'16,837 vs 690' Welfare Equipment Market Overwhelmingly Lagging Behind Japan [Korea-Japan Comparison]③

[The Era of 10 Million Elderly, Learning from Japan]③
90% of Domestic Business Offices Lack Proper Equipment Consultation Management
Intense Competition Only in Health Insurance Corporation Registration
Japan, with Active Private Competition, Leads in Technology

16,837 to 690.

This is the difference in the number of welfare equipment benefit (financial support) products between Japan and South Korea as of the second quarter of this year. Welfare equipment refers to devices such as walkers and bath chairs that support the daily life and physical activities of elderly people aged 65 and over with diminished physical and mental functions. Both Korea and Japan operate welfare equipment benefit systems under insurance schemes by law. When long-term care insurance beneficiaries purchase welfare equipment like electric beds or wheelchairs, the government subsidizes most of the sales price. Although Japan’s elderly population aged 65 and over is about 36.23 million, roughly 3.7 times larger than Korea’s 9.73 million, why is there more than a 20-fold difference in welfare equipment?

The long-term care industry points to the current domestic welfare equipment registration system as the root cause of this issue. Since products are guaranteed to sell once registered with the National Health Insurance Service, there is no competition at the private sector level, and due to stringent registration criteria and price controls, the equipment itself struggles to develop.

Another difference is that while Korea’s home care benefit insurer is the central government, in Japan, each local government acts as the insurer. The authority to accept products as benefit items lies with each local government, enabling a more field-oriented and efficient management system. Additionally, professional counselors called “care managers,” selected through national examinations and assigned by local governments, recommend welfare equipment tailored to the beneficiary’s situation.

Accordingly, while Japan actively attempts to integrate technology into welfare equipment at the national level, Korea’s welfare equipment remains at a basic level both in design and technology.

This also reveals the limitations of government support systems. Park Young-ran, a private member of the Low Fertility and Aging Society Committee, said, “With the acceleration of aging, the Elderly-Friendly Industry Promotion Act was enacted in 2006 to revitalize industries targeting the elderly, and it was expected that many competitive welfare products would be developed. However, the following year, with the passage of the Long-Term Care Insurance Act, the government provided exceptional support to a limited 18 product categories, blocking the development path of the welfare equipment market,” she pointed out.

"Because it’s cheap... even if I don’t like it, I have no choice"

Under the Long-Term Care Insurance Act, welfare equipment can be rented or purchased depending on the care grade. Up to 85% of the sales price is covered by the National Health Insurance Service, and the remainder is borne by the beneficiary. Therefore, for families caring for elderly people with long-term care grades, the direct cost burden is significantly reduced.

However, this perception causes beneficiaries to think they must accept the products even if they are not well informed about them. Recently, Park Ji-hoon (61), who purchased welfare equipment for his mother in her 80s through an online welfare equipment shopping mall, said, “My mother is a home care benefit recipient, so I looked for a walker, but most of the small-scale companies only had a few devices displayed in warehouses or stores, making it difficult to compare the quality and functions of various products. It’s also hard to visit individual stores with an elderly mother, so I relied on catalogs and reviews, thinking I had no choice even if the product didn’t suit her.” Ultimately, welfare equipment in Korea is chosen by the government rather than the actual consumers.

Given this reality, companies prioritize registering their products with the National Health Insurance Service, and there is little incentive to enhance the products afterward. This is why imported products from countries like Japan generally have higher quality than domestic ones. Lim Ki-jun, director of the Korean Long-Term Care Society, added, “Since welfare equipment registered with the National Health Insurance Service automatically receives reimbursement rates, greatly increasing price competitiveness in the market, there is almost no need to worry about sales, which is actually a problem.”

Management of welfare equipment used by beneficiaries is also found to be inadequate. Beneficiaries purchase or rent welfare equipment through welfare equipment service providers, who are supposed to regularly counsel and survey whether beneficiaries are using the equipment properly and their satisfaction levels. However, according to the 2020 Long-Term Care Institution Evaluation Report by the National Health Insurance Service, about 90% (882 out of 989) of domestic welfare equipment service providers were rated as “insufficient” in this management area. The Service evaluated, “Compared to other home care benefits, welfare equipment has a very high rate of insufficient counseling management at 89.2%, indicating that home visit counseling is not properly conducted.”

Japan Promotes Private Competition... Without Development, Products Are Eliminated from the Market

According to the Techno-Aide Association (ATA), a foundation under Japan’s Ministry of Health, Labour and Welfare, about 17,000 welfare equipment products are currently handled in Japan. ATA operates a separate welfare product information system and updates these figures and product data in real time daily. This contrasts with Korea, which updates related information monthly.

Also, local governments operate exhibition halls where elderly people can compare and experience welfare equipment, and the annual HCR (International Welfare Equipment Expo) hosted by the Ministry of Health, Labour and Welfare attracts over 100,000 visitors each year to see Japan’s innovative products. Lim Ki-woong, former professor at Kyung Hee University Graduate School of East-West Medicine, said, “I attend the annual welfare and medical device exhibitions in Japan and feel that welfare equipment incorporating advanced technologies such as robots and artificial intelligence (AI) is more widely distributed in the Japanese long-term care insurance market. In contrast, even if new technology-applied welfare equipment is developed in Korea, it is difficult to register as a benefit product unless it falls under the 18 designated categories, resulting in an overall downward leveling of product quality.”

At the welfare and medical device exhibition 'CareTEX 2024' held in Tokyo, Japan, a welfare equipment company is showcasing a patient bed. Photo by Park Yujin

Experts unanimously say Korea should create a welfare equipment market where consumers, not the government, make choices, similar to Japan. Former Professor Lim said, “For example, even if welfare equipment is equipped with important advanced software, it is difficult to price the technology because it is linked to reimbursement rates. The government’s attempt to manage, control, and set standards for everything causes the system to lag behind technology.”

Unlike Korea, Japan allows benefits through market price competition. Korea’s government sets official product prices, which is different. Director Lim suggested, “In Korea, the government imposes many stringent standards on product specifications as a preventive measure, but Japan only sets minimal standards and lets the market evaluate products. More products should be registered to foster healthy competition.”