Aging Japan struggles to rein in health costs

TOKYO (Reuters) - At 83, Saburo Iwata shows no sign of taking things easy.

The star of the local senior volleyball team, Iwata rises at 4 a.m. each morning to sweep the street outside his immaculately kept house in Fujisawa, south of Tokyo, and tend his garden.

"When I was about to turn 70, my wife told me I'd have to give up volleyball. But I didn't give it up at 70, nor at 80," he boasts. "It's too much fun."

Iwata is a model for active retirees. He says he rarely needs medical treatment, and he and his wife seem more than able to manage their daily routine without help.

But good health is precarious for the elderly and Iwata and his wife may find themselves among the ranks of Japan's frail and sick, who are starting to overwhelm the country's health and nursing care system.

On the surface, health care, funded by individual premiums, taxes and treatment fees and covering more or less the entire population, seems to be highly efficient.

Japanese boast a life expectancy among the longest in the world, while per capita health spending -- an estimated $2,358 in 2004 -- is less than half U.S. levels.

But Japan's health-care costs are creeping up along with the number of elderly -- reaching an estimated 8 percent of GDP in 2005, compared with 4.4 percent 40 years earlier. More than 40 percent is related to patients aged 70 or over.

And experts say local governments are not planning enough new nursing care centers or recruiting helpers to meet predicted needs.

Other ageing nations will be watching closely to see how far the heavily indebted government can rein in costs especially as the number of elderly in Japan creeps up with projections that 40 percent of the population will be aged 65 and over by 2055.

COST CUTTING

Doctors are encouraged to prescribe generic drugs, and unnecessary consultations have been pruned by bumping up the percentage of costs paid directly by the patient.

A once common joke that elderly Japanese only stay away from the doctor's office on the days when they feel unwell has lost its currency.

The government also launched a concerted strategy to avoid "social" hospitalization, where the elderly are kept in hospital beds simply because they have no one to help them at home.

A tax on over-40s was introduced in 2000 to help fund equipment such as wheelchairs and send carers to private homes and retirement institutions to help the elderly. That allows many who would previously have been in hospital to remain at home or in institutions that are less expensive to run.

The elderly and their families are largely delighted with the this program, but its very popularity is starting to cause trouble. Its budget has doubled to 7.4 trillion yen ($64 billion) since its launch, and the number of elderly recognized as requiring help has likewise swelled to twice the initial figure.

Once again, the government is looking to tighten belts, and this time the more able elderly are among the targets in a related program dubbed "nursing care prevention."

Instead of being offered wheelchairs or help with meal preparation, which some say encourages the elderly to become dependent, relatively able-bodied seniors are being offered assessments to pinpoint how they can improve their health.

"There are two aims here -- to increase the number of lively, healthy old people, and to save on medical costs," an official at the Health Ministry said.

QUALITY OF LIFE

A self-administered questionnaire can lead to prescription of a course of physical workouts to develop muscles and help prevent falls, or to advice on incontinence -- a minor problem that prevents some older people from leaving the house.

"There is evidence to show that people with a healthy lifestyle not only live longer, but have a shorter period of disability at the end of their lives," said Shuichi Obuchi of the Tokyo Metropolitan Institute of Gerontology.

The program he leads, which trains local government officials and others in nursing care prevention, is the most advanced of its type in the world, he said.

Wako, a city of 80,000 near Tokyo has introduced exercise programs meant to pique the interest of the elderly such as a traveling casino aimed at preventing dementia.

"People love this. Even an old lady who had pains in the waist began to walk to grab tokens by herself," said Kyoichi Tonai, the head of the city's elderly care centre.

But many experts are skeptical about whether this kind of effort, launched last year and yet to undergo a rigorous assessment, will actually save much money.

Longer lifespans will almost always mean higher medical costs, according to some researchers.

Even the athletic octogenarian Iwata had to undergo surgery for cancer a few years ago.

"I'm not saying it is a waste of time to try to remain healthy and avoid long-term care," said Takashi Fukuda, director of research at the Institute for Health Economics and Policy. "We just don't know what the economic effects will be."

(Additional reporting by Hideyuki Sano)