Decomposing Cost Efficiency in Regional Long-term Care Provision in Japan

Abstract

Many developed countries face a growing need for long-term care provision because of population ageing. Japan is one such example, given its population's longevity and low birth rate. In this study, we examine the efficiency of Japan's regional long-term care system in FY2010 by performing a data envelopment analysis, a non-parametric frontier approach, on prefectural data and separating cost efficiency into technical, allocative, and price efficiencies under different average unit costs across regions. In doing so, we elucidate the structure of cost inefficiency by incorporating a method for restricting weight flexibility to avoid unrealistic concerns arising from zero optimal weight. The results indicate that technical inefficiency accounts for the highest share of losses, followed by price inefficiency and allocation inefficiency. Moreover, the majority of technical inefficiency losses stem from labor costs, particularly those for professional caregivers providing institutional services. We show that the largest share of allocative inefficiency losses can also be traced to labor costs for professional caregivers providing institutional services, while the labor provision of in-home care services shows an efficiency gain. However, although none of the prefectures gains efficiency by increasing the number of professional caregivers for institutional services, quite a few prefectures would gain allocative efficiency by increasing capital inputs for institutional services. These results indicate that preferred policies for promoting efficiency might vary from region to region, and thus, policy implications should be drawn with care.

Assessment of Functional Effectiveness of the Long-Term Social Care Institutions in Latvia’s Municipalities by the Data Envelopment Analysis Method

“…In the context of an ageing population, Japan has also made an assessment of the effectiveness of long-term social care institutions by assessing both the costs and expenses, and the effectiveness of the infrastructure by comparing the institutions in different regions of Japan (Yamauchi 2015). Similarly, the European Union has performed a study related to the effectiveness of long-term social institutions using DEA.…”

Correlation Between Walking Ability and Monthly Care Costs in Elderly Patients After Surgical Treatments for Hip Fractures

“…The general budget of Japan for the 2012 fiscal year was approximately ¥90 trillion. The annual sum allotted to the long-term care insurance (LTCI) system established in 2000 steadily increased to ¥8.9 trillion in the 2012 fiscal year, and is difficult to sustain [ 1 ]. The Nursing Care Needs Certification board, which consists of physicians, nurses, and other experts, determines the certification levels of LTCI, to comply with the needs of elderly persons aspiring to receive benefits [ 2 ].…”