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Gatekeeper incentives and demand inducement: An empirical analysis of care managers in the Japanese long-term care insurance program

Author

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  • Sugawara, Shinya
  • Nakamura, Jiro

Abstract

This study analyzes the incentives and supplier-induced demand of care managers, who are intermediaries between consumers and service providers in the Japanese social insurance program for long-term care. Care managers can be considered as pure gatekeepers, in that their function is limited to referral people to specialists and they themselves do not provide care. Care managers are rewarded by capitation, which is considered as a cost-effective payment mechanism for insurers. However, many care managers actually work for firms that also operate as service providers. Service providers are rewarded by a fee-for-service payment and can have a motivation to induce excess consumer demand. The violation of the neutrality of care managers might result in a financial burden on social insurance. In this study, we empirically test whether there is a positive correlation between care manager density and care costs, which might imply the existence of supplier-induced demand. Our results show a positive correlation, particularly in the case of care managers who work for firms that jointly operate in service provision sectors. Based on these results, we conduct a quantitative analysis, and show that the demand induced by care managers might produce a considerable financial burden on social insurance.

Suggested Citation

  • Sugawara, Shinya & Nakamura, Jiro, 2016. "Gatekeeper incentives and demand inducement: An empirical analysis of care managers in the Japanese long-term care insurance program," Journal of the Japanese and International Economies, Elsevier, vol. 40(C), pages 1-16.
  • Handle: RePEc:eee:jjieco:v:40:y:2016:i:c:p:1-16
    DOI: 10.1016/j.jjie.2016.03.001
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    Cited by:

    1. Sano, Kazuaki & Miyawaki, Atsushi & Abe, Kazuhiro & Jin, Xueying & Watanabe, Taeko & Tamiya, Nanako & Kobayashi, Yasuki, 2022. "Effects of cost sharing on long-term care service utilization among home-dwelling older adults in Japan," Health Policy, Elsevier, vol. 126(12), pages 1310-1316.
    2. Shinya Sugawara, 2022. "What composes desirable formal at-home elder care? An analysis for multiple service combinations," The Japanese Economic Review, Springer, vol. 73(2), pages 373-402, April.
    3. Song, Misook & Song, Hyunjong, 2020. "Disagreement between a public insurer’s recommendation and beneficiary’s choice of long-term care services in Korea," Health Policy, Elsevier, vol. 124(8), pages 881-887.

    More about this item

    Keywords

    Elderly care; Gatekeepers; Incentive; Supplier-induced demand; Japanese long-term care insurance program; Care managers;
    All these keywords.

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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