Silviase/jgov_v1.4_full_ann huggingface dataset:
concept. Medical experts such as Alan Garber (1996) equate the LTC concept with ongoing medical care, particularly that which is designed to comfort those who “suffer from the disabling effects of diseases and injuries that medical treatment can neither cure nor fully relieve” (p. 143). Similarly, health economists such as Edward Norton (2000: 957) emphasize care provided to those with chronic medical conditions who require medical and palliative care. On the other hand, health services researchers such as Nelda McCall (2001: 3) propose a more expansive notion, one that encompasses a “continuum of medical and social services designed to support the needs of people living with chronic health problems that affect their ability to perform everyday activities.” A broad approach to LTC is also taken by healthcare management specialists such as Pratt (1999: 6) who identifies LTC according to the users of these services. Those he defines as people who are physically or mentally dependent on others, and who consequently require health, social, personal, and other services for a sustained period of time.

Since experts differ in what they mean by LTC, it is not surprising that LTC providers are many and diverse, and the product mix included in LTC varies by country and over time. Of course, the traditional nexus of support for the elderly and disabled throughout history has been the family, with multigenerational households exchanging goods and services in a mutual support system. People lacking that option were forced to turn to “poorhouses” financed by charities and other welfare organizations (Pratt, 1999). In the last 50 years, however, many developed countries experienced dramatic fertility declines and rising longevity which contributed to rapid population aging. Combined with a more mobile population, these facts produced a sharp fall in multigenerational co-resident households, making it increasingly difficult for the relatively small working-age cohort to care at home for its long-lived and needy elderly parents/grandparents.

Partly in response, governments in many developed nations have begun to establish, finance, and otherwise support nursing homes, often seen as the institutions most closely associated with the notion of long-term care. Yet the range of services and institutions today associated with LTC is much wider, including the following (Pratt, 1999: 21-22):
and physical therapy) over longer periods of time; and non-skilled nursing facilities which provide long-term and lower-level medical intervention. $ ^{2} $

- Assisted Living/Residential Care facilities: This category of residential caregiving facility accepts people requiring assistance with both regular and instrumental activities of daily living.

- Adult Day Care services: These are non-residential programs providing consumers with meals, social and educational activities, and supervision. $ ^{3} $

- Home Health Care services: Generally these offer consumers services in their own homes for a few hours a week, including a dietary consultation, a modest level of nursing attention, and some therapy. $ ^{4} $

- Hospice Care: Support is offered by trained but often volunteer staff for those in the final stages of a terminal illness.

Experts often propose that these services and facilities should be thought of as arrayed along a so-called “continuum” of care. In the ideal case, a customer’s case would be managed in a coherent and integrated way, and this care would be paid for without gaps. It is worth emphasizing, however, that in practice the institutions and entities which provide care deemed useful and/or necessary for the physically and mentally dependent often are not integrated in a comprehensive way, either in terms of services or financing. Furthermore, even today, much of the care for the long-lived and needy elderly is still provided informally by relatives in both the developed and developing world (McCall, 2001).

## Aged-care Provision in Japan

The current LTC system in Japan is a relatively recent addition to the country’s mandatory national health care system established in 1961. Under the Japanese national healthcare plan, individuals are assigned coverage for medical care based on their job or residential location (Ikegami and Campbell, 1999). Each employer or municipality (prefecture) then must offer mandatory healthcare coverage financed by premiums levied on household heads (in the case of the community-based plans), or shared half by employers and half by employees (for company-based plans; Ikegami, 2003). Self-employed workers are required to pay the entire healthcare premium themselves.
National fee schedules are set by the government and apply to all providers in Japan; medical care providers are further prohibited from balance billing (Ikegami, 2003). In 2002, for instance, fees for medical procedures were cut by the central authority by 1.3% overall, and by 5-30% for some services such as CT scans and MRIs. Drug fees are also set centrally and were reduced 5% in 2002; drug competition is permitted only as long as prices are below the centrally-set fee (Ikegami, 2003).

When citizens reach retirement age, they are required to join the Citizens’ Health Insurance plan (CHI), a decentralized system providing various levels of home care and also institutional care. As part of this system and particularly from 1973 on, the frail elderly were entitled to free hospitalization even if they did not require intensive medical care; as a consequence, by 1993 the elderly accounted for almost half of all hospital beds and one-third stayed for more than one year (Campbell and Ikegami, 2000). This phenomenon, termed “social hospitalization,” was the target of reform under the Gold Plan of 1989 and revised in 1994. Under this initiative, the central government instituted efforts to boost the number of nursing home slots, adult day-care centers, and home health aid providers. At the same time, municipalities were given a key role in setting eligibility standards and determining who was entitled, in keeping with public assistance philosophy. It represented a formal acknowledgement that care for the frail elderly was a problem of growing national consequence.

The present Japanese LTC program was introduced in 2000, with four key objectives

enunciated by the Japan Ministry of Health, Labor, and Welfare (JMHLW, 2003a). First, the approach sought to reduce the burden of home care of the elderly, a burden traditionally borne by women. In other words, this program represented a major shift in the responsibility for elderly care away from the family, and toward the state (Campbell and Ikegami, 2000). Second, the new system sought to make more transparent the relationship between benefits received and premiums paid. Third, the new program was designed to integrate what had been a vertically-divided system of health, medical, and welfare services operating relatively independently, so as to provide a means by which customers would receive comprehensive services from a variety of institutions of their choice. Fourth, by separating long-term care from health insurance coverage, the new insurance program sought to reduce the number of “social hospitalization” cases where elderly were hospitalized simply because of a lack of
viable alternatives.

## Program Benefits

Focusing first on system benefits under the Japanese public LTC system, the program is explicitly intended to provide both in-home services (at-home care) and also services at facilities (institutional care). $ ^{5} $ All persons age 65+ are eligible, along with people age 40-64 with health-related disabilities. Eligibility is determined based on condition, rather than income and/or assets, and it must be reevaluated every six months (Campbell and Ikegami, 2000).

To receive LTC benefits, an individual must undergo a lengthy and information-intensive disclosure process, beginning with application to an expert committee which collects extensive information and applies a computer algorithm to 85 data inputs, including the applicant's income, assets, and health information (Ikegami, 2003). Facilities-based services are offered only to customers who are certified by the LTC expert committee as needing such care based on health status. These committees must make a screening determination based on the opinions of doctors within 30 days of application (Campbell and Ikegami, 2000). Though standards for long-term care requirement certification are intended to be nationally uniform and objectively determined, in fact, each municipality appoints its own examiner group comprised of physicians and other care providers. It is worth noting that municipal government officials having budget responsibilities do not serve on these examiner committees, which may diminish incentives for cost-cutting (Campbell and Ikegami, 2000).

At the time a person is certified in need of LTC, he is further determined as falling into one of health condition groupings identified as Care Levels 1-5, versus “support required.” $ ^{6} $ Benefit
entitlements correspond to each care level, though services provided may vary across regions. On the whole, long-term care “welfare” facilities mainly focus on the consumer’s activities of daily living, while health facilities are mainly oriented toward rehabilitation. LTC medical facilities are mainly health-care delivery institutions. As an example, the financial value accorded to in-home benefits and home-visit outpatient services varied in 2003 from ¥62,000-¥358,000/month, and for short-stay service, people are entitled to 7-42 days in a facility every 6 months. Facility benefits are determined according to the level of long-term care required. After the municipality board assesses the customer’s eligibility and level of care needed, he is referred to a care manager who then consults with the customer as well as the patient’s doctor. After the customer approves the care plan, the care services actually delivered; customers are permitted to switch care managers at will.

Two types of services are offered under the LTC program. In-home services include a variety of offerings including (1) home-visit/day services (home-visit long-term care, home-visit bathing, home-visit rehabilitation, day rehabilitation (day care), home-visit nursing care, day service, welfare devices leasing); (2) short-stay service/short-stay care; (3) in-home medical care management counselling; (4) care service for the elderly with dementia; (5) care service provided in for-profit private homes for the elderly; (6) allowance for purchase of welfare devices; and (7) allowance for home renovation (handrails, removal of level differences, etc.). Services at facilities are described according to three types of nursing homes: (1) long-term care welfare facilities for the elderly (special nursing homes for the elderly); (2) long-term care health facilities for the elderly; and (3) long-term care medical facilities for the elderly. The last type also includes sanatorium-type wards as well as wards for elderly patients with dementia, and hospitals with enhanced long-term care service provision. Medical care, per se, is not included in the LTC program but instead is offered under the national healthcare system.

Rates for all covered LTC services are set by the JMHLW and are based on the units concept. The Ministry has allocated a given number of "units" to particular services, where a unit varies with the service involved and by region (taking into account some degree of regional wage differentials of service providers). A unit's value is currently set at about ¥10; this will be revised every three years.
For example, 231 units are associated with home-help service care ranging from 0.5-1 hour (as of April 2003), regardless of the actual level of care administered. This means that the price of home-help service in a typical area is ¥2,310. The number of units assigned to institutional care depends on the customer's required care level. For example, in a typical long-term care welfare facility, 959 units per day are allocated to a Care Level 5 case, and 677 units are associated with a day in a Care Level 1 environment. Further detail on the unit allowances for different types of care is provided in Table 1, arrayed by the condition of the elderly person.

## Program Financing

Turning to financing, the Japanese public LTC system is operated as a pay-as-you-go program, financed by both earmarked premiums levied on insured persons and general tax revenue. Half of the program costs are paid by premiums assessed on workers (age 40+) and their employers as well as retirees (deducted from their public pensions); these premiums are collected by municipalities. $ ^{7} $ Workers under the age of 40 do not currently pay premium taxes into the LTC system.

It is worth emphasizing that the LTC premiums are means-tested: for example, the “basic” premium is ¥3,293/month for “Category 1” individuals (JMHLW, 2003), but it is higher for other categories of individuals. Category 1 individuals must be age 65+, among whom some are exempted from municipal taxes by virtue of having very low income; the group also includes those on public assistance, people with confirmed disability, and widows and widowers whose total income in the previous year is less than 1.25 million yen. Category 2 persons are those age 40-64 who are insured by the national health insurance system. A Category 2 individual having income under ¥2.5 million annually pays a LTC premium of 1.25 times the “basic” amount, while an individual with income over that threshold must pay a premium set at 1.5 times the “basic” amount. $ ^{8} $ Premiums also vary across municipalities; after setting premium levels in 2000 and revising them in 2003, the expectation is that premiums will be revised every three years going forward.

Annual LTC expenditures in 2002 totalled ¥5.2 trillion (AJFNHIO, 2002). This is composed of
premiums worth just over half of a percent of workers' annual earnings covering about one-third of the total program cost (Campbell and Ikegami, 2000). Premiums paid by the elderly (age 65+) cover 17% of the program's costs, and the rest of the costs are paid by the central government (25% of the cost), prefectures (12.5%), and municipalities (12.5%).

In addition to premiums, eligible consumers must pay additional out-of-pocket amounts for LTC services and care. An eligible person must pay a 10% co-insurance amount for each insured service. For instance, if home-help service care is priced at ¥2,310 per hour, the customer would pay ¥231 for that service and the municipality pays the rest. The customer is also responsible for meal charges when in a nursing home. These co-pays are set by service and type of care, and vary depending on the consumer's care level but not his income level. After spending up to a threshold, the consumer is responsible for 100% of any additional costs until hitting a stop-loss threshold called the “high-cost long-term care service limit.” Above that threshold, additional expenses incurred by the consumer are covered by the LTC program at 100%.

The stop-loss threshold is reduced for low-income consumers, in some cases by more than half. $ ^{9} $ In 2003, for instance, a Care Level 3 consumer faced an out-of-pocket limit for care services of 26,750 units/month, with one unit equal to ¥10. In other words, he was eligible to use care services worth ¥267,500 in a month simply by paying ¥26,750. For meals, the standard charges amounted to ¥23,400/mo (or ¥780/day). If the cost of services consumed exceeded this limit, the consumer would have to pay for all the additional services, up to an out-of-pocket maximum of ¥37,200/month for a non means-tested consumer. After that point, all additional costs would be paid by the system.

## Public LTC Service Utilization and Cost Projections

To evaluate how the public component of Japanese LTC may evolve over time as the population ages, it is useful to assess models of utilization and cost projections. In Japan, as elsewhere, LTC projections are fraught with uncertainty. Often analysts take existing utilization patterns and multiply them by population projections, though this can result in imperfect projections because of changes in demand due to subsidized care. There may also be changes in demand if copays and
deductibles are raised, or if the existence of the LTC system contributes to the rehabilitation and recovery from illness and injury. In addition, some experts project substantial declines in future utilization rates as a result of more resilient older populations. For instance Fries (1980) contended in a controversial but influential paper that “[e]xtension of adult vigor far into a fixed life span compresses the period of senescence near the end of life.” Subsequent research offers additional empirical support of this view including Lubitz et al. (2003) who suggests that longer lifespans may not necessarily boost healthcare spending per capita. In any event, future morbidity declines will probably not offset much of the cost increases attributable to the rise in the fraction of the population that is elderly (Garber, 1999).

The All-Japan Federation of National Health Insurance Organizations (AJFNHIO, 2003) estimated that 3.7 million persons were certified as in need of some LTC in 2003. Of these, only 2.7 million received care, with at-home care users totalling 2 million (58%) and institutional care users totalling 0.7 million (20%). Projections of possible future LTC need and utilization are offered by the Japanese Ministry of Health, Labor, and Welfare (JMLHW), which relies on methodology developed by the Research Group on Elderly Care and Support Systems for Autonomous Living (the precise methodology has not yet been explicated formally so the resulting estimates are quasi-official). It is known that the office estimated the number of demented elderly for every five years going forward, from 2005 to 2045, and it also estimated government net expenditures (aka “Evaluation Payments”) for 2005, 2015, and 2025.

Kishida (1998) estimated the number of elderly needing care using a different model, and it indicated far more shortfalls than found by the MLHW. Relying on 1993 incidence rates from the MLHW, he concluded that more people would require care over time than the government estimated. In fact, by 2020 he estimated that the number needing care would rise to 4.8 million (assuming a 3% annual growth rate) and that the population needing care would grow until 2030. He used the “current” unit costs of LTC in these projections, and obtained overall net cost estimates higher than the JMHW’s 1995 estimates: the Ministry had forecast costs of ¥4.2 trillion for 2000, while Kishida’s projections totalled ¥8.5 trillion. In addition to differences in projected numbers of users, Kishida took a more comprehensive view of cost; he included living expenses for elderly and imputed a value to the care
provided by family members to the elderly (no breakdown was provided, however, of exactly comparable numbers).

Table 2 assembles some future projections of elderly eligibles and costs of LTC in Japan. These rely on historical data for the number of elderly requiring LTC in Japan during the 1990s (see Table 3). Of course, utilization patterns could well be higher since the current LTC program only went into effect in 2000; in view of population aging and likely increased demand for LTC services, an extrapolation of historical trends may underestimate future LTC costs. Table 4 reports the official projections of the number of elderly expected as of 2025 as well as the number of frail, bedridden, weak, and those expected to need LTC services at that point.

Using these numbers, one may try to bound the range of estimates for aggregate LTC costs in Japan by 2025. On the assumption that care prices remain constant over time and that the share of users does not change, total costs would rise by virtue of population aging alone from ¥5.2 trillion currently to reach ¥9 trillion (AJFNHIO, 2002). If, instead, at-home and institutional user prices are fixed, but the share of at-home users rises at historical rates, projected expenditures would exceed ¥10 trillion.

Further, allowing both the number of at-home users and the price of home care (but not institutional care) to rise at historical rates would boost total estimated costs to ¥26 trillion. Finally, the estimates would be much higher if both price and utilization rates for institutional users were projected to rise at historical rates. Microeconomic panel data will be required to refine these projections, permitting the development of statistical transition matrices between health status categories influencing healthcare utilization and cost patterns. $ ^{10} $

## Regional Differences in Dependency, Capacity, Utilization and Costs

One interesting aspect of the Japanese LTC system is that some aspects are highly centralized, while others are quite decentralized. The central government requires that LTC services can only be provided by non-profit nursing homes and hospitals, whereas home-care services may also be provided by private for-profit firms. Prices of services and units of care are also set by the central government. Each municipality – of which there are 3,200 – then decides which people are eligible for what kinds of
care. $ ^{[11]} $ Municipalities set premium levels for LTC at the local level, and they also collect premiums from workers and retirees in their locales. And finally, the “insurance carriers” of this long-term coverage are the municipal governments which in turn approve the care providers. In the case of at-home care, these include local government service organizations and non-profit outfits and more recently, for-profit firms. Since fees are set centrally, providers are intended to compete based on quality of care, though it is not yet known whether consumers and their families are able to judge, and act on, the information provided.

A consequence of this “decentralized yet centralized” approach is that there are important regional differences in provision and capacity. Each community has different income and age structures, which results in sharply different utilization patterns by region, as is shown in Figure 1 and Table 5, derived from data provided by the All-Japan Federation of National Health Insurance Organizations (AJFNHIO, 2003). $ ^{12} $ While the percentage of elderly as a fraction of the Japanese working-age population (defined as 15-64) averages 31%, this dependency ratio varies across prefectures from a low of 19% to a high of 43%. Also there are substantially different concentrations of elderly requiring services across the country, meaning some local areas are more likely to confront serious financing problems than others. For example, elderly entitled to LTC services amount to only 4% of the working-age population overall, and 14% of the elderly population. Nevertheless the range is again large, from 2 to 7% of the working-age group, and from 12 to 18% of the elderly. Figure 1 groups the 47 Japanese prefectures by region, and the graphic makes clear that there is substantial regional unevenness in terms of where the elderly live, with higher concentrations in the southern regions of the nation and lower rates in the Kanto region. Entitlement ratios, on the other hand, are more even suggesting some implicit rationing.

Evidently the elderly in Japan, as in many other nations, are not dispersed evenly across the land. This is, in part, because many elderly remained behind in the rural sector when their children moved to the cities in search of work. In the future, the elderly may become increasingly concentrated in a few prefectures: for instance, Doteuchi (2003) suggests that the largest growth in elderly populations