The demand for healthcare for the older population is growing because of the aging population. Additional funding is required to satisfy this growing demand. Most developed countries have multiple financial sources: public (e.g., tax and social insurance) and private (e.g., private insurance and out-of-pocket payments). The funding system and public–private mixture of healthcare for older populations have been shaped by various factors. The social norms and preferences of the general public towards income equity, healthcare finance, healthcare utilization, and health in itself are important factors.
Health economics research has used discrete choice experiments (DCEs) to elicit preferences regarding various topics. A strength of DCEs lie in their ability to elicit individual preferences when faced with multiple discrete alternatives. By presenting respondents with a set of hypothetical choice scenarios, each characterized by varying attributes and levels, DCEs allow us to quantify the relative importance of different attributes influencing decision-making. Akkazieva et al. [1] elicited patient preferences regarding healthcare system reforms. DCE is also used to extract public preferences on the issue of the financial burden on the healthcare system. Gyrd-Hansen and Slothuus [2] elicited public preferences in Denmark for financing healthcare. Brau and Bruni [3] used DCEs to determine the demand for long-term care coverage.
Furthermore, DCEs explicitly consider the heterogeneity of preferences by classifying individuals into groups with similar preferences. Akaichi et al. [4] found by using these types of DCEs (Latent Class Model: LCM) that major segments in the US negatively evaluate the introduction of compulsory private insurance. This approach enables us to identify variations in decision making and specific groups of individuals with similar preferences. The LCM provides more nuanced insights into individuals’ preferences and better information-targeted interventions and policy recommendations.
Previous studies investigated the preferences of the general public in the US and Western European countries. However, no related studies have been conducted in Asian countries facing rapid aging.
Japan has the fastest aging population among developed countries. Currently, over 28% of the population is aged 65 years or older, and this number is projected to reach nearly 40% by 2060. Baby boomers in Japan were born between 1947 and 1949. Children of this generation are called second-generation baby boomers (baby boomer juniors). By 2035, all baby boomers will be at least 85 years old, and the same will be true for junior baby boomers by 2060. Thus, the healthcare demand of older generations will continue to grow for the next 40 years.
During the longstanding economic turndown since the 1990s, income inequality among the working generations has expanded in Japan. The Gini coefficient increased from 0.43 (0.36 after redistribution) in 1990 to 0.56 (0.37 after redistribution) in 2017 [5], indicating that Japanese society has become more inequitable. Therefore, more public support for healthcare expenses for working-age people (junior baby boomers are the main component) is indispensable to prevent more inequitable health in the future.
Japan has maintained a universal public healthcare system since 1961. The finances of healthcare for older people have been paid by taxes before a new medical care system for those 75 years and older started in 2008. Since then, social employment-based insurers have subsidized healthcare for those over 75 years, meaning that the working-age population supports the healthcare of older populations [6]. Moreover, rapid aging has increased the tax devoted to healthcare for older adults. Healthcare expenses for older adults increased from 1.32% (1990) to 3.0% (2019) of the total GDP.
Currently, public healthcare for those over 75 years is financed in part by the government and in part by health insurance schemes. Among government schemes, the ratio of central to local governments is two to one. Out-of-pocket payments for those over 75 years are income proportional, ranging from 10–30% of the total healthcare costs. The combination of these financial resources is one of the most important social issues, comprising taxes (central and local governments), social insurance, and out-of-pocket payments for older adults.
The current study aims to elicit the preference of the Japanese public towards finance allocation to the medical care of older populations and considers how respondent preferences for healthcare funding attributes vary across respondent groups. This approach will be helpful in designing funding policies tailored to the needs of each group and in addressing them more efficiently.
Our results using DCEs suggest that the public overall has a negative preference for an increase in public funding but has positive preferences for income-proportional burdens, universal burdens regardless of age, and the increase in central government burdens relative to local government burdens. We also relied on the latent class type of DCE to reveal the heterogeneity of public preferences.