Rest homes in Japan juggle financial solvency and resident well-being
Although vaccination of the elderly is accelerating in Japan, the country’s elderly continue to be particularly at risk from COVID-19, both directly and indirectly. Japanese public broadcaster NHK is running a series of special reports on how the pandemic is ‘changing the world’, and the May 23 installment was for eldercare services. The program targeted the government kaigo hoken (health care insurance) introduced in 2000 and to which anyone aged 40 and over contributes. Although the problems inherent in the system have been discussed previously, the pandemic has exacerbated them, making them even more apparent as the well-publicized aging of Japanese society has yet to reach its peak. The demand for services will increase over the next decade, even if the healthcare insurance system collapses.
So far, media coverage has focused on the lack of caregivers due to low wages and difficult working conditions. One of the sectors most affected by the pandemic is that of establishments for residents, which very early on became hotbeds of hotbeds of infection, thus bringing to the fore one of the main objectives of the caregiver insurance system, which is to encourage and promote home care, where the elderly can be cared for by family members or contract “home helpers”. The main idea behind health insurance was to reduce the pressure on national health insurance in order to reduce public spending.
As NHK pointed out, the need for such workers has not suddenly abated with the spread of the coronavirus. Even with the state of emergency, home helpers are expected to make their usual rounds to check the elderly’s loads and meet their needs, which, in addition to giving baths and changing sheets, often includes shopping and cleaning.
In one scene from the show, a contracted homemaker calls the local administrative office and informs the manager that her husband has tested positive for COVID-19, and although she herself is asymptomatic, she understands that she is must isolate himself. The office manages around 20 home helpers who take care of around 100 elderly people. Losing one means having to juggle schedules and divert other assistants to different addresses. Ideally, an assistant makes five or six visits a day, but with the pandemic some make 15 or 16 a day without additional pay or additional assistance. NHK follows a middle-aged assistant who rides her bike to clients’ homes in the pouring rain. She works from 8 a.m. to 6 p.m. non-stop.
The pandemic has been even more damaging to senior day care centers, which seniors go to for care they may not be able to receive at home. NHK showcased a small private facility in Kamakura, Kanagawa Prefecture, which had to close last June due to financial problems caused by the pandemic. Set up to accommodate eight people at a time with a staff of four, the facility tried to make do by serving four people, but their income, paid by the care insurance system according to the number of patients, were not enough. The owner is now considering starting from scratch at a new facility, as the government subsidizes renovations that discourage the spread of viruses. He asked for 1.5 million yen, but was refused without explanation. Since he was made to understand that the government preferred his kind of smaller service to reduce pressure on large institutions, he was intrigued by the response.
The monthly premium for health care insurance in 2000 was ¥ 2,911 per month. By 2040, it will be 9,000 yen per month, and the total cost of health care services will be 25 trillion yen, up from 3.2 trillion yen in 2000. The system is estimated to be under 380,000 caregivers. by 2025. The government must either charge more for premiums or reduce services.
The government’s plan applies market principles to a public health issue, since the primary goal is to save money overall. If so, perhaps it should rely more on the private sector, which in this case is trying to take advantage of the situation. Various foreign investment funds are interested in purchasing elderly care facilities in Japan in order to make them profitable by rationalizing costs through consolidation.
A May 25 Asahi Shimbun article reports funds buying majority shares in senior care companies. The idea is to buy a listed company, write it off, improve its management and then put it back on the stock market for a considerable profit. In some cases, the fund has tripled the value it paid for the business. Improving profitability is a matter of scale. The funds support care businesses, consolidate them, buy supplies wholesale, negotiate facility rents, and hire help through employment agencies.
The risk for the funds is almost zero. As one fund manager at the Asahi Shimbun said, the government, through the care insurance system, pays a set amount per person depending on the service, so the care company has guaranteed income. However, a finance ministry official said it would be better if there was a “difference” in the amount the government pays these companies “according to their size.” In other words, what is good for these funds is not necessarily good for the government or for the people who contribute to the caregiver insurance system.
Will these companies improve the service? At this point, it’s hard to say, but private equity firms in the United States have been buying and running retirement homes for years, and the the results have often been tragic: Higher death rates due to downsizing and draconian care methods, all in the name of increased profitability.
In Japan, private retirement homes are still a luxury, but the business model that investment funds use in Japan for care services is the same as that used by investment funds in the United States. Obviously, the government needs to keep a close eye on these businesses, but at the moment their primary concern appears to be financial solvency rather than the well-being of seniors.
Visit www.philipbrasor.com for addenda to Media Mix contributions.
In a time of both disinformation and too much information, quality journalism is more crucial than ever.
By subscribing you can help us tell the story well.