he effect of 2006 Long-term Care Insurance Amendment on Cost Containment: an empirical evidence from nationally representative claims data

2018 Fiscal Year Final Research Report

• Project/Area Number: 17H07182
• Research Category: Grant-in-Aid for Research Activity Start-up
• Allocation Type: Single-year Grants
• Research Field: Public finance/Public economy
• Research Institution: Waseda University
• Principal Investigator: FU RONG 早稲田大学, 政治経済学術院, 助教 (70805259)
• Project Period (FY): 2017-08-25 – 2019-03-31
• Keywords: Long-term Care Insurance / Moral Hazard

Outline of Final Research Achievements

We evaluate the presence and magnitude of moral hazard in Japan’s public long-term care insurance (LTCI) market. Using monthly LTCI claim records from January 2006 to December 2015 linked to concurrent death records, we construct a sample by propensity score matching insured individuals who copay 10% of their fees to those with no required copayments, and we implement fixed-effect estimations. We find that a ten-percentage-point reduction in the copayment rate increases monthly costs by 10.2 thousand yen, corresponding to a price elasticity of about -0.1. Insured individuals with no copayments tend to use more services and have more utilization days than those with copayments do.

Free Research Field

Health Economics

Academic Significance and Societal Importance of the Research Achievements

Fiscal sustainability is the greatest concern faced by Japan's LTCI. We verify the possibility of cost-sharing adjustments as one solution. Our findings may have broad implications for the rapidly aging world by providing valuable evidence for governments planning to launch public LTCI.