With plush paintings, potted plants, comfy sofas and floor-to-ceiling windows, the Orix Living Corporation nursing home in Urayasu, Japan, resembles an up-market hotel, rather than an institution for the elderly.
Its residents may be old and infirm, but many are full of life. Like the staff, they smile often – and are ever ready for a chat, even with strangers. The company runs 31 nursing homes in Japan, most of which opened in recent years, and boasts average occupancy rates of more than 90 per cent.
Yet, its president, Etsuaki Morikawa, has reined in expansion plans as doubts and despondency grow over the future of the country’s long-term care insurance system – one which pays for up to 90 per cent of the nursing care costs of all residents in nursing homes, irrespective of how rich or poor they are.
Earlier this year, the Lien Foundation took two Singaporean seniors on a study trip to Japan to glean lessons in living from the world’s oldest country, where 27.3 per cent of the people are aged 65 and above.
We visited nursing homes, innovative day-care centres, assisted living facilities and even senior-friendly housing estates, malls and restaurants to get a first-hand glimpse of the wide variety of top-quality services Japan has made available to its growing group of seniors.
We were impressed by the diverse, humane, habilitative models of eldercare that we witnessed. The adventures of the two “Genki Kaki” – and the world they encountered – are chronicled at www.genkikaki.com.
DARK CLOUDS AHEAD
But among care sector leaders like Mr Morikawa, as well as among think-tank analysts and academics, the undercurrent of tension was hard to miss. Indeed, there is plenty that ageing Singapore can learn from Japan’s policy mistakes, dilemmas and challenges too.
Since 2000, Japan has had a public, mandatory long-term care insurance system which pays for care costs at home, in the community and in long-term care institutions such as nursing homes and assisted living facilities.
The number of people making insurance claims has climbed steadily, straining the system – even though the vast majority get care in the community and at home, rather than in residential facilities.
In recent years, care infrastructure has also fallen short of demand and led to increasing numbers of Japanese leaving the workforce to care for their ailing loved ones.
In 2013, the country faced an uproar when Government statistics revealed that there were 150,000 people with high care needs – and incapable of caring for themselves – who were waiting to get into nursing homes across the country. Including those with lesser care needs, the number exceeded 500,000.
In a bid to prevent taxpayers from leaving their jobs to look after ailing loved ones at home, Prime Minister Shinzo Abe’s Government quickly announced plans to build new care facilities to accommodate an additional 500,000 seniors by 2020. It is also scaling up community and homecare services.
But merely building homes will not do. According to Japan Government estimates, the country will face a shortage of nearly 380,000 care workers by 2025. The impact is already being felt. As of April 2016, there were 269 jobs available in the care industry for every 100 job seekers.
So what lessons are there in this for Singapore?
It’s a no brainer that we should aspire to the standards of humane, person-centred care that seems to have become the norm in Japan.
There is also an urgent need for a greater diversity of senior living options. For the longest time, Singapore did not need assisted living facilities – which provide physical support rather than nursing care – because of a steady supply of foreign domestic workers.
But the supply of these workers might shrink or become more expensive, given the relatively low pay, long work hours and the limited protection of labour laws.
One way forward is introduce a separate category of more competent, better-qualified domestic workers certified in eldercare. Domestic workers can currently be trained under an “elder-carer scheme”, but it is still relatively limited.
We must also gradually reduce the over-reliance on cheap domestic help for senior care, to prevent the disabling effect of too much one-to-one care. These domestic workers can then be re-employed by nursing homes and assisted living communities.
Singapore must also try and grow a local care industry.
Older workers, such as retirees, housewives with grown-up children and former caregivers whose loved ones have died, need to be tapped as full-time or part-time care workers. They can be wooed with incentives beyond salaries, such as discounts for fees, should they themselves ever need professional care.
BOOST PAY, OR ELSE
Finally, and perhaps most urgently, there is also a need to professionalise the sector and increase pay and perks.
A positive start has been made and the Ministry of Health (MOH) has been putting more money into training. For instance, on Sept 6, Senior Minister of State Amy Khor announced that MOH would invest nearly S$12 million over the next four years to improve capabilities in the community care sector.
But career progression also needs to be looked at. In Japan, several of the nursing home leaders I met had degrees in social welfare. Incredibly, a couple started right at the bottom rung – as humble care assistants – and worked their way up, something which is unheard of here.
In what could spell trouble for Singapore, Japan is beginning to look overseas for foreign care workers as realisation sinks in that there are simply not enough locals who want to do the job.
The Abe Government has already entered into economic agreements with the Philippines, Indonesia and Vietnam to import care workers, though progress has been slow, primarily because workers need to learn Japanese.
The Government has also made efforts to raise the pay of care workers, who earn an average of 220,000 yen (S$2,700) a month. Unlike in Singapore, there is no disparity in pay between local and foreign care workers in Japan.
According to Ministry of Manpower statistics, local healthcare assistants in Singapore earn a gross pay of around S$1,800 per month. But the problem lies in the fact that given the relatively low pay and the back-breaking nature of the job, the vast majority of care staff in Singapore are foreigners.
Most are on work permits from countries like the Philippines, Myanmar and Indonesia. There are no publicly available salary estimates for these foreign workers, but interviews last year for the Safe but Soulless report showed that some earned as little as S$400 a month, excluding food and accommodation – which is less than what many domestic workers get these days.
If you count domestic workers, Philippines and Indonesia – the very same countries that Japan is targeting to boost its ranks of professional carers -- account for the majority of care workers in Singapore too.
If conditions don’t improve, chances are slim they will want to stay to meet the eldercare needs of Singaporeans, if their pay, perks and rights remain what they are today.
But by far the biggest problem facing Japan is the escalating cost of care because of rapid, unprecedented ageing and a long-term-care insurance system which, though based on noble principles, has fundamental flaws in its design.
The system pays for the care costs of people above 65, as well as those aged between 40 and 64 who need care because of cancer or ageing-related illnesses. It is funded in equal part by taxes and premiums.
Insurance pay-outs have soared from 3.6 trillion yen (S$44.5 billion) in 2000 to 10.4 trillion yen (S$128.4 billion) in FY2016.
A key flaw in the system is that from its inception till 2015, the insurance paid for 90 per cent of the care costs of everyone, including billionaires and millionaires. In Aug 2015, the maximum co-payment limits for the high income-earners was raised to 20 per cent. This will, once more, be raised to 30 per cent in 2018.
Despite the generous insurance benefits, tax rates are nowhere near the rates seen in northern Europe. The consumption tax (equivalent to Singapore’s GST) in Japan, for instance, is only 8 per cent, compared to close to 20 per cent or more in countries like France, Germany and the Netherlands.
Average premiums too have remained relatively modest over the years, rising from 2,911 yen (S$35) a month in 2000 to 5514 yen (S$70) currently. The number of treatment or care options that can be covered by insurance, meanwhile, has soared from 2,000 initially to 20,000 types at present.
The insurance law also states that care managers must determine and prescribe the type of care a person needs. In yet another design flaw, the care managers are incentivised based on the quantum of claims made from the insurance. The higher the claim, the higher the incentive they receive. This, too, has led to overuse.
Small wonder, then, that care expenditure has far outstripped incomes from taxes and premiums, and contributed to the rising national debt.
The country is currently going through a laborious process of overhauling its insurance and care system. Premiums are being raised, even as benefits are being cut. Community care is being boosted. With a wealth of publicly available data on the costs of the system vs benefits, the country is having frank and open collective conversations.
However, it would be wrong to write off an insurance-funded system altogether, because it is sound in principle. The fatal design flaws in Japan’s system can be avoided.
A key principle ingrained in the Japanese system that Singapore must study further is whether to decouple care from accommodation costs in residential care. Japan’s long-term care insurance only pays for care. Accommodation costs meanwhile are means tested, and those with high incomes pay for the rent in nursing homes themselves.
Currently, in Singapore, MOH subsidises both accommodation and care costs of eligible residents. It is worth studying if MOH could extend care subsidies to those middle-income folk who don’t qualify for subsidies currently, but leave it to them to pay for the accommodation costs, should they need residential care.
Super-aged or fast-ageing nations like Japan, Germany, the Netherlands and South Korea all have public insurance systems to pay for long term care. Taiwan – which is also ageing rapidly – recently opted against an insurance system and passed a Long-Term Care Act which will be entirely funded by taxes.
There are no easy answers on the way forward in the complex and uncertain world of senior care. As countries age, more will need to be spent on care. Each country must discuss and decide on the financing option that best suits national needs.
Singapore has already made a start. A Government-appointed committee tasked with looking at ways to revamp ElderShield, Singapore’s rather limited insurance scheme for the severely disabled, has been holding public consultations on ways forward.
With the number of elderly in Singapore set to double to nearly a million in under 15 years, the time for more such collective conversations is long overdue.
Radha Basu is Director of Research and Advocacy at the Lien Foundation and author of Safe But Soulless, an in-depth report on the state of nursing homes in Singapore.