Issues and Challenges of Home-Visit Long-term Care Service Providers in Japan
―Toward the expansion of business scale―

The number of elderly people dying at home is expected to double to about 350,000 in 2040, further boosting the demand for home care services. The number of home-visit long-term care service (home-help service) offices and workers has tripled since the Public Long-term Care Insurance System started in 2000, but the majority of these offices are still small. There are two factors behind this: low barriers to entry and the individuality of the service.

A smaller size of service provider offices results in higher adjustment costs and lower management functions. The burden of communication and coordination arises when a user is forced to use multiple offices because their needs cannot be met by one service provider. Small business offices are burdened with management tasks such as appropriate treatment and training based on competency assessments, countermeasures against risks such as natural disasters and infectious diseases, and the prevention of abuse and harassment, while the introduction of ICT and improvement of operational efficiency are lagging behind. Against this backdrop, small-scale establishments face high employee turnover and problems with business continuity.

The target for a home-visit long-term care business to maintain stable operations on a standalone basis is 90 users and monthly sales of 3.5 million yen. Currently, only 3.8% of all homevisit long-term care offices have more than 100 users. Simply assuming one service provider office per 90 users, the total number of appropriate offices is calculated to be approximately 11,500, and in that case, the number of employees per office would be 48, including 17 fulltime and 31 part-time employees. Excluding those that provide home-visit long-term care services as an adjunct to other facilities, there are currently approximately 20,000 home-visit long-term care service provider offices nationwide, and consolidation and integration of these offices will be necessary.

To consolidate and integrate home-visit long-term care service provider offices, there are measures to be taken on the supply side and the demand site. Firstly, for newly entering service providers, prefectures should require them to submit a business continuity plan (BCP) at the time of application for designation as a Public Long-term Care Insurance service provider, to encourage them to consider whether or not they can operate stably. Prior to designation, there should be more opportunities for consultation between prefectures and municipalities, and designation should be made after considering the service delivery system and the allocation of care resources. Secondly, for existing service providers, Public Long-term Care Insurance Service Fees can be designed to offer incentives for cooperation with other service providers. Mitigating re-commission of service may encourage them to substantially increase the scale of their management. Thirdly, on the demand side, it is difficult to expect selection and consolidation of service providers by user choice, because of the supply-demand balance and information asymmetry. However, a considerable percentage of home-visit long-term care services are now provided to residents of serviced senior housing, and the concentration of users living close to service provider offices is expected to contribute to the expansion of the scale of business. As the working-age population continues to decline and the supply constraints become more severe, it is necessary to consider the realistic option for users to relocate within their own neighborhoods closer to the service provider offices.

The establishment of the Public Long-term Care Insurance System has advanced the socialization of long-term care in which society as a whole takes care of the elderly in place of the family. However, if the necessary services are not available due to a shortage of supply, the situation could be reversed. Early withdrawal from the labor market due to parental caregiving would be a great loss for our country, whose working-age population is shrinking. In order to provide services effectively and efficiently with fewer workers, it is important that service provider offices are consolidated to a size that allows them to operate stably.

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