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Insurance System Inspires New Products, Services

June 21, 2000

Japan's public Long-Term Care Insurance system came into effect on April 1, 2000. The system covers 90% of the costs of nursing-care services received--either at home or in nursing homes--by elderly people who have been certified as being in need of care. The value of the nursing-care market to care providers will be 4.2 trillion yen (40 billion U.S. dollars at 105 yen to the dollar) in 2000 and is predicted to reach 7 trillion yen (67 billion dollars) in 2010. Using the heightened interest in nursing care caused by the creation of such a huge market, companies are queuing up to offer care-related services and products--even ones not covered by insurance--to elderly people.

Care Convenience
Among the services being offered, one venture that is attracting particular attention due its scale is a system centered on selling nursing products through convenience stores. Using the information provided by home helpers who visit people in need of care to assist with such tasks as housework and bathing, the system answers many other of the patient's household needs by delivering meals for the patient or sending products they want from convenience stores.

This system is being offered by Seven Meal Service, a joint venture between four companies, including Seven-Eleven Japan Co., which has 8,200 convenience stores nationwide, and major medical-related clerical service provider Nichii Gakkan Co. To coincide with the start of the Long Term Care Insurance system, Nichii Gakkan has begun offering the home-help service to those in need of care using the approximately 10,000 health workers it already employs. The workers phone or fax information on what the patients need to the SMS reception center or a Seven-Eleven store, and in response SMS delivers what is needed via its distribution center. Or, the worker goes to the Seven-Eleven store to collect the goods and takes them to the patient's home.

The cost of one delivered meal, for example, is between 800 and 900 yen (7.60 dollars and 8.60 dollars). To this is added a delivery charge of 200 yen (1.90 dollars) each time, but this fee is waived on large orders. Patients can also place their own orders from a catalogue that has been delivered to their home. Soon simple mobile terminals will be developed that can be carried by the home helpers and used for online purchasing. Operations will start in earnest in July 2000, with the service being offered at first by the 250 Tokyo-area branches of Seven-Eleven. That number will be increased in the future. The firms are aiming for sales of 16 billion yen (152 million dollars) in the first year and 70 billion yen (667 million dollars) after three years.

Rush to Provide Nursing Products
The airline Japan Air System Co. has introduced discounts of about 28% on air tickets for, for example, sons or daughters living in Tokyo returning home to care for parents who are certified as needing nursing care and live in the countryside. People risk running up quite large bills if they have to travel frequently between Tokyo and outlying areas, so the offer has attracted much interest. Other companies entering care-related sectors include The Tokyo Electric Power Co., which is offering care products and home alteration in the greater Tokyo area. Hitachi and TOTO have also entered the market for elderly-friendly home improvements, and Matsushita Electric Works is developing a network of franchise stores renting care products.

Food maker Q.P. Corp. is selling boil-in-the-bag foods aimed at elderly people under the label "nursing foods." It took popular foods that were easy to chew, tasted good, and were nutritionally well balanced and completely redesigned the packaging so that at first glance they were not easily recognizable as aimed at elderly people. The new designs had the desired effect, and sales shot up. About 90,000 servings were sold in December 1999. Soft tableware made from silicon, easy-to-operate household appliances, and other care-related products are claiming a bigger share of the sales floor at department stores like Mitsukoshi and Tobu.

Japan's population is aging rapidly, and consequently the number of elderly people requiring nursing care is rising fast. More and more firms are bound to jump on the nursing-care bandwagon.

Trends in JapanCopyright (c) 2000 Japan Information Network. Edited by Japan Echo Inc. based on domestic Japanese news sources. Articles presented here are offered for reference purposes and do not necessarily represent the policy or views of the Japanese Government.