What you need to know
Taiwan is facing a social time bomb as its population ages. Critics question how the Tsai administration intends to pay for long-term care and ask what the implications are for the future.
Seventy-year-old retiree Mrs. Lin is part of the fastest growing demographic in Taiwan – the elderly, who now account for some 13 percent of the population but will likely reach 20 percent by 2025, bringing Taiwan into the ranks of the super-aged societies.
Yet the retired septuagenarian is healthy and active, keeping a schedule of activities ranging from dance classes to volunteering to care for grandchildren that would exhaust people one-third her age. With a wide network of friends and family and benefiting from many government-sponsored community programs aimed at keeping the elderly engaged and healthy, Lin represents the best side of growing older in Taiwan.
Mrs. Chang, 88, experiences old age in a very different way. Physically frail, with some degree of dementia and relying solely on the care of a daughter who is in the midst of an active career, Chang is largely isolated in her home, cared for by a foreign worker who has only a rudimentary understanding of Chinese and is unable to take her to community activities.
Further, Chang’s daughter notes that none of the caregivers offered by various nonprofit organizations has been sufficiently trained to deal with the level of disability involved (requiring assistance with toileting, for example), rendering them effectively useless. Forced to leave an assisted living center in her home city of Taichung (台中) after her care needs exceeded the center’s capacity, Chang is lonely and isolated in Taipei (台北) and presents a considerable burden on her daughter both in terms of caregiving and finances.
These two women are in many ways emblematic of the hopes and challenges surrounding Taiwan’s efforts to provide long-term care to its growing elderly population.
Last November, Taiwan launched its Long Term Care 2.0 (LTC 2.0) (長照 2.0), an amended version of the Long-Term Care Act (長期照顧服務法) passed in 2015 to replace legislation enacted in 2008 under the Chen Shui-bian (陳水扁) administration. LTC 2.0 greatly expands the array of services provided by the government to care for the elderly, as well as widening the scope of people capable of receiving these services. Budgets have been significantly bolstered to fund the needs of the elderly.
Yet Taiwan faces significant hurdles in bringing its long-term care to the level needed by much of its population. Training for caregivers is widely conceded to be inadequate in preparing workers for the intense physical realities of toileting, safely lifting seniors in and out of public transportation, and otherwise navigating the complex terrain of Taiwan’s cities. Critics maintain that the expanded scope of services includes redundancies and that Taiwan still fails to provide the necessary services for the most vulnerable portion of the population.
The original LTC was debated in the Executive Yuan (行政院) and the legislature for around seven years before it was passed, and implementation did not begin until January 2008. With an average annual budget of NT$3.3 billion (around US$100 million), the initial LTC covered people suffering from age-related disability over 65 years old, mountain aboriginals over 55 years of age, disabled persons over 50 years of age, and elderly people living alone, according to documents supplied by the Ministry of Health and Welfare (MOHW).
For these individuals, LTC offered such types of care as home nursing, home and community-centered rehabilitation, subsidies for rent and other living costs, and transportation services. The services were provided through nonprofit organizations (NPOs) under contract from local health and welfare departments using funding from the central government.
LTC 2.0, developed by the Tsai administration and passed by the Legislative Yuan (立法院) in September 2016, employs a much larger budget of NT$20 billion to greatly expand both the number of people eligible for assistance and the kinds of aid available. Now added to coverage by the LTC 2.0 are people over the age of 65 with dementia, disabled lowland aboriginals between 55 and 64 years of age, disabled people under 49 years of age, and the frail elderly.
The number of services has been increased by nine for a total of 17 items. Among the new categories are dementia care, family care support, community-based preventive care, integrated services for aboriginal groups in remote areas, and hospital discharge plans and transition care.
“The dramatic change in the demographic structure is quite a new challenge not only for Taiwan but for a lot of the world,” says Tsay Shwu-feng (蔡淑鳳), director-general of MOHW’s Department of Nursing and Health Care. “Behind the structural population changes, there is a lot of work to do.”
The changes to elderly care in Taiwan are aimed at easing the burden for more seniors and their families while generating greater efficiencies in service delivery and leveraging Taiwan’s cultural characteristics, including the desire for senior citizens to be cared for by the family. Tsay says that the revisions in the LTC 2.0 combine traditional views of elder care with nearly a decade of experience with the original LTC, as well as learnings and best practices derived from other countries, particularly Japan.
“We want to develop a Taiwanese model that uses our cultural strengths and reflects our tax and economic situation,” she explains. “By the community, in the community, and for the community will be the most efficient way. People know each other and we know what we need. A bottom-up approach, sharing with one another, will help keep costs down and lead to better care.”
The family role tradition
National Taiwan University sociology professor James Cherng-Tay Hsueh (薛承泰) notes that Taiwanese tradition calls for senior citizens to be cared for in the home by their children. “This is what we call aging in place,” and is still the ideal for most elderly Taiwanese, says Hsueh, who formerly headed the Department of Social Welfare in the Taipei City government and then served as a Minister without Portfolio tasked with, among other things, guiding the implementation of the LTC under the Ma Ying-jeou (馬英九) administration.
Due to this cultural emphasis on family care for senior citizens, under the original LTC only those in low-income groups or suffering from severe disabilities – 20 percent of the total senior population – were eligible for substantial government support. The remainder paid out of pocket for the long-term care they received. A review of the services available under the original LTC led the MOHW to conclude that the needs of society were in fact not being met and that more needed to be done.
Development of the LTC 2.0 involved a review of the considerable resources available for long-term care in Taiwan, including 1,500 residential care facilities and 1,500 home care and community care services. Tsay of the MOHW says the Ministry recognized “that the delivery systems weren’t integrated” and that those in need struggled to access all the appropriate available services. In the 2.0 revision, “we have tried to innovate different models of community-based long-term care delivery systems in Taiwan,” she notes.
LTC 2.0 promises three tiers of community-based service centers: “community-based integrated service centers (Tier A ‘flagship stores’), combined day-care service centers (Tier B ‘specialty stores’), and long-term care stations in lanes and alleys (Tier C ‘corner stores’),” according to government documents. This network is seen as integrating “health care services, preventive care, support for everyday needs, home-based services and medical care into a unified system that any senior citizen with diminished physical or mental capacities can access within a 30-minute drive,” according to MOHW data (although presumably the impaired senior would not be the one behind the wheel).
Tiers A and B centers currently exist under LTC 1.0 and have been providing opportunities for socializing, exercise, and education to Taiwan’s senior citizens for around eight years. The earlier mentioned Mrs. Lin, for example, has been taking classes in dance, painting, and English conversation at the Wenshan Senior Citizens community center for years, and regards the center as a significant asset in her life.
Taipei has over a dozen community centers throughout the various sections of the city, funded by the Taipei City Department of Social Welfare but managed by private NPOs. The NPOs are often affiliated with charitable or religious foundations, many of which also operate nursing homes and assisted-living residences for senior citizens.
The benefits of these centers in helping senior citizens maintain their health and well-being is substantial. Senior center managers stress that isolation and lack of exercise can be debilitating for the elderly, leading to depression and frailty. At that point, costly medical intervention may be necessary.
The majority of seniors accessing the community center services are still generally healthy. Mrs. Chang's daughter says that after moving her mother to Taipei, “I called so many of the community centers trying to find the right fit, and they all asked me point blank: How old is she? Can she walk? If she can’t walk, then we may not be suitable for her.
“It’s the intention of the government to create a social environment where the elderly can go for the day, but it’s very difficult to actually take advantage of that for people like my mother,” she says.
In addition, she notes that like much of the middle class, she is not affluent enough to provide the various kinds of in-home care needed by her mother, but not poor enough to qualify for government support. “The government tries to look after people like my mom but the bracket is very small,” she observes. “The services are limited to those clearly defined categories.”
To provide services for the 16 percent of Taiwan’s elderly who are not healthy, community centers employ teams of social workers as case managers to assess their needs and provide access to services to help alleviate suffering and enhance the quality of life. Up to now, though, those case workers have been overworked, often handling dozens of individual cases. Moreover, eligibility was often strictly appraised, with many disabled seniors unable to gain access to public services.
Community centers also deploy volunteers, usually healthy elderly who have the time, energy, and empathy – and who have received the requisite training – to help their less fortunate peers through home visits. Yet this too has limitations, with most volunteers unable to help with toileting and other physical issues, necessitating the presence of a family member or professional caregiver and thus limiting the utility of volunteer visits.
New strategies adopted
LTC 2.0 aims deal with this situation by enabling greater access to in-home care and expanding the reach of care to include those suffering from dementia, estimated at some 8 percent of the total population of senior citizens. Tsay of the MOHW says that since only about 20 percent of dementia sufferers currently have access to government assistance, three strategies are being developed to deliver help to a higher proportion of sufferers. The first is to provide training to the caregivers – both family and professionals. The second is to “develop share-care community-based dementia care centers” to offer dementia elder-sitting programs, respite care, home visits, and a variety of other services.
The third level consists of dementia care centers, staffed with case managers, to provide clinical evaluations, memory clinics, practice care and consultation, and other more professionalized services. Detailed plans for how these dementia care centers would operate remain unspecified, however, as MOHW is currently still accepting proposals from certified NPOs for the establishment of such resources.
“We’re encouraging the local governments to select potential candidates for long-term care of dementia patients,” says Tsay. “We set very clear guidelines for the role and function of share care dementia centers, including a very clear performance outcome index and a schedule of case management fees.”
Nevertheless, although the goals of the LTC 2.0 are already established, the means of achieving of them are still in development. For example, Tier C is an innovation and experts remain somewhat murky as to what these small “corner stores” will look like or exactly what their function will be.
Among the key questions facing the rollout and continued implementation of LTC 2.0, one of the thorniest is how to finance the system. With the budget for long-term care rising from an average of NT$3.35 billion annually to NT$20 billion in 2017 and scheduled to rise again in 2018 to NT$30 billion, according to the MOHW, funding will be a major challenge for the government.
In January, the Legislative Yuan passed an Executive Yuan proposal amending the Estate and Gift Tax Act and the Tobacco and Alcohol Tax Act to earmark funds specifically for long-term care services. The amendments will raise inheritance taxes from the current 10 percent to a maximum of 20 percent for endowments of at least NT$50 million and bequests of at least NT$100 million, while each packet of cigarettes will increase in price by NT$20. The tax hikes are expected to raise NT$28.8 billion in funding for the LTC 2.0, with the remainder coming from the general budget.
The decision to fund the LTC 2.0 through taxes is controversial. As an alternative, the government had long mulled instituting a Long-term Care Insurance scheme to fund the system. In fact, a draft Long-term Care Insurance Act was approved by the Executive Yuan in June 2015, only to languish in the legislature. The bill would have levied a Long-term Care Insurance tax premium on incomes in much the same way as the National Health Insurance (NHI) program operates, with employers contributing 40 percent, employees 30 percent, and the government 30 percent. Various kinds of public long-term care insurance are currently in use in other demographically challenged countries around the world, including Japan, Germany, and the Netherlands.
When the Democratic Progressive Party (DPP) administration of President Tsai Ing-wen (蔡英文) took office last year, however, it rejected long-term care insurance as a financing tool, preferring a system in which the entire society shares the responsibility of caring for the elderly, rather than placing the burden on insurance premium payers. Lin Chien-chen (薛承泰), a research fellow at the Kuomintang (KMT)-affiliated National Policy Foundation (NPF) think tank, sees the decision to forego long-term care insurance by the government as shortsighted. “They are using a short-term plan to provide long-term care services,” he says. “They want a Swedish model but they don’t want to pay for it.”
The Swedish model for long-term care is to fund all the services through taxation and to deliver those services through nonprofit or state-owned providers. Lin notes, though, that taxation levels are much higher in Sweden, and that according to the Organization for Economic Co-operation and Development (OECD), Sweden is spending 3.2 percent of its entire GDP on long-term care. Taiwan has much lower tax rates, and by contrast, will be spending less than 0.3 percent of its GDP on long-term care, even with the tremendous increases in budgets under the LTC 2.0.
The debate over long-term care insurance touches on a number of factors, including the role of the private sector and the availability of human resources. Under current government regulations, private for-profit businesses are prohibited from obtaining revenues from either the National Health Insurance (NHI) system or government-funded long-term care services. Through complex financial arrangements, however, many private hospitals organized as foundations are able to draw out profits from the NHI program, in effect becoming profit-making institutions. According to Lin, the DPP sees this de facto profit-making in private hospitals as wasting NHI resources and is strongly opposed to allowing a similar situation to arise in the provision of long-term care. Funding long-term care services entirely through taxation will enable the government to retain strict control over the provision of such services.
In the view of the opposition KMT, however, total government control over the provision of long-term care services limits how these services can be deployed. “If long-term care is based on taxation alone, that will give the government total control over the spending and will impact the quantity and the quality of long-term care,” asserts NTU’s Hsueh.
NPF’s Lin sees the LTC 2.0 as providing insufficient services for the elderly, and also considers the tax base of cigarettes as an especially unstable source of revenue, as implicit in such a tax hike is the hope that fewer people will smoke. The KMT plan for long-term care insurance seeks to open up the market to private enterprise, allowing citizens to shop around and obtain the best care that meets their needs, paying for it using long-term care insurance funds as well as a co-pay. “We want to include the private sector, public sector, nonprofit organizations, community services and institutional service – in other words, we need a long-term care industry,” Lin says.
Hsueh regards the private sector as crucial for the future success of long-term care services. “Of course, nonprofits are very important in carrying out long-term care, but we need some kind of input from the private sector to diversify and innovate,” he says. “To diversify, we need some competition. We need innovation, new ideas, new technologies, and new types of service items to deal with long-term care as the situation get more critical.”
Having the necessary human resources is crucial to the provision of long-term care services, and Taiwan currently relies to a large degree on foreign laborers, some 220,000 of whom are currently in Taiwan providing care for the elderly both in homes and in institutions. Internationally, this situation is not unusual; European countries, for example, rely largely on immigrant labor for elder care.
Taiwan faces a pending crisis, however, as the bulk of its caregivers currently come from Indonesia, which has vowed to stop sending such workers to Taiwan within the next few years unless their pay is raised substantially. Further, recipients of long-term care services say that many of the caregivers are not adequately trained to deal with the rigors of caregiving for the disabled and those suffering from dementia.
MOHW’s Tsay suggests that part of the solution would be to encourage more young people to take on a career in social work, noting that 45 universities currently offer social work degrees. This step would not address the immediate problem, however, as social workers are more likely to act as case managers rather than caregivers charged with performing such crucial tasks as helping the disabled elderly bathe, toilet, and move around the community.
Tsay says that MOHW recognizes that current training programs for caregivers, consisting of only 90 hours of largely classroom lectures, do not adequately prepare them for these jobs and that most caregivers learn the essential skills on the job. The Ministry is reviewing proposals for upgrading the curricula and raising the wages for caregivers. Foreign caregivers earn around NT$17,500 per month, while their local counterparts can earn around NT$30,000.
But despite the higher wages offered to locals, caregivers remain in short supply because of the low social status of such jobs and unpleasant working conditions, according to MOHW surveys. President Tsai convened a forum to address these concerns and lauded caregivers for their tireless and compassionate efforts on behalf of the elderly and disabled.
“It’s true that we have a big shortage of care workers,” says MOHW’s Tsay. “But the good thing is that everybody is paying attention to the issue and trying to think of solutions.” NTU’s Hsueh considers that many of Taiwan’s “new immigrants” – some 500,000 foreign brides, mainly from China and Vietnam, live in Taiwan – could be trained as caregivers.
He also notes that the “baby boom” generation born between 1950 and 1965 comprises some 26 percent of Taiwan’s entire population. Members of this generation are now aged between 50 and 67, meaning they are near or at retirement and have elderly parents in their late 70s and beyond. “This is very good human power,” says Hsueh. “These baby boomers have time, they have money, and they have a number of siblings, so they can share the time and money to care for their parents. If we can provide them with care skills, why do we need to send our parents to someone else to care for them?”
Hsueh advocates this approach as adhering to Taiwanese tradition as well as saving substantial costs for the country. An added benefit is that through caring for their elderly parents, these boomers will become more aware of their own future needs. After becoming more familiar with the chronic diseases of their parents, “they can learn how to prevent such illnesses in themselves,” says Hsueh. “It’s a very good prevention mechanism.”
Aging societies are a challenge throughout the world, and increasing amounts of resources will undoubtedly have to be brought to bear to care for the elderly. While there is debate in Taiwan over the best way to meet the social and financial challenge, a firm consensus appears to exist regarding society’s responsibility to ensure that its aged citizens are well cared for. With its sophisticated, educated citizenry and strong commitment to social welfare, Taiwan stands a good chance of effectively managing the issues to enable its senior citizens to grow old with dignity and comfort.
The News Lens has been authorized to repost this article. The piece was first published by Taiwan Business TOPICS.
(Taiwan Business TOPICS is published monthly by the American Chamber of Commerce in Taipei.)
TNL Editor: Edward White