Social Welfare Reforms from a Policy-Network Perspective:

Comparative Policy Processes of the Long-Term Care Insurance Law and the Child Welfare Law in Japan

Takeshi HIEDA,

Doctoral Student, Graduate School of Social Sciences

Hitotsubashi University, Tokyo, Japan

Paper prepared for the East Asian Social Policy research network (EASP)

Second Conference: Pressure, Policy-Making and Policy Outcome

University of Kent, UK, 30th June to 2nd July, 2005

Abstract

This paper concerns the policy reform processes of the Long-Term Care Insurance Law and the Revised Child Welfare Law based on the theory of policy networks. In 1990s, some significant reform bills on social welfare policies were passed through the Diet in Japan. Since then, those policy reforms have transformed the outlook of Japanese social welfare from the placement system to the contractual system to different degrees. Among them the Long-Term Care Insurance Law and the Revised Child Welfare Law give us an interesting case of social policy reforms. The Long-Term Care Insurance Law witnessed the remarkable changes from the long-established placement system into the contractual system. In the newly-established system the frail elders directly contract with care suppliers while in the former one the administration placed the needy to care facilities. On the other hand, the Revised Child Welfare Law did not bring about drastic changes but nominal ones. It retains the basic structure of child care policy and allows parents to contract with a local municipality in enrolling their children in day-care facilities. This paper examines the major causes of different outcomes of two policy reforms. Based on the theory of policy networks, we can observe a sharp contrast between the policy arena of elderly care and that of child day care in the law-making process of the two bills. The policy process of the long-term care included diverse interest groups such as medical care, geriatric health, and elderly care, among others, which shaped an issue network. In contrast, the policy process of the child welfare consisted of very few interest groups which held firm relationship with the bureaucracy, and maintained a policy community. This paper concludes that the difference of these two policy networks created the variation of outcomes among the two social welfare reforms.

Abbreviations

APCFAdvisory Panel on Child-Day-Care Facilities

CHWECouncil of Health and Welfare for the Elderly

JichiroAll Japan Prefectural and Municipal Workers' Union

JPSJapan Socialist Party

LDPLiberal Democratic Party

LTCILong-Term Care Insurance

MHAMinistry of Home Affairs

MHWMinistry of Health and Welfare

MOFMinistry of Finance

RCWRevised Child Welfare

RengoJapanese Trade Union Confederation

SBISubcommittee of Basic Issues of Central Child Welfare Council

1. Introduction

In 1990s, Japanese social welfare policies[1] experienced a great transformation from placement system to contractual system. ‘Placement system’ means that a government such as a prefecture or a local municipality has authority to make institutional placement or designate other welfare services for vulnerable persons. Japanese social welfare policies had been managed based on it ever since the U.S. occupation era (cf. Kitaba 2005). This system, however, has been criticized as it does not allow persons under placement by government authority to have right to welfare services though it imposes an obligation to treat vulnerable persons on administration. Several legal reforms therefore changed the placement system into the contractual system, which permit citizens who require welfare services to select service providers. The Long-Term Care Insurance (LTCI) Law and the Revised Child Welfare (RCW) Law, both of which passed the Diet in 1997, ushered in this new trend. Each of them introduced the contractual system into the elderly care and the child-day-care policy.

Although both of these two legal reforms changed the placement system, they have considerable differences. The LTCI Law converted the established placement system into the contractual system, where frail elders directly contract with care suppliers and the long-term care insurers subsidize users from the social insurance budget. On the other hand, the Revised Child Welfare Law did not bring about drastic changes but nominal ones. It retains the basic structure of child care policy and allows parents to contract with a local government in enrolling their children in child-day-care facilities. The former policy process made a radical policy reform in the elderly care whereas the latter made a moderate policy reform in child day care. Why did these two policy reforms mark this contrast?

This paper intends to examine the causes of this contrast from the perspective of policy networks. These two legal reforms were discussed and negotiated in parallel within the same ministry, the Ministry of Health and Welfare (the current Ministry of Health, Labor, and Welfare). Thus, we can control the conditions such as socio-economic factors, party politics, and different characters of bureaucratic apparatuses. Through comparison of very similar cases of policy reforms, this paper aims to distill the different character of policy networks and show how the differences in policy networks made contrasting outcomes between elderly care and child-day-care policies.

This paper consists of following sections: the second section establishes the research question; the third section explains the theory of policy networks; the forth section explores the law-making process of the LTCI bill; the fifth section probes the revision process of Child Welfare Law; the sixth section compares the two policy processes from the view point of policy networks and concludes the entire discussion.

2. Research Question

The purpose of this section is to set the research question this paper intends to answer. First, this section outlines the contents of the LTCI Law and the RCW Law. Second, it indicates the differences between the two bills.

The LTCI Law established an elderly care system based on social insurance in Japan. This system provides care services for the frail elderly through the LTCI budget collected as insurance premium. In the placement system, the administering authority had placed the vulnerable elderly to reference institutions (managed by social welfare corporation[2]), paid treatment fee to those institutions, and collected charges from users based on the principle of ability to pay. The LTCI system dramatically changed the previous situation. It enables users to make a contract with service providers, and subsidizes the 90 percent of expenses incurred.

The RCW Law also transformed the placement system in child day care into the contractual system. It reformed the previous system especially in enrolling children in day-care facilities, which local municipalities had managed administratively since the Child Welfare Law was implemented in 1947. Before the law was amended in1997, the local municipalities placed children “lacking care” to child-day-care facilities (limited to public or private accredited facilities), pay the expenses incurred to those facilities, and collect the charges from users based on the principle of ability to pay. After the law was revised, the assignment process of child-day-care facility was changed into being based on a user’s application including selection of day-care facilities: that is, the revised law allowed parents to contract with administration.

The LTCI Law considerably differs from the RCW Law though both of them changed the placement system in social welfare services. The most important point is that the ‘contract’ of the LTCI Law refers to the contract between the user (a frail elder) and the care supplier, whereas that of the RCW Law indicates the contract on public law between user and administration, which does not mean the contract on civil law between user and care provider. In contrast to the LTCI Law, the RCW Law never changed the basic system of child day care. After the RCW Law was implemented, local municipalities continue paying the expenses incurred to day-care facilities and collect charges from guardians of children. The revised law takes over the core of placement system in the child-day-care policy (Akimoto 1997).

Here we set the research question: what caused the difference between these two policy reforms. Both policy processes of elderly care and child-day-care reforms started in the early 1990s, and they progressed in parallel in coalition government periods from non-LDP (Liberal Democratic Party) to LDP-Sakigake-JPS (Japan Socialist Party). In addition, the Ministry of Health and Welfare (MHW) had no distinct attitudes to these policy fields, as the younger welfare officials proposed in their policy paper that “[the government] should reform the elderly care and child-day-care fields in which diversified needs toward social service are prominent, and intend to make care services combined with the new system based on free contract [italic by author]” (Kouseisyo Seisaku Bijon Kenkyukai 1988). Despite this, why were there considerable differences in their respective policy reforms? Since they share many conditions like universalization of care needs, party politics of coalition governments, and economic situations, we cannot attribute this contrast to socio-economic conditions. Thus, this paper probes those two policy processes.

3. Theory of Policy Networks

This section explains the theoretical framework of this paper to compare the two policy reforms. The theory of policy networks, employed here, is the theory conceptualizing governance as the interaction between state and society. This theory was pioneered by Peter Katzenstein, and has been developed by Renate Mayntz and R.A.W. Rhodes (Katzenstein 1978, 1987; Mayntz and Marin 1991; Rhodes and Marsh 1992b). Following part of this section, dependent on the works of Rhodes, who is focusing on mezzo-level policy networks, defines ‘policy network’ and explores the typologies for the case studies carried out here.

‘Policy network’ is defined “as a cluster or complex of organizations connected to one another by resource dependencies” (Rhodes 1997: 37). Governance is performed through a relatively autonomous policy network, consisting of organizations requiring the exchange of resources like money, authority, information, expertise, and so forth. Through the theory of policy networks, Rhodes aims to reveal how characteristics of inter-organizational interdependency of policy network affect policy outputs. For example, when Rhodes says “policy networks foster incremental changes, thereby favouring the status quo or the existing balance of interests in the network” (Rhodes and Marsh 1992b: 262-3), he assumes that an inter-organizational constellation of policy network becomes an inertia to policy changes. Thus, with cross-sectional analysis, he examines to what degree the different types of policy networks caused distinct outcomes.

Since the Rhodes’s theory of policy networks is originally comparative perspective, it requires the typology. He exhibits following five types of policy networks (Rhodes and Marsh 1992a: 183):

① Policy community: Stability, highly restricted membership, vertical interdependence, limited horizontal articulation,

②Professional network: Stability, highly restricted membership, vertical interdependence, limited horizontal articulation, serves interest of profession,

③ Intergovernmental network: Limited membership, limited vertical interdependence, extensive horizontal articulation,

④ Producer network: Fluctuating membership, limited vertical interdependence, serves interest of producer, and

⑤Issue network: Unstable, large number of members, limited vertical interdependence.

This typology of policy networks is to fundamentally assign every policy network between highly integrated policy community and less integrated issue network, though he also uses other components as variables. In accordance with the Rhodes’s theory of policy networks, this paper categorizes policy networks based on the degree of integrity, and reveals how the distinct character affect the outcomes of policy processes.

4. Policy Process of the Long-Term Care Insurance Law

This section explains the law-making process of the LTCI Law from the formation of the policy proposal, to the deliberation at the advisory board of the MHW, until the passage of the bill in the Diet.

4.1. Formation of Policy Idea

The first point discussed here is where the policy idea came from. Long-term care for the fail elderly was recognized as a problem among the MHW officials by the late 1980s (Kouseisyo Seisaku Bijon Kenkyukai 1988; Nishikawa 1987; Zenkoku Syakaifukushi Kyogikai 1989). At the beginning of the 1990s, the MHW set up Koreisya Totaru Puran Kenkyukai [the Study Group of Total Plan for the Elderly]. Toshiharu Okamitsu, Director of the Health and Welfare Department for the Elderly, was the head of this study group. This indicated that the welfare officials were serious in seeking a policy solution for the problem.

The policy paper that the study group made for internal circulation candidly pointed out some problems which elderly care policies had at that time. The most important one is the limitation of placement system. The paper strongly criticized that the placement system as it was could not respond to the increasing elderly-care demand. Since the placement system originally came from the public assistance system and dependent on tax expenditure, it did not flexibly expand the capacity of care facilities. The principle of ability to pay, on which the placement system was based, virtually excluded the middle class citizens from using special nursing homes because of the heavy out-of-pocket payments. Since the frail elders of middle class poured into hospitals, this caused social hospitalization[3] which skyrocketed the budget of medical insurance. These problems forced the welfare officials to recognize the elderly care as an urgent issue. The policy paper proposed that the government should consider frailness of old people to be a social risk in an aged society, thus it should introduce the contractual system to the long-term care, and it should establish the social insurance system for the frail elderly (Kouseisyo Rojin Hoken Fukushibu 1993: 4-7).

The study group was elevated into the project team as a higher level organization later.[4] It continued examining the proposed scheme of long-term care system for the frail elderly. The project team called it the self-support system for the elders.

It can be pointed out that the officials of MHW nurtured the policy idea of long-term care security through social insurance from the earlier stage of the policy process. They were aware of following problems: the limitation of placement system due to fiscal constraints; the inappropriate pricing scheme for hospitals, geriatric healthcare facilities for the elderly, and special nursing homes; and the predicted upsurge of the demand for elderly care. Through discussions within the MHW the welfare officials had already worked out a well-formed blue print before the advisory bodies of MHW started deliberating the new long-term care policy for the frail elderly.

4.2. Agenda Setting

This subsection takes a look at the agenda setting process of long-term care insurance. In parallel to the deliberations within the ministry, the MHW set up Koreisya Shisaku no Kihon Hoko ni kansuru Kondankai [the Advisory Panel of Basic Policies for Elders] in April 1993. This consisted of members from three advisory boards concerning the aged.[5] Those boards had been divided into medical care, healthcare, and welfare.[6] The intention of welfare officials was to integrate those councils on the aged into one under the jurisdiction of the Health and Welfare Department for the Elderly.

An advent of a new administration played a certain role in elevating the long-term care proposal for the aged on the policy arena. Japanese party politics experienced a drastic change in August 1993: the LDP, which had continued one-party dominance for 38 years since 1955, lost the election, and Hosokawa non-LDP coalition government was realized. Prime Minister Hosokawa nominated Keigo Ouchi, the Democratic Socialist Party Chairman, as the minister of MHW. Soon after taking office, he directed officials of MHW to set up Koreisyakai Fukushi Bijon Kondankai [the Advisory Panel on Vision for Elderly Welfare]. This panel discussed broad issues such as elderly care, child day care, and employment. The report of the panel, Niju-Ichi Seiki Fukushi Bijon [ Vision for Welfare in the 21st Century], proposed that government hold down the ratio of social security costs to gross national income through expanding social services and restraining medical costs. The matter of care security was officially identified as a policy issue from this point onward.

While the topic of care security for the aged was broadly recognized as a problem in society, it was Aratana Koreisya Kaigo Shisutemu no Kochiku wo Mezashite [A Proposal to New System for Elderly Care], the report of Koreisya Kaigo Jiritsu Shien Shisutemu Kenkyukai [the Study Group of Elderly Care and Self-Support System], that publicly proposed the long-term care insurance as a solution for the problem of nursing care in December 1994. This study group, composed of scholars and experts, presented “self-reliance support for the aged” as a principle of new long-term care policies. At the same time, it advocated that the social insurance was desirable for the new system of the aged care from the viewpoint of ‘risk sharing’ (Koreisya Kaigo Jiritsu Shien Shisutemu Kenkyukai 1994). The study group was the venue for the MHW to authorize its own elderly care policies.