Solving the “super-ageing” challenge

 

Japan’s population is aging at a globally unprecedented pace. As of 2012 the share of those 65 or over had reached 24%. By 2025 the figure is expected to reach 30%, and by 2060 the share will probably be almost 40%. This is a level of “super-ageing” that no country has ever experienced.

 

Population ageing, accompanied by working force shrinkage, pulls down the potential growth rate, and it places greater burdens on the social security system. Increased social security costs are a major cause of Japan’s fiscal deficit. And because of the declining birthrate, younger people must bear a heavier burden to keep the system solvent. These trends threaten the sustainability of the existing set of schemes. 

 

Countries in Europe and Asia will soon experience a similar ageing of their populations. Sooner or later they will confront the same sort of issues that Japan is facing now.

 

A report issued last year by the National Council on Social Security System Reform expressed Japan’s determination to tackle the issue. Instead of taking a negative view, the Council declared this change to be an opportunity to build a “mature society”—a super-aged society in which people can live full lives—and suggested tackling the challenge accordingly.

 

The advanced longevity that today’s Japanese enjoys is due in considerable measure to the nation’s universal public health insurance system. Maintaining universal coverage must be one of the planks of social security reform. Since ageing is expected to cause increases in medical and nursing care costs, steps must be taken to enhance the sustainability of existing health and long-term care insurance systems.

 

First, we must see to it that the financial burden of supporting these systems is shared among different generations in a manner consistent with their ability to pay, and we must rigorously prioritise benefits and enhance their efficiency. We should also seek to lengthen “healthy life expectancy,” focusing on initiatives to promote good health and prevent disease so that people can enjoy longer healthy lives. This will improve people’s quality of life, and it should also help control the rise in medical and nursing care costs.

 

Efforts are already under way. Business corporations have started to view employee health as a management issue. Promoting good health and preventing disease among employees, in addition to improving their quality of life, can lead to higher productivity and lower medical care costs. Some corporations have launched “data health plans” under which they analyse the results of regular physical check-ups and records of visits to medical facilities to identify employees at high risk from chronic illness and provide intensive guidance to keep them well. 

 

In addition, the Japan Revitalisation Strategy, the government’s growth strategy, calls for a comprehensive package to encourage the development of new businesses that can help lengthen people’s healthy life expectancy without drawing on public funding. In addition, a newly created Next-Generation Healthcare Industry Council has started deliberating ways to improve the environment for healthcare-related businesses and health-promotion activities.

 

Japan is addressing the issues of population ageing that other countries around the world will be facing. In this respect, Japan is a “problem pioneer.” It is my hope and expectation that Japan will soon be a “solution pioneer.”

 

 

*Keidanren is a confederation of Japanese business and a member of the Business and Industry Advisory Committee to the OECD.

 

Visit www.keidanren.or.jp and www.biac.org

 

OECD work on Ageing and Employment Policies

OECD work on Employment

OECD Forum 2014 Issues

 

Saito

Katsutoshi Saito, Chairman, Dai-ichi Life Insurance Company, Ltd; Vice-Chairman, Keidanren and Vice-Chairman, BIAC Executive Board*

© OECD


© OECD Yearbook 2014