現代日本老人住宅產業營運模式之研究 - 政大學術集成

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(1)國立政治大學商學院企業管理學系研究所碩士學位論文. 現代日本老人住宅產業營運模式之研究 A Study of Business Model Analysis on Today’s Japanese Elderly Housing Industry. 指導教授：林月雲. 博士. 研究生：樂野鷹輝. 中華民國 106 年 3 月.

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(3) Acknowledgement. First and foremost, I would like offer my sincerest gratitude to Professor. Lin for her continuous support and guidance of my MBA research, for her patience, motivation, and immense knowledge through the learning process of this master thesis. I could not have imagined having a better advisor and mentor than her for my MBA study. Besides my advisor, I would also like to thank everyone who supported me throughout the courses of this MBA project. I am thankful for their aspiring guidance, invaluably constructive criticism and friendly advice and cooperation during the project research. I am sincerely grateful to them for sharing their truthful and illuminating views on a number of issues related to the project. I would also like to thank all the participants of the four companies in my survey, who have willingly shared their precious time during the process of interviews. Without their valuable supports, it would not be possible to conduct this MBA research project. Last but not the least, I would like to thank all the people who I met in Taiwan for supporting me spiritually throughout life in Taiwan to pursue my MBA degree..

(4) Abstract The aging of Japan outweighs all other nations, as the country is purported to have the highest proportion of elderly citizens resulting from increase of life expectancy due to improvements in medicines and nutrition coinciding with rapid population growth after the World War II. The growing share of elderly people coinciding with changes of family structure and function, people’s lifestyle, fertility rate, and economic as well as sociocultural factors have resulted in a sharp decrease of the traditional three generation households in the last few decades. Nation’s rapid declines in mortality and fertility result in increasing public expenditure for public social welfare while decreasing tax revenue paid by working population. As a result, Japanese social welfare system needs to be restructured, and some social welfare programs need to be outsourced to external business entities to correspond to the nation’s super aging society. In the past, Japanese institutional long-term care facilities largely served for either low-income class people or upper-income class people, and majority number of middleincome class elderly citizens had stayed at home and received family’s living supports. However, large number of today’s and future Japanese middle-income class elderly people are required to live on their own as a result of complex sociocultural factors, such as decrease number of family care taker and changing attitude toward taking care of older parents. Besides, elderly abuse problem, forced healthcare treatments, socially abandoned elderly, and fraud and dispute by elderly care service providers have been major social problems in longterm care service business industry. In order to solve the stated problems, Japanese government restructured law and regulation standard for elderly housing business served mainly for middle-income class agedcitizens in 2011. In order to seize a great investment opportunity and public subsidies to operate business, numerous business entities from numerous types of industry have entered into the elderly housing industry. In a short period of time since new system started, some companies gained success, while others faced problems and left the industry. This study analyzes the industry’s problems and characteristics as well as four case companies from the perspectives of business management theory. In this study, industry analysis model is based on Michael Porter’s five forces model, and case companies are analyzed using Alex Osterwalder’s business canvas model as well as Michael Porter’s SWOT analysis..

(5) Based on the study, it is found that delivering right values to target customer groups and building key partnerships with local businesses are especially important factors to make company’s business model more effective for today’s Japanese elderly housing business. Unlike institutional care services provided for socially vulnerable groups in the past, the customer groups of elderly housing are middle-income class and have different demands toward residential services. Moreover, threat of new entrants of this industry becomes higher and industry competition is expected to be growing continuously. Besides, developing unique living support services and preventive care services can be major revenue streams of business as well as a strong competitive advantage over others. Therefore, developing services from customer’s perspective and making a long-lasting relationship become more important to operate residential service business for the elderly in today’s changing Japanese elderly customer’s demands and industry environment..

(6) Table of Contents Chapter 1 Introduction ............................................................................................................... 1 1.1 Research Motivation and Background ............................................................................. 1 1.2 Research Objectives and Questions ................................................................................. 5 1.3 Research Procedure .......................................................................................................... 6 Chapter 2 Literature Reviews .................................................................................................... 7 2.1 Industry Analysis.............................................................................................................. 7 2.1.1 Introduction ............................................................................................................. 7 2.1.2 Study of Today’s Japanese Elderly Housing ........................................................... 8 2.1.3 Industry Profile ...................................................................................................... 13 2.1.4 Industry Problems that Induces the Demand of Elderly Housing Service ............ 24 2.1.5 Summary ............................................................................................................... 43 2.2 Business Model Analysis ............................................................................................... 43 2.3 Porter’s Five Forces Analysis ...................................................................................... 58 Chapter 3 Research Methods ................................................................................................. 61 3.1 Research Methodology ................................................................................................... 61 3.2 Selection of Companies .................................................................................................. 62 3.3 Data Collections ............................................................................................................. 63 3.4 Research Limitations ...................................................................................................... 65 Chapter 4 Industry Competition Analysis .............................................................................. 66 4.1 Structural Analysis of Japanese Elderly Housing Industry ............................................ 66 4.1.1 Threat of New Entrants ......................................................................................... 66 4.1.2 Intensity of Rivalry among Existing Competitors ............................................... 68 4.1.3 Threat of Substitutes. .......................................................................................... 71. 4.1.4Bargaing Power of Buyers ................................................................................... 72 4.1.5 Bargaining Power of Suppliers ........................................................................... 74 4.2 Summary ........................................................................................................................ 75.

(7) Chapter 5 Case Study: Cocofump Hiyoshi ............................................................................. 79 5.1 Company Background .................................................................................................... 79 5.2 Business Model Analysis ............................................................................................... 81 5.3 SWOT Analysis.............................................................................................................. 92 5.4 Conclusion ...................................................................................................................... 97 Chapter 6 Case Study: Suncity Group Housing ..................................................................... 98 6.1 Company Background .................................................................................................... 98 6.2 Business Model Analysis ............................................................................................. 101 6.3 SWOT Analysis............................................................................................................ 113 6.4 Conclusion .................................................................................................................... 117 Chapter 7 Case Study: Smart Community Inage .................................................................. 120 7.1 Company Background .................................................................................................. 120 7.2 Business Model Analysis ............................................................................................. 123 7.3 SWOT Analysis............................................................................................................ 133 7.4 Conclusion .................................................................................................................... 137 Chapter 8 Case Study: Showa no Yahisro ............................................................................ 139 8.1 Company Background .................................................................................................. 139 8.2 Business Model Analysis ............................................................................................. 141 8.3 SWOT Analysis............................................................................................................ 148 8.4 Conclusion .................................................................................................................... 151 Chapter 9 Research Conclusion and Recommendations ....................................................... 153 9.1 Research Conclusion .................................................................................................... 153 9.2 Recommendations ........................................................................................................ 162.

(8) List of Tables Table 1.1: The Number of Registered Elderly Housing with Supportive Living Services ....... 4 Table 2.1: Registration Standard of Elderly Housing with Supportive Services ....................... 9 Table 2.2: History of Japanese Social Welfare Law and Residential Services for the Elderly 15 Table 2.3: Summary of Japanese Long-term Care Services and Residential Services ............ 17 Table 2.4: Financial Anxiety of Retirement Life ..................................................................... 22 Table 2.5: Summary of Public Subsidiary for Elderly Housing Business ............................... 23 Table 2.6: Summary of Long-term Care Service Facility’s Single Unit Room ....................... 38 Table 2.7: Number of Elderly Abuse Victims in Japan in 2014 ............................................... 40 Table 2.8: Selected Business Model Definitions ..................................................................... 45 Table 2.9: Nine Building Blocks of Business Activities .......................................................... 48 Table 2.10: Elements of Value Creations ................................................................................. 51 Table 2.11: Types of Customer Relations ................................................................................ 53 Table 2.12: Porter’s Generic Strategies ................................................................................... 59 Table 3.1: Case Housing’s Basic Information ......................................................................... 63 Table 5.1: Company’s Profiles ................................................................................................. 80 Table 5.2: Cocofump Hiyoshi’s Revenue Streams ................................................................... 87 Table 5.3: Cost Structures of Cocofump Hiyoshi ..................................................................... 91 Table 6.1: Company’s Profiles ............................................................................................... 101 Table 6.2: Cost Structures of Suncity Group Housing ........................................................... 112 Table 7.1: Company’s Profiles ............................................................................................... 122 Table 7.2: Cost Structures of Smart Community Inage ........................................................ 133 Table 8.1: Company’s Profiles ............................................................................................... 140 Table 8.2: Cost Structures of Showa no Yashiro .................................................................. 147 Table 9.1: Summary and Comparison of Business Model Analysis of Four Companies ...... 154 Table 9.2: Summary of Company’s Information and Customer Segmentation ..................... 157.

(9) List of Figures Figure 1.1: Japanese Population Transition ............................................................................... 2 Figure 1.2: Transition of Number of Elderly Housing with Supportive Services ..................... 4 Figure 2.1: Basic Service System of Elderly Housing ............................................................. 10 Figure 2.2: Transition of Japanese Public Healthcare Expenditures........................................ 16 Figure 2.3: Elderly’s Residential Services Options based on Physical Condition .................. 19 Figure 2.4: Transition of Japanese Population Composition 1940-2060 ............................... 20 Figure 2.5: Financial Savings of over 65 Years Old Japanese Elderly .................................... 21 Figure 2.6: Elderly People’s Purpose of Financial Savings ..................................................... 22 Figure 2.7: Japanese Elderly Citizen’s Average Financial Income.......................................... 22 Figure 2.8: Polarization of Residential Services for the Elderly (1980-1990s) ....................... 26 Figure 2.9: Research Result about Willingness to Live with Parents ...................................... 27 Figure 2.10: Japanese Elderly’s Social Hospitalization Factors .............................................. 29 Figure 2.11: Number of Reported Elderly Abuse in Facility Nationwide ............................... 41 Figure 2.12: Number of Reported Elderly Abuse at Home Nationwide .................................. 41 Figure 2.13: Relations of Business Model’s Nine Building Blocks ........................................ 49 Figure 2.14: Channel Mix ........................................................................................................ 52 Figure 2.15: Porter’s Generic Strategies .................................................................................. 59 Figure 3.1: Five Forces Framework of Japanese Elderly Housing Industry............................ 70 Figure 5.1: Organizational Chart ............................................................................................. 80 Figure 8.1: Showa no Yashiro Organizational Revenue Generation Model .......................... 144.

(10) Chapter 1. Introduction 1.1. Research Background and Motivation Based on the World Health Organization (WHO), the chronological age of 65 years. old is widely accepted as a definition of ‘elderly’ or ‘older person’ in most developed countries because the age is about equivalent to retirement ages in those nations. In Japan, this over 65 years old age group used to have a small portion to the total population and Japanese government could support their livings through providing various financial supports, including public medical insurance, long-term care insurance, pension payment, and some public assistances for the low-income people. However, as a result of low birthrate, longevity, and aging of large population of baby boomer, it became financially difficult to support the livings of elderly people by Japanese government alone, so some of those public living assistance services need to be outsourced to private businesses and those fees must be paid by civilians. An aging issue of Japan is considered to outweigh all other counties, as the nation is purported to have the highest elderly citizens proportion among the other age groups. Based on a Cabinet Office, Government of Japan’s report, the year of 2015’s elderly population whose age is equal to and over 65 had reached 33.92 million which represents 26.7% of Japanese population, and this ratio is expected to increase to 39.9% in 2060 (Cabinet Office, Government of Japan 2016). Although Japanese elderly population is expected to grow in a very rapid pace and the public social welfare system is expected to be deteriorated, there are not enough housings with supportive services for elderly people unlike western countries such as Denmark and the United Kingdom. Extension of average life span of Japanese population also contributed to nation’s aging issue which is resulted from advancement of medical technology and improvement of public social welfare system as well as nation’s standard of living. In 1990, the average life. 1.

(11) span of Japanese people was 75.92 years old for man 81.9 years old for woman while the average life span increased to 80.79 years for man and 87.05 years old for woman in 2015 (MHLW 2016). Average life span of Japanese citizens is expected to be risen to 83.55 years old for man and 90.29 for woman in 2050 according to the report of the Cabinet Office, Government of Japan. Japanese current social welfare system cannot function well because it was made during the time when both population and economy were growing, which was projected to be operated under one elderly person’s life was assisted by about 6 working age people’s tax payment. As a result, the nation’s social welfare service for one elderly civilian may be financed by 2 working people’s tax payment in 2020 and 1.3 working age people’s tax payment will support one elderly person in 2050 based on government’s estimation (Cabinet Office, Government of Japan 2016).. Figure 1.1: Japanese Population Transition. 1 http://www8.cao.go.jp/kourei/whitepaper/w-2014/zenbun/s1_1_1.html 2 http://www8.cao.go.jp/kourei/whitepaper/w-2015/gaiyou/pdf/1s2s_1.pdf. Source: White Paper on Elderly Care, Cabinet Office of Japan (http://www8.cao.go.jp/kourei/whitepaper/w-2015/gaiyou/pdf/1s1s.pdf). Broadly speaking, there were only three types of residential services for elderly people; 1) fee-based nursing home for upper-income elderly citizens that was operated by. 2.

(12) private business and 2) public long-term care facilities and 3) medical institution’s bed room mainly served for low income elderlies that require free or low-cost service fee. Since those public elderly care facilities prioritize the application by low-income people, middle-income elderly had few chances to use those services and medical and healthcare treatments’ pricing models were also varied based on patient’s income level. Therefore, taking care of aged parents at home had used to be a common practice for Japanese middle-income class people, which was usually a duty of wife of oldest brother. However, nation’s social thought has changed and major number of people are not willing to live with their aged-parents due to variety of reasons today while more and more elderly people wish to spend their last moment at house instead of a facility or other people’s house (Cabinet Office, Government of Japan 2016). In addition to the shortage of public long-term care facilities for middle-income class elderlies, Japanese government has had troubles to finance the social welfare system resulting from growth of elderly population under declines of working population and numerous inappropriate uses of public social welfare systems. As a solution of nation’s aging issue, Japanese government has provided various financial subsidies to private business to help them participate in the elderly housing business industry to support their retirement life. Due to a number of complex and social factors, the number of elderly housings has increased dramatically in Japan since 2011 with new entrants into a market from different industry backgrounds aiming to seize a great investment opportunity. Although the number of elderly housings has increased in a rapid pace every year, there are numerous problems in this industry, including deterioration of business and increasing customer disputes and issues of elderly abuses (MHLW 2015). In today’s business environment, a business needs to deeply understand how company’s internal resources and external business factors will develop unique competitive business model in order to maximize its financial performance.. 3.

(13) Figure 1.2: Transition of Number of Elderly Housings with Supportive Services. Source: Federation of Housing & Community Center. Table 1.1: The Number of Registered Elderly Housing with Supportive Living Services Building. Room. number. number. Hokkaido. 412. 16,653. Aomori. 103. 2,517. Iwate. 78. Miyagi. Area. Building. Room. number. number. Ishikawa. 52. 1,739. Fukui. 50. 1,446. 1,761. Yamanashi. 63. 1,258. 117. 3,239. Nagano. 102. Area. Building. Room. number. number. Okayama. 106. 3,188. Hiroshima. 211. 6,879. Yamaguchi. 127. 3,293. 2,810. Tokushima. 67. 1,916. Area. Akita. 65. 1,623. Gifu. 97. 2,624. Kagawa. 68. 2,151. Yamagata. 58. 1,326. Shizuoka. 137. 4,596. Ehime. 150. 3,938. Fukushima. 99. 2,615. Aichi. 241. 8,341. Kouchi. 25. 863. Ibaraki. 189. 4,480. Mie. 173. 5,049. Fukuoka. 206. 8,245. Tochigi. 124. 3,822. Shiga. 78. 1,962. Saga. 21. 561. Gunma. 155. 4,617. Kyoto. 114. 4,124. Nagasaki. 110. 2,806. Saitama. 330. 11,828. Osaka. 550. 21,371. Kumamoto. 108. 2,877. Chiba. 244. 8,634. Hyogo. 298. 10,902. Oita. 67. 215. Tokyo. 299. 11,648. Nara. 55. 1,884. Miyazaki. 29. 1,047. Kanagawa. 281. 10,828. Wakayama. 102. 2,526. Kagoshima. 87. 2,120. Niigata. 92. 2,628. Tottori. 42. 1,397. Okinawa. 75. 2,415. Toyama. 74. 1,794. Shimane. 46. 1,530. Total. 4,177. 132,527. Source: Federation of Housing & Community Center (2016). 4.

(14) As the industry becomes more competitive and the number of new entrants from different industry increases, numerous numbers of unique business models appeared in the market to gain a sustainable competitive advantage over other companies. This study mainly focuses on analyzing the four types of elderly housings’ business models based on the use of several business theories.. 1.2. Research Objectives and Questions This paper will examine the business models and key internal and external factors of. four Japanese elderly housing businesses and analyze how industry’s history and Japanese sociocultural factors has contributed to the emergence of today’s residential services for the elderly citizens. For further understanding of different management methods and developing possible strategies as a future reference, each of four case elderly housings has its unique business model and service characteristic to satisfy distinct customer segments. Those housings’ information was gathered through conducting onsite interviews, telephone interview, emails and referring related-articles and public researches and statistical data. Based on this analysis, this study proposes possible business frameworks and recommendations. This research has the following three main questions: 1. How company’s business model can create value to today’s elderly people? 2. How do industry’s environmental factors influence company’s business? 3. How do company’s resources and expertise develop its competitive advantages over its competitors?. Although there are several articles discussing about elderly housing services and operation methods for potential entrepreneurs, existing companies, and potential customers, there are few researches analyzing and evaluating elderly housing business using analysis models of both business model and the relationship of industry’s internal and external factors. 5.

(15) and today’s company’s businesses.. 1.3. Research Procedure This paper begins with the discussion of research motivation and its purposes, and. introducing literature reviews that discuss Japanese industry background and the analysis model using nine business blocks which proposed by Osterwalder and Pigneur (2010). Based on the analysis model, four different companies’ business models and their internal and external factors are analyzed. Based on the analysis of the stated four companies, the research results are summarized and conclusions and recommendations are proposed as references for potential investors who plan to start residential service business for the elderly. Research Motivation. Research Question and Objectives. Literature Review  . Industry Analysis Business Model Theory Analysis.  . Business model analysis SWOT analysis. Case Study. Summarizing researches. Recommendation and Conclusion. 6.

(16) Chapter 2. Literature Review 2.1 Industry Analysis 2.1.1 Introduction New type of elderly housing with supportive services has started to have high profile in Japan since the end of 2011 in order to respond to expected market’s great expansion of the residential services for the elderly accompanied with rapid growth of elderly population, expected deterioration of public social welfare, and sociocultural changes. This new type of housings for the elderly is different from the services dominated the market in the past: 1) luxury fee-based nursing retirement homes, 2) public long-term care facilities for the lowincome class, and 3) medical institution’s long-term hospitalization service. In those days, middle-income elderly citizens could not use neither of those facilities’ services due to several factors such as financial restriction, social prejudice, and poor quality of living environment. As a result, middle-income elderly citizens have had few opportunities to use those public long-term care facility services and private business owned nursing homes and receive living assistances for their daily activities from either family. However, the demand toward elderly housing for middle-income elderly people has been rapidly growing in today’s Japan due to complex sociocultural factors and expected deterioration of public social welfare system which has been mainly used to support agedperson’s retirement life. As a result, numerous numbers of private business firms from different industries entered into this elderly housing industry in order to seize a great investment opportunity since 2011. Japanese government’s subsidy programs have also contributed to the rapid increase in those business’ participation into the industry as it is discussed in the later chapter. The following sections will discuss fundamental background information of today’s elderly housing, its industry’s background, and how the issues of residential care services for. 7.

(17) the elderly has led the emergence of new services for the elderly people which had been paid less attention.. 2.1.2 Study of Today’s Japanese Elderly Housing A) Definition of Today’s Japanese Elderly Housing with Supportive Living Services First of all, the definition of “elderly housing with supportive services” is specified in order to avoid confusion of residential services between fee-based nursing home and public long-term care facility which is described as follows: Newly established Japanese elderly housing with supportive services is defined as a housing which must be a publicly registered barrier-free housing which aims to provide secured residential environment for aged-citizens in their accustomed communities through coordinating with care facilities and medical institutions (Act on Elderly Person‘s Housing, passed April 17, 2011 , joint jurisdiction by the Ministry of Land, Infrastructure and Transport (MILT)and the Ministry of Health, Labor and Welfare). The table below shows the registration standard to operate an elderly housing which is specified by MILT.. 8.

(18) Table 2.1: Registration Standard of Elderly Housing with Supportive Services. Requirement of residents. Room size Facility. 1. Single elderly family - a person with more than 60 years old or a person in a condition of need for either long-term care or support 2. Elderly + his/her family (spouse, relative with more than 60 years old, or relative who requires long-term care or support) 1. Room size should exceeds 25 square meter in principle 2. Room size with more than 18 square meter is permitted only if there are shared space for living room, kitchen, dining room, and other spaces 1. Each room needs to equip a kitchen, flush toilet, storage facility, and bathroom 2. Housing must be barrier-free structure. Service. 1. Housing must provide safety-check and life-consultation services - Either a staff of social welfare corporation, medical corporation, or qualified housing service organizaion or a doctor, nurse, care worker, social worker, long-term care specialist, or a person finished the basic training course of care worker program is required to offer services during daytime - Beside daytime, organizer can outsource the service to an emergency communication system. Contract. 1. Contract must be paper-based 2. Housing information must be clearly stated on the contract form 3. Contract must not include a premium agreement and the payment information except security deposit, rent, service fee, and advance payment fee for service. 4. Contract must not be cancelled without the contractor's agreement due to the reasons of resident's hospitalization or change in their physical condition 5. Any fees must not be received from residents before housing construction is finished.. Source: Ministry of Land、Infrastructure and Transport’s website (http://www.mlit.go.jp/jutakukentiku/house/jutakukentiku_house_tk3_000005.html) A major purpose of this registration standard listed above is aiming to prevent fraud and misunderstanding regarding the leasing contract between service user and provider since the issue of forced deportation of room without resident’s consent, forced usage of unnecessary services to residents, and monetary issues happened in the past. As the table shows, there are no restriction on participant’s business service types to start the residential service, so any companies are accepted to engage in elderly housing business as long as their residential services and structure satisfy the public regulation standard and provide at least services of safety-check and living consultation for a resident. In. 9.

(19) other words, today’s elderly housing has a high degree of flexibility in developing distinctive business methods and service models. The illustration below shows the basic service system that an elderly hosing should develop in order to provide safe and secured residential services for its customers. As it will be stated in the later section of this chapter, some services can be outsourced or provided inhouse depending on each company’s expertise and business model to satisfy its customers.. Figure 2.1: Basic Service System of Elderly Housing. Source: Summarized by the Author. B) Distinctive Characteristics of today’s Elderly Housing with Supportive Services Every aged-person might have his/her unique problems in their retirement living and seeks for possible solution which can satisfy those distinctive problems. In order to be competitive in the industry, each company needs to develop unique services and business model that are correspond to its targeting customer segment based on their expertise and strengths and analysis of each area’s demographic and geographical factors since each area may have different characteristics. Today’s Japanese elderly housing can be broadly divided into five types stated as follows (Medical Management Planning Group, 2011):. 10.

(20) -. Independent living housing This type of housing might be a potential residential service option for those who have few age-related problems but are highly concerned about the security and safety of their independent livings. Based on the Comprehensive Survey of Living Conditions conducted by Ministry of Health, Labour and Welfar in 2010, approximately 10 million households aged over 60 should be categorized into this customer segment (coupled household 4.87 million, one-person household 5.01 million) and the number of customer segment is expected to be growing in the next few decades. The average age of this customer segment tends to be younger than the other older adult’s groups and some of this age group are more willing to acquire the services that can prevent or extend the potential age-related problems in addition to the security and safe living support services. Healthcare services and others can be outsourced to the third-parties since those services should not be frequently used.. -. Long-term care intensive housing This type of housing mainly serves for the people who require living assistances for the activities of daily living. This type of housing is often a secondary option for elderly citizens those who are perceived to be disqualified to stay in a public long-term care facility due to their income restriction and ambiguous qualification judged by each facility based on each elderly applicant’s physical condition, living condition, and possession of a qualified caregiver to assist his/her daily activities at home. A public research data shows there might be 523,584 people having similar problem in Japan in 2013 (MHLW 2014).. -. Medical care intensive housing This housing is mainly for the elderly people who require dedicated medical care treatment in order to sustain their lives but they are unable or unwilling to stay in hospital. 11.

(21) for some reasons. Because Japanese government will abolish the system of medical longterm stay care sanatorium and rehabilitation centers by 2017 due to increasing financial burden for the social welfare. The demand toward this type of medical care intensive housing is expected to be increased greatly. However, the government’s policy to abolish the long-term stay in the medical institutions receive numerous complaints from both civilians and medical institutions, therefore, the future trend of the market and government policy change should be paid close attention. -. Dementia care intensive housing. This type of housing is concerned to have a greater demand as a substitute of public dementia care facility. This type of care service would be outsourced to private businesses in order to cut the social welfare expense for future aging society. Operating this type of care facility would be more difficult than the other types of residential services for the elderly since a company needs to have adequate level of facility setting and dementia care professionals. The risk of lawsuit resulting from resident’s injury or disappearance as well as employee’s physical and mental burdens are very high.. -. Composite community-based residential facility This type of residential facility has started to be paid a greater attention in Japan as a new style of elderly housing in which a number of aging care needs. From assisted living, nursing home care, to independent living, the housing possesses all services in a single residence to provide lifelong residential service for aged customers regardless of changes in physical conditions. In this composite facility, each type of residential services is usually provided separately such as on a different floor, in physically adjacent buildings, or in an independent building in the close area. This type of facility usually provides long-term preventive healthcare services, which aims to prevent age-related diseases and extend heathy physical and mental conditions, which in turn may result in decreasing multiple different risk factors and. 12.

(22) causes resulting from diseases for senior residents and potentially decreasing the government’s social welfare service expenses as a result of having healthier aged-adults. Development of large-scale retirement community also brings a lot of advantages to a local community such as creating jobs, increasing population, and regional consumption level.. 2.1.3 Industry Profile A) Industry History Background Japanese residential service for the elderly started as a public assistant program since the Public Assistance Act 1950.The Act aimed to guarantee a minimum standard of living as well as to promote self-support for all low-income people through providing necessary public assistance based on the poverty level. In those days, Japan have neither public pension program nor social insurance program and it was only a decade after the World War II. Therefore, there were numerous numbers of senior citizens who had financial issues and lost their children during the great war who customarily took responsibility of taking care of elderly parents in Japan. Under the stated circumstances, public living assistance facilities were filled with unfortunate elderly people and the word of “socially vulnerable” became a commonly-used discriminatory term to describe those people. In 1961, universal public health insurance coverage system was founded to enable all citizens to receive healthcare services as needed for a uniform co-payment, 50 percent of allowed fees. In 1972, free healthcare service system was established and numbers of public care facilities and hospital’s bed rooms for the elderly had been developed during this period. However, free-medical service system for aged citizens was abolished in 1983 because of tremendous increase in public expenditure for the healthcare services while Japanese economy changed to stable growth from high growth. Later, Japanese government revised the laws for public social welfare programs over time and some public living assistant services. 13.

(23) were outsourced to the third parties in order to correspond to the changes in time and stagnant economy. As time passes, there are numerous numbers of assistance services for the elderly were developed by public institutions, medical institutions, and private businesses. Then, various social issues started to appear mainly resulting from inappropriate uses of public insurance programs by both healthcare facilities and insured aged-adult or his/her family, such as “ubasute (literally represents abandoning an old parents)” custom, social hospitalization, and elderly abuse. Japanese social welfare laws have been revised over times and new types of residential services for the elderly appeared and some were disappeared in the market because of numerous external and internal factors of the industry as well as residential service facilities. Revision of Act on Securement of Stable Supply of Elderly Persons' Housing in 2011 is the major turning point for Japanese elderly housing businesses. The act abolished the systems of three types of elderly housings in order to solve the vagueness as well as complexity of old residential service businesses for the elderly which resulted in increasing problems and legal disputes between a company and service users. As a result, Japanese government modified the regulation standard to operate new type of residential services for the elderly and started to offer numerous financial subsidies to stimulate the supply of the services in order to correspond to the expected rapid growth of middle-income class agedcitizens and to suppress public social welfare expenditures through outsourcing some of the civilians’ living assistance services to the private businesses. As a result, numerous companies from different business industries have entered into the market to seize a great investment opportunity as described on Figure 1.2. As the market competition increases, developing competitive and unique business model and services became more important than ever in today’s elderly housing industry. Based on the assumption of increase in aging population, the size of market for the elderly’s nursing care services is expected to increase to. 14.

(24) 15.2 trillion JPY in 2025 from 6.8 trillion JPY in 2007 based on a report by a Mizuho financial group (Fujino, 2015).. Table 2.2: History of Japanese Social Welfare Law and Residential Services for the Elderly 1950 1958 1961 1962. 1972 1973 1982. 1984. 1985 1987 1989 1991 1992 1998 2000 2001 2005 2008 2011. Public Assistance Act Revision of the National Health Insurance Law Universal Public Health Insurance Coveral Establishment of the Social Insurance Agency Act on Social Welfare for the Elderly. - Incentive care nursing home for the elderly (MHLW governed) - Nursing home for the elderly (MHLW governed) - Low-cost social welfare facilitity (MHLW governed) - Fee-based retirement home for the upper- income class elderly (MHLW governed) Revision of the National Health Insurance Law for the Elderly - Free medical care for the elderly (Implemented in 1973) Revision of the Health Insurance Law Law of Health and Medical Services for the Eldelry - Abolishment of free medical fee for the elderly (implemented in 1983) - Started to discuss the shortage of residential service for the elderly Revision of the Health Insurance Law - Ten percent cost-sharing by the insured. - Relaxation of regulations on high-technology health care. - Introduction of the health care program for retired persons. - Srarted to increase the number of private business-owned long-term care residential services Revision of the Medical Service Law. – Medical plan by prefecture. Public silver housing service for the low-income elderly started (MILT governed) Ten-Year Strategy for the Promotion of Health and Welfare for the Elderly so-called Gold Plan). - Public care house service for the independent living elderly started (MHLW governed) Revision of the Law of Health and Medical Services for the Elderly. - Visiting nurse care service for the elderly. - Increase in public funds for nursing care from 30 to 50 percent. Revision of the Medical Service Law. - Classification of hospitals by function: high-tech hospital, long-term care beds. Superior rental housing for the elderly started (MILT governed) Introduction of Long-term Care Insurance for the Elderly - Increased the number of long-term care beds in medical and healthcare facilities (MHLW governed) - Started to appear fee-based retirement home for low-income class elderly (MHLW governed) Act on Securement of Stable Supply of Elderly Persons' Housing - Elderly resident acceptable rental housing started (MILT governed) Rental housing exclusively for the elderly started (MLIT governed) Introduction of Health Care Program for the Elderly aged 75 and over Revision of Act on Securement of Stable Supply of Elderly Persons' Housing - Abolishment of "Superior rental housing for the elderly," "Elderly resident acceptable rental housing," and "Rental housing exclusively for the elderly" - Elderly housing with supportive services started to appear (MLIT governed). Source: Summarized by the Author B) Financial Difficulty for Public Social Welfare Services for the Elderly. 15.

(25) Based on government report, over 50% of the public health care expense is used for people above 65 years old (MILT 2015). As Figure 2.2 shows, public healthcare expense has been continuously rising and the amount is assumed to be increased by two times from the current expense although government’s tax revenue is expected to be diminishing as a result of decreasing workforce. Therefore, it is no longer possible to fully support citizen’s retirement life by public service alone and some of the living support services are required to be paid by civilian’s own expense in today’s Japan.. Figure 2.2: Transition of Japanese Public Health Care Expenditures. Source: Ministry of Health, Labour and Welfar statistic report (2016). C) Residential Services of Today’s Japanese Market In today’s Japan, there are broadly 11 types of residential services for the elderly as described in Table 2.3. Although there seem to have numerous options that senior citizens can select based on their requirements, both public facilities and fee-based nursing homes have income restrictions that prevents most of middle-income class elderly people from using those services. Therefore, living in own home with receiving family’s living assistances and long-term care used to be a common practice for them. However, as a result of changes in. 16.

(26) industry structure, economy, population demographics, and people’s lifestyle, traditional social practice became no longer realistic to most of middle-income aged-citizens.. Table 2.3: Summary of Japanese Long-term Care Services and Residential Services. Source: Summarized by the Author. As stated above, public care facilities are mainly operated for low-income agedpeople and the living costs and service fees of those facilities are largely covered by public long-term care insurance. Those facilities’ residential quality is usually low and shared-room residential setting are commonly used methods in order to lower operation cost and increase efficiency of daily service operations. In order to use those facilities’ services, elderly citizens are required to go to local administrative office to apply and public agency examines the qualification of applicants based on income level, physical conditions, and family structures, etc. Low-income applicants are prioritized to use those services in most cases, and the average waiting time to use the facility service from sending application document often takes about six months to over one year due to shortage of public care facilities and excess. 17.

(27) applicants. Based on a report by Ministry of Health, Labour, and Welfare, there were 523,584 elderly citizens on the waiting list of Intensive care home for the elderly in 2013 (MHLW 2014) although 8935 facilities have provided the capacity of 538,900 people nationwide in 2014 (Long-term Care Insurance Planning Division 2015). On the other hand, most fee-based nursing homes have good quality residential setting and dedicated long-term care services for their customers. They require high lumpsum payment, lifelong resident membership right, and monthly residential service cost in exchange for gorgeous retirement living. The number of Japanese fee-based nursing home had increased rapidly as alternative retirement living options for upper-income elderly people since 1980s when the time Japanese economy was rapidly growing and various social welfare policies were developed. However, the social image toward a nursing home became poor since its unethical business practices were found many times, such as contract fraud, mistreatments toward residents, forced medicare treatments to gain public insurance compensation, and inappropriate uses of public social welfare programs. Figure 2.3 summarizes potential options that aged-Japanese citizens can choose based on their physical conditions. Besides, there are several factors to choose residential environment of retirement life such as physiological needs, safety needs, privacy needs, economic factor, social needs, esteem, residential quality, and preference of living environment. In addition, there are complex sociocultural factors making Japanese senior citizens living in their own home more difficult, as opposed to the traditional retirement lifestyle. Therefore, an elderly housing with supportive services is expected to be a potential solution for aged-Japanese citizens and the industry has grown in a rapid pace.. 18.

(28) Figure 2.3: Elderly’s Residential Service Options based on Physical Condition. Source: Summarized by the Author. D) Population Analysis The aging of Japan is expected to outweigh all other nations as the nation which is assumed to have highest proportion of elderly citizens. Based on the 2014 report, 33% of the Japanese population is over age of 60, 25.9% are above age of 65 or above (MILT 2016) and the elderly population ratio is expected to be risen continuously as a result of sub-replacement fertility rates combined with high life expectancy. Both modern Japanese economic and sociocultural factors have resulted in the decline in childbirth. Those factors include later marriage, increasing woman’s participation in the workforce, small living spaces, poor worklife balance, a decline in wage and lifetime employment along with a high gender income gap, and high cost of raising children (Yamada 2012). Nation’s population aging also makes government to revises its strategies of social welfare in order to correspond to the changes on economic and socio cultural factors. As stated in the previous sections, more and more older adults are estimated to have independent livings as a result of shortage of family’s living supports, who used to be responsible to serve an aged-parents’ caregiver. Also, the population aging and decline of the working-age population will directly influence the nation’s economy and the solvency of the public. 19.

(29) pension and healthcare services that are largely provided by the government’s income tax from working-age population (Hashimoto 2011). Due to the stated reasons, Japanese traditional public social welfare policies are expected to be collapsed or have a major revision which would decrease certain amount of financial supports for civilians and abolish some public care facilities or care services for senior citizens. Those demographical factor is also a part of reasons contributing to the today’s demand growth toward residential services for aged-citizens.. Figure 2.4: Transition of Japanese Population Composition 1940-2060. Source: Ministry of Internal Affairs and Communication, Statistics Bureau. E) Financial Analysis of Japanese Elderly Citizens Based on public research report as shown on the chart below, about 48 percent of Japanese elderly people have more than 10 million JPY financial savings which is saved mainly for the expected uses of medical services and own retirement life as shown on Figure 2.6. Another research data shows average annual income of Japanese elderly people is about. 20.

(30) 3 million JPY. In addition to the stated income data, elderly citizens can have various types of social welfare benefits such as free travel pass and low-cost medical expense From Figure 2.5, it can be seen majority of elderly people have a certain level of financial savings and secure retirement income which are used for their retirement livings and urgent expenditures resulting from age-related health issues. One of important points would be developing pricing and revenue making strategies based on consideration of each customer group’s financial ability and the usage of public social welfare programs to receive compensations for either/both medical and health care services provided for handicapped residents. Because of few public restrictions toward managing today’s elderly housing business, there are numerous potential revenue streams that can be generated through developing and providing the services what customers value and they are not necessarily related to living assistance services to some customer groups.. Figure 2.5: Financial Savings of over 65 Years Old Japanese Elderly. Source: Cabinet Office's report "Research of elderly people's financial savings". 21.

(31) Figure 2.6: Elderly People’s Purpose of Financial Savings (Target: more than 65 years old). Source: Cabinet Office's report "Research of elderly people's financial savings". Figure 2.7: Japanese Elderly Citizen’s Average Financial Income. Source: Cabinet Office's report "Research of elderly people's financial savings". Table 2.4: Financial Anxiety of Retirement Life. Source: Cabinet Office's report "Research of elderly people's financial anxiety". 22.

(32) F) Public Subsidy Program for Elderly Housing Business In order to stimulate the supply of residential services for the elderly in Japanese super aging society, Japanese government has provided various financial subsidies to elderly housing firms used for their housing construction and operation expenses as well as fundraising from the bank since the year of 2011. Increasing in number of private business owned elderly housing will not only support citizen’s retirement lives, but also is assumed to potentially reduce public expenditures used for aged-citizens’ retirement livings. As Table 2.6 shows, public budget financed to support elderly housing business is 32 billion JPY in 2016 and 1.9 billion JPY in 2015 respectively. Japanese government’s targeting number of elderly housing is 4% of total elderly population or about 1.46 million rooms (= 4% x 36.57 million people aged 65 years old or more, assumption made by Statistic Bureau, Ministry of Internal Affairs and Communication) for the elderly by the year of 2025. Based on the public report, 208,026 rooms of elderly housing have developed nationwide as of October 2016, which is only about 14% achievement rate for the target residential service growth. In order to increase the number of nation’s elderly housings for future demand and savings of public welfare and healthcare expenditures mainly used by elderly citizens, the public subsidies are expected to be provided continuously or increased. Table 2.5: Summary of Public Subsidy for Elderly Housing Business. Source: Publicized Document by Ministry of Land, Infrastructure, Transport and Tourism. 23.

(33) G) Changes in Awareness of Elderly People toward Elderly Housing Today, more and more Japanese people started to be willing to transfer to a certain type of elderly housing with supportive services regardless of their physical conditions. One of the reasons of today’s demand growth toward independent living-style elderly housing would be people’s increasing concern about preventive healthcare, which consists of measures for disease prevention, as opposed to disease treatment. Just as a variety of physical and mental states influence our health, so do disease and disability, which are encompassed by environmental factors, genetic predisposition, disease agents, and lifestyle choices (Hugh, 1979). Besides, Japanese citizens are expected to accept elderly housing more because of shortage of caregivers at home. As people age, they face various types of age-related health problems. Those problems are difficult to be solved by themselves alone and they require supportive living services by external parties to have secured independent retirement living. Therefore, living in an elderly housing are thought to be a common residential method for Japanese elderly citizens in near future.. 2.1.4 Industry’s Problems to Induce the Demand of Elderly Housing Services This section discusses the problems commonly happened in the elderly housing industry in the past and describe how those issues lead to the increase in demand toward today’s elderly housing with supportive assistance services.. A) Bipolarization of Residential Services for the Elderly By the early 1980s, Japanese public care facilities and medical institutions had largely supported socially disadvantaged elderly people. In the early time, Japanese elderly care did not exist for commercial purposes, but for providing minimum standard of living for socially vulnerable at free or low cost. Due to facility’s and user’s characteristics, the. 24.

(34) residential quality of public facilities was often hardly acceptable for most general income level citizens. In addition, there were increasing reported cases about unethical treatments to patients at elderly hospitals and long-term care facilities which will be described in the later section. During the late 1980s, the elderly residential services started to receive an increasing attention as a profitable investment project because of rapid increase in aging population and the emerging of above upper-middle income class people during the period of nation’s high economic growth. As a result, private business operating fee-based nursing homes became more profit oriented and only targeted upper-income class elderly people. They developed luxury retirement residential environment with supportive care services while charging high service costs to their customers. During the 1990s, inappropriate usages of public medical and healthcare insurance programs by fee-based nursing homes and medical institutions started to be found nationwide and became a controversial social issue. Among them, forced medical treatment toward patients was most commonly used revenue making method in those facilities in order to earn medical and healthcare insurance compensation. Since patients’ financial burden to use those services were low and the service fees were largely covered by public insurance, most patients might be less willing to resist those forced care treatments resulting from anxiety of losing living places (Yuki, 2011). Besides, unethical usages of public social welfare program by publicly unregistered nursing homes also became a controversial social issue in the late 1990s. Some unregistered fee-based nursing homes provided low-cost or free residential services for low-income elderly people or homeless elderly people and forced them to apply for public assistances. Their public living assistance subsidies are often a major revenue of those facilities. According to a report of Ministry of Health, Labour and Welfare, there were 1650. 25.

(35) unregistered fee-based nursing homes in the nation in 2015 which was 689 facilities more than the previous year. As stated above, Japanese residential services for the elderly have been polarized and the shortage of the services available for middle-income class households was a major problem. In today’s Japanese society, “care for old parents at home,” which was believed to be a conventional wisdom and responsibility for children, is no longer a common living practice as a result of changes of people’s lifestyle and nation’s socio-cultural factors. Therefore, residential services for middle-income class senior citizens are expected to take an important role in future Japanese society.. Figure 2.8: Polarization of Residential Service for the Elderly (1980-1990s). Source: Yasuhiro Yuki (2011) Japanese care service system p.63. B) Changing Conventional Wisdom of Living with Older Parents Although caregiving for aging parents had been considered to be a social virtue and responsibility of children to repay an obligation of parent’s supports during the childhood in Japan, those kinds of conventional wisdom have been changing and more and more people. 26.

(36) accept to live separately from children’s family. In the past, sending old parents to nursing home or public long-term care facilities might have been seen as unethical, irresponsible code of conduct and elderly people living in care facilities were often discriminated as “socially vulnerable groups” or “abandoned parents.” However, consciousness of today’s Japanese people toward living with their parents have been changing and majority number of married couples are unwilling to live with their parents due to numerous economic and socio-cultural factors as Figure 2.9 shows. 19% of interviewed married couples conditionally accept to live with parents, but they prioritize their lives rather than caregiving their parents. Since living with elderly parents may bring higher financial, psychological, physical, and other types of burdens to family members and their lifestyles than the prosperous times of Japanese economy, demand toward residential services for the elderly has been assumed to be continuously growing in Japan.. Figure 2.9: Research Result about Willingness to Live with Parents n=1213. Target group married couples who currently do not live with parents 17%. Willing to live with parents Willing to live near parents, but unwilling to live with them. 27% 29%. Neither willing to live with parents nor living near them I don’t know. 27% 0%. 5%. 10%. 15%. 20%. 25%. 30%. 35%. Source: MRI Research Associate’s report of Aged Society with Low Birth Rate (2015). 27.

(37) Figure 2.10: Consideration Factors to Accept Living with Parents (n=1365). Source: MRI Research Associate’s report of Aged Society with Low Birth Rate (2015). C) Social Hospitalization problem Social hospitalization” is a term commonly used to describe an issue of the elderly people’s long-term staying at a medical or long-term care facility although his/her physical condition does not require further medicare services due to complex reasons (Ito, 2011). As a result of the public policy of free-medicare service for the elderly between 1973 and 1983 and the later policy of low-medicare expense policy for the elderly, more and more elderly people were abandoned by their family and sent to a long-term medicare facility and public budget expenditures for medicare services has increased year by year. As a result, 232,000 elderly people whose hospitalization period exceed 6 months was considered to spend public medical expenditure of 955.4 billion JPY in 1993, and the number increased to 221,000 people with public medical expenditure of 1.819 trillion JPY in 1999, and 215,000 people with public medical expenditure of 1.569 JPY in 2002 respectively (Niki, 1985 and Hatano, 2004). This unique social issue of Japan has been developed by several factors as described on the illustration below and explained the detail in the following section:. 28.

(38) Figure 2.11: Japanese Elderly’s Social Hospitalization Factors. Source: Summarized by the Author. I.. Patient’s Factors Patient’s factors can largely be divided into two major factors: patient’s physical functioning factors and psychological factors. -. Physical functioning factors Difficulty of regular outpatient treatment might contribute to the social hospitalization issue even after the recovery of patient’s physical condition. Infectious diseases of elderly patients might also be a potential factor to generate social hospitalization since they are not able to live with family or to use neither public nor commercial residential services. Recent study found elderly people’s physical condition and requisite of living assistance might not be a major contribution factor of social hospitalization, rather insufficient living assistance systems in Japanese society might largely contribute to the problem (Tokuchi et al., 2000).. 29.

(39) -. Psychological factors Insufficient information regarding physical condition and medicare treatments given by a doctor and ambiguous standard of leaving the hospital might also generate social hospitalization issue. Those stated issues resulting from lack of communication between care givers and patient might result in patient’s unrealistic idea toward his or her physical recovery or hospitalization term (Moriyama, Iwamoto Hobara & Koyama, 1994；Ichimura and Ishi 2003； Tadaura, Endou & Ogiwara, 2005). Other patient’s psychological factors such as anxiety of independent living (Ichimura and Ishi, 2003), loneliness at home (Moriyama, Iwamoto Hobara & Koyama, 1994), and anxiety toward activities of daily living without assistance (Okumura, Kato, Ikegawa, & Aoki, 1992）might also have strongly contributed to increase patient’s willingness of long-term stay at a hospital and overdependence on facility’s nursing cares.. II. Family’s Factors There are mainly three factors that might have led to elderly people’s social hospitalization issue; inability to support elderly family, poor family relationship, and family’s psychological burdens explained as follows: -. Inability to support elderly family Due to today’s Japanese nuclear family structure, a caregiver of the patient could be a patient’s partner in most cases. As a result, a caregiver might be aged and have a certain level of health problem. In fact, there are some cases found that elderly patient’s partner’s health condition was too poor to support the patient’s daily living activities even if the patient could leave the hospital Tokuchi, 2000).. 30.

(40) Double-income family as resulting from recent year’s social progress of women also might create a shortage of caregiver inside family, which used be regarded as a job of elderly people’s oldest son’s wife (Okumura et al., 1992).. -. Family’s relationship Based on Moriyama and others’ research, patient’s family’s unwillingness to live with older family as a result of contemporary people’s egocentric thought might have increased social hospitalization problem (Moriyama, Iwamoto Hobara & Koyama, 1994). As a matter of fact, a research conducted by Kondo and Adachi found proportion of early leave of hospital could be risen by 84% as a number of patient’s family member increases (Kondou and Adachi,1999). If elderly patient had no family or had poor family relationship, the patient might have a higher risk of social hospitalization (Tateishi et al., 2000).. -. Family’s psychological burdens Although patient’s family might think they would like to support elderly family’s activities of daily living, anxiety of caregiving and mental as well as physical burdens might potentially result in an extension of patient’s living at the hospital (Moriyama, Iwamoto Hobara & Koyama, 1995). Patient’s family’s consciousness of social appearance would also lead to patient’s long-term stay at hospital since the family could avoid being perceived as unethical children although they could abandon the customarily regarded common practice as children. Therefore, some patient’s family sent their parents to the medical institution for a long-term living instead of sending them into a long-term care facility or a nursing home (Takemoto, 2002).. 31.

(41) III. Patient-family’s shared factors -. Residential factors Patient’s housing structure might also have contribution factors of his or her social hospitalization problem. Specifically speaking, if patient’s housing was a single-family detached house with the universal designed structure and had a room for patient’s daily living which is large enough to provide daily living assistance services, patient would be more likely to leave the hospital and stay at his or her house with his partner or family or using a home visit care service if necessary (Momino, Hasegawa, Hashimoto, Takemura & Gunji, 2000, Taketorige et al., 1990).. -. Seasonal factors Seasonal fluctuation of climate would increase the family’s motivation to extend the hospitalization term of elderly parent mainly based on the consideration of patient’s difficulty to adapt seasonal climate changes, especially summer and winter seasons (Moriyama, Iwamoto, Hobara & Koyama, 1995, Tadaura, Endou, & Ogiwara, 2005).. -. Economic factors Japanese government’s free-medical expense service for the elderly, which was changed to low-cost medical care policy for the elderly, might be a major contribution factor of elderly people’s social hospitalization. Since elderly patient’s living cost in the hospital was free or less expensive than any other residential services, patient’s family was more willing to send their elderly parent to the medical institution and solitary aged person voluntarily chose to live in the hospital (Moriyama, Iwamoto Hobara & Koyama, 1994). Limited use of home-. 32.

(42) care services and requisite of family’s assistance toward the patient might not bring much financial benefit based on the consumption of both patient’s and his family’s physical and psychological burdens (Koyama, 1998). Some of the incentive care treatment of long-term hospitalization might have higher benefit-cost ratio than the use of residential services of intensive care home for the elderly due to medical institution’s expertise of medicare treatments and possession of teams of medicare experts (Tadaura, Endou & Ogiwara, 2005). Those stated social hospitalization’s economic incentive factors were often found before adoption of the long-term care insurance system and other public policies to promote patient’s early hospital discharges. In recent years, hospitalization’s expense theoretically should require more financial cost than living in a home with receiving the third party’s care services. However, there are some opinions pointed out the long-term hospitalization might not be more expensive than the home care services expense by concerning the various costs that both patient and his family are required to pay.. -. Insufficient knowledge of medicare and welfare systems Although the public long-term care insurance system was implemented to encourage hospitalized elderly patient to stay at home and use local community’s care services with public insurance, the system is unfamiliar to elderly citizens and his/her family. Therefore, social hospitalization issue has not been solved for a long time in Japan.. IV. Facility’s Factors -. Lack of consciousness toward patient’s early leave. 33.

(43) After the year of 2000, Japanese government has enforced several new policies to shorten the aged patient’s hospitalization term and to promote clinical specialization to provide dedicated treatments, and more and more acute care hospitals and a new job to consult patient’s hospital discharge schedule appeared. However, medical institution’s attitude toward patient’s early leave of hospital had often been low since there was no regularized criteria to determine patient’s leave and the hospitalization term could be differed by a doctor (Tadaura, Endou & Ogiwara ,2005). This unregularized criteria of aged-patient’s hospital discharge might also contribute to medical staff’s limited attention toward home care and continuous medical treatments (Kurata,1998). Due to the lack of regulated determination criteria of patient’s hospital discharge, each doctor had a major authority to determine patient’s hospitalization duration. As a result, patient’s hospitalization was often determined based on patient or his family’s will regardless of patient’s health condition (Moriyama, Iwamoto Hobara & Koyama, 1994).. -. Economic incentive Hospital’s profit-oriented management method and flexibility of medical care fee system resulting of insufficient supervision of the compensation policy might have promoted hospital’s excessive provision of care services and patient’s unnecessary long-term hospitalization (Arioka,1992). After the reveal of Misato Central Hospital’s excessive uses of medication and checkups toward agedpatients, Japanese government has restricted and monitored the uses of medical treatments for each patient in order to solve the stated problems and those facilities’ sanatorium long-term care beds are expected to be eliminated by the year of 2017.. 34.

(44) V. External Factors -. Disproportion of costs between hospital expense and home care expense As stated on the sections of patient’s and family’s incentive factors, hospital expense was much less costly than the costs incurred to use home care services and the psychological and family’s mental and physical burdens resulting from living with handicapped aged-parents. Another cost to caregiver might be an unemployment to provide home care for his/her aged parent or partner, which will result in a larger financial loss than the patient’s hospital cost.. -. Insufficient home care support system Insufficient care services and related living assistance facilities in a local community to support handicapped aged-person’s activities of daily living would also be a contribution factor of aged-patient’s social hospitalization (Okumura et al., 1992). Besides, non-existence or imperfection of social resources to backup. aged-person’s daily living, such as complicated and time-consuming application process for long-term care insurance and use of care services (Ichimura and Ishi2003), insufficient cooperation between medical institution and local community (Hondou, 2000), and shortage of local community’s care support system might prevent aged-person’s living at home. -. Medical treatment compensation system As already stated above, early Japanese medical insurance program’s shortage of inspection process for each medical compensation and lack of regulation for the provision of medical services might have increased the hospital’s incentive to provide excess or unethical provision of treatments. Free and low-cost medical fee policy might also have increased patient’s and his family’s usage of longterm medical services.. 35.

(45) Aged-people’s social hospitalization problem in Japan had been created by complex factors and national medical and healthcare expenses, which are largely used by aged-people, have been increased year by year. Although there were various new policies to restrain the national medical expenses, neither of them had not much effect to control the increasing usage of medical services. As a result, Japanese government publicly announced the abolishment of current sanatorium long-term care beds by 2017 and encourage elderly citizens to stay at home with appropriate living supports. To achieve this goal, Japanese government has promoted the industry of residential services for the elderly through providing various public subsidies. Japanese social hospitalization has a huge contribution factor of today’s rapid expansion of the elderly housing business.. 1) Family of elderly people’s advantages -. Be able to reduce family’s economic pressure to take care of elderly family. Daily hospitalization fee including three meals are between 710 and 1700 JPY using long-term care insurance (insured amount is differed based on income level). Hospitalization fee may be smaller than living in their home for most of low-income people.. -. Be able to relieve family’s psychological and physical pressures to take care of their elder family.. -. Be able to avoid negative social perceptions of abandoning their old parents.. -. Be able to avoid room’s renovation or moving to a universal designed house and have more room space to use as a result of elderly family’s long-term hospitalization.. -. Be able to earn double income as a result of relieving from elderly care. 2) Medical and nursing care facilities’ advantages -. Be able to receive fixed income from patients. 36.