LEE, Sun-Young

(Ph.D. Student , Doshisha University)

The 3rd seminar on East Asian Social Welfare

Doshisha univ. and Chung-Ang Univ.
June 25, 2011
Contents
1. Background and Purpose of the presentation

2. Definition of Quasi-Market by Le Grand

3. Factors of Quasi-Market in Long-term Care service

4. Comparative structure of Quasi-Market, Japan and

Korea
1) Regulation of suppliers entry to the market
2) Setting the official price table

5. Concluding remarks
2
Background(1)
A number of reforms surrounding supply system of long-term
care for the elderly are being carried out around the world.

Japan: as part of Social Welfare Basic Structure Reform,

Long-term Care Insurance Act was legislated in 1997.

Korea: introduced Long-term Care Insurance for the elderly in

2008. It is well known that it was formulated based on
Japans Long-term Care Insurance Schemes, and it
has very similar structure to Japans care service.

Quasi-Market mechanism begins(expands) to function in

welfare service supply system.
4
Background(2) & Purpose
Great Britain first introduced Quasi-Market mechanism into
welfare supply system. The representative study of the Great
Britain on Quasi-Market is the one by J. Le Grand and W.
Bartlett in 1989.

The purpose:
To compare Japans Long-term Care Insurance
Schemes with Koreas counterpart in the framework of Quasi-
Market.

5
What is Quasi-Market?

The final responsibility to provide the social welfare

service : The government

Accordingly, while service is supplied in market

principle, but perfect competition could not be expected.

There exist competition in service supply and the

government places various limitation with laws for
guaranteeing rights of users, which is called Quasi-
Market.
7
Definition of Quasi-Market
by J. Le Grand (1)
Definition of Quasi-Market was first formulated
by J. Le Grand.

Market, because they replace monopolistic state

providers with competitive independent ones.

Quasi, because they differ from conventional

markets in a number of key ways. The differences
are on both supply and demand sides.

(Le Grand 1993:10) 8

Definition of Quasi-Market
by J. Le Grand (2)
- On the supply side, there exist non-profit organizations
which competed against profit organizations for users.

- On the demand side, consumers purchasing power is

not expressed in money terms in a quasi-market.
Instead, either it takes the form of voucher or need.
Services are bought by purchasing agent and then
distributed to users.

(Le Grand 1993:10) 9

 1. Factors of Quasi
2. Factors of Market
 Factors of Quasi in Quasi-Market

Public
administrator
Provider Assessment of
frailty grade,
Evaluation Entitlement of
Regulation of the Services, Quasi
suppliers entry to Maximum
the elderly care Setting the official amount
market Service
Provider price table by long-
term Care user
Remuneration

Administrative measures,
Canceled Provider

11
Factors of Market in Quasi-Market

Service user
Provider fees
Service user
Choices
Provider
Service user Market
Competition among
Provider providers for
securing users Service user

Provider Service user

Profit seeking

12
1. Regulation of suppliers entry to the market
2. Setting the official price table
Regulation of the suppliers entry
to the market
Japan
Profit-seeking bodies are Profit-seeking bodies are
prohibited to participate. allowed to participate.
Institutional Residential
exclusively delivered by the over half of the services
care service
social welfare corporations. care service
are delivered by such bodies.
Quasi aspect of Quasi-Market Market aspect of Quasi-Market
The dual structure of monopoly by the non-profit bodies
and major occupation by the profit-seeking bodies

Korea
all area of services has allowed all types of providers including
individuals.
14
 The proportion of subjects entering the
offer of the residential care service in Japan
100.0
Other
90.0

80.0 NPO
22.3
70.0 27.2 29.0
36.0 39.6 Cooperation
60.0 44.6 46.1 46.6 46.9
50.0 Medical
corporation
40.0 54.6
Profit-seeking
30.0 56.1 52.8 bodies
46.2 42.5
20.0 38.1 36.7 36.1 36.4 Social welfare
corporation
10.0
Municipality
0.0
2000 2001 2002 2003 2004 2005 2006 2007 2008
Source: Ministry of Health, Labour and Welfare in Japan (2000-2008) 15
 The proportion of subjects entering the
offer of the residential care service in Korea
100.0
90.0 22.1
80.0
70.0
Other
60.0 78.6 77.4
89.7 89.0
50.0 Individual
40.0 72.7
30.0 Corporation
20.0
10.0 19.1 21.4 Municipality
9.8 10.6
0.0
home-visit home-visit day care home-visit short-stay
care bathing nursing
care care
Source: Ministry of Health and Welfare in Korea (2009) 16
Setting the official price table
Japan and Korea
The fees of care services are officially set (named care
remuneration) by the Long-term Care Insurance Act.

price competition among service providers is prohibited by

the regulation.
leading to service quality competition in order to acquire the
service users.

These schemes are very different from the quasi-market of

NHS in Great Britain.

17
Differences of remuneration unit
between Japan and Korea
Two kinds of elderly care service
(visiting care services and visiting nursing services)
(unit: yen)
The time of required Japan Korea
in case of In case of
bodys care household
less than 30minutes 2,540
30minutes~59minutes 4,020 2,290 748
60minutes~89minutes 5,840 2,910 1,128
visiting care 90minutes~119minutes 6,670 1,495
service 120minutes~149minutes 7,500 1,869
150minutes~179minutes 8,330 2,114
180minutes~209minutes 9,160 2,345
210minutes~239minutes 9,990 2,562
more than 240minutes 10,820 2,765
less than 20minutes 2,850
visiting 20minutes~29minutes 4,250 1,915
nursing service 30minutes~59minutes 8,300 2,472
60minutes~90minutes 11,980 3,028 18
Low level of remuneration leads to

Cream skimming

Low level of Low pay

remuneration Low quality of services

Fraud

19
Structures of Quasi-Market of Japan and Korea
Japan Korea
Residential care service: open to varieties of bodies
Regulation of the Institutional care service:
Institutional care service:
monopoly by the non-profit
suppliers entry to the bodies
open to varieties of bodies
elderly care market possible individuals without
only corporate bodies
juridical(legal) person
setting the official price table
- be prohibited price competition
Regulation of price - leading to service quality competition
competition by setting regional differences: existent regional differences:
the official price table (0.3~0.5% premiums) non-existent
official prices disparity of visiting care service and visiting nursing
service: existence
Supervision and - Public research and release
assessment by the public system start in the year of 2011
administrator - Assessment by the third party
Entitlement of Services Application First step assessment by the computer Second step
based on the Assessment assessment based on the medical doctor opinion Seven frail-
of frail-grade grades in Japan, three grades in Korea
10% of costs for all kinds of institutional care service: 15%,
co-payment service residential care service: 20%
right of choice of service choice-by-users type
21
care manager care manager: existent care manager: non-existent
Concluding remarks
Similarities of Japan & Korea
Residential care service: open to varieties of bodies
Price competition is prohibited

Differences of Japan & Korea

Institutional care service: open to varieties of bodies
in Korea
Low levels of care remuneration in Japan, especially
in Korea 22
Why such difference?
Cause1.
Insufficiency of infrastructure(quantitative &
qualitative capacity of supply)
Cause2.
Low degree of general acknowledgment
to long term care (services and schemes)

Quasi-Market factor does not always remain the

same, varying with era and area.
23
Thank you!
The proportion of subjects entering the offer
of the institutional care service in Japan
100.0

90.0

80.0

70.0
other
42.5 48.3 48.7 49.3 49.8 50.1 50.6 51.0 51.3
60.0
medical
50.0 corporation
40.0 Social welfare
30.0 corporation
39.2
34.6 34.8 35.4 35.6 35.9 36.0 36.2 36.3 municipality
20.0

10.0

0.0
2000 2001 2002 2003 2004 2005 2006 2007 2008

25
The proportion of subjects entering the offer
of the institutional care service in Korea
100.0
90.0
80.0
50.1
70.0
60.0 80.8 Other
50.0
Individual
40.0
30.0 Corporation
45.8
20.0
municipality
10.0 18.3
0.0
Geriatric Care Facility Senior Congregate
Housing
26
 Two kinds of elderly care service
(visiting care services and visiting nursing services)
(unit: yen)
The time of required Japan Korea
in case of In case of
bodys care household
less than 30minutes 2,540
30minutes~59minutes 4,020 2,290 748
60minutes~89minutes 5,840 2,910 1,128
visiting care 90minutes~119minutes 6,670 1,495
service 120minutes~149minutes 7,500 1,869
150minutes~179minutes 8,330 2,114
180minutes~209minutes 9,160 2,345
210minutes~239minutes 9,990 2,562
more than 240minutes 10,820 2,765
less than 20minutes 2,850
visiting 20minutes~29minutes 4,250 1,915
nursing service 30minutes~59minutes 8,300 2,472
60minutes~90minutes 11,980 3,028

Amount of care remuneration when minimum wage is one

Japan=1:18
Korea=1:40 27