How Japan Prepared to Care for Its Rapidly Aging Population

japan

As far back as the early 1960s, the government became aware of the imminent ageing problem and began to establish nursing homes and home helpers. In the 1970s, benefits for retirees were more than doubled and a system of virtually free healthcare for older people was established. In 1990, Japan introduced the “Gold Plan”, expanding long-term care services. Ten years later, it started to worry about how to pay for it, and imposed mandatory insurance for long-term care. All those over 40 are obliged to contribute. The scheme’s finances are augmented with a 50 per cent contribution from taxes and recipients are charged a co-payment on a means-tested basis. Even then, there have been financing problems and the government has had to scale back the level of services provided. Still, Campbell calls it “one of the broadest and most generous schemes in the world.”

As a result of these and other adaptations, he argues, Japan has struck a reasonable balance between providing care and controlling costs. Other countries, including Britain, have studied Japan closely for possible lessons. Of course, 15 years of deflation have left Japan’s overall finances in lousy shape, with a public debt-to-output ratio of 240 per cent, the highest in the world. Spending on healthcare per capita, however, is among the lowest of advanced nations, though outcomes are among the best. That is partly down to lifestyle. Most Japanese eat a healthy, fish-based diet and consume less processed food and sugary drinks than westerners. Obesity is far less common. So are violence and drug abuse. But even taking into account such factors, Japan gets a big bang for its healthcare buck. Every two years, the government renegotiates reimbursement fees with doctors, hospitals and pharmaceutical companies, routinely imposing restraints or reductions. Primary care is given priority over specialist treatment: the Japanese visit the doctor far more often than Americans but receive far fewer surgical interventions.

In the Financial Times, David Pilling looks at Japan’s aging population and what the country has done to take care of their elders. More stories about Japan.

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Photo: George Alexander

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Mike Dang
Mike is the managing editor at Longreads, and the editor of The Billfold. He has written for Bloomberg Businessweek, Pacific Standard, and the Chicago Tribune, among other publications.