Long-term Care in China: Bridging the Gap Between Capacity and Need

Introduction: The population of China is aging rapidly. Due to declining fertility, increasing life expectancy, and large-sized cohorts progressing to older ages, the population aged 65 and older is projected to double from 180 million in 2020 to 360 million in 2040 (United Nations 2022). Among numerous health and economic challenges (see, e.g., Rouzet et al. 2019; Kotschy and Bloom 2023), this trend will dramatically increase the population at risk of chronic and non-communicable diseases and consequently raise disability prevalence and the need for long-term care. In 2020 about 42 million older people had disabilities and needed care (Ren 2022). To meet the care needs of older adults the national government launched pilot programs on long- term care insurance in 15 cities in 2016 and extended these programs to another 14 regions in 2020, with plans to introduce a public long-term care system in the upcoming years (Chen et al. 2021; Lei et al. 2022). Differences in population age structure and access to long-term care across provinces and between rural and urban areas suggest substantial variation in care needs and in the capacity of China's public and private insurance systems to meet those needs. Effective delivery of long-term care requires knowledge about these differences.

The central objectives of the proposed research are to i) estimate the trajectories of needs and capacities for long-term care across provinces and between rural and urban areas to gauge the current and future extent of unmet long-term care needs, and ii) to formulate policy recommendations based on comparisons of the Chinese long-term care system with those of other countries. In calculating these needs and capacities, we will quantify the differentials in long-term care between rural and urban areas and characterize provinces according to the adequacy of their long-term care programs.

Research plan:

Methodological framework and data. We will estimate current and prospective unmet needs in long-term care at different geographic levels in China. To this end, we will analyze individual-level and aggregate-level longitudinal data from the China Health and Retirement Longitudinal Study (CHARLS), the Chinese Longitudinal Healthy Longevity Study (CLHLS), the United Nations World Population Prospects, the statistical database of the Organization for Economic Co-operation and Development, and the China National Health Commission. We will calculate unmet needs as the gap between long- term care needs (demand) and capacity of the formal and informal care sectors (supply).

Demand. Care needs will be computed from information on population age structure and age-specific disability prevalence in terms of limitations in activities of daily living(ADL) and instrumental activities of daily living (IADL). Limitations in ADL and IADL are well-suited to measure the need for long-term care: They are an integral component of eligibility assessment for long-term care benefits, and they predict formal and informal care use, the intensity of care received, and the presence of major drivers of old-age disability such as dementia, as evidence from U.S. and European samples shows (Kotschy and Bloom 2022). We will validate these measures in the Chinese context and explore a frailty index as an alternative approach to the measurement of disability.

Supply. The capacity of the long-term care sector will be quantified from information on formal and informal caregiving. Capacity of formal long-term care will be measured with the number of nurses, care workers, and beds in long-term care facilities, which approximate capacity in terms of the staffing ratio. In addition, we will document trends in the number of geriatricians as an alternative capacity indicator. The capacity of informal long-term care will be estimated from individual-level information on spouses and family members who act as caregivers. When quantifying informal care, we will highlight gender differences in care supply and receipt and colocation of family members. We will approximate the size of the informal care workforce by multiplying the share of caregivers with population weights. Finally, we will sum up formal and informal caregivers to obtain an estimate of the overall size of the full-time equivalent long-term care workforce.

Comparison with other long-term care systems. We will quantitatively compare care needs and capacities of China's long-term care system with those of the systems in the United States, Europe, India, Japan, and South Korea. To this end, we will leverage individual-level data from the Health and Retirement Study (HRS) and its sister surveys in other countries for which we have done preparatory work as part of the STGA initiative (Agarwal and Bloom 2022; Kotschy and Bloom 2022). Special emphasis will be placed on care needs to highlight potential differences in elderly health between the developing long-term care system in China and the more-established systems, especially in the United States, Germany, Japan, and South Korea.

Policy recommendations. Furthermore, we will qualitatively classify China's long-term care system along the axes of funding, access, service provision, and structure. We will compare the Chinese long-term care system along these axes with those in the United States, Germany, Japan, and South Korea. These systems cover a broad range of approaches to the provision of long-term care and can serve as benchmark to identify pathways for extension and reform of the Chinese system. We will especially focus on approaches to strengthening informal care and disease prevention, which are central to China's emphasis on health- and community-based services (Feng et al. 2020).