The Current and Future Situation of Rehab in Japan and China
By Carol Meyers, OTR/L
Both China and Japan are in the midst of major changing demographics which offers immense opportunities for foreign care providers. The colossal number of Chinese and Japanese who grow older without caregiving options will become an overwhelming economic drain, as well as a source of social instability. The senior care market in both Japan and China is also a promising opportunity if well thought out business models emerge making both countries one of the world’s most lucrative markets for senior care companies.
In 2016, 26.7% of the Japanese were 65+ years. It is estimated that by 2050, 40% of the population will be 65 years or older. Japan also has the highest numbers of elders living to 100 years and older. The prevalence rate of dementia among people aged 65 and over in Japan is estimated at 15%. The Japanese are well known for their “positive” aging with many octogenarians continuing to work, engage socially, and volunteer.
In China, it is estimated that by 2050, one-third of China’s population will be over 60, with a large majority diagnosed with cardiovascular disease, diabetes and cancer exacerbated by environmental factors such as air pollution. By 2040, it is estimated that China will have more individuals with dementia than exist in the entire developed world. The growing numbers of older Chinese with chronic disease presents a large challenge to China’s healthcare system.
Social and Cultural Shifts
Traditionally, honoring and revering elders has been a core value in Asian cultures. Multi-generational families have been the norm, and older adults were cared for by their children and grandchildren. The caregiving has been predominately provided by women. Japanese women are now entering the workforce in greater numbers, and this trend has created a greater need for alternative caregiving.
However, with the massive migration of younger people from rural to urban areas, has left elderly parents and grandparents whose geographic distance from their children means China’s traditional cross-generational housing model will no longer be an option. The one child policy has created a “4:2:1” problem with four grandparents and two parents for every one working Chinese.
The People’s Republic of China’s government (PRC) can no longer ignore the changing demographics with its impending economic and social impact. Currently, government funding only covers 1.6 percent of seniors in need of care, who otherwise cannot pay for their own care. The World Bank’s standard for developed nations is 8 percent coverage. This translates into a need for an additional 3.4 million hospital and nursing facility beds committed to senior care over the next several years.
In Japan, with the fastest aging population, over 500,000 elder Japanese are on wait lists for nursing facilities. From 2000-2012, home health providers increased 300%, private, semi-public and public nursing facilities increased 500%. Robotics are replacing the shortage of health care professionals, with an expanding and robust market in artificial intelligence.
Japan has a national health insurance plan for long term care, however, with the ever growing aging population, and declining birthrates, the government is dealing with balancing its budget and taking care of its aging citizens. The resistance to immigration is another obstacle in providing the needed human resources, despite a dire shortage of workers in all sectors.
Japan recognizes the importance of “aging in place” and has developed continuing care communities that allow individuals to remain in the same physical location when care needs change. Similar to China, the focus is on home health services and products to allow its elders to remain in their homes as a cost control measure and enhancing quality of life.
Perceived Value: Cultural expectations of how seniors are to be honored and taken care of in their old age is a key value in Asian culture. Secondary caregiving is not the preferred option, however, the reality of this secondary caregiving is becoming a reality for many Chinese. Foreign operators need to stress the quality of services provided, if not the outright luxury of the senior care experience.
Many early entrants into the Chinese market have focused on providing this luxury product with “5 Star Resorts.” The question remains as to whether there is a large enough market for the wealthy. The government has stressed the importance of providing cost-effective customized care to the mid-low end of the market with a focus on rehabilitation hospitals, hospice care and in-home elder care services.
Government Involvement: A lack of regulations, how the government will expand its reimbursement and what role government should play in shaping elder care remains problematic in developing healthcare services in China. The government has focused on provision of in-home care as a more cost-effective option.
Licensing: Obtaining licensing for foreign senior care operators is a major obstacle. The process is complicated time consuming and varies across provinces.
Human Resources: The paucity of qualified personnel, lack of training and educational opportunities and quality control pose a major challenge. Chinese who wish to pursue professions in healthcare need to travel to other countries to receive their education and training.
Marketing: Greater resources are needed to increase marketing efforts in China for foreign operators. The poor quality of outsourced senior care is one major obstacle and many Chinese are unaware of in-home or residential based caregiving options. Many people do not know that there are rehab services for an elderly parent who has had a stroke or needs therapy. To educate the average Chinese family on their options, Western operators are studying the hospital discharge process.
The Role of Therapy
China is still in its infancy in regards to educational programs for physical, occupational and speech therapy. Japan, on the other hand, has established academic programs for these disciplines, although a shortage exists to address the needs of the growing aging population.
A vast market exists for investment of U.S. rehabilitation companies with a focus on the following:
Rehabilitation hospitals: hip and knee replacements, spinal surgeries, and chronic diseases
Home Health Services
Adult Day Health Centers
Education and Training
Continuing Care Facilities