visit short-staynursing
care

Source: Ministry of Health and Welfare in Korea (2009)16

Setting the official price table§Japan and Korea◎ The fees of care services are officially set (named careremuneration) by the Long-term Care Insurance Act.
◪ “price competition” among service providers is prohibited bythe regulation.
◪ leading to service quality competition in order to acquire theservice users.
→ These schemes are very different from the quasi-market ofNHS in Great Britain.
17Differences of remuneration unit
between Japan and Korea◎ Two kinds of elderly care service(visiting care services and visiting nursing services)
The time of required

visiting careservicevisiting
nursing service

less than 30minutes
30minutes~59minutes
60minutes~89minutes
90minutes~119minutes
120minutes~149minutes
150minutes~179minutes
180minutes~209minutes
210minutes~239minutes
more than 240minutes
less than 20minutes
20minutes~29minutes
30minutes~59minutes
60minutes~90minutesJapanin case ofbody’s care
2,540
4,020
5,840
6,670
7,500
8,330
9,160
9,990
10,820In case ofhousehold
‐
2,290
2,910
‐
‐
‐
‐
‐
‐
2,850
4,250
8,300
11,980(unit: yen)
Korea
‐
748
1,128
1,495
1,869
2,114
2,345
2,562
2,765
‐
1,915
2,472
3,028

18

Low level of remuneration leads to…
Cream skimming

Low level ofremuneration

Low pay⇒ Low quality of services

Fraud
19

Structures of Quasi-Market of Japan and Korea
Japan

Regulation of thesuppliers’ entry to theelderly care market

Regulation of pricecompetition by setting
the official price table
Supervision andassessment by the public
administrator
Entitlement of Services
based on the Assessmentof frail-grade
co-payment
right of choice of service
care manager

KoreaResidential care service: open to varieties of bodies
Institutional care service:
Institutional care service:monopoly by the non-profit
open to varieties of bodies
bodiespossible
individuals
without
only corporate bodies
juridical(legal) person
setting the official price table- be prohibited “price competition”- leading to “service quality competition”
regional differences: existentregional differences:(0.3~0.5% premiums)
non-existentofficial price’s disparity of visiting care service and visiting nursing
service: existence- Public research and releasesystemstart in the year of 2011- Assessment by the third party
Application → First step assessment by the computer → Second step
assessment based on the medical doctor’ opinion → Seven frailgrades in Japan, three grades in Korea
10% of costs for all kinds of institutional care service: 15%,service
residential care service: 20%
choice-by-users type21
care manager: existentcare manager: non-existentConcluding remarks◎ Similarities of Japan & Korea◪ Residential care service: open to varieties of bodies◪ Price competition is prohibited◎ Differences of Japan & Korea◪ Institutional care service: open to varieties of bodies
in Korea◪ Low levels of care remuneration in Japan, especiallyin Korea22

Why such difference?
Cause1.
Insufficiency of infrastructure(quantitative &qualitative capacity of supply)
Cause2.
Low degree of general acknowledgment
to long term care (services and schemes)→ Quasi-Market factor does not always remain thesame, varying with era and area.
23

Thank you!

The proportion of subjects entering the offer
of the institutional care service in Japan
100.0

90.0
80.0
70.0

42.5

48.3

48.7

49.3

49.8

50.1

50.6

51.0

51.3

60.0

medicalcorporation

50.0
40.0
30.0
20.0

other

39.2

Social welfare
corporation
34.6

34.8

35.4

35.6

35.9

36.0

36.2

36.3

municipality

10.0
0.0

2000 2001 2002 2003 2004 2005 2006 2007 2008
25

The proportion of subjects entering the offer
of the institutional care service in Korea
100.0
90.0
80.0
70.0

50.1

60.0

80.8

50.0

Individual

40.0
30.0

OtherCorporation

45.8

20.0

18.3

10.0

municipality

0.0

Geriatric Care Facility

Senior Congregate
Housing26

◎ Two kinds of elderly care service(visiting care services and visiting nursing services)(unit: yen)
The time of required

visiting careservicevisiting
nursing service

less than 30minutes
30minutes~59minutes
60minutes~89minutes
90minutes~119minutes
120minutes~149minutes
150minutes~179minutes
180minutes~209minutes
210minutes~239minutes
more than 240minutes
less than 20minutes
20minutes~29minutes
30minutes~59minutes
60minutes~90minutesJapanin case ofbody’s care
2,540
4,020
5,840
6,670
7,500
8,330
9,160
9,990
10,820Korea

In case ofhousehold
‐
2,290
2,910
‐
‐
‐
‐
‐
‐
2,850
4,250
8,300
11,980

Amount of care remuneration when minimum wage is oneJapan=1:18
Korea=1:40

‐
748
1,128
1,495
1,869
2,114
2,345
2,562
2,765
‐
1,915
2,472
3,02827