Skip to main content


Table 1 Relevant regulatory differences among three facility types

From: Impact of a fixed price system on the supply of institutional long-term care: a comparative study of Japanese and German metropolitan areas

  Institutional facilities (Japan) Private nursing homes (Japan) Institutional facilities (Germany)
Market entrance -Supply control: authorities can reject approvals in terms of their referring levels capping bed density [28] -Service provision planning by each municipality as insurer & prefecture -Not subject to authorities’ provision planning (-2006) -No supply control under LTCI: LTCI funds must contract with any provider who meets quality standard [24].
-No supply control (-2006) -Need planning: abolished
Providers -Not-for-profit; small minority is municipal - Majority is for-profit -Mixed: for-profit & not-for-profit; minority is municipal
Financing LTCI -Half by contributions & half by taxation [32] (Public payers: state, prefecture & municipality) -Half by contributions and half by taxation [32] (Public payers: state, prefecture & municipality) -Financed solely by contributions
Financing care fees -Fees: publicly fixed - Fees: publicly fixed under LTCI -Before LTCI: fully financed based on cost- recovery-principle [23]
-Co-payment before LTCI: according to ability-to- pay principle -Different according to eligible levels -Fees: bargained between providers & social-assistance (SA) sponsor/LTCI funds etc.; reflecting facility’s individual costs for each eligible level
-Co-payment under LTCI: 10% of fees - Co-payment: 10% -Benefits under LTCI: publicly fixed and capped, according to eligible levels
-Different according to eligible levels under LTCI -Care fees for PNHs are lower than that for IFs -Users who cannot co- payment: eligible for SA
Financing hotel costs (accommodation & meals) -Fees: Publicly fixed; not adjusted to local price/rent level -Fees: market-based; set by facility -Before LTCI: fully financed based on cost- recovery-principle [23]
- Co-payment: depending on room type and income -Fully paid out-of-pocket -Fees: individually bargained between LTC fund and facility (provider) based on costs [33]
-After 2005, middle and high income users are no longer subsidized & pay full price set by facility out-of-pocket -Not subsidized -Fully paid out-of-pocket -Users who cannot co- payment: eligible for SA
-Users who cannot co-payment eligible for SA
Interests of insured persons Preferable to other residential facilities due to higher subsidies, not-for-profit status & no time-limits [34] More expensive alternative to IFs -SA-recipients: preferable to other services due to higher subsidies
-Not-SA-recipients: more expensive than home care due to considerable out- of-pocket payments [24]
Interests of authorities (J) & LTCI funds (G) Economic incentive to constrain IF supply & fees, but politically for need-oriented provision Economically preferable due to lower benefits & almost no subsidy compared to IFs No strong economic incentive to constrain fees & expenditures
Subsidy for (initial) capital costs - Amount is based on a national standard [28] Rarely -Before LTCI: directly paid (only to not-for-profit facilities)
-Paid directly by state -Under LTCI: capital costs are fully financed by users separately from hotel costs; low- income users are subsidized for capital costs
-Sometimes additionally subsidized depending on municipal decision
-Land acquisition subsidized decreasingly
Significance -24% of LTC beneficiaries use IFs (2009; calculated based on official data [35]) -4% of LTC beneficiaries (2009; incl. PNH-similar facilities; calculated based on official data [35]) -30% of LTC beneficiaries (2009) [27]
-LTCI gave a boost in development of PNHs
Clientele with LTCI benefits - Eligible persons assessed as heavily independent All LTC eligible persons -All LTC eligible persons
- Low-income users as majority - SA-recipients: about 80/30% of users (before /under LTCI) [24, 36]