Drawing conclusions from Japanese demographics

THE REALITIES OF DEMOGRAPHICS and the aging of Japanese society are causing some people, primarily in private-sector businesses, to draw their own conclusions and act accordingly. Meanwhile, others are oblivious to the new realities because they can’t see–or don’t want to see–beyond their own front yard. The latter group might wind up regretting their failure to pay attention.

Here are some examples:

Item 1

The Nishinippon Shimbun published a survey earlier this week that revealed 58 hospitals and clinics in all seven Kyushu prefectures eliminated their pediatric wards during the period from April 2007 to April 2008. The primary reasons cited for the step included the declining number of children and a shortage of pediatricians. In contrast, 35 facilities added an internal medicine ward.

Some hospital officials pointed out the difficulties of pediatric practice. Because both parents are working in many more families than before, they take their children for medical examinations during their off hours, when most examinations are being conducted on emergency patients. It is also difficult to determine the severity of a child’s illness, and illnesses in children tend to become more severe more quickly than in adults. That means pediatricians must work longer hours without a commensurate increase in pay.

The 2004 reform of the system for medical education resulted in greater freedom for students to select their course of study. Since then, the number of medical students choosing pediatrics has sharply declined.

One hospital director also cited business factors as a reason. The remuneration for treating children is low, their diagnosis and treatment involve a lot of time and trouble, and fewer tests and drugs are ordered. Pediatrics always has been a money-loser for hospitals, but the falling population of children has spurred the elimination of the wards that treat them.

Here’s what is being left unsaid, but is perfectly obvious: Bright young medical students have drawn the conclusion that pediatrics is not a growth sector in Japan, and some hospitals think the sector is more trouble than it’s worth.

Why are pediatrics wards becoming unnecessary in some hospitals?

Item 2

The Ministry of Internal Affairs and Communications released a report for 5 May–Children’s Day–estimating the national population of children on 1 April this year. The estimate counted a record low of 17,250,000 children aged 14 or younger, down 30,000 from the previous year. The number of children in this category have declined every year since 1982, or 27 straight years. According to the ministry, this age group accounts for 13.5% of the population, one of the lowest levels in the world. This percentage has been dropping for 34 consecutive years.

On the same day, the National Institute of Population and Social Security Research (link also on right sidebar) reported there will be fewer than 15 million children by 2015, and they will account for less than 12% of the population. The institute said that urgent measures were needed to deal with this situation.

The institute broke down the percentages by prefecture. Tokyo had the lowest percentage with 11.7%, followed by Akita with 11.8%. This is significant because these two locations represent different population extremes. It isn’t surprising that there would be fewer children in Tokyo, a megalopolis with a high percentage of singles. But Akita is a more rural prefecture with a much smaller urban population.

The prefecture with the highest percentage of children was sunny Okinawa at 18.1%. The only one in which the percentage of children rose over the past year was Tokyo–by 0.1%.

The private sector has drawn its own conclusions from this information and is taking steps to seize their financial opportunities.

Item 3

On the same day that its report on local pediatrics wards appeared, the Nishinippon Shimbun ran a feature explaining that Kyushu Electric Power, Saibu Gas, Nishitetsu Railroad, and other big businesses in the Kyushu region are ramping up their business investments in homes for the aged by building facilities on their unused land holdings. These companies are parlaying their name recognition to create facilities that provide services similar to those of hotels. Some are assisted care facilities that require initial payments ranging from several hundred thousand yen to several million yen, and a few upscale institutions require initial entry payments of more than 100 million yen (about US$ 952,000).

A facility built in Fukuoka City by Saibu Gas has 122 units on 24 floors with Italian furniture in every unit and a natural hot spring on the premises. The minimum entry fee is 30 million yen. It opened in 2006 and now has an occupancy rate of 40%. Two of those units carried the 100-million-yen price tag.

The extreme aging of society

Recall that the National Institute of Population and Social Security Research forecast that children aged 14 and younger would account for less than 12% of the population in seven years. Statistics from the institute’s website also show that the percentage of Japan’s population aged 75 and older rose from 1.4% in 1930 to 4.7% in 1995 and to 8.8% in 2004.

Everyone knows the reasons for this: the Japanese are a healthier people to begin with, and they are living longer as a result of the advances in medical science.

That means the day there are more people aged 75 in Japan than those younger than 15 is just over the horizon. How far away is it? We might be able to count the years on our fingers, with a few toes thrown in.

To its credit, the Japanese government drew its own conclusions about this situation a long time ago. Japan’s semi-socialized medical system provides exceptional care with few of the drawbacks of the systems in Canada or Great Britain, for example. Until recently, the elderly were required to pay just 10% of their costs, and those who were registered as dependents of employed children (not unusual in this East Asian country) were exempt from payments altogether.

Considering the general abundance of modern life and the success of the Japanese pension system, the elderly—who are naturally the primary consumers of health care—had quite a deal for themselves.

But the country is in a difficult fiscal situation: gross public debt is more than 170% of GDP and is expected to continue to rise. More old people are using more health care resources paid for by public funds. And the tax-paying population is going to decline in the future, not grow.

The government began planning changes in the system a few years ago, and they inaugurated the new system on 1 April this year. Those people aged 75 and older will be required to be responsible for their own health care costs (though this has been purposely delayed to limit the political backlash), and there was a marginal increase in the monthly payments.

It’s difficult to blame anyone for the inevitable uproar that resulted.

Gray anger

The government is trying to keep outlays from getting out of hand. It’s not unreasonable to expect people to assume more responsibility for their health care, particularly when the system is so generous and affordable to begin with.

People who have ceded their responsibility for the basic functions of life to the government are not going to act their age when that government tells them fairness requires they start assuming more personal responsibility.

As the novelist Upton Sinclair once observed, it is difficult to get a man to understand something when his salary depends upon his not understanding it. Replace salary here with benefits, and the statement describes the reaction of many Japanese elderly to the new system.

One old man on the street interviewed for national television blustered for the camera that it was as if the government was telling him it hoped he died early. In fact, some people have started calling this the “hurry up and die” insurance system.

The reaction was so intense it was cited as one of the reasons for the defeat of the ruling party’s candidate in a by-election for a lower house seat in Yamaguchi.

Yes, that is blubbering selfish stupidity, but no one seems anxious to set them straight. Indeed, no one explained the new system to them to begin with. Discussions about the reforms became public around the time the war in Iraq started, and the mass media, being an entertainment enterprise, knows that people dying in explosions wins the ratings battle every time. Instead of covering a development that involved all Japanese, they devoted their time and resources to covering a story that involved almost no Japanese.

And when it became a matter of public discussion, the media chose to fan the political flames and turn it a potential election issue between the ruling party and the opposition rather than present it in a reasonable way.

Meanwhile, communicating with the citizens has never been a forte of the Japanese government.

Failing to connect the dots

The only ones who seem to be unable to draw any conclusions are those people over the age of 75, though they are probably hiding their eyes deliberately. The government is fiscally strapped. Personal liability for health care costs is low. The population is rapidly aging, and more elderly are using health care services more often. The number of children is plummeting, which means the pool of potential taxpayers to pay the bills is shrinking.

And yen trees don’t grow in the gardens of Nagata-cho.

Responding to the criticism, Prime Minister Fukuda Yasuo said the government would study ways to alleviate the burden on the lower-income elderly using funds from the national budget, but the new system would remain in place.

The contours of future developments are not difficult to make out, however. As health care costs continue to rise in tandem with the number of late-stage elderly, the older citizens will exercise their right to vote until they find a party that will shelter them from financial reality.

There will be no shortage of politicians volunteering for the task.

But that will inevitably place a larger financial burden on an increasingly smaller group of younger people who are employed. As with other social welfare programs, the Japanese health care system shares the same characteristics as a pyramid scheme—it requires a growing population to sustain, and that’s no longer possible in Japan. The taxpaying population won’t put up with it forever, and one day they will demand tax relief, perhaps with an American-style taxpayer revolt.

In that scenario, the logical first step would be to ration health care. Arguments in favor of that step already are being made elsewhere. As this article points out:

(In the book Setting Limits, author Daniel) Callahan proposed that the government refuse to pay for life-extending medical care for individuals beyond the age of 70 or 80, and only pay for routine care aimed at relieving their pain.

As we’ve seen, some people have been calling the new Japanese health care plan for the late-stage elderly the “hurry up and die” system. Of course that’s just silly, but it’s time those people started drawing conclusions of their own.

Otherwise, before too long, they might find that the rest of society really has begun to wish they would hurry up and die.