Elderly Care Supply Systems and Services which Decrease Elderly Care Requirements

In Japan, total elderly care costs continue to increase because of the aging of the population. An overall increase in elderly care costs will raise government expenditures because the elderly care system in Japan is financed mainly with public funds. To reduce elderly care costs, some services exist which reduce the need for elderly care services. For these analyses, we created a model with ordinary elderly care services and services which reduce the need for elderly care to ascertain how these services should best be supplies. The results are as follows: if these two services are provided by different service providers, the reduction in the necessary elderly care service is less than for the case in which that the service is provided by the same provider. Moreover, in order to minimize the total costs of elderly care provide by the government, our paper derives the appropriate remuneration for services that reduce the need for elderly care.