Restructuring of Hospital Long-Term Beds

• Abstract
• Purpose of health policy or idea
• Characteristics of this policy
• Political and economic background
• Purpose and process analysis
• Expected outcome
• References

Abstract

In 2006, the Government declared to decrease the number of long-term care beds in hospitals by 2012 to promote community care and to mitigate the increase in hospital care costs. To achieve the goal, Government introduced differentiated payments to hospital long-term beds according to medical need, and facilitated conversion of those beds into nursing home or community-based services through subsidies and deregulations. In addition, prefectures made plans on reorganization of long-term care.

Purpose of health policy or idea

Long-term care beds in hospitals have been historical products in health and social care in Japan. Institutional long-term care for the elderly had been provided at hospitals as well as at nursing homes or intermediate care facilities in the late 20th century. Since hospitals had a large number of long-term beds when the long-term care (LTC) insurance was implemented in 2000, hospitals have continued to provide long-term care even after the inception of LTC insurance.
 
In 2005, the Ministry of Health, Labour and Welfare declared that it intends to restructure 380 thousand long-term care beds in hospitals by the end of FY 2011 (March 2012). The restructurings are intended to decrease the number of long-term care beds in hospitals in order to mitigate the increase of hospital or medical costs and to utilize the beds more effectively to provide health services to patients with chronic medical conditions.

In 2005, there were approximately 380 thousand long-term beds at hospitals, of which 250 thousand were used for services covered by the public health insurance, and the remaining 130 thousand beds for services covered by LTC. In addition to those 130 thousand beds at hospitals, 400 thousand beds at nursing homes and 270 thousand beds at intermediate care facilities were used for services covered by LTC. On these beds the present policy will have no direct impacts. There have been differences in standards for rooms and buildings, and average cost per occupant between the beds at the various types of facilities. Put simply, hospital beds are more expensive, smaller, and more medically staffed.

The Government announced that the period for restructuring will be from FY 2008 to FY 2012. Also, it announced the following principles for the restructuring:

• After the end of the restructuring phase, long-term beds at hospitals shall be used only for treating patients with chronic medical conditions, but not for patients without such conditions;
• After the end of the restructuring phase, no long-term beds at hospitals shall be used for services paid by LTC insurance;
• The government shall provide financial measures, including loans and subsidies, to support providers operating the existing long-term care beds at hospitals when they want to convert beds at hospitals to other facilities used for other types of services.

According to the initial projection given by the Ministry, at the end of the restructuring phase, the number of long-term beds at hospitals will be reduced from 380 thousand to 150 thousand, which shall be used only for the medically needy, and financed by public health insurance. On the other hand, 230 thousand beds will be used for services paid by LTC insurance, mostly for beds at intermediate care facilities.

Main points

Main objectives

The main objectives of this policy are to increase allocative and technical efficiency in long-term care by restructuring long-term care beds according to their functions; and to make long-term care provision more understandable for citizens.

Type of incentives

The Government has introduced three types of financial incentives with decentralized planning.

• Firstly, both demand- and supply-side financial incentives have been introduced: one important demand-side incentive has been increased co-payments for utilization of long-term beds at hospitals by the elderly; while differentiated per-diem payments, according to medical necessity, have been introduced for long-term beds at hospitals used for services paid by the public health insurance as a supply-side incentive to promote managerial changes in hospitals with long-term beds. Three levels of medical necessity have been determined (level 1, with least necessity, to level 3, with most necessity) by using medical diagnoses and procedures used for occupants.
• Secondly, the Government has been developing deregulation measures and financial incentives to promote conversion from hospital long-term beds, funded by the public health insurance, to long-term beds or other types of facilities, funded by the long-term care insurance. The former includes permissions to (not-for-profit) medical corporations to establish nursing homes, and relaxed standards for converted LTC facilities in terms of manpower, building, and services provided; the latter includes subsidies, refunding loans, and tax breaks.
• Thirdly, local governments (prefectures) are obliged to set targets for reducing the number of hospital long-term beds as well as to plan visions on how to restructure existing beds until 2012.

Groups affected

Providers operating hospitals with long-term beds, citizens, local governments (prefectural governments)

Innovationsgrad	traditionell		innovativ
Kontroversität	unumstritten		kontrovers
Strukturelle Wirkung	marginal		fundamental
Medienpräsenz	sehr gering		sehr hoch
Übertragbarkeit	sehr systemabhängig		systemneutral

The policy seems innovative in the sense that its objective is neither to increase nor to maintain, but to decrease the number of hospital beds. Also, the fact that the national plan was built on local or prefectural plans is a new way of health policy making, although similar ways had been used for developing policies on social services.

The policy has been continuously under debate not on its direction but on the speed, the extent, and the processes of its implementation. It will not change the basic structure of the public health insurance and the long-term care insurance, but adapt existing hospital long-term beds to the two different public insurance systems. Thus its structural impact will be marginal.

Public visibility has not been very high because there have been more visible issues such as the physician shortage since 2006. But this policy will become more visible if old citizens discharged from hospital long-term beds suffer from serious health and social problems.

The policy of restructuring hospital long-term beds can be transferred to countries with similar structures, at least, in terms of setting targets and developing policy instruments such as financial incentives and deregulation to promote conversion of beds.

Political and economic background

The policy of restructuring hospital long-term beds reflects the circumstance of continuous population aging as well as general policies for containing social costs (including health care, pension, and social services) to clear off national debt and achieve a balanced budget.

After the resignation of former Prime Minister Koizumi, who had strong power to carry through drastic policies with amazing popularity, however, the Government has apparently become more careful in handling these potentially controversial issues.

Complies with

The policy has been developed along national and prefectural cost containment plans.

Purpose and process analysis

Current Process Stages

	Idee	Pilotprojekt	Strategiepapier	Gesetzgebung	Umsetzung	Evaluation	Veränderung/Richtungswechsel
Implemented in this survey?

Origins of health policy idea

The debate on the policy started when the Ministry of Health, Labour and Welfare declared its vision to restructure hospital long-term beds in December 2005. Making delivery of health and social care more efficient has been a major policy objective, and the policy is along this line.

This relatively drastic policy, however, was formulated as a part of cost containment policies and has been included in "Making-Health-Care-Cost-Reasonable Plans" of the national and local governments (prefectures) that the Health Care Reform Act 2006 requires.

Initiators of idea/main actors

• Regierung

• Leistungserbringer

• Patienten, Verbraucher

Approach of idea

The approach of the idea is described as:
new: Drastic reduction of hospital long-term beds is a new policy approach.

Stakeholder positions

As in other cases of policy-making in Japan, the Ministry of Health, Labour and Welfare was the initiator of this policy. There has been concern over the feasibility of the drastic MoH visions among providers, civil societies, and even Diet members of the ruling party: they fear that drastic restructuring of hospital long-term beds might reduce the total number of long-term care beds, leading to shortages and incapacity in providing long-term care to those with either medical and/or social needs.

Local governments have been concerned with additional budgets incurred by shifts of long-term care provision from the public health insurance to the long-term care Insurance. Local governments are solely responsible and accountable for managing the LTCI, while public health insurance, including the Health Insurance for the Old-Old, has mechanisms for cross-subsidizing between occupation-based insurance and the Citizen Health Insurance. That's why they are concerned over additional expenditures incurred by the shift.

On the other hand, cost containment policies have been supported at large until recently by most stakeholders except healthcare providers. Therefore, the Health Care Reform Bill 2006 passed the Diet.

The media welcomed policies for a more efficient provision of long-term care, but expressed anxiety that with the rapid reduction of hospital long-term beds patients might have difficulties in finding available long-term care facilities.

Actors and positions

Regierung
Government	sehr unterstützend		stark dagegen
Leistungserbringer
Hospitals having long-term beds	sehr unterstützend		stark dagegen
Japan Medical Association	sehr unterstützend		stark dagegen
Patienten, Verbraucher
Alzheimer's Association Japan	sehr unterstützend		stark dagegen

Influences in policy making and legislation

The Health Care Act 2006 includes provisions for five-year national and prefectural "Making-Health-Care-Cost-Reasonable Plans", which shall include plans for making health care delivery more efficient. In the process of legislation, the Ministry of Health, Labour and Welfare published documents indicating that those plans shall include plans for restructuring of hospital long-term beds.

The Act passed under the powerful Koizumi administration, but concerns over possible capacity shortages lead to a resolution at the Diet that the Government shall take financial measures and support community care development to ensure appropriate service delivery to occupants of long-term care facilities according to their needs.

Legislative outcome

success

Actors and influence

Regierung
Government	sehr groß		kein
Leistungserbringer
Hospitals having long-term beds	sehr groß		kein
Japan Medical Association	sehr groß		kein
Patienten, Verbraucher
Alzheimer's Association Japan	sehr groß		kein

Positions and Influences at a glance

Adoption and implementation

The Government revised payment rules of the public health insurance and introduced differentiated per-diem payments for long-term beds at hospitals according to medical need. As described above three levels of medical necessity have been determined (from level 1, with least necessity, to level 3, with most necessity) by using medical diagnoses and procedures used for occupants.

Also, co-payments for hospital long-term beds have been increased although exemptions for those with intensive medical needs have been established later.
The government conducted surveys of all hospitals having long-term beds and sampled patients there in 2006. The results showed that half of all long-term beds are used for medically needy patients (MHLW 2007).

In June 2007, the Government announced deregulation measures and financial incentives to promote conversion of hospital long-term beds, funded by the public health insurance, to long-term beds or other types of facilities, funded by the long-term care insurance (MHLW 2008b). For example, hospital long-term beds can be converted to a new type of long-term care facilities with more registered nurses which shall be covered by the LTC.

Other measures include permissions for establishment of nursing homes to (not-for-profit) medical corporations, and relaxed standards for converted LTC facilities in terms of manpower, building, services provided, subsidies for renovation of buildings, refunding loans, and tax breaks. For example, hospital long-term beds have more medically trained staff than other long-term beds and provide more services requiring medical skilfulness, such as suction. Thus the relaxation enables converted beds at intermediate care facilities with more skilled nurses to keep providing those services. Another relaxation is concerned with building facilities. For example, the standard for the space of a bed at hospitals is less than that at intermediate care facilities. The government relaxed the standard for converted beds at intermediate care facilities. The relaxation will make conversion easier because rooms do not necessarily have to be re-built. Another example is that if a hospital and an intermediate care facility are built on one site they can share elevators and stairs. Those relaxations will promote conversion of beds but will unlikely lead to a deterioration of quality of long-term care.

On the other hand, prefectures developed their "Making-Health-Care-Cost-Reasonable Plans", including restructuring plans for hospital long-term beds. Prefectures have discretion to decide on targets for reducing the number of hospital long-term beds, taking into account possible conversion to other types of facilities for long-term care, the forecasted increase of the elderly population, preventive measures and so forth (MHLW 2008a). By June 2008, 44 of 47 prefectures had established their plans. Based on these plans, the Government released the "National Making-Health-Care-Cost-Reasonable Plan" in September 2008 (MHLW 2008c). The plan endorses the prefectural plans. The national plan, summarizing prefectural plans, projects that there will be approximately 210 thousand hospital long-term beds in FY2013, which is 60 thousand more than the initial projection.

Monitoring and evaluation

Prefectures and the Government shall evaluate the advancement of "Making-Health-Care-Cost-Reasonable Plans" and report them in 2010, for revision toward 2012, when formal evaluation shall be conducted.

Expected outcome

There seems a rationale for the policy in terms of technical and allocative efficiency. The financial incentives and deregulation introduced by the Government will work to facilitate conversion from hospital long-term beds to other types of long-term care facilities.

Considering the inevitable and dramatic increase of the aged population, concerns that the reduction of hospital long-term beds might lead to capacity shortages in providing quality long-term care are understandable. Because providers can exit from long-term care as well as hospital care at their discretion, the government shall carefully monitor providers' behaviour and take additional measures to maintain the necessary amount of institutional long-term care.

Impact of this policy

Qualität	kaum Einfluss		starker Einfluss
Gerechtigkeit	System weniger gerecht		System gerechter
Kosteneffizienz	sehr gering		sehr hoch

Differentiation of hospital long-term beds to those for the medically needy and for residents with less medical needs will improve quality of care and increase efficiency in the long term although conversion may increase costs in the short term. It is difficult to project overall impacts on equity, but the policy will make it easier to evaluate equity either in health care or in long-term care.

References

Sources of Information

Ministry of Health, Labour and Welfare (MHLW) (2007). Result of A Survey on Hospital Long-Term Beds and Patients Using Them.

MHLW (2008a). A Guideline for "Making-Health-Care-Cost-Reasonable Plans".

MHLW (2008b). Measures on Restructure and Conversion of Hospital Long-Term Beds.

MHLW (2008c). The National Making-Health-Care-Cost-Reasonable Plan.

Reform formerly reported in

Delivering appropriate care for the aged Process Stages: Strategiepapier, Idee

Author/s and/or contributors to this survey

Ryozo Matsuda

Ryozo Matsuda is a professor in community health and health policy at the College of Social Sciences, Ritsumeikan Univerisity.

Empfohlene Zitierweise für diesen Online-Artikel:

Matsuda, Ryozo. "Restructuring of Hospital Long-Term Beds". Health Policy Monitor, October 2008. Available at http://www.hpm.org/survey/jp/a12/2