5. Shift to Stable Growth and Reexamination of the Social Security Systems: 1975-1989

(1) Overall Situation

End of High Economic Growth and Administrative and Fiscal Reforms

• Ironically, in the autumn of 1973, when a large-scale improvement in benefits of medical insurance and pension programs was carried out, the first oil crisis broke out, which resulted in major social and economic changes in our country. In addition to causing prices to skyrocket, the high price of oil forced down company profits, thus bringing to a close the period of high economic growth.

• Later, the economy shifted to a mode of stable growth. However, because it was difficult to increase tax revenue, a great number of government bonds were issued, the accumulation of which burdened national finances.
  Furthermore, in the midst of the economic setbacks accompanying the second oil crisis in 1979, administrative and fiscal reforms were proposed under the slogan "fiscal restoration without increasing taxes," aiming at thoroughly controlling government expenditures.

Reexamining the Social Security Systems

• During this period, administrative and fiscal reforms were promoted to tackle the worsening fiscal situation caused by changes in the basic economic conditions. Various reexaminations of the social security systems were also carried out. Under such circumstances, in the 1980s and after, large-scale revisions in the medical insurance system and the pension system were carried out. This was due to the population aging, which caused the increase of the benefits for the elderly such as health expenditures for the elderly and old-age pension. In addition, it made clear the imbalance of burden due to the difference in the rate of participation by the elderly in various separately established programs.

Establishing a Health Service System for the Elderly

• Medical services for the elderly were made free in 1973; after that, health expenditures for the elderly drastically increased. This had a direct impact on, and worsened the financial situation of the National Health Insurance which structurally covered many elderly people.
  As a result, in 1982, the Health and Medical Service Law for the Elderly was enacted and, from the perspective of fairly sharing the burden among various medical insurance programs, it was decided that each program shall make financial contributions to fund the medical expenses for the elderly. To enhance awareness for maintaining the health of the elderly and to achieve proper levels of medical service utilization, it was determined that beneficiaries themselves shall bear certain amount as copayments. Moreover, in order to ensure a medical care delivery system which responds to the characteristics of the elderly, the medical fee schedule for the elderly was decided to be separately created. Also, health services such as health examinations, health education, home-visit guidance and functional training for persons age 40 and older were established, and measures against geriatric diseases were actively developed in the municipalities closest to where people live.

• Moreover, in the midst of the population aging, an increasing number of the elderly were hospitalized for long periods. In particular, the problem of so-called "social hospitalization", in which elderly people who mainly need personal care are placed for long periods in general hospitals had become a major issue. This was the result of a situation in which, because of the insufficient provision of nursing homes for the elderly and in-home care delivery, hospitals were forced to accommodate these people. In order to remedy this, "health services facility for the elderly" was established; it is an intermediate facility offering both medical care and personal care services.

Reforming the Medical Care System

• In a situation in which the increase in health expenditures was substantially outpacing the growth in national income, it was necessary not only to reexamine the medical insurance system, but also to make more effective use of resources in the medical care delivery system. Because of this, in 1984, the Health Insurance Law was revised. A system was introduced in which the insured was responsible for 10% of the cost. In addition, under the new system, corresponding to the discovery of new medical technology, a patient's copayment was introduced for the portion which made use of it, while the basic portion continued to be covered by the insurance. Moreover, in terms of the medical care delivery system, in 1985, a regional medical care plan was introduced and the targets in developing hospitals were set forth, focusing on the necessary number of beds and functions of the hospitals per region.
  Furthermore, because the hospitals' emergency patients had become a social problem, systematic development of emergency medical services was promoted.

Measures for geriatric diseases

• Cases of acute infectious diseases decreased consistently after the war, while geriatric diseases such as cancer and heart diseases increased in relative importance. Entering the 1970s, partly because of the influence of the aging of the population, geriatric diseases continued to increase. As a response to deal with such diseases, the importance of active health promotion from younger age was stressed and the necessity of offering administrative services at the location nearest to where people live was recognized. Based on these points of view, a gradual shift was seen to transfer administrative services from prefectural health centers to municipalities. More specifically, in addition to beginning to set up municipal health centers in municipalities over the entire country in 1978, the posting of municipal public health nurses was strengthened.
  Moreover, under the Health and Medical Service Law for the Elderly, health services such as health examinations for those over 40 years old were institutionalized as a municipal responsibility. Furthermore, measures were promoted to target cancer and cardiovascular diseases, with the National Cancer Center being established in 1962 and the National Cardiovascular Center in 1977 as national focal points for treatment, research, education and training of medical personnel, and the collection and distribution of information on these diseases.

• Moreover, as far as cancer is concerned, in 1984 an "Comprehensive Ten-Year Strategy for Cancer Control" was established under the Cabinet Council for Cancer Control and, with the cooperation of the related ministries and agencies, research was promoted focusing on understanding the mechanism of developing cancer.

Developing Mental Health Measures

• Our country's mental health measures have developed from a treatment system focusing on hospitalization to a system centering on community-based care. In 1950 when the Mental Hygiene Law was enacted, measures were adopted to primarily accommodate and protect patients in mental hospitals. However, in 1965 health centers were positioned as the forefront facilities to implement mental health measures in the community. In the 1970s, social rehabilitation facilities for people with mental disorders were developed. By 1987, the basic principles for implementing mental health measures were established: ensuring appropriate psychiatric care with due consideration of human rights, promoting social rehabilitation of people with mental disorders and maintaining and strengthening the mental health of the general public. Later, in 1995, welfare measures for people with mental disorders to promote their social rehabilitation, independence and participation in society were clearly defined in the law.

Responding to the Issues Related to Drug Hazards

• In 1960, while the expansion of coverage of mandatory health insurance schemes accelerated growth of drug consumption, the thalidomide incident (pregnant women who took thalidomide, a sleeping pill, delivered children with birth defect) occurred. The incident renewed public awareness of the importance of securing the safety of drugs on the national pharmaceutical policy agenda. The Government responded by introducing various guidelines on assessment of the safety and efficacy of drugs, reporting of adverse drug reaction (ADR) and reevaluation of initial approval of drugs.
  Subacute myelo-opticoneuropathy (SMON) incident, another serious drug hazard with nerve damage caused by chinoform, a drug for controlling intestinal function, brought stricter regulations on the safety of drugs. Pharmaceutical Affairs Law was amended in 1979 in order to establish new mandatory requirements of complying with guidelines which had been introduced as administrative guidance. At the same time, an ADR relief system was established for the purpose of swift relief of those affected by ADR.
  In March 1996 lawsuits against the Government and manufactures of non-heat-treated blood products which had been brought into by hemophiliacs and other people infected with HIV through those products concluded settlement agreements by mediation of courts. The Ministry of Health and Welfare, which has assured at the occasions of previous incidents that the Ministry would take every step to prevent recurrence of serious health damage caused by ADR, repents of the tragic HIV incident suffered by hemophiliacs. The Ministry concentrates its effort on following measures;

a)	investigation of actual cause of the incident,
b)	improvement of management system of collecting, analyzing, assessing and disseminating information on ADR and other incidents which might cause serious health damage,
c)	promotion of AIDS treatment programme and research on AIDS.

Establishing a Basic Pension and Raising the Pensionable Age

• In the area of pension security, in 1985, a large-scale revision was carried out which included integrating the basic portion of various pension programs. In this revision, benefits levels in the future were reexamined in order to balance the burdens and benefits between the working generation and the elderly. In addition, the basic portions of various pension programs were unified as the Basic Pension, in order to balance the burdens and benefits between the pension programs for employees and the National Pension Program; pension programs for employees were positioned as providing additional benefits on top of the Basic Pension.

• Moreover, from the viewpoint of constructing a pension system appropriate for the age of people living over 80 years while taking into consideration the growing burden on future working generations, from around 1980, there had been repeated discussions about raising the pensionable age. Later, in 1994, based on the fact that mandatory retirement age was 60 or above in more than 80% of companies and that nearly 70% of such companies had a scheme of extended employment and reemployment, the system was revised so that the pensionable age would gradually be raised to 65 from the beginning of the 21st century along with the introduction of a partial pension provided between the ages of 60 and 65.

Move From Institutional Care to In-home Care

• In the field of welfare services, under considerations of "maintaining and improving quality of life (QOL)," emphasis shifted from measures centered on institutional care to those on in-home care so that it would be possible for people to live in familiar surroundings as much as possible. In welfare for the elderly, in addition to starting "short stay" (respite care) programs in institutions and day service programs for the elderly needing long-term care, the number of home helpers making home calls on the elderly in need of long-term care and carrying out personal services for them was increased.

• Moreover, in welfare for people with disabilities, taking advantage of the "International Year of Disabled Persons" in 1981, there was a major shift from institutionalization to assisting people to live in communities based on the concept of normalization.

Comprehensive Development of Measures for the Employment of the Elderly

• In 1986 the existing Employment Promotion Law for Middle-aged and Older Workers was revised as the Employment Security Law for Older Workers in order to secure employment up until the age of around 65 as a way of employing the elderly. This law stipulated such things as the obligation to endeavor to have 60 as the age of mandatory retirement and the establishment of Organization of Silver Human Resources Center.
  Moreover, in 1994 the law was revised to raise the mandatory retirement age to 60; this change of retirement age is suppose to begin in 1998.
  It is important to have a society in which it is possible to fully implement the 60-year-old mandatory age and work in some form or another up until the age of 65 in order to maintain the vitality of the economy and society.

Discussion on Social Security Policies

(1) Reexamining the Medical Insurance System and the Pension System

• The reexamination of the medical insurance system and the pension system, which was carried out in this period, was very significant as an effort to ensure the stability of the social security system in preparation for the advent of an aged society, while the basic tone of the economy was shifting to a period of stable growth.

1. Medical Insurance System and the Health Service System for the Elderly
   
   The medical insurance system was revised in order to encourage patients' cost consciousness and ensure fairness between those who were and were not receiving care. The health service system for the elderly was also created, that included the introduction of a system to fund medical care for the elderly through the elderly's copayments as well as a financial contribution system in which the responsibility for medical expenses for the elderly was borne by the entire nation. These efforts were epoch-making in that they prepared the medical insurance system to face a new era of the rapid aging of population and a shift to stable economic growth. Moreover, it can be appreciated that a mechanism was introduced to provide highly advanced medical technology at a comparatively low cost to the patient in an effort to respond to the sophisticated and diversified medical care needs of the general public.
   However, afterwards, with the accelerated population aging, health expenditures for the elderly continued to increase and caused several issues such as a) further pursuing reexamination of copayments, b) continuing increase in the burden of each medical insurer in the contribution of funds to cover health expenditures for the elderly, and c) how to cope with the long-term care needs of the elderly from the perspective of solving the problem of the so-called "social hospitalization."
   
   
2. Pension System
   
   Along with the shift in the economy to a period of stable growth were changes in the structure of industry and employment, the aging structure of the population and further maturing of the pension system. Under these circumstances, the aim of the pension system policy shifted from raising the level of benefits to ensuring the long-term stability of the system. As a result, creating a balance between the burdens of the productive generation and the benefits of the elderly in order to maintain a stable system became an important issue in the public pension system which is a mechanism of intergenerational support.
   From this perspective, by such means as introducing the Basic Pension and raising the pensionable age, long-term stability of the pension system corresponding to changes such as those in the industrial structure was ensured and the level of future pension insurance premiums controlled. However, afterwards, due to the tendency toward having fewer children and population aging of a sort unprecedented in other countries, continued studies on how to handle benefits and burdens have become necessary.

• From the latter half of the 1960s, in contrast to the decline in the death rate from causes such as infectious diseases, there was a relative increase in geriatric diseases, which made measures for geriatric diseases more important. However, in spite of the fact that a flexible service such as individual health guidance was needed to respond to individual needs in coping with these illnesses, health centers could not make themselves completely free from the methodology of unified, collective instruction, thus made activities against geriatric diseases generally stagnated. In municipalities, on the other hand, the system remained deficient both in terms of finances and personnel. In the midst of residents' increasing interest in health with a new disease pattern, both health centers and municipalities lacked a decisive approach to conform to residents' needs. In this situation, a shift was made away from programs focusing on health centers to developing those focusing on municipalities. The enactment of the Health and Medical Service Law for the Elderly further accelerated this movement to municipalities.

• Furthermore, under the health service system for the elderly, the development of health services by municipalities was done simultaneously throughout the entire country and, as a result, a difference in the quality of service between municipalities which were able to establish a service system and those which were not arose. This can be said to be a turning point in the health administration of our country, which has been characterized by offering uniform services.

• During this period, "the health service system for the elderly" was created but, in tandem with the further population aging, the ability of families to carry out long-term care declined and the issue of long-term care for the elderly in need of it, such as the bedridden and senile, became a major social problem. In rural areas in particular, the aging of the population further progressed and rural people felt families should care for the elderly more strongly than urban people, resulting in a serious issue of increased burden in taking care of family members. Institutional and in-home services based on the two systems of welfare for the elderly and health services for the elderly were offered in response to this problem of long-term care for the elderly, but these services were insufficient and the problem became increasingly serious.

• In particular, welfare services, especially in-home welfare services, were insufficient. Conversely, though there was sufficient supply of accessible medical services for the elderly, while the copayments of elderly users of medical care were small. Thus, the imbalance of welfare and medical care gave rise to the problem of "social hospitalization" in which much a greater number of hospital beds and longer average length of hospital stay were seen than in the other developed countries.