The introduction of Japan's long-term care insurance (LTCI) system in April 2000 has made long-term care an explicit and universal entitlement for every Japanese person aged 65 and older based strictly on physical and mental status. At the start of the program, more than two million seniors were expected to apply for services to approximately 3,000 municipal governments, which are the LTCI insurers. The LTCI implementation required a nationally standardized needs-certification system to determine service eligibility objectively, fairly, and efficiently. The current computer-aided initial needs-assessment instrument was developed based on data collected in a large-scale time study of professional caregivers in long-term care institutions. The instrument was subsequently tested and validated by assessing data of 175,129 seniors involved in the national model programs before the start of LTCI. The computer-aided initial assessment (an 85-item questionnaire) is used to assign each applicant to one of seven need levels. The Care Needs Certification Board, a committee of medical and other professionals, reviews the results. Three years after implementation, the LTCI system and its needs-assessment/certification system have been well accepted in Japan. Despite the overall successes, there remain challenges, including area variations, growing demands for services, and the difficulty of keeping the needs certification free of politics. The LTCI computer network that links municipalities and the central government is instrumental in continuously improving the needs-certification system. Future challenges include promoting evidence-based system improvements and building incentives into the system for various constituencies to promote seniors' functional independence.

Japan implemented a mandatory social long-term care insurance (LTCI) system in 2000, making long-term care services a universal entitlement for every senior. Although this system has grown rapidly, reflecting its popularity among seniors and their families, it faces several challenges, including skyrocketing costs. This article describes the recent reform initiated by the Japanese government to simultaneously contain costs and realize a long-term vision of creating a community-based, prevention-oriented long-term care system. The reform involves introduction of two major elements: "hotel" and meal charges for nursing home residents and new preventive benefits. They were intended to reduce economic incentives for institutionalization, dampen provider-induced demand, and prevent seniors from being dependent by intervening while their need levels are still low. The ongoing LTCI reform should be critically evaluated against the government's policy intentions as well as its effect on seniors, their families, and society. The story of this reform is instructive for other countries striving to develop coherent, politically acceptable long-term care policies.