Aged society and Japan’s experiencesMechanism for healthy and vibrant society

Hiroto Izumi, Doctor of EngineeringSpecial Advisor to the Prime Minister

(Director-General of the Office of Healthcare Policy,

Cabinet Secretariat, Government of Japan)

April 14th, 2018

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

11,000

12,000

13,000

800 1000 1200 1400 1600 1650 1700 1750 1800 1850 1900 1950 2000 2050 2100

（万人）

（年）

(1338)

(1716 to 1745)(1868)

(2030)

116,620,000 people

Aging rate: 31.6%

(2050)

97,080,000 people

Aging rate: 38.8%

(2100) (moderate-

range estimate)

49,590,000 people

Aging rate: 41.1%

(2100) (high-end estimate)

64,850,000 people

(2100) (low-end estimate)

37,950,000 people

(1192)7,570,000 people

8,180,000 people

(1603)12,270,000 people

31,280,000 people

33,300,000 people

(1945)

71,990,000 people

Kamakura

shogunate

established

Meiji

Restoration

Muromachi

shogunate

established

Kyoho

Reform

sEdo

shogunate

established

End of war

(2010)

128,060,000 people

The total population in Japan is expected to return to the level of 100 years ago, in the late Meiji era, by the coming

centennial. It will be an extremely rapid and extraordinary change compared with the past millennium.

(10 thousand ppl)

(Year)

Source:Population to 2010: materials prepared by National Spatial Planning and Regional Policy Bureau, Ministry of Land, Infrastructure Transport and Tourism (MLIT) based on the national census results

by Ministry of Internal Affairs and Communications (MIC) and the analysis of long-term chronological population distribution data in the Japanese islands (1974) by National Land Agency

The population thereafter: the materials prepared by National Spatial Planning and Regional Policy Bureau, MLIT based on Population Projection for Japan by National Institute of Population and

Social Security Research (estimated in January 2012)

Long-Term Changes in Total Population and Estimates of Future Population

1

Comparison between medical costs, self-pay burdens, and premiums per capita by age group (public medical insurance) (annually)

2

(Estimated values based on the performance in 2014)

22.7

12.3 9.2 7.2 7.4 9.4 11.0 12.3 13.9 17.2 21.9

27.8 36.0

45.4

61.9

77.7

92.3

103.1 109.3

116.7 117.1

3.7 2.8 2.2 3.6

11.8

21.9 25.9 28.9 32.4 35.8 38.5 38.0 30.3 23.3

18.5 13.9 14.3 14.6 13.2 12.5 12.0

60

40

20

0

20

40

60

80

100

120

140

0～4 5～9 10～14 15～19 20～24 25～29 30～34 35～39 40～44 45～49 50～54 55～59 60～64 65～69 70～74 75～79 80～84 85～89 90～94 95～99 100～

医療費 保険料 自己負担

Me

dic

al

co

sts

Self-p

ay b

urd

en

an

d p

rem

ium

(x 10,000

yen)

自己負担 1.7 1.7 2.2 2.5 2.8 3.2 3.9 4.9 6.1 7.6 9.1 7.5 6.4 7.4 8.0 8.1 8.4 8.5保険料 1.9 10.0 19.8 23.4 26.1 29.2 31.9 33.6 31.9 22.7 14.2 11.0 7.5 6.9 6.6 5.1 4.0 3.5

内訳

Medical costs

PremiumSelf-pay burden

Breakdown

Self-pay burden

Premium

FY2012

<<¥479.6 trillion>>

FY2015

<<¥509.8 trillion>>

FY2020

<<¥558.0 trillion>>

FY2025

<<¥610.6 trillion>>

Pension

Healthcare

Child rearing

Long-term care

Other

0

20

40

60

80

100

120

140

160

(Trillion yen)

109.5

(22.8%)

119.8

(23.5%)

134.4

(24.1%)

148.9

(24.4%)

118.7

(23.3%)

131.8

(23.6%)

144.8

(23.7%)

Simulation based on

current situation

After reforms

Outlook of benefit expensesBenefit expenses will increase from 109.5 trillion yen (22.8% of GDP) in FY2012 to148.9 trillion yen (24.4% of GDP) in FY2025.

Note 1: This outlook takes into account concrete measures, processes, and estimates expenses for social security reforms and reflects the effects of fulfillment, concentration, and

an increase in efficiency.

Note 2:The above figures for child rearing include the expenses of nursery schools, kindergartens, overtime childcare, community childcare support centers, temporary childcare,

cash benefits for children, childcare leave benefits, benefits for delivery, social care, and prenatal checkups provided that new systems should be carried out.

Note 3: The figures in parentheses “( )” represent the ratios against GDP. The figures in double-parentheses “<<>>” represent the amount of GDP.

19.8

54.0

60.4

14.9

46.9

58.5

10.5

39.5

56.5

8.4

35.1

53.8

Estimates for Future Social Security Expenses

3

Ref.) Budget size

of Japan:

¥96.3 trillion in

FY 2015

Social Security:

¥31.5trillion

Ratio of the

social security

against the policy

expenses(*):

55.0%

(*) Budget excluding government debt

expenses and local allocation tax subsidies

Years Required for Aging Rate to Rise from 7% to 14%

4

2025

2023

2016

2002

2002

2000

2000

2000

1994

1970

1930

1947

1941

1944

1944

1938

1890

1865

25

28

18

22

24

18

19

26

60

24

45

45

53

65

69

73

85

115

2050

2051

2034

2024

2026

2018

2019

2026

2054

1994

1975

1992

1994

2009

2013

2011

1975

1980

1850 1900 1950 2000 2050

Indonesia

India

Vietnam

Thailand

Sri Lanka

South Korea

Singapore

China

Kazakhstan

Japan

United Kingdom

Spain

Hungary

Canada

United States

Australia

Sweden

France

Year

Pro

ject

ion

Note : The year to the left of the bar designates the year in which the percentage of the population aged 65 and above (aging rate) reached 7%; the number to the

right of the bar designates the year when the aging rate attained 14%. The number on the bar designates the years required for that increase.

Source : Kinsella and Wan He (2009); Kazakhstan, Vietnam, India, and Indonesia calculated using UN (2015).

The lost twenty years in Japan

Why did Japan lose international competitiveness and

suffer from an economic slump?

￥

EPA

High corporate tax

Strong yen

Increased electricity

cost

Restrictions on

energy/environment

Delay in the agreement of

EPA(Economic Partnership

Agreement), etc.

Labor regulations

Shortage of labor

Decreasing demand

. . .

Super-aging society with fewer children/

society with a falling birth rate

In reality the

fundamental

factors are:

Basic structure for sustainable growth – The fundamental idea –

5

Basic structure for sustainable growth – Supply side –

6

Ensure immediate effects and easily gain a national

consensus.

More children Social participation by

women

Working elderly

3) Securing labor power (quantity, quality, and efficient utilization)

2) Promotion of capital investment

1) Improvement of productivity (TFP) by innovations (Total Factor Productivity - TFP)

Supply side

Foreign workers

＋

Reforms regarding work style (Dynamic Engagement of All Citizens)Efficient

utilization

Quantity

Essentially healthyQuality

Infrastructure that allows as many nationals as possible to enjoy a society

with health and longevity, to continue to work if they wish, to participate in society,

and to proudly lead meaningful lives

A revolution in human resources development

〇Elderly in Japan are more eager to

work than those in Europe and

America. The percentage of people

aged 65 or more to the whole labor

force for 2016 is 11.8%, and the

number of those elderly is expected

to reach 7.7 million.

〇Labor force percentage of women

for 2016: 68.1% (the highest ever)

※Plan to Accelerate the Elimination

of Childcare waiting lists.

→Expand the capacity of childcare

to 500,000 by 2017

〇 Takes time to reach

consensus on some

issues such as developing

the environment to accept

foreign workers

〇The most important

but lacks immediate

effectivity

＋ Absorb overseas demand

ex.) Recurrent education

ex.) Labor regulation reform

Males

Females

2010

2016

2010

2016

79.55

80.98

70.42

72.14

9.13 years

8.84 years

12.68 years

12.35 years

86.30

87.14

Average life expectancy healthy life expectancy

73.62

74.79

Sources:

- Average life expectancy:

Complete Life Table 2010, Ministry of Health, Labour and Welfare (MHLW)

Abridged Life Table 2016, MHLW

- Healthy life expectancy:

Abridged Life Table 2010/ 2016, MHLW

Vital Statistics of Japan 2010 / 2016, MHLW

Comprehensive Survey of Living Conditions 2010 / 2016, MHLW

Population Projection for Japan 2010 / 2016, MIC

* Goal of Health Japan 21 (the second project): to extend the healthy life expectancy to exceed the increase in the average life expectancy (FY2022)

Goal of Japan Revitalization Strategy and Healthcare Policy: to extend the healthy life expectancy nationally by at least one year by 2020 (FY2020)

The healthy life expectancy in 2016 was 72.14 years for males and 74.79 years for females.

The healthy life expectancy was extended by 1.72 years in males and 1.17 years for females, compared with 2010.

The period with limitations for ADL was shortened by 0.29 years for males and 0.33 years for females, compared with 2010.

Average life expectancy and healthy life expectancyHealthy life expectancy: period with no limitations for activities of daily living (ADL)

7

Future Prospects

8

As The Japan Gerontological Society and Geriatrics Society propose to change the definition of

“the elderly” from people aged 65 and older to people aged 75 and older, the rejuvenation of the

bodily functions of the elderly and the extension of healthy life are important aspects.

Historical changes in total points of a

physical strength test

（Source）Japan Sports Agency

The result summary of the physical strength/exercise ability test in FY 2015

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2010年 2015年 2020年 2025年 2030年 2035年 2040年 2045年 2050年

Thousand people Elderly population (Five-year age group)

65～69歳 70～74歳 75～79歳 80～84歳 85～89歳 90歳～

【people over 80 years of age】15.99 million

(As of 2050 year)

【people over 65 years of age】29.45 million (Approx. 23%)

(As of 2010 year)

【people over 75 years of age】23.85 million (Approx. 25%)

(As of 2050 year)

（Source）Made by Ministry of Land, Infrastructure, and Transportation

It is expected that around 2020, the

physical strength of those aged 76-79

will improve to the level of physical

strength of those aged 66-69 in 1998.

Male

FemaleMale

Female

Male

Female

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Change in the number of employed people by age group and employment rates in major countries

9

492(7.8)

519(7.9)

1247(19.8)

1124(17.2)

1472(23.4)

1458(22.3)

1291(20.5)

1489(22.8)

1227(19.5)

1134(17.4)

570(9.1)

807(12.4)

6,298 6,293 6,280 6,326 6,371 6,401 6,465 6,530

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2010 11 12 13 14 15 16 17

(x 10,000 people)

(Year)

Over 65

years old

55-64

years old

45-54

years old

35-44

years old

25-34

years old

15-24

years old

Reference) 1. Prepared from the Ministry of Internal Affairs and Communications,

“Workforce survey” and OECD.stat.

2. Inside ( ) is the proportion of each age group of employed people.

The numbers of employed people by age group

Employment rates in major countries

51.5

50.6

55.3

58.4

58.0

60.4

58.5 59.7

56.6

58.2

50

52

54

56

58

60

62

2010 11 12 13 14 15 16

(%)

(Year)

U.S.UK

Germany

France

Japan

46.8 46.8

49.7

53.5 52.8

55.2

53.6 54.1

46.3

48.9

46

48

50

52

54

56

2010 2011 2012 2013 2014 2015 2016

(%)

(Year)

U.S.UK

Germany

France

Japan

Employment rates in major countries (women)

Comprehensive healthcare industries contributing to healthy and vibrant society

10

Medical care

Elderly care

Prevention― Meal, exercise, etc. ―

Healthy life― Housing, society development, etc. ―

Providingpersonal care

Supporting the independenceof elderly people

Treatment after illness

Disease prevention and individualized medical care

e.g.) Genome diagnosis

Cu

rre

nt S

itu

atio

nD

esira

ble

Dire

ctio

n

Medical Intensive

Elderly CareRehabilitation

Elderly

Care

Medica

l Elderly Care

Intensive

Elderly Care

Care WorkerPhysical Therapist, Occupational Therapist,

Speech TherapistMedical

(Doctor, Nurse)Specialist

（Recovery）

（Recovery）（Recovery）

（Recovery） （Recovery） （Recovery）

Home

Hospital /

Elderly Care

Facility

Frailty Prevention

Increase of

persons living

at home

Long-term care Service

Demand-Supply GapsFunctional

Recovery

Care

Disease Prevention

Rehabilitation

Functional

Recovery

Care

Home

Functional

Recovery

Care

Functional

Recovery

Care

Hospital/

Elderly Care

Facility

Desirable Direction regarding Medical & Elderly Care in Japan

11

Jan 2016

Taken to hospital

after found lying

at home from

suffering stroke

(Cerebral

infarction)

Feb 12

PEG tube is

inserted

(Percutaneous

endoscopic

gastrostomy)

Feb 20 April 9

Enter a home

Oct. 2016

Diagnosis:

All Bowel movement at Toilet

Meals are served as Regular diet

Walking with a use of circle walker

Long-term Care Level： 5

Diagnosis:

Hemiparesis

Impossible to

Intentionally communicate

Tube feeding (PEG)

Requiring complete assistance

(Bedridden, use of diapers)

BEFORE AFTER

Undergone

Operation

(Inguinal hernia)

Application

of

FRCEP

*details on next slide

Long-term Care Level： 3

CASE: An 86yr-Old-Female, Who Has Experienced Cerebral Infarction

12

Reference: Fifth period project plan of long-term care insurance in Wako-city

Japan

Saitama

Wako

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Transition of Certified Rates of Cases Requiring Long-Term Care(requiring assistance) in Wako City, Saitama Prefecture

13

This is an example of community approach which includes functional recovery care.

Wako city in Saitama prefecture, Japan is implementing functional recovery care on community basis.

They achieved lower ratio of population certified as being in need of elderly care than national average.

Ratio of population certified as

being in need of elderly care

The overview of the Act on Promotion of Healthcare Policy

14

Japan Agency for Medical

Research and Development

（AMED）

Headquarters for Healthcare Policy

Healthcare Policy (Cabinet decision)

(1) R&D in a medical field, arrangement of the environment, and sharing the outcome

(2) Creating/activating new industrial activities that can contribute to the formation of a

society of health and longevity (e.g., international expansion) and the arrangement of the

environment

Plan to promote R&D in the medical field (decided by Headquarters)

Purpose of the Act: to contribute to the formation of a society with health and longevity through R&D that

can help to provide the world’s highest level of healthcare

Asia Health and Wellbeing Initiative (AHWIN)

15

Contributing to Goal 3 of SDGs, achievement of Universal Health Coverage (UHC)

Promoting comprehensive healthcare industries in Asia including society development enabling healthy life as well as medical care to

achieve UHC and realize healthy and vibrant society

Minimizing the needs of medical / elderly care and enriching necessary healthcare services

Establishing Asia's framework for self-sufficiency and management of medical care through sharing Japan's knowledge / experiences and

promoting global activities of Japanese companies, etc.

Realizing data-based next generation medical care in Asia and sharing Japan’s experiences of the next generation medical foundation act

Target

Medical care

Elderly care― Functional recovery care ―

Prevention― Meal, exercise, etc. ―

Healthy life― Housing, society development, etc. ―

AsiaBuilding economic ties among

healthcare related industries

Accumulating technologies and experiences of healthcare field

Enriching human resources for professional health care services

Promoting global activities of Japanese industries

Japan

Development of healthcare services through commitment of

Japanese industries

Skilled medical personnel and care workers trained in Japan

E.g.) Human resouce developmentE.g.) Development of manufacturing infrastructure for medicines with global quality

< Comprehensive healthcare industries contributing to healthy and vibrant society >

Thank you for your attention