In Japan, the Rising Cost of Elder Care—and Dying Alone

In Japan, the Rising Cost of Elder Care—and Dying Alone

By Kanoko Matsuyama on February 28, 2013

Itoko Uchida, 82, was counting on the nephew she raised to support her during old age. He refused, she says, forcing the Tokyo widow to pay 710,000 yen ($7,600) to a nonprofit, which will assist with her nursing home application and act in lieu of a close relative on health-care matters. Some 420,000 Japanese nationwide are waiting for a nursing home bed.

An erosion of traditional Confucian values, which stress the obligations children have to their parents, means fewer elderly are being cared for at home by relatives. By 2025, one in three citizens in Japan will be 65 or older, up from 12 percent of the population in 1990, the Organisation for Economic Co-operation and Development estimates. “The system is designed for the 1970s, when multiple generations lived together and family caregiving was thought to continue forever,” says Hiroshi Takahashi, a professor of health sciences at the International University of Health and Welfare in Otawara, north of Tokyo. “But that’s not the reality now.”

In 1980, 53 percent of people older than 65 in Japan lived with their children, according to Japanese health ministry data. In 2010 that proportion was down to 18 percent. By 2030 the number of seniors living alone will increase 54 percent from 2010 levels, according to the National Institute of Population and Social Security Research in Tokyo.

Annual elder care costs will more than double by 2026, to 19.8 trillion yen ($212 billion), from March 2013, the health ministry estimates. This rise in spending threatens to overload the country with the world’s highest debt load as a percentage of GDP. By 2030 an estimated 470,000 seniors may die alone in Japan unless more investment is made to care for them, Takahashi says.

The growing demands of the elderly may be stoking violence toward them. In 2011, 21 seniors in Japan were murdered or died from neglect, and the number of elderly who were abused by family members jumped 32 percent from 2005 levels, to 16,599, according to health ministry statistics.

After Uchida’s husband died, her 60-year-old nephew at first stepped in to assist with her nursing home application and to sponsor her long-term care. In Japan, a sponsor agrees to be the one a nursing home consults when there’s a problem with a resident. The help from her nephew stopped when his wife intervened, says Uchida, who is 22nd in line for a bed in a nearby home. “I put stress on his marriage,” she says. Uchida paid for support from the Four-leaf Clover Association, a nonprofit that’s helping about 200 elderly in Tokyo and Kobe complete applications and obtain the requisite sponsorship for a place in a nursing home.

More Japanese, including the elderly, are abandoning tradition and opting to live independently, according to a 2008 government study. Social networks are breaking down as family members live farther apart and can’t afford to socialize as much at weddings and other family events, says Katsuyoshi Kawai, professor of social welfare at Meiji Gakuin University and the author of the book Seniors Living Alone in Urban Cities and Social Isolation. “It’s hard to continue such customs” when the economy is stagnating, Kawai says.

Authorities are responding: In metropolitan Tokyo, officials in Adachi ward are conducting an audit of people older than 70 who live alone and shared households with residents who are all older than 75. They are sharing this information with social workers and police.

Traditional households, with two or three generations under one roof, are not coming back. “Our generation has lived separately from our parents, and so wives have enjoyed freedom from their in-laws,” says Toshie Kurita, 69, whose mother-in-law volunteered to move into a nursing home eight years ago. Kurita, a widow, visits her mother-in-law every other week and says she will be happy to hire professional assistance if necessary later in life. “If money can solve the problem, that’s the best,” Kurita says. “No one wants to beg their daughter-in-law to care for them when they’re nearing the end of their life.”

The bottom line: Annual elder care costs in Japan may reach $212 billion by 2026 as the society ages and more nursing homes are built.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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