Containing Health Care Costs in Japan

14 Comparison of Long-Term Care for the Elderly between Japan and the United States

CHAPTER 14 Section IV Institutions and Costs Comparison of Long-Term Care for the Elderly between Japan and the United States Naoki Ikegami and Takeshi Yamada SUMMA RY Despite commonly held beliefs to the contrary, the institutionalization rates of the elderly in Japan and the United States are identical. The severity of the disability of those institutionalized also appears to be of about the same level. The total monthly work hours of institution staff per 100 residents/patients is about 10% more in the United States due to the fact that more aides are employed. However, the costs (using the purchasing power parity [PPP] rate) are about the same because higher wages are paid to aides in Japan. There are more physicians in Japanese institutions because the hospital is the primary organization for providing long-term care (LTC), but whether this translates into better care is doubtful. The physical facilities are in general inferior to those in the United States, as are the efforts made to maintain quality control. The LTC system in Japan is a result of disjointed measures made by the government to solve an immediate problem. While the situation in the United States leaves much to be desired, the 1987 OBRA legislation and the case-mixed-based form of reimbursement can serve as models for Japan to pursue. Background From the point view ofthe average American, one ofthe reasons for Japan's lower health care expenditures would appear to lie in the difference in the provision of LTC for the elderly. It is a commonly held belief in the United States that the elderly in Japan are well taken care of by their children and, as a consequence, require far less formal support. On the other hand, Americans themselves feel that the disintegration ofthe family has made informal care very difficult to provide in the United States. The objective of this paper is to point out not only that these assumptions are mistaken, but also that LTC may tum out to be more costly in Japan, especially when the quality of service is taken into consideration. 155 Section IV Institutions and Costs CHAPTER 14 Comparison of Long-Term Care for the Elderly between Japan and the United States Naoki Ikegami and Takeshi Yamada SUMMARY Despite commonly held beliefs to the contrary, the institutionalization rates of the elderly in Japan and the United States are identical. The severity of the disability of those institutionalized also appears to be of about the same level. The total monthly work hours of institution staff per 100 residents/patients is about 10% more in the United States due to the fact that more aides are employed. However, the costs (using the purchasing power parity [PPP] rate) are about the same because higher wages are paid to aides in Japan. There are more physicians in Japanese institutions because the hospital is the primary organization for providing long-tenn care (LTC), but whether this translates into better care is doubtful. The physical facilities are in general inferior to those in the United States, as are the efforts made to maintain quality control. The LTC system in Japan is a result of disjointed measures made by the government to solve an immediate problem. While the situation in the United States leaves much to be desired, the 1987 OBRA legislation and the case-mixed-based fonn of reimbursement can serve as models for Japan to pursue. Background From the point view ofthe average American, one ofthe reasons for Japan's lower health care expenditures would appear to lie in the difference in the provision of LTC for the elderly. It is a commonly held belief in the United States that the elderly in Japan are well taken care of by their children and, as a consequence, require far less formal support. On the other hand, Americans themselves feel that the disintegration ofthe family has made informal care very difficult to provide in the United States. The objective of this paper is to point out not only that these assumptions are mistaken, but also that LTC may turn out to be more costly in Japan, especially when the quality of service is taken into consideration. 155 156 IV: Institutions and Costs Is There a Difference in the Demand for LTC? The basis for the belief that the elderly are looked after well by their children probably comes from the idea that Japanese society is steeped in the Confucian tradition that stresses filial obligation. The three-generation patriarchal...