New nursing-care plan already struggling

By Akemi Nakamura
insurance

Jun 30, 2007

Nursing-care provider Kisako Nakamura feels the new state insurance plan that was supposed to improve her lot and better benefit the recipients of such services is instead short-changing them and eroding quality.</PARAGRAPH> <PHOTO> <TABLE WIDTH='250' ALIGN='RIGHT' BORDER='0'> <TR> <TD><IMG ALT='News photo' BORDER='0' SRC='../images/photos2007/nn20070630f1a.jpg' WIDTH='250' HEIGHT='200'/></TD> </TR> <TR> <TD><FONT SIZE='1'><B>Employees from Hasesanzu, a nonprofit care-service provider, teach seniors how to brush their teeth properly in Tokyo's Ota Ward in March. </B> PHOTO COURTESY OF HASESANZU</FONT></TD> </TR> <TABLE> </PHOTO> <PARAGRAPH>While Nakamura, who runs Fukuju Kagayaki, a small nursing-care firm in Tokyo's Sumida Ward, is angry at Comsn Inc. for its unethical attempts at making greater profits at the expense of the elderly, she said the real problem is the way the system is being run.</PARAGRAPH> <PARAGRAPH>There was a major revision in the national nursing-care insurance system in 2006, and the state fees the plan paid to service providers were cut by an average of 2.4 percent. </PARAGRAPH> <PARAGRAPH>The cuts were made to curb increases in government spending on nursing care, but they have had a huge negative impact on the system, making it hard for companies to make a profit.</PARAGRAPH> <PARAGRAPH>'We have been buffeted by changes in the system,' Nakamura said. 'I wonder if the government realizes how we are suffering.'</PARAGRAPH> <PARAGRAPH>Nakamura had to cut her own salary by 40 percent and those of two of her nine employees to stay in business after the April 2006 revisions.</PARAGRAPH> <PARAGRAPH>The government introduced the nursing-care insurance plan in 2000 to help deal with long-term care issues for the rapidly rising number of elderly people. The national plan is funded by taxes and premiums that everyone starts paying at age 40.</PARAGRAPH> <PARAGRAPH>'The system is on the verge of collapse' due to the revision, said Ikuo Takagi, a professor emeritus at Japan Women's University in Tokyo. 'Unless the government does something about it, Japan will not be able to cope with its aging society.'</PARAGRAPH> <PARAGRAPH>The government has cut payments for people who need the lower level of care. The majority of seniors fall into this category.</PARAGRAPH> <PARAGRAPH>The amount of services in value terms for seniors needing the lowest level of care was cut to 49,700 yen a month from 61,500 yen. As a result, for example, service providers say people in this category only get two home visits a month, compared with three before the cuts.</PARAGRAPH> <PARAGRAPH>Payments for services to seniors who need a higher level of home care were increased by an average of 4 percent. But people who need the lower level of care had their payments cut by 5 percent.</PARAGRAPH> <PARAGRAPH>The criteria for those who qualify have also changed. Some of the people who were receiving a moderate level of care now get nothing, because under the new criteria, they are deemed not in need of care. Fukuju Kagayaki's Nakamura said the number of seniors her firm provides home care to has dropped to 60, compared with 100 in 2003.</PARAGRAPH> <PARAGRAPH>Subsequently, profits at all the service providers took a big hit.</PARAGRAPH> <PARAGRAPH>Comsn reported a 2.1 billion yen pretax loss for its home-care business in the July-December first half of its business year ending this month, compared with an 876 million yen pretax profit in the same period a year before.</PARAGRAPH> <PARAGRAPH>The welfare ministry announced earlier this month it will not renew the operating licenses of about 1,600 Comsn care centers because they had padded their employee rosters on their applications so they would get more users of insured services and more service fees.</PARAGRAPH> <PARAGRAPH>The changes also have made it difficult for service providers to pay enough to keep employees.</PARAGRAPH> <PARAGRAPH>Ikuko Sakaguchi, director of Hasesanzu, a nonprofit group providing seniors care in Ota Ward, Tokyo, said skilled workers are needed to maintain quality, but few want to do care work with a recovering economy offering higher-paying jobs.</PARAGRAPH> <PARAGRAPH>According to the welfare ministry, the average monthly salary for care managers — certified care workers who draw up care plans — was only 260,300 yen in 2006. Home helpers earned an average of 202,100 yen in 2006.</PARAGRAPH> <PARAGRAPH>Hasesanzu currently has 15 care workers, but Sakaguchi said that's not enough.</PARAGRAPH> <PARAGRAPH>'I wish we could have 10 more care workers who could work more than 500 hours a year,' Sakaguchi said.</PARAGRAPH> <PARAGRAPH>The average length of time an employee stays at one organization was between four and seven years in 2006, compared with 12 years for all workers.</PARAGRAPH> <PARAGRAPH>The lack of experienced nursing-care workers will lead to lower quality service, even though premiums are on the rise, said Mariko Hattori, a professor of social welfare at Rikkyo University in Tokyo.</PARAGRAPH> <PARAGRAPH>She said it is a problem that the service providers are not able to make money.</PARAGRAPH> <PARAGRAPH>'The –

system is not designed for providers to earn profits," Hattori said.

However, she said the way Comsn tried to expand its business was particularly despicable. Before the fraud scandal mushroomed, if Comsn got caught inflating the number of employees at a nursing-care facility, it would shut the facility down to avoid disciplinary action.

Hidekatsu Watanabe, a senior analyst at Mizuho Securities Co., said he hopes the Comsn scandal serves as a warning to service providers not to break the law and encourages them to build networks with other providers rather than trying to expand their businesses on their own.

However, Watanabe warned that things could worsen for everyone as the government is expected to toughen the rules on users to rein in spending when it revises the program again in 2012. He said people must pressure the government not to make cuts and to improve the system.

"They should push (politicians) to improve the system," he said.