To succeed, the Taiwan government’s plan must overcome fiscal, talent, and cultural challenges.
In April this year, Taiwan passed the threshold to officially become an aged society, with more than 14% of the population older than 65. That trend is set to accelerate over the next decade. By 2026, 21% of the population will be senior citizens, making Taiwan a hyper-aged society.
While the government has tried to boost the fertility rate, those efforts have largely fallen flat. Taiwan’s birth rate of 1.13 is the third-lowest in the world, down from nearly 1.8 at the turn of the 21st century.
Given the growing number of elderly and the low replacement rate – which means fewer young people to help look after their aged family members – the government has felt the need to develop a robust long-term care plan. Currently Taiwan is in the second stage of an ambitious two-decade program. The first stage, from 2007 to 2016 – referred to as LTC 1.0 – established state-subsidized care for the elderly and disabled, covering home nursing, meals, and transportation, as well as rehabilitation and respite care services.
Launched in November 2016, LTC 2.0 adds a number of community-based services, including preventive care, dementia care, and family caregiver services. Under the new policy, coverage is extended to infirm seniors over 65, people over 50 affected by mild dementia, and the disabled under 49 (who were not covered in LTC 1.0).
Among the projects under LTC 2.0, for example, is one called OxyLife that was proposed by Air Liquide and approved by the Ministry of Health and Welfare (MOHW) this April. It is designed to enable the aged and disabled suffering from shortness of breath to become more mobile to prevent even more serious ailments from developing. After being checked by a physician, the patients are visited at home by a healthcare professional for training on the proper use of oxygen to restore their energy levels.
Although the National Health Insurance Administration currently does not include oxygen within its reimbursement coverage, individuals found eligible by MOHW can receive subsidies under LTC 2.0 for the oxygen costs. “The core concept is that the more you go out and get some exercise, the less likely you will suffer from a disability in the future,” says Herman Chu, head of the healthcare division at Air Liquide Far Eastern Ltd.
With LTC 2.0, the government aims to develop “a high-quality, affordable, and universal long-term care service system able to enhance the elderly’s quality of life and reduce the burden on family members caring for them,” MOHW told Taiwan Business TOPICS in an email response to interview questions.
“The government should be recognized for achieving a long-term care system in such a short period of time – it’s something that many developed countries cannot accomplish,” says Kuo Tsuann, president of the Taiwan Association of Family Caregivers and a professor at Zhongshan Medical University in Taichung. “It’s a very comprehensive plan,” she says. “There are lots of services available for people [in need] to use.”
Kuo points out that among Taiwan’s population of 23 million, 760,000 are disabled or live with dementia. Of these, 55% do not use any caregiving resources, while 30% employ foreign caregivers and 15% utilize government-funded LTC resources.
MOHW estimates that eligible care recipients will grow from 511,000 to 738,000 under LTC 2.0, which could strain state coffers and human capital. From January to May this year, 58,000 people applied for long-term care services, an annual increase of more than 69% compared with the same period a year ago, the ministry said.
The ministry forecasts that long-term care costs will reach NT$73.6 billion (US$2.42 billion) by 2026, 4.5 times the NT$16 billion spent in 2016. In addition to funds drawn from the government’s budget, the long-term care plan is supported by recent increases in the gift, inheritance, and tobacco taxes. Legislation passed last year raised both the gift and inheritance taxes from 10% to 20%, while hiking the price of a pack of cigarettes by NT$20.
The Ma Ying-jeou administration (2008-2016) considered funding long-term care through an insurance scheme, similar to how Taiwan’s National Health Insurance (NHI) is financed. Some of the world’s most advanced economies, including Japan, Sweden, and Holland, pay for long-term care this way. A bill along these lines, backed by the Kuomintang, then the ruling party, made it to the legislature in 2015, but never passed, lacking support from Democratic Progressive Party (DPP) lawmakers.
Instead, the DPP sought to fund the program through government appropriations supported by tax revenue. “Tax-based funding would facilitate the redistribution of wealth to lessen the burden on the public” and “would meet the people’s needs more than insurance-based funding,” the then DPP vice presidential candidate Chen Chien-jen told the media in December 2015.
Of the NT$33 billion annually budgeted for long-term care, NT$17.8 billion is from the government budget. The government expects it can raise another NT$15.2 billion from the recent tax increases.
Darson Chiu, deputy director of the economic forecasting center at the Taiwan Institute of Economic Research (TIER), expresses skepticism about that prediction. TIER reckons that the supplemental tax revenue will come to only NT$11.5 billion. “The government is overly optimistic about the potential revenue from tax increases,” he says. As a result of expansionary fiscal policies such as public construction programs, it’s unlikely that sufficient budget can be allocated to LTC, he explains.
Given the financial challenges posed by the current policy, Taiwan ultimately should shift to insurance-based funding for long-term care, argues Wang Tsu-chi, president of the Taiwan Long-Term Care Professional Association. “It’s more realistic than relying on tax revenue. But first we need to prepare the facilities and manpower.”
Raising human capital
Observers say that the toughest challenge facing Taiwan’s LTC 2.0 program is a lack of qualified personnel. There are currently about 20,000 professional Taiwanese caregivers. The problem will only worsen as Taiwan grays, said Minister of Health and Welfare Chen Shih-chung in an April interview with the Chinese-language Liberty Times. “LTC personnel must double by 2026 to meet the surge in demand from the aging population,” Chen said. “Failure to do so would see deterioration of long-term care quality,” he added.
At present the shortage of caretakers is already causing problems. People in need of care typically have to wait five to ten days for someone to come, Wang says.
Currently Taiwan retains only about one-third of all long-term care personnel trained annually, according to the ministry. Another third retire while the remaining third change to a different profession. Most caretakers leave their positions because of low salaries and because they want to work in a more prestigious field.
Indeed, the caretaking profession has not enjoyed a positive image in Taiwanese society. “It’s seen as a low-rung job,” Wang says. “Parents tell their kids not to choose it as a career path, so it’s hard to both attract and retain talent.”
The low salaries also discourage people from entering the field. The typical monthly salary for a Taiwanese caretaker is just NT$30,000, well below the median Taiwan income of roughly NT$41,000. “It’s tiring work and not very forward-looking,” says TIER’s Chiu. “There needs to be a stronger economic incentive to attract more personnel.”
To be sure, foreign caregivers hired by individual families – these caretakers are not part of the government’s program – may be content with far less than NT$30,000 a month or less. Most come from Southeast Asian countries such as the Philippines, Indonesia, and Vietnam, where median salaries remain well below Taiwan’s. But at the same time living costs in Taiwan are higher than in their home countries.
MOHW in April decided to address the salary issue by increasing wages of long-term caregivers to NT$32,000 a month or NT$200 on an hourly basis, though many observers deem that to still be inadequate. A better reference point might be the NT$60,000 that bus drivers are paid on average. Their work is tiring and redundant, but they earn more than many office workers.
In a January commentary for the Taipei Times, Cho Chiung-yu, a physical therapy professor at National Cheng Kung University, proposed that instead of across-the-board salary increases for caregivers, higher pay should be linked to greater patient and family-member satisfaction.
“A patient of mine has employed a Taiwanese caregiver and is paying a high salary, because the caregiver is willing to learn, is easy to communicate with, asks serious questions during treatment, and helps the patient do physical therapy activities at home, enabling the patient to achieve double the results with half the effort,” Cho wrote.
She suggests that Taiwan refer to Japan’s professionalized long-term care system as a model. Japanese care providers are officially known as “care workers,” and if they pass a national exam they can be promoted to “case managers,” certified to lead a care-service institution.
By email, MOHW noted that following changes to LTC legislation, senior home caregivers can now be promoted to “home supervisors,” although it was not immediately clear what benefits that status confers. The ministry encourages experienced caretakers to take leadership roles in long-term care organizations, the email said.
Further, the government plans to develop long-term care courses both in vocational schools and at the university level. MOHW and the Ministry of Education will share responsibility for this program.
Hopefully these initiatives will help improve the general image of caretaking in Taiwan. “We need to address the prejudice against caretaking,” Chiu says. “The government should promote it as a normal and respectable occupation, emphasizing that it’s good to help people who can’t take care of themselves live better lives.”
Toward that end, the government has launched a media campaign to boost the public’s impression of long-term care as an occupation. The campaign covers outdoor billboards, television, and the social media channels Facebook and Line.
Looking ahead, Taiwan’s long-term care program should focus on boosting the quality of life for both patients and caretakers, observers say. At present, most families in need of assistance opt for a foreign caregiver rather than someone available through the government’s LTC plan. Given the shortage of government-provided caretakers, “It’s easier to hire a foreign worker – it’s a quick solution,” says Kuo.
Yet most foreign caregivers are not trained to emotionally engage with their patients or help them maintain healthy social lives. In that sense, hiring a foreign caretaker can be “a double-edged sword,” she notes. “Foreign caretakers – many who are not fluent in Chinese or Taiwanese – are expected to keep their patients safe, to keep them out of physical danger that might occur if they were left on their own. But emotional health is very important to maintain too, especially for the elderly.”
For patients who are physically able, Kuo recommends that foreign caretakers take them to senior centers and public parks with exercise activities for seniors.
While convenience is an important factor in the decision to hire a foreign caretaker, many Taiwanese families feel cultural pressure to take care of an ill family member at home. “Sending someone to an institution for the elderly, which is common in the West, is not widely acceptable in Taiwanese society,” Kuo says. “If you do that, other people will say you are not a good son or daughter – that you’re not filial.”
“But bringing a foreign caretaker into the home is fine – it’s contracted filial piety,” she adds.
The DIY option
For some Taiwanese the alternative to either using the government’s LTC plan or hiring a foreign caretaker is to do the job themselves. Every year, about 130,000 people quit their jobs to take care of an ailing family member, usually a parent. They may opt to take a less demanding job that allows them to concurrently handle their caretaking responsibilities, or they may not work at all.
Most people cannot easily afford that change from either a financial or career standpoint, but some do it anyway out of a sense of filial duty, Kuo says. She urges the government to do more to inform these caregivers about the services available to them through the government’s LTC plan.
In its email to Taiwan Business TOPICS, MOHW said that in 2015 it established a support program for family caregivers, which this year was expanded to cover 30 locations across Taiwan. The program offers a wide variety of services, including support groups that caregivers can join, mental-health support from therapists, assistance with work on specific cases, and activities that help to relieve stress.
Kuo suggests that the government seek to make its LTC plan more user-friendly through better coordination, more easily accessed advisory services, and efforts to make its programs more family- and community-centered.
In fact, MOHW says it is working to increase the community focus of its long-term care program. To ensure that people can access long-term care services near their homes, the central government will “work with local governments to create services tailored for local conditions,” the ministry said.
Wang of the Taiwan Long-Term Care Professional Association considers the community aspect to be paramount. “If every convenience store could serve as a community base and had a home helper, it would be very helpful for adoption of long-term care services,” she says.