In this article we outline the broad contour of China’s evolving long-term care landscape,trace the development of major government policies in shaping this landscape, and discussthe multifaceted challenges for Chinese policy makers as they scramble to build a viablelong-term care system. We offer policy insights that are applicable not only to China butalso to other rapidly aging and developing countries. To place these discussions inperspective, we begin by summarizing demographic and sociocultural trends in China.
NIH-PA Author ManuscriptNIH-PA Author ManuscriptNIH-PA Author ManuscriptChina’s Demographic Tsunami
In 1950 China had a young and fast-growing population, with a median age of twenty-four(Exhibit 1). By 2010 the population age structure had shifted upward considerably, to a
median age of thirty-five (Exhibit 2). By 2050, when the median age will approach fifty, oneout of every four Chinese will be sixty-five or older (Exhibit 3).8
The old-age dependency ratio—the number of people ages 65 and older per 100 working-age people ages 20–64—is projected to soar, from 13 dependents per 100 working-agepeople in 2010 to 45 per 100 by 2050.8 The ranks of the “oldest old,” those ages eighty andolder, is swelling even faster, from roughly eighteen million in 2010 to a projected ninety-eight million by 2050.8
Nationwide, an estimated thirty-three million Chinese over age sixty have limitations inhandling daily living activities, and almost a third of them are dependent on others for
assistance.9 Long-term care needs and associated costs are especially high for the oldest oldand are projected to rise rapidly.10
Elder Care In China: Tradition And Change
The Confucian norm of filial piety is deeply rooted in Chinese elder care.11,12 The centralityof family care for older Chinese has been summed up by the statement: “For thousands ofyears, filial piety was China’s Medicare, Social Security and long-term care, all woven intoa single family value.”13
However, demographic shifts and socioeconomic changes are eroding this tradition, raisingconcerns that families may not continue to be the mainstay of elder care.14–16 In cities, theemerging “4-2-1” family structure (four grand-parents; two parents, neither of whom hassiblings; and one child) is emblematic of the potential problem.3 In the countryside, thefulfillment of filial piety by adult children is increasingly difficult, aggravated by the
massive outmigration of young people to cities for work.16 Some rural elders have resortedto signing a “family support agreement” contract with adult children to ensure neededsupport and care.17
The very concept of filial piety is evolving, as reflected in shifting attitudes among both theold and the young toward independence and autonomy in living arrangements and theincreasing tolerance of institutional care for elders.18–21
China has recently launched a series of policy initiatives to improve its health care andsocial security systems. These include expanding basic health insurance for all through theUrban Employee Basic Medical Insurance Scheme (since 1998), the New Rural CooperativeMedical Scheme (since 2003), and the Urban Resident Basic Medical Insurance Scheme(since 2007).22,23 In 2009 the New Rural Pension Insurance pilot program started in 10percent of Chinese counties and is scheduled to roll out nationwide to cover all rural elderlyby 2020.24 Because the policy focus is on achieving universal coverage with shallow
benefits in the short term,25 whether these programs will be extended to include long-termcare services remains to be seen.
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China’s Evolving Long-Term Care Landscape
Until recently, institutional elder care in China was rare and limited to the so-called “ThreeNo’s”—people with no children, no income, and no relatives, who were publicly supportedwelfare recipients.26 Institutionalized elders were stigmatized.27 Few families could imagineplacing a loved one in an institution to be cared for by strangers. Most residential carehomes were run by the state, municipalities, local governments, or collectives.
In the mid-1990s China implemented reforms to decentralize the operation and financing ofstate welfare institutions.28,29 Since then, these institutions have shifted their financial basefrom reliance on public funding to more diversified revenue sources, including privatelypaying individuals.27
Elder care homes have proliferated, primarily in the private sector in urban areas.4,7
Although there are limited data, one recent study provides a glimpse into the growth andcharacter of this nascent industry over the past thirty years.4 In Tianjin, for instance, therewere only 4 facilities in 1980 (all government run), but there were 13 by 1990, 68 by 2000,and 157 by 2010 (20 of these facilities were government run, and 137 were privately run).Similar rates of growth were also observed in Nanjing and Beijing.4
The historical pattern of residents in elder care facilities and the sources of revenue that payfor their institutional care have also changed, as shown in Exhibit 4. In Tianjin in 2010 andNanjing in 2009, almost all residents in nongovernment-run homes were private payers.Even in government-run homes, most residents were private payers. Welfare recipients wererare and mostly housed in government facilities.
The current mix of facilities spans a wide spectrum, ranging from “mom and pop”–styleboard-and-care homes providing little professional care to modern nursing homes withskilled nursing and medical services.4
As of 2010 there were an estimated 40,000 elder care facilities and 3.15 million beds inthose facilities nationwide.30 On a per capita basis, China has about half as many long-termcare beds per 1,000 older people as most developed countries do. Just 1.5–2.0 percent ofpeople ages sixty-five and older live in residential care facilities in China, compared with 4–8 percent in Western countries.31,32
China’s twelfth five-year plan (2011–15) for socioeconomic development set a goal of
adding another 3.42 million beds in the next five years, to boost total capacity to thirty bedsper 1,000 elders ages sixty and older by 2015, from roughly eighteen beds per 1,000 eldersin 2011.30
NIH-PA Author ManuscriptNIH-PA Author ManuscriptNIH-PA Author ManuscriptShaping A Long-Term Care System In China
Policy attention to aging issues in China has increased since 1999, when the China NationalCommittee on Aging was established. This committee now involves twenty-eightministerial-level government agencies and coordinates policy making, planning, anddeveloping elder care services nationally.
Recent national policy initiatives have sought to develop a system of services for the elderly.The blueprint of this emerging system, as outlined in the twelfth five-year plan, consists ofthree tiers of social services for the aged: home-based care as the “basis,” community-basedservices as “backing,” and institutional care as “support.”33
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HOME AND COMMUNITY-BASED SERVICES REMAIN SPOTTY
The Chinese government has actively promoted home-based care as the primary pillar ofservices for the aged. This stance is con- sistent with the cultural tradition of filial piety.32Most of the care within an elder’s home is informal care by family members. For those whocan afford it, this informal care may be supplemented by formal services provided at homeby paid caregivers.
A series of national policy initiatives over the last decade attempted to develop community-based services. A notable example was the Starlight Program, under which the governmentinvested a total of 13.4 billion yuan (roughly US $2.1 billion) to build urban community-based senior services centers during 2001–04. By 2005 the program had established 32,000Starlight Senior Centers nationwide.34
However, the centers have apparently not served their intended purpose. After 2005 theStarlight Program lost momentum partly because of dwindling financial support from thegovernment, raising questions about the viability of similar initiatives. To date, self-sustaining, community-based long-term care services remain largely nonexistent, except in afew major urban centers like Shanghai.35
More recently, a new type of home-based elder care model, called Virtual Elder Care Homeor Elder Care Home without Walls, has gained popularity in China.36 It features home careagencies providing a wide range of personal care and homemaker services in elders’ homes.Services are initiated by phone calls to a local government–sponsored information andservice center, which then directs a qualified service provider to the elder’s home.
Participating providers contract with the local government and are reimbursed for servicespurchased by the government on behalf of eligible care recipients, the majority of whom are“Three No’s” or otherwise vulnerable. Since its inception in 2007 in the city of Suzhou, ineastern China’s Jiangsu Province, the Virtual Elder Care Home model has spread to manyparts of the country, including Gansu Province in northwest China.37
To date, policy initiatives to support home or community-based care have been largely
limited to urban areas, and even there, the number of beneficiaries is still relatively small. Inmuch of rural China, the development of home and community-based services faces manypractical challenges because of the physical environment and the lack of resources and
infrastructure. Instead, current practice and policy directions in rural areas favor institutionsby encouraging “centralized support and care” in rural homes for the aged that are run, orsubsidized, by the local county or township government.38,39
INSTITUTIONAL ELDER CARE IS BOOMING
In recent years, the Chinese government has increased efforts to build residential elder careservices by actively promoting the construction of senior housing, homes for the aged, andnursing homes.34 This development has followed two separate tracks leading to a dualsystem of institutional elder care: One is directly developed, owned, and managed by thegovernment; the other is market driven and developed, owned, and run by private-sectorentities.
In cities, government-run institutions and senior care homes are required to admit elderswho qualify as “Three No’s.” In rural areas, government-run homes for the aged target the“Three No’s” who are eligible for the “Five Guarantees”—namely, food, clothing, housing,medical care, and burial expenses. Indeed, virtually all residents in rural facilities arewelfare recipients, as they have always been.40
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What is new is that the government now looks to the private sector to develop elder carefacilities to address the severe shortage of long-term care beds. Private-sector initiatives areseen as the fastest way to meet the demand.41 Policy makers also realize that thegovernment’s role must shift from being the direct “supplier and provider” to being a“purchaser and regulator” of services.41
Guided by this strategic shift, a series of national policy directives have been issued to speedup private-sector development of institutional social services for the aged. Multiplestrategies are in play, ranging from state-built and privately run facilities to privately
operated facilities with government support and subsidies for construction and operations.34
POLICY INDUCEMENTS ARE FUELING FURTHER GROWTH
National policy directives have urged local governments to apply preferential policytreatments for private-sector development of elder care facilities, such as tax exemptions,subsidies for new and existing beds, land allotment or leasing for new construction, andreduced utility rates. Formulated and implemented locally, the incentives and subsidies varysubstantially by form and amount across regions.
Municipal governments have responded to national policy directives with substantialincentives to spur construction and operation of facilities. In Nanjing, for instance, the
municipal government provides financial inducement for new construction in the amount of2,000–4,000 yuan (roughly US$317–$635) per new bed and an ongoing operating subsidyof 80 yuan (about US$13) per occupied bed each month.4 In Beijing the municipalgovernment provides a construction subsidy of 8,000–16,000 yuan (about US$1,270–$2,540) per new bed and an operating subsidy of 100–200 yuan (about US $16–$32) peroccupied bed.39
Policy inducements, coupled with rising consumer demand and purchasing power, havebolstered entrepreneurial interest amongreal estate developers, venture capitalists, investors,and other businesses—both domestic and foreign— in tapping China’s booming senior caremarket. Several US-based firms and private equity funds have recently sought to invest inWestern-style senior housing in China.42,43 However, the obstacles to success are numerous,including an unrealistic market niche (most investors pursue high-end facilities, which fewelderly Chinese can afford), cultural incongruity (Western-style care and services may notalign well with local customs or consumer preferences), and an uncertain regulatoryenvironment.
NIH-PA Author ManuscriptNIH-PA Author ManuscriptNIH-PA Author ManuscriptThe Challenges Of Regulatory Oversight
The national regulatory authority over elder care services rests primarily with the Ministryof Civil Affairs. As is typical of the Chinese policy-making process, the ministry setsnational policies and regulatory guidelines that are to be implemented by provincial-levelofficials. Directives then trickle down to cities and counties in each province.
NATIONAL REGULATORY FRAMEWORK REMAINS SKETCHY
At the national level, only minimal standards currently exist for the regulation of providersof elder care. In 1999 the Ministry of Civil Affairs released the Provisional Measures for theManagement of Social Welfare Institutions.44 This national policy effort was the firstdesigned to formalize regulation of all types of social welfare institutions. The current
regulatory structure is based on three major policy documents, as outlined below. Efforts arenow under way to revise these regulations, although they are still the prevailing officialguidelines.
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The Code for Design of Buildings for Elderly Persons was jointly promulgated by theMinistry of Construction (now named the Ministry of Housing and Urban-Rural
Development) and the Ministry of Civil Affairs in 1999 and addresses the “bricks andmortar” of facilities housing the elderly.45 The Code is applicable to all city and townresidential buildings and public facilities that cater exclusively to the elderly.
The Basic Standards for Social Welfare Institutionsfor the Elderly was promulgated by theMinistry of Civil Affairs in 2001.46 It stipulates the guiding principles, basic service
standards, facility operations, and equipment for such institutions. This was the first nationalguideline to set minimum standards applicable to social welfare institutions of all types. Itoutlines different facility characteristics appropriate to meet the varying needs of the elderly.However, detailed criteria differentiating residents by levels of care are lacking.
The National Occupational Standards for Old-Age Care Workers was drafted by the
Ministry of Civil Affairs and approved and promulgated by the Ministry of Labor and SocialSecurity (now named the Ministry of Human Resources and Social Security) in 2002.47 Anold-age care worker is defined as a person who “provides daily living assistance or nursingfor the elderly.”47(p1) The basic requirements for this occupation, a fairly new job category,include a middle school education (nine years of schooling) and at least 180 hours oftraining for entry-level workers. However, the number of workers who have actually metthese basic requirements is widely believed to be very small.
LOCAL REGULATORY ENFORCEMENT IS WEAK
Local authorities are responsible for adhering to national policy guidelines in a manner thatbest fits local conditions. Officials in Tianjin acknowledged many practical difficulties thatexist in exercising regulatory oversight, partly because of the lack of specificity in currentregulations and the paucity of qualified inspection personnel.48
Compliance with the required building code is a challenge in Tianjin, where most elder carehomes are retrofitted residential buildings, factories, or even schools leased by the provider.Since there are limits to repurposing existing buildings for elder care, many facilities maynot comply with mandated standards. Local officials acknowledged this situation but viewedit as a necessary compromise to increase bed supply quickly.48
TENSIONS RESULT FROM CONFLICTING POLICY INTERESTS
Officials in Tianjin noted the tension between conflicting government policies of ex-pandingsupply and implementing regulations.48 Generally, the zeal for growth trumps regulatoryoversight on the policy agenda.
NIH-PA Author ManuscriptNIH-PA Author ManuscriptNIH-PA Author ManuscriptThe misalignment of policy incentives is also evident in the allocation of land for new
construction. With economic growth as the top priority, local governments tend to favor for-profit businesses when approving land deals. In Tianjin and elsewhere, virtually all private-sector elder care facilities are registered as non-enterprise, not-for-profit entities in order toreceive a tax exemption. Given the scarcity and escalating cost of land, it is not surprisingthat local governments have little incentive to parcel out land to nonprofit entities that do notgenerate tax revenue.48
Consequently, relatively few private-sector facilities have been built recently because ofdifficulties obtaining government land leases. This may increasingly become a barrier forprivate-sector initiatives in developing long-term care services. For rental facilities, disputesover property rights—which are often murky in China— and leasing contracts alsocomplicate investment.
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Policy Recommendations
Chinese policy makers confront numerous challenges in developing appropriate policyresponses as the formal long-term care services sector continues to grow rapidly. Wehighlight three pressing issues and offer recommendations to address them.
PROVIDING A MIX OF SERVICES THAT ELDERLY PEOPLE WANT
The preference of older people for living in their own home for as long as possible seems tobe universal, but it is perhaps especially so in China, where family values are highly
regarded and ingrained in the cultural tradition of filial piety. China’s blueprint for a three-tiered long-term care system aptly emphasizes home and community-based services.In actuality, however, current policies and resource allocation tilt toward institutional care.The need for more facilities may be justified, but Chinese policy makers should be careful toavoid an institutional bias in the country’s fledgling long-term care system. Although whatconstitutes an optimal service mix seems elusive, policy makers should strive to build abalanced system of services that reflects older people’s preference as much as possible.
STRENGTHENING REGULATORY OVERSIGHT THROUGH INFORMATION SYSTEMS
Scandals have already begun to surface about Chinese long-term care facilities,
underscoring the need for regulatory oversight. Chinese policy makers need to institute aformalized regulatory structure soon. Effective oversight will require building aninformation system to facilitate evidence-based policy making, quality assurance, andregulatory enforcement.
China may learn a great deal from the United States, where all publicly certified nursinghomes must report both facility- and resident-level data electronically, using a uniformannual facility inspection survey and standardized resident assessment. It will take time andresources to build an information infrastructure in China, but the ubiquitous Internet meansthat China can institute such a system more quickly than was possible in the United Statestwo decades ago.
BUILDING A LONG-TERM CARE WORKFORCE
At present, the lack of a qualified and professional workforce in long-term care is an urgentissue in China. The majority of direct care workers are inadequately trained and poorly paid.Even the most optimistic estimate suggests that fewer than one-third of all direct careworkers providing elder care services have received any professional training.9
NIH-PA Author ManuscriptNIH-PA Author ManuscriptNIH-PA Author ManuscriptHowever, inadequate training for direct care workers is not the only impediment.Professional clinical and management staff are also needed to ensure a transition to a
modern, information-based long-term care delivery system. Chinese policy makers shouldprioritize education and training initiatives to grow a professionalized long-term careworkforce.
Conclusion
As China’s population ages, pressures are building for policy makers to develop a viablelong-term care system to meet escalating demands. Although home and community-basedservices are preferred by most elderly Chinese and promoted by the government, such
services remain spotty across most cities and towns in China and are virtually nonexistent inrural areas. In contrast, institutional elder care is expanding rapidly, primarily in the urbanprivate sector.
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Partially due to policy makers’ zealous pursuit of building beds quickly to meet the
perceived gap between rising demand and limited supply, little regulatory oversight existsover the kinds of services and the quality of care provided in Chinese long-term carefacilities. Policy makers in China will confront numerous challenges in fostering and
monitoring this rapidly growing long-term care services sector, including conflicting policyinterests, a weak regulatory framework, and lack of enforcement capacity.
Acknowledgments
NIH-PA Author ManuscriptNOTES
NIH-PA Author ManuscriptNIH-PA Author ManuscriptThe research reported in this article was supported, in part, by a grant from the Fogarty International Center at theNational Institutes of Health (Grant No. R03TW008142).
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NIH-PA Author ManuscriptNIH-PA Author ManuscriptNIH-PA Author ManuscriptBiographies
Zhanlian Feng is a senior research public health analyst at RTI International.
In this month’s Health Affairs, Zhanlian Feng and coauthors analyze China’s evolving long-term care landscape and trace major government policies and private-sector initiatives thatare shaping it. Although home and community-based services remain spotty, institutionalcare is booming, with little regulatory oversight and a lack of enforcement capacity. Theauthors recommend that China learn from past mistakes in the United States and build abalanced system of services for home and community-based care; strengthen regulatoryoversight and quality assurance; and prioritize the education and training of aprofessionalized long-term care workforce.
Feng is a senior research public health analyst in the Aging, Disability, and Long-Term CareProgram at RTI International and an adjunct assistant professor of health services, policy,and practice at Brown University. His current research interests include the use of healthservices by older people with dementia or cognitive impairments, federal and state policiesshaping the US long-term care landscape, and socioeconomic differences in access to andquality of long-term care services.
Feng is a leading researcher on emerging long-term care issues in China and was named anaged care policy research expert in 2011 by the China Association of Social Welfare. Heearned a master’s degree and a doctorate in sociology and demography from BrownUniversity.
Health Aff (Millwood). Author manuscript; available in PMC 2013 December 01.
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Chang Liu is a doctoral candidate at Brown University.
Chang Liu is a doctoral candidate in the Department of Health Services, Policy, and Practiceat Brown University. His research focuses on health insurance and elder care. His currentwork uses econometric study designs to examine the impact of insurance policies on patientand provider behaviors and their economic implications. He is also interested in cost-effectiveness analysis in health care decision making.
Liu was awarded the eXebs Friedrich J. Schoening International Scholarship and was namedan eXebs Fellow while he was an exchange student at the European Business School. Healso received scholarships from the Ronald Coase Institute, the Fu-ren Dong Foundation,and the Rand Summer Institute. Liu received a master’s degree in finance from theGuanghua School of Management of Peking University, in China.
Xinping Guan is director of the Institute of Social Development and Administration atNankai University.
Xinping Guan is a professor in and chair of the Department of Social Work and SocialPolicy and director of the Institute of Social Development and Administration at NankaiUniversity, in China. His current academic and research areas include social policy, socialwork, and social demography. He serves as vice director of the China Association of SocialWork Education and vice director of the Social Policy Committee of the China Associationof Sociology.
Guan is a member of the Expert Advisory Committee of the Ministry of Civil Affairs and amember of the Directing Board of Sociological Teaching of the Ministry of Education, inChina. He received a master’s degree in sociology and a doctorate in economics fromNankai University.
Vincent Mor is the Florence Pirce Grant Professor of Community Health at BrownUniversity.
Vincent Mor is the Florence Pirce Grant Professor of Community Health in the Public
Health Program at the Brown University School of Medicine and a research health scientistat the Providence Veterans Affairs Medical Center. He was awarded a DistinguishedInvestigator Award by AcademyHealth in 2011 and is a member of the AcademyHealthboard of directors.
Mor is also an editorial board member of Health Services Research, the Journal ofPsychosocial Oncology, and BMC Health Services Research. He received a master’s degree
Health Aff (Millwood). Author manuscript; available in PMC 2013 December 01.
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in rehabilitation administration from Northeastern University, a doctorate in social welfarepolicy from Brandeis University, and an honorary master’s degree from Brown University.
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EXHIBIT 1.
Age Structure Of China’s Population, 1950
SOURCE United Nations. World population prospects: the 2010 revision (Note 8 in text).
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EXHIBIT 2.
Age Structure Of China’s Population, 2010
SOURCE United Nations. World population prospects: the 2010 revision (Note 8 in text).
Health Aff (Millwood). Author manuscript; available in PMC 2013 December 01.
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EXHIBIT 3.
Age Structure Of China’s Population, 2050 (Projected)
SOURCE United Nations. World population prospects: the 2010 revision (Note 8 in text).
Health Aff (Millwood). Author manuscript; available in PMC 2013 December 01.
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EXHIBIT 4.
Elder Care Homes’ Residents And Sources Of Daily Operating Revenue, Nanjing (2009)And Tianjin (2010), China
SOURCE Authors’ analysis of data from elder care homes in Nanjing and Tianjin. NOTENumbers are means across facilities in each column.
Health Aff (Millwood). Author manuscript; available in PMC 2013 December 01.
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