Here
and
Now

kuchikomi

What happens to residents when an old age home goes bankrupt?

9 Comments

“I wonder if I could ask you to change my diaper?”

 The senior citizen home staff member to whom that plaintive request was addressed did not reply. He lowered his eyes. The elderly resident who had approached him sighed and withdrew. He might have insisted, but thought better of it. When the home, located in Oiso, Kanagawa Prefecture, declared bankruptcy last December, he’d feared the worst. It would close down; he’d be on the street with nowhere to go. Relieved to be spared that fate when another operator took over the facility, he resigned himself to a decline in service. Staff had to be cut, money saved, individual attention curtailed.

Bankruptcy besets the care industry, reports Shukan Gendai (April 13). Beware, it warns current and prospective residents. The problem will get worse before it gets better.

2019 is year one of a new era. 2020 will bring the Tokyo Olympics. But the year to watch for something to dread, not celebrate, is 2025, when the youngest baby-boomers turn 75. How will the nation cope with its swelling population of “old old” people?

It’s grave enough now. Care facilities, live-in and non-live-in, are going bankrupt at an unprecedented rate, Shukan Gendai finds. The past three consecutive years – 2016, 2017 and 2018 – have each seen more than 100 bankruptcies (108, 111 and 106 respectively) – roughly twice the number registered by 2013 and 2014 (54 each).

A former staffer at the Oiso facility tells the magazine what this means on the floor: “We had orders from the top: Don’t change diapers so often, it’s a waste. Staff was cut to a bare minimum.” Baths were reduced from three a week to one. She herself,  a 10-year veteran, quit, along with other experienced staff members. Those who remained were generally less experienced and less well trained. “And there’s no time or money to train them,” she says.

Aging people who sell their homes for the relief of settling into a care facility had better think twice, Shukan Gendai warns. But the question arises: Why, given the swelling demand, should the businesses that meet it be going bankrupt? Certain peculiarities of the industry help explain it.

“The key is the occupancy rate,” the magazine says. “A senior citizen facility must have an 80-percent occupancy rate to break even. Above 80 percent, you’re turning a profit. Below, you’re in the red."

The Oiso facility was 76 percent full. Others operated by the same management company were down to 70 percent. Again: Why should that be, given the demand? The answer is two-fold: too many facilities, too few workers. It’s arduous work, and poorly-paid. Why doesn’t demand drive up wages? Because employers feel pressed to reduce, not expand, overhead.

Longevity brings with it many problems along with its obvious benefit. Among them is the threat it poses to the profitability of care facilities. Profitability hinges much more on the steep one-time admission fee than on monthly “rent.” The longer a resident lives, the fewer new admissions there is room for. This issue will grow more acute as longevity expands – as presumably it will continue to do long past the year 2042, when Japan’s “old old” population will peak and begin to fall.

“Kimiko Kudo” (a pseudonym) is 85. After her husband died, she sold their house to live in a care facility. That made life easier. It gave her company, and help with the basic issues of daily life that she could no longer cope with on her own. Her relief was short-lived. Within a year the facility went bankrupt. She had a month to find a new place, failing which she’d be homeless. She found one, and avoided the worst-case scenario. As for the 7 million yen she’d paid to be admitted to the first facility, she is resigned to never seeing it again.

© Japan Today

©2024 GPlusMedia Inc.

9 Comments
Login to comment

Not all nursing homes or assisted living facilities turns in to bankrupcy. So many nursing homes today, just choose wisely.

0 ( +0 / -0 )

Is there no non-profit operator in this sector?

For years in Southern Calfornia there was a particular non-profit nursing home that had mostly Asian residents. It was actually one of the better nursing homes. But it depended heavily on charitable contributions and government subsidies which over the years declined to the point where it was running in the red and operations couldn't be sustained. (So yes, even non-profit operators goes bankrupt.)

It limped along until it was sold to a FOR PROFIT management who found high turnover, short-term rehabilitation/therapy made it more profitable. The established long term residents (many whom are under Medicaid) are allowed to remain, but it is now more difficult to get a new resident in for long term unless financial ability can be demonstrated and sustained. It costs about $7,000 per month. Very few people can afford these rates, so in order to qualify for Medicaid, they spend down their assets to have no more than $2,000 and an annual income no higher than $12,000.

While my elderly mother was recovering from a stroke, one of the nurses (who was Japanese), opined that Japan has a much better elder care system. But as this article points out, even Japanese nursing homes have their problems and are not immune to financial woes, despite government oversight and subsidies.

0 ( +0 / -0 )

Assisted living and nursing homes are different facilities. Assisted living is when you're still independent, can still walk, whether you need a cane or a walker or what. When you can no longer walk and are in a wheelchair or bedridden, basically on your last leg, they move you to a nursing home. They told me straight, everybody there is paid by Medicare. Of course I don't know first hand how it is in other areas or states, but I would think they're all the same.

1 ( +1 / -0 )

In America, Medicare/Medicaid (government programs) pay for just about everybody in a nursing home.

That's not what I've read. From Wikipedia:

"In the US, 67% of the one million or so residents in assisted living facilities pay for care out of their own funds."

https://en.wikipedia.org/wiki/Elderly_care

0 ( +0 / -0 )

In America, Medicare/Medicaid (government programs) pay for just about everybody in a nursing home.

0 ( +0 / -0 )

Things got bad so instead of staying and fighting the company and helping the seniors who can't fight for themselves, they quit and turn their back on them. So selfish, so sad.

-1 ( +0 / -1 )

Is there no non-profit operator in this sector?

In other countries, the Christian churches, the Taiwanese Taoist, Muslim charity operates non-profit aged care facilities, and I have yet to learn any of them has gone broke.

1 ( +1 / -0 )

Every type of government system has an ugly side.

3 ( +3 / -0 )

The UGLY side of capitalism, when the vulnerable are at risk.

1 ( +4 / -3 )

Login to leave a comment

Facebook users

Use your Facebook account to login or register with JapanToday. By doing so, you will also receive an email inviting you to receive our news alerts.

Facebook Connect

Login with your JapanToday account

User registration

Articles, Offers & Useful Resources

A mix of what's trending on our other sites