Long-Term Care Insurance Business Market in Japan: Key Research Findings 2023

With Accumulating Challenges, Digital Transformation for Long-Term Care Accelerated by Deployment and Spread of ICT Devices

Yano Research Institute (the President, Takashi Mizukoshi) has carried out a survey on the domestic long-term care insurance business and has found out the market status, trend of market players, and future perspectives.

Market Overview

The long-term care insurance system was established in 2000 as a mechanism for the entire society to support the elderly who needs care. The system respects the rights of users to make choices and has switched from a group care to individual care by adopting care management. Since then, the system has been revised every three years.

Due to aging and shrinking population, chronic labor shortage in the very-much demanded long-term care services has encouraged the service providers to take various measures, such as raising of wages through improved compensation, promotion of long-term employment, and recruitment of foreign workers, which have gradually brought about some effects. Still, the speed of increasing long-term care demand caused by the aging population is outpacing the supply of caregivers.

With accumulative challenges, operation of the scientific long-term care information system called “LIFE” has started, aiming to improve the productivity and other efforts for more efficiency by propelling the evidence-based scientific long-term care and by pressing ahead with digital transformation. It is required to change the way the conventional long-term care services are provided. 

Noteworthy Topics

Promotion of Scientific Long-Term Care and ICT Application Required

Conventional long-term care services tend to rely mostly on the experience, knowledge, and skills of caregivers. Scientific long-term care, on the other hand, bases on the scientific evidence, supports the elderly for independence, and prevents from making them severer. In the revision of long-term care fee payment system in 2021, the “additional fees for promoting scientific long-term care system” have been newly established. It is to allow long-term care service providers to earn a certain unit of additional payment after registering the data on long-term care users in “LIFE” and by making use of the feedback from data analytics results to improve the care. The long-term care service providers are then involved in providing quality, evidence-based services.

In addition, some facility services have implemented the reviewing of their systems such as relaxation of nighttime staffing standards, etc. on the condition of deploying ICT devices including watch devices and intercom systems. By 2022, staffing has been relaxed by introducing long-term care robots, ICT devices, and assistants to caregivers, which have been proven by the demonstrations for no negative impact to be affected on staff workload. As ICT is indispensable for the future long-term care services, the entire industry requires digital transformation. Therefore, the government has established the subsidies to help long-term care service providers apply ICT.

Future Outlook

The trend of long-term care insurance system affects enormously to the market environment. As a direction of the system revision, evidence-based long-term care services have been placed importance. As ICT application is inevitable to conform to the policy, the demand for LIFE and ICT devices including watch devices is likely to increase.

With its contribution expected significantly to workstyle reform and productivity improvement, ICT application will be one of the measures for securing human resources for long-term care.

Long-term care service providers are needed to make some other diverse efforts, such as improvement in compensations for long-term care personnel, more profound education as well as training programs, enhanced local cooperations, etc. In addition, M&A in the long-term care service business has been on the rise, increasing the clout by major companies, while small businesses are expected to play their important roles through their community-based business models that provide long-term care services suitable for each of local characteristics.

Research Outline

1.Research Period: April to July 2023
2.Research Object: Long-term care insurance program related data, long-term care insurance related companies, medical or long-term care personnel service providers
3.Research Methogology: Face-to-face interviews (including online) by specialized researchers, and literature research

<Products and Services in the Market>

In-home services, facility services, community-based services, etc. that are covered by long-term care insurance, and support for in-home care services.

Published Report

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