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Viewing cable 06FUKUOKA14, KYUSHU'S AGING SOCIETY CREATING BOTH HEADACHES AND

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Reference ID Created Released Classification Origin
06FUKUOKA14 2006-02-28 10:37 2011-08-25 00:00 UNCLASSIFIED Consulate Fukuoka
VZCZCXRO1210
RR RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHFK #0014/01 0591037
ZNR UUUUU ZZH
R 281037Z FEB 06
FM AMCONSUL FUKUOKA
TO RUEHC/SECSTATE WASHDC 0169
RUEHKO/AMEMBASSY TOKYO 0175
INFO RUEHKSO/AMCONSUL SAPPORO 0071
RUEHNAG/AMCONSUL NAGOYA 0070
RUEHOK/AMCONSUL OSAKA KOBE 0079
RUEHNH/AMCONSUL NAHA 0073
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEAUSA/DEPT OF HHS WASHINGTON DC
RUEHC/DEPT OF LABOR WASHINGTON DC
RUEHFK/AMCONSUL FUKUOKA 0187
UNCLAS SECTION 01 OF 02 FUKUOKA 000014 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EFIN ELAB SOCI PGOV BTIO JA
SUBJECT: KYUSHU'S AGING SOCIETY CREATING BOTH HEADACHES AND 
OPPORTUNITIES 
 
 
SUMMARY 
 
1. While analysts frequently warn about the coming demographic 
and fiscal challenges that Japan's aging population will pose, 
in much of the Kyushu/Yamaguchi region that future has already 
arrived.  Senior citizens age 65 and over now account for more 
than one in five Kyushu residents, and this proportion is 
forecast to reach nearly one in three by 2025.  Rural 
prefectures are already struggling to provide health care and 
other services to senior citizens in outlying areas.  Meanwhile, 
the continued population influx into Fukuoka Prefecture mirrors 
the national trend of young Japanese abandoning rural areas to 
concentrate in big urban centers.  While the Government of Japan 
(GOJ) and local governments grapple with the skyrocketing costs 
of caring for the elderly, businesses are moving to take 
advantage of new opportunities this "gray society" is creating. 
End summary. 
 
AROUND KYUSHU, VARYING SHADES OF GRAY 
 
2.  According to 2005 census figures, the population of the 
Kyushu/Yamaguchi region (seven Kyushu prefectures plus Yamaguchi 
in western Honshu) stood at 14.9 million, with a "senior rate" 
(i.e. portion of the population age 65 or older) of 22% - two 
percentage points higher than the national average.  That share 
is forecast to rise to 27% by 2015 and to exceed 30% by 2025, 
ahead of the national rate.  World-leading Japanese longevity 
also means more very elderly people:  half of Kyushu seniors 
(particularly women) are already age 75 or older, and that 
population segment will grow sharply over the next two decades. 
 
3.  Around the region, the "senior rate" varies among 
prefectures, from a low of 18% in Fukuoka to over 24% in 
Yamaguchi and Kagoshima, tying them for fourth highest among 
Japan's 47 prefectures.  Wide variations exist within 
prefectures.  In Kagoshima, for instance, the rate is 17% in 
Kagoshima City but ranges as high as 50% in some small towns; 
rates exceed 30% in more than half the prefecture's 
municipalities.  On the national level, the Japanese media 
reported widely in October 2005 that, a full year earlier than 
expected, the country had officially reached the "tipping point" 
at which deaths exceeded births - marking the start of 
population decline.  In the Kyushu region, with the lone 
exception of Fukuoka, prefectural populations reached that point 
and began declining more than a decade ago. 
 
FUKUOKA, KYUSHU'S FOUNTAIN OF YOUTH 
 
4.  While not exempt from the aging trend, Fukuoka Prefecture - 
in particular the Fukuoka City metro area - is a steady magnet 
for Kyushu's shrinking population of young people.  Attracted by 
Fukuoka's large number of universities, healthier economy and 
job opportunities, and abundant shopping and nightlife, the hip, 
younger crowd on Fukuoka streets contrasts sharply with the 
scene in most interior areas of Kyushu.  Fukuoka City's 
population of under 40-year-olds, at 52% of the total, is by far 
the highest of any Kyushu city. 
 
5.  Fukuoka is the region's only prefecture where the population 
continues to grow.  Officials here forecast that, even as 
Fukuoka's "senior rate" creeps higher in line with the national 
trend, it will average at least a full percentage point below 
the national average and well below the rest of Kyushu.  On a 
regional level, Fukuoka is gradually becoming a microcosm of 
Japan's likely future - a teeming urban island of relative youth 
and prosperity, surrounded by a depopulated countryside largely 
abandoned to the elderly. 
 
FOR SENIORS, EXPANDING SERVICES BUT ESCALATING COSTS 
 
6.  Both the national and local governments are grappling with 
the enormous fiscal and societal implications of the "elder 
boom."  Under Japan's obligatory nursing care insurance system 
introduced in 2000, all citizens aged 40 and over must enroll 
and continue to pay monthly premiums for life - including those 
drawing benefits.  Elderly beneficiaries, who receive services 
ranging from home nursing visits to full time hospice care, 
numbered 587,700 in Kyushu in 2003, up from 420,500 in 2000. 
System outlays in the region rose from USD 4.74 billion to 6.71 
billion in the same three-year period. 
 
7.  In addition to their monthly premiums, beneficiaries under 
the system pay 10% of the fixed cost of the service received. 
The national insurance fund, supported by subscriber premiums, 
covers 50% of the remaining cost, with governments responsible 
 
FUKUOKA 00000014  002 OF 002 
 
 
for the other 50% (25% central government, 12.5% prefectures, 
12.5% municipalities).  For local governments, which must cover 
their portion out of general tax revenues, the pressure on 
budgets is enormous - especially in areas where the aging, 
declining population means a shrinking tax base.  Kumamoto 
Prefecture officials told post that in the last five years their 
outlays for elderly care rose 55%.  That includes a whopping 
222% increase for home nursing services, due to rapidly rising 
demand from the elderly in smaller, more isolated communities. 
 
8.  Local officials say this situation is unsustainable, and 
government cost containment strategies will require the elderly 
increasingly to shoulder more of the cost for their own care. 
One major push is to limit full-time public nursing home/hospice 
care.  The waiting time for admission to these facilities now 
averages 2-3 years, and starting in October 2005 nursing home 
patients must now pay separate room and meal charges (an average 
increase of USD $250/month on top of the standard 10% service 
fee).  Effective April 2006, a revision in the nursing care 
insurance law will require local governments to provide more 
services aimed at keeping the elderly in good health longer, 
such as more home visits for physical therapy/muscle training, 
nutritional counseling, etc.  While this will cost more in the 
short term, officials hope they will save in the long term by 
helping the elderly to better care for themselves. 
 
SERVICING THE ELDERLY BECOMES BIG BUSINESS 
 
9.  While caring for the elderly is a growing headache for local 
governments, it is increasingly lucrative for the private 
sector.  The explosion in demand for home care and other 
services has attracted many new business entrants, and seniors 
with the means to pay - or with good private insurance to cover 
costs - can choose from many options.  A social welfare official 
in Kumamoto Prefecture lamented, however, that his office is 
hard-pressed to license and regulate properly all the new 
service providers.  Ensuring quality of care and preventing 
fraud/abuse is shaping up to be as much of a challenge as rising 
costs, he said. 
 
10.  As the traditional Japanese practice of elderly parents 
living with grown children wanes, the number of private 
sector-run nursing homes, assisted living centers, and condos 
for seniors has mushroomed.  There was only one such facility in 
all of Fukuoka Prefecture in 2000; by 2005 there were 121. 
Businesses are especially eager to tap well-to-do retirees. 
Post staff recently visited a luxury senior living center in 
Kumamoto, run by Kyushu Electric Power Co. (Kyuden), which 
opened in 2005.  Residents enjoy top-notch facilities, including 
24-hour nursing staff, but at a price:  as much as USD $70,000 
up front, and $1500-2000 per month thereafter depending on the 
size of the unit.  Kyuden has a similar facility in Fukuoka and 
hopes to build others in each prefectural capital in Kyushu. 
Like Kyuden, other major Kyushu companies in unrelated lines of 
business - Nishinippon Railroad Co., Saibu Gas, and Fukuoka 
Jisho, to name a few - already operate senior living centers or 
plan to jump into the market.  Other types of business, such as 
interior remodeling to make homes more accessible and "senior 
friendly," are also booming. 
 
COMMENT 
 
11.  From post's discussions with officials around Kyushu it is 
clear that local governments are already feeling the strain of 
providing adequate public services for the growing elderly 
population.  This is especially true in many rural communities 
where, given current trends, within another decade or two only 
the elderly will be left.  Officials acknowledge that Japan's 
societal commitment to provide equitably for its senior 
population is wavering in the face of stark fiscal and 
demographic realities.  Japanese senior citizens enjoy many more 
options for care and services than their counterparts elsewhere 
in the world, but accessing those services will increasingly 
depend on one's personal ability to pay.  End comment. 
WONG