Finding
In other words, the growing number of care providers may, in fact, have played at least a partial role in creating demand for their services.
Paper
The Expansion in Long-term Care Use in Japan: A Case of Supplier-Induced Demand?
Abstract
Following the introduction of Japan’s long-term care insurance in 2000, longterm care utilization in Japan experienced a remarkable expansion. According to the official statistics provided by Japan’s Ministry of Health, Labour and Welfare, total expenditure on care use through the scheme totaled 6.18 trillion yen in FY2004, a 75.4 percent increase over the 3.52 trillion yen in FY2000 which is largely accounted for by the jump in at-home care use. Until 2000, under the “distribution system”, only the wealthy were able to afford care services and the market was accordingly small; everyone else was assigned to nonprofit providers as part of the government’s welfare policy. However, along with the introduction of the elderly care insurance, the government also encouraged new providers to enter the market and allowed for-profit providers of at-home care for the elderly for the first time (M et al., 2004). Aimed at breaking the bottleneck in the supply of care services, deregulation was successful in spurring an increase in the number of establishments providing at-home care from 9,833 in September 2000 to 17,295 four years later. The simultaneous rapid expansion of supply and demand is often explained by the pent-up demand before the year 2000 that found an outlet following deregulation. However, another possible explanation is that the rapid demand expansion was driven by suppliers. In other words, the growing number of care providers may, in fact, have played at least a partial role in creating demand for their services. Under the public insurance system, care suppliers are reimbursed on a fee-forservice basis. Prices for each type of service are set by the central government and
Authors
Satoshi Shimizutani
Journal
Swiss Journal of Economics and Statistics