Liberal Japan

Let’s look at the recent scandal revolving around Comsn. And remember, don’t trust everything you read on the Internet, especially here. If the issue interests you, please check out the many links below and double check me on my facts!

Who is Comsn?
Comsn is a large company in Japan with a staff of about 24,000 that provides nursing care for about 65,000 people through 2,000 facilities. Comsn is owned by the massive Goodwill Group which in terms of revenue is Japan’s biggest employment service.

What is the background for the recent scandal?
If you are sick in Japan, national health insurance will cover you generally at about 70%. Until the year 2000, health insurance provided very strong coverage of elder citizens, many of whom stayed in hospitals almost as if they were nursing homes.
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However, realizing that with the population aging fast this would be totally infeasible, government policy makers decided they needed to get all these older people out of the hospital. So they created a new plan which would give nursing insurance to those who qualified. Under this plan you could get home assistance or even go to stay at a nursing center, and be covered up to 90%. This would save money, because it eliminates the costly hospital room and the doctor.
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The first year the program was put into effect, it genuinely seemed to save money. But nevertheless the cost to the government of even just nursing insurance went from 3.6 trillion yen in fiscal year 2000 to 6.8 trillion yen in fiscal year 2005. You had people relying completely on house helpers despite the fact they were still capable of cooking and cleaning. You even had people in wheel chairs although they didn’t need them. So again in 2005 there was a revision to the nursing insurance law.
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Though it didn’t get a lot of attention in the media, the government added disclosure clauses because, as it turns out, a lot of the new companies were springing up to take advantage of the new nursing insurance law and it wasn’t at all clear that they were on the up and up. Presumably the hospitals had stricter standards, but these new nursing facilities didn’t. However, it was hoped through greater disclosure these companies could be discovered and penalized. Thus the new clauses in the revised law.
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So this brings us to the present, Comsn is basically one of the companies that has attempted to profit through the new nursing insurance law. They have been doing so fraudulently and without offering good services to their customers.

What did Comsn do that was bad?
Well, they’re service has been unreliable. Their workers have often been poorly trained. There are reports of them being rude and abrasive in their treatment of elder people. Sometimes they are late. One worker actually showed up drunk, another fell asleep on the job. (Some of this was on Tokudane this morning.)
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However none of that is illegal, per se. And, in general, it’s sort of what one expects from companies that get their money primarily from bureaucrats and not their customers.
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What Comsn did that was a problem was to lie to the government about their staff numbers (and perhaps qualifications) so they could get more money. Reimbursement procedures are very confusing, but apparently the government reimburses companies depending on their staff numbers and qualifications. Comsn has clearly been over-reporting their staff numbers. It’s also possible they may be violating certain other standards as well.

What’s the government going to do?
Huh? Do you think the government will actually do something? Okay … well, the government basically said it would no longer renew licenses for any of Comsn’s facilities, nor would it offer new licenses for five years. This would have resulted in most of Comsn’s facilities being shut down over the next five years. However, Goodwill Group the owner of Comsn said that they will merely transfer ownership of Comsn’s facilities from one subsidiary to another. This means no facility will actually be affected. The media feigned outrage, and then the designated bureaucrat in charge had the president of Comsn come over for a chat. They agreed to hold off any transfers for now, and will decide how to proceed in late July. (Conveniently after the elections.) More than likely the transfer will go through as it can’t be legally stopped. Goodwill Group will promise to be good, and if nothing else, will try to be much less obvious when it defrauds the government.

What’s this say about the looming health care crisis in Japan?
It says its going to be bad, bad and bad. You’ve got some form of opaque corporatism going on in Japan. People don’t really choose policy through their politicians. Instead, bureaucrats work out deals with various high powered executives and policy is sort of forged in ways that will generally benefit the status holders more than the recipients of the actual services. The only reason this issue came up at all, I am guessing, is that local level bureaucrats were sincerely concerned and forced the issue. Local bureaucrats actually have contact with the people they serve and understand their problems. They don’t, however, have the power to fix them.
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My prediction is that we’ll probably see a little bit of hand waving and then the issue will disappear. It will then return again in a more severe incarnation. I mean who doesn’t want someone cooking and cleaning for them if the government will pay for it? Who doesn’t want someone to look after a troublesome elder dependent, if it’s nearly free? Understaffed corporations looking to cash in big are clearly going to be out there ready to take up the challenge, whether it’s Comsn or somebody else.

News articles about Comsn:

• 2007/06/08 Ministry asks Comsn to freeze transfer plan, The Yomiuri Shimbun; Plan is likely to move forward, but under supposed government scrutiny.
• 2007/06/08 Ministry blocks Comsn’s cozy deal with NSS, The Japan Times; The headline reads blocked, but this is not true. The deal was voluntarily rescinded for now. Yomiuri’s take on this issue is clearer. See the article linked to directly above this one.
• 2007/06/08 Debt collector dropped troublesome Comsn, The Yomiuri Shimbun; “Comsn Inc. used a credit collection agency to collect individual payments from elderly people who used its nursing care service, and problems between the agency and clients occurred frequently … The collection agency canceled its contract with Comsn after three months because it received many complaints from users who said that they had already paid. … The agency judged it could not make a profit from the contract with Comsn because there were so many problems and terminated the contract at the end of January. The National Consumer Affairs Center of Japan and the Tokyo metropolitan government also received similar complaints concerning Comsn.”
• 2007/06/08 Comsn closures worry customers, The Yomiuri Shimbun; Interesting stories from the customers. One person reports a drunken healthcare worker.
• 2007/06/08 Ward to lose its control of aged care, The Asahi Shimbun; This article bears no direct relation to Comsn, but is helpful in grasping the situation. The article states, “By counting the woman among the night-shift care workers, the organization received 3 percent more than it was entitled to from the insurance program.” What this means is how much money a company gets from the government health insurance is variable depending on whom they staff. It’s probably variable on a lot more as well.
• 2007/06/08 Comsn in trouble over penalties, The Asahi Shimbun; “Comsn Inc., the nation’s largest nursing-care services operator, faced the prospect Wednesday of having to close hundreds of branches in the next few years after the health ministry punished it for inflating staffing numbers for nursing-care insurance payments.”
• 2007/06/7 Comsn nursing centers to lose licenses, The Japan Times; “About 1,600 Comsn Inc. nursing-care centers will not get their licenses renewed because some were obtained fraudulently, government officials said Wednesday.”
• 2007/06/07 Comsn deserves licensing suspension, The Yomiuri Shimbun; “If such misconduct is allowed, the very foundation of the nursing care insurance system will be shaken. As such, the ministry had good reason to take the steps it did. … Nursing care insurance was launched to entice into the market nursing care companies seeking to make a profit and to ensure a steady supply of service providers. However, the government appears to have put quantity before quality and its supervision of the industry has been lax.”
• 2007/06/07 Govt curbs Comsn care licensing for 5 years, The Yomiuri Shimbun; “The Health, Labor and Welfare Ministry on Wednesday ordered prefectural governments to stop renewing operating licenses or granting new operating licenses for nursing care facilities belonging to Community Medical Systems & Network (Comsn) Inc. until December 2011.”
• 2007/06/06 Welfare Ministry to refuse permits to home nursing provider COMSN over scandal, Mainichi Daily News; “The Ministry of Health, Labor and Welfare has decided to punish major home nursing provider COMSN for submitting false declarations on its employees, by refusing applications from the welfare firm for permit renewals and the establishment of new facilities. … All of COMSN’s operating permits are up for renewal within the next six years, and the ministry’s move means that the firm, which operates about 2,000 business offices nationwide, will likely have no option but to pull out of the nursing business. … COMSN, which stands for Community Medical Systems and Network, is part of Japan’s Goodwill Group. It was founded in 1988, and employs about 24,000 workers.”

Company Links:

• Comsn Home Page
• The Goodwill Group, Inc.

News about the Revised Nursing Care Insurance Law:

• 2006/07/06 Adversely revised law forces over 1,000 seniors to leave care facilities for economic reasons, The Press Weekly; “Last year, the Liberal Democratic Party, the Komei Party, and the Democratic Party of Japan used their majority to adversely revise the nursing-care insurance law so as to exclude expenses for meals and beds in nursing-care facilities from insurance benefits, imposing expenses on users.”
• 2006/04/21 EDITORIAL: Reforms for nursing-care insurance, The Japan Times; Interesting background to the problem which spurred reform in the first place. For example, “Some people have begun to use wheelchairs even though they can still walk, and others have come to completely rely on helpers for household chores, including preparation of meals, even though in reality they are still capable of doing some housework themselves.”
• 2005/07/26 New Nursing Fees Hit Elderly / Revised Law Increases Cost Burden On geriatric Patients, The Daily Yomiuri via Global Action on Aging, Yoko Harihara and Takeharu Yasuda; Good background article for this topic.
• 2005/07/20 Social security cutback intended to ease burdens of corporations, Japanese Communist Party; “First, a series of cuts in social security services have been imposed. In the wake of an adverse revision of national pension systems, a revised nursing care insurance law was railroaded through this current Diet session by the majority of the ruling Liberal Democratic and Komei parties and the opposition Democratic Party. The revision is designed to have elderly people in care facilities shoulder the full cost for meals and rooms as ‘hotel-like costs.’ It sounds like ‘if they are unable to pay, they will have to leave.’”
• 2005/07/15 EDITORIAL: Preventive care for the elderly, The Japan Times; Article focuses entirely on benefits of plan, reduced costs and preventive treatment.
• 2005/06/23 Diet passes bill to curb geriatric care, The Japan Times; “Under the revision, elderly people at public nursing homes will have to start paying for accommodations and meals starting in October. The payments are expected to average 30,000 yen per month. The amendment also calls for the government to sponsor muscle training and nutritional counseling for the elderly to prevent them from needing nursing care in the future.”
• 2004/04/07 Nursing-care firms for the aged to face new disclosure law, The Japan Times, “The welfare ministry is considering requiring government-designated nursing-care firms for the elderly to disclose information about their operations, according to ministry officials. The move is aimed at helping users select appropriate facilities and address a recent series of bogus claims made by such firms for reimbursement under the government-managed nursing-care insurance program. … As of February, some 237,800 firms were designated to offer nursing-case services to the elderly under the program.”
• 2000/08/01 JAPAN”S MEDICAL SPENDING FELL IN FY2000 DUE TO NURSING INSURANCE, Asia Pulse News; I don’t have access to this story, but the headlines is revealing.
• 1999/04/15 New Public Nursing Insurance System, AP Worldstream via Pacific Bridge Medical; “Due to the unprecedented speed at which Japan’s population is aging, the Japanese government will introduce a new nursing care insurance system by April 2000. To date, insufficient nursing care services have created an immense financial burden for Japan’s National Health Insurance (NHI) system, as the elderly (which will reach 21% of Japan’s population by the year 2010) have resorted to long-term, medically unnecessary hospitalization. The new nursing care system, which is expected to save NHI about $10.4 billion, separates nursing services from medical care and introduces a separate social insurance scheme for the former. Instead of allowing the elderly to be hospitalized, most will either be brought home or placed in nursing homes. According to the MHW’s program model, those needing the least care will receive visits from nurses, home help, and day-care service once or twice a week; those in most need of nursing care will be looked after every day. Hospitals and wards, however, will be able to choose in April 2000 whether to accept patients under existing medical insurance programs or the new nursing insurance system.”
• 1997/06/20 CARING FOR A GRAYING JAPAN: Elderly Nursing-Care System Is In the Works Trends In Japan; “As part of the government’s response to the rapid aging of Japan’s population, a range of bills aimed at establishing a system of public nursing-care services are moving toward approval in the Japanese Diet, which ended its regular session on June 18. Discussion on the nursing-care insurance bills will carry over to the extraordinary Diet session scheduled to convene in the fall. Pending passage, they are slated to take effect from April 2000.”