Summary of Research Findings

Domestic demand for ICT solutions at long-term care facilities is mostly renewals (updating of an outdated system). When opening a new facility or management office, or when their management corporations go through mergers, etc., long-term care providers renew their contract or sign a new contract.

Our estimate on the size of the ICT Systems & Solutions for long-term care service providers (based on the sales of businesses) was 25,213 million yen in FY2022, 102.8% of the previous year. While the benefit of governmental financial relief during the COVID-19 crisis diminished, deterioration of business environment led by care worker shortage and surge in prices of utility, fuel, food, and other products, caused long-term care service providers to postpone system deployment of any kind.

Although the reclassification of new coronavirus to Category 5 infectious disease in FY2023 eased behavioral restrictions, ongoing price surge and labor shortage continue to strain long-term care businesses. In addition, given the revision of long-term care service fees upcoming in FY2024, long-term care service providers are likely to defer system deployment in FY2023. For these reasons, the market is forecasted to grow only marginally.

Noteworthy Topics

Consolidation of Long-term Care Providers Induce IT System Renewal

Amidst the persistent labor shortages, long-term care service providers are forced to operate without passing on the soaring prices to service charge, because of the charges are fixed based on the long-term care insurance system. As seen in the shutdown of small- and micro- long-term care operators in particular, considering that the market situation continues to be rough, consolidation of long-term care service providers is expected to accelerate further.

In addition, the government started a new framework in April 2022 that promotes consolidation of social welfare corporations to increase productivity of the long-term care service operations. Under the system, multiple social welfare corporations become a group company to collectively recruit caregivers, strengthen management, and promote ‘coexistence’ for these businesses and local communities. According to the Ministry of Health, Labour and Welfare, there are only 20 of these corporations as of October 2023. Still, the number of groups is expected to increase hereafter.

In the process of consolidations, long-term care providers are likely to update/deploy systems for various functions, including long-term care insurance claims, with a view to improving productivity and reducing costs.

Research Outline