Simplifying Complexity: Core Directions of China's Elderly Care Industry Policies in Recent Years
Recently, the 2nd World Internet Conference was held in Wuzhen. Known for its emphasis on “intelligence, informatization, and technology,” Wuzhen has now added another technology-for-the-people initiative: the launch of China’s first “Internet + Elderly Care” service platform based on a long-term care system, bringing elderly care one step closer to high-tech solutions.
China is currently grappling with intensifying social contradictions driven by population aging. It is projected that by the end of 2015, the number of Chinese residents aged 60 and above will reach 216 million. Over the next two decades, China’s elderly population is expected to grow by an average of 10 million per year. By 2030, the proportion of China’s population aged 65 and older will surpass that of Japan, making China the country with the highest level of population aging globally. Around 2050, the elderly population is anticipated to account for one-third of the national total, marking China’s entry into a stage of deep aging. Consequently, population aging will become an increasingly prominent challenge in China.
Figure. Forecast of Trends in Changes to China's Population Structure
In 2011, the General Office of the State Council issued the "Plan for the Construction of the Social Elderly Care Service System (2011–2015)," proposing that by 2015, a social elderly care service system would be basically established, featuring sound institutions, robust organizations, appropriate scale, efficient operations, high-quality services, effective supervision, and sustainable development. The Plan explicitly set a target of achieving 30 nursing home beds per 1,000 elderly individuals by 2015. The policy emphasized the introduction of non-governmental forces to develop the elderly care industry, making the elderly care service sector one of the hotspots for capital investment. Provincial and municipal governments began to use the number of beds per 1,000 elderly people as a key indicator in promoting elderly care undertakings. As 2015 draws to a close, it has been reported that the Ministry of Civil Affairs conducted nationwide inspections from September to October to assess the implementation of policies and measures in the elderly care service sector. Statistics show that by the end of September this year, the number of nursing home beds per 1,000 elderly individuals in China increased from 17.8 at the end of 2010 to 32.33, seemingly achieving the target. The newly set target is to reach 40 beds per 1,000 elderly individuals by 2020. Of course, the number of beds per capita is not the sole criterion for the development of elderly care undertakings.
Based on a series of policy documents issued in recent years, the development trends of national policies can be summarized as primarily leaning toward the following aspects:
1. Integration of medical and elderly care services: Elderly care institutions should establish bilateral cooperation with nearby medical institutions. Healthcare facilities shall open convenient access channels for elderly care residents, while elderly care institutions should also enhance their capacity to provide basic medical services.
2. Encourage the development of integrated elderly care. Promote the integration of home-based, community-based, and institutional elderly care to leverage respective strengths and engage in mutually beneficial cooperation.
3. Encourage medical institutions to extend nursing services into residents’ homes and communities. Primary healthcare institutions shall establish contracted service models with communities and elderly households. Enhance the capacity of communities to provide elderly individuals with services such as daily care, chronic disease management, rehabilitation, health education and counseling, and traditional Chinese medicine (TCM) healthcare.
4. Encourage private social capital to establish specialized medical institutions that integrate medical care with elderly care, such as geriatric rehabilitation and geriatric nursing facilities. Meanwhile, standardize the development, utilization, and management of land designated for elderly care service facilities, and vigorously support the growth of the elderly care service industry.
5. Encourage the establishment of pilot programs for comprehensive reform in the elderly care service industry, creating benchmark demonstration institutions that are sustainable and scalable nationwide.
6. The development of the social elderly care service system should be based on home care, supported by community services, and underpinned by institutional care. Within the overarching framework where home-based care is primary, supplemented by community and institutional care, efforts should be accelerated to promote diversified forms of home-based elderly care, enhance the capacity of community elderly care services, and develop specialized elderly care services.
7. Enhance the informatization level of elderly care services. Leverage information technologies such as the Internet and the Internet of Things (IoT), integrate diverse intelligent systems, and develop comprehensive management and service platforms for elderly care institutions with distinct features, thereby better enabling these institutions to deliver services to older adults residing at home and within their surrounding communities.
8. Launch pilot programs for telemedicine in elderly care institutions, and apply hierarchical diagnosis and treatment systems—such as two-way referrals and remote consultations—to elderly care medical services.
9. Vigorously cultivate talent for the elderly care service industry. Strengthen the comprehensive training of elderly care professionals across all dimensions, including undergraduate education, graduate education, elderly care service majors, professional textbooks, and faculty development.
10. Advance the development of elderly care services in rural areas, promote the establishment of diverse, convenient, and practical home- and community-based elderly care service networks in rural areas, and help ensure that rural seniors receive adequate support in their old age.
Overall, elderly care policies revolve around three types of resources—human (significant labor shortages in the elderly care service industry), financial (sources of industrial investment capital), and material (with land use as the core)—as well as how to optimize resource allocation and improve resource utilization efficiency. Horizontal coordination and vertical collaboration among elderly care-related institutions have become key to optimizing resources, enhancing efficiency, and improving outcomes.
The following are the major policies related to the elderly care industry introduced over the past five years.
In 2015, emphasis was placed on integrating elderly care with medical services, and private capital participation was encouraged.
In December 2015, the Ministry of Human Resources and Social Security issued the Service Standards for Basic Old-Age Insurance for Urban and Rural Residents, which came into effect on January 1, 2016. These standards apply to social insurance agencies at all levels and types, as well as institutions related to social insurance services, in providing basic old-age insurance services for urban and rural residents.It serves as a working guide for social insurance agencies at all levels across China to carry out the standardization of operational services for the Basic Old-Age Insurance for Urban and Rural Residents, providing professional guidance and regulation.
On November 20, 2015, the General Office of the State Council forwarded and issued the “Guiding Opinions on Promoting the Integration of Medical and Health Care with Elderly Care Services.”, comprehensively deploy further efforts to integrate medical and health services with elderly care services, so that by 2020, a system and policy framework for the integration of medical and elderly care suited to China’s national conditions will be basically established, and a service network for such integrated care will be largely in place.
The “Opinions” Clarify Five Key Priority AreasFirst, establish and improve the cooperation mechanism between medical and health institutions and elderly care institutions. Encourage elderly care institutions to engage in various forms of contractual cooperation with nearby medical and health institutions. Second, support elderly care institutions in providing medical services. Based on service demands and their own capabilities, elderly care institutions may apply to establish geriatric hospitals, rehabilitation hospitals, nursing homes, traditional Chinese medicine hospitals, hospice care facilities, and other such entities in accordance with relevant regulations; they may also set up internal infirmaries or nursing stations to enhance their capacity to provide basic medical services. Third, promote the extension of medical and health services into communities and households. Fully leverage community-based service and information network platforms to achieve seamless integration between primary medical and health institutions and community elderly care service providers. Fourth, encourage non-governmental entities to establish integrated medical and elderly care institutions. Support social forces to meet the health and elderly care needs of older adults by establishing, through market-oriented operations, integrated medical and elderly care institutions as well as specialized medical facilities for geriatric rehabilitation and nursing. Fifth, encourage the integrated development of medical and health institutions with elderly care services. Encourage local authorities to adapt measures to local conditions and adopt diverse approaches to foster the integrated development of medical and health services and elderly care services.
In April 2015, the General Office of the National Development and Reform Commission, the General Office of the Ministry of Civil Affairs, and the Comprehensive Department of the China National Committee on Ageing jointly issued the “Notice on Further Promoting the Development of the Elderly Care Services Industry.” The notice emphasized that all relevant departments should urge the implementation of policies for the development of the elderly care services industry, optimize the investment structure, and increase government support for the construction of the elderly care service system. It also called for advancing comprehensive reform pilots in elderly care services to create sustainable and replicable demonstration projects.
In April 2015, the Ministry of Civil Affairs and the China Development Bank issued the “Implementation Opinions on Leveraging Development Finance to Support the Construction of a Socialized Elderly Care Service System.”The “Opinions” point out that we should leverage the catalytic role of development finance in mobilizing capital, attract private investment, adhere to the principle of inclusive elderly care, and jointly promote the construction of a social elderly-care service system that is home-based, community-supported, and institutionally backed.
The "Opinions" prioritize support in five key areas: community-based home care service facility construction projects, including urban community day-care centers, elderly canteens, senior activity centers, elderly care service information platforms, and accessibility-enhanced community elderly care facilities; home-based elderly care service network construction projects, primarily supporting small and micro enterprises that provide in-home services such as meal assistance, bathing assistance, cleaning assistance, emergency aid, and medical assistance, covering life care, health services, cultural and recreational activities, emotional support, and legal consultation; nursing home construction projects; training base construction projects for elderly care professionals; and other related projects.
In February 2015, ten ministries and commissions, including the Ministry of Civil Affairs, the National Development and Reform Commission, and the Ministry of Education, jointly issued the “Implementation Opinions on Encouraging Private Capital to Participate in the Development of the Elderly Care Service Industry.”The "Opinions" propose specific measures to encourage private capital to participate in home- and community-based elderly care services, institutional elderly care services, and the development of the elderly care industry.
In January 2015, the National Development and Reform Commission and the Ministry of Civil Affairs issued the “Guiding Opinions on Regulating Service Fee Management in Elderly Care Institutions to Promote the Healthy Development of the Elderly Care Service Industry.” The Opinions pointed out that service fees for privately-run elderly care institutions should be determined by market forces; government-funded elderly care institutions should implement differentiated fee policies based on the categories of service recipients; and fee management models for elderly care institutions operated through public-private partnerships, such as the “publicly built, privately operated” model, should be actively explored.
On January 3, 2015, the State Council issued the "Decision on Reforming the Old-Age Insurance System for Staff of Government Organs and Public Institutions."(Guo Fa [2015] No. 2) implements a basic old-age insurance system that combines social pooling with individual accounts, while simultaneously reforming the method for calculating and distributing basic pensions. This decision marks the long-awaited breakthrough in dismantling the “dual-track” pension system.
2014: Guiding Land Use, Encouraging Foreign Investment, and Promoting Talent Development
In December 2014, the Ministry of Commerce and the Ministry of Civil Affairs issued an announcement encouraging foreign investors to establish for-profit elderly care institutions in China to provide elderly care services, and encouraging foreign investors to independently or jointly venture or cooperate with Chinese companies, enterprises, and other economic organizations to operate for-profit elderly care institutions in China.
In November 2014, the Ministry of Commerce issued the “Guiding Opinions on Promoting the Development of the Elderly Care Service Industry”The "Opinions" propose that the work tasks are to accelerate the development of home-based elderly care services in the directions of diversification, convenience, specialization, and integration.
In November 2014, the Ministry of Finance and the National Development and Reform Commission issued the "Notice on Issues Concerning the Reduction and Exemption of Administrative and Institutional Fees for Elderly Care and Medical Institutions", administrative and institutional fees shall be fully exempted for the construction of non-profit elderly care and medical institutions, and halved for the construction of for-profit elderly care and medical institutions.
In October 2014, six departments, including the Ministry of Civil Affairs, the National Development and Reform Commission, and the Ministry of Industry and Information Technology, issued the “Notice on Launching Pilot Work for the Information Benefit Project for Elderly Care Services and Community Services.”. The goal is to promote the widespread application of information technologies, such as the Internet and the Internet of Things (IoT), in the fields of elderly care services and community services, so as to better meet the demands for such services and unlock the potential of information consumption. We will advance the informatization of community services, innovate grassroots social management methods, enhance the capacity of communities to serve residents, expand the participation of non-governmental forces, and improve the environment for information consumption within communities.
In September 2014, the National Development and Reform Commission and other departments issued the Notice on Accelerating the Construction of Health and Elderly Care Service Projects. This initiative promotes the parallel development of health, elderly care, sports, and fitness sectors, while strengthening the construction of health service systems, elderly care service systems, and sports and fitness facilities.
In August 2014, the Ministry of Finance and other departments issued a notice on effectively implementing government procurement of elderly care services. The notice specified that the entities responsible for procuring such services are administrative organs at all levels undertaking elderly care responsibilities, as well as public institutions managed by reference to the Civil Servant Law and possessing administrative management functions. The scope of procurement was defined to primarily include: purchasing door-to-door services such as meal assistance, bathing assistance, cleaning assistance, emergency aid, medical assistance, and nursing care for elderly individuals who meet government subsidy criteria, along with the development of information networks for elderly care services; purchasing community-based day-care services, as well as rehabilitation, cultural, and sports activities for the elderly; purchasing institutional support and nursing services for “three-no” elderly persons (those with no ability to work, no source of income, and no legal guardians or supporters), low-income elderly persons, and financially disadvantaged elderly persons with partial or complete disability; and purchasing vocational training, vocational education, and continuing education services for elderly care workers.
In June 2014, the Ministry of Civil Affairs released the “Demonstration Project for the Application of the Internet of Things in Smart Elderly Care,” deciding to launch pilot work for the National Smart Elderly Care IoT Application Demonstration Project at seven elderly care institutions, including the Beijing No. 1 Social Welfare Institute, the Xinqiu Elderly Apartment in Daxing District of Beijing, the Hebei Province Hospital for Preferential Treatment, the Wuxi Disabled Elderly Care Center in Jiangsu Province, the Zhongzhou Yiyang Jiayuan Community Elderly Service Center in Henan Province, the Hefei Luyang Lenian Elderly Home in Anhui Province, and the Ziyang Social Welfare Institute in Sichuan Province.
In June 2014, the National Development and Reform Commission and other agencies issued the “Notice on Organizing Pilot Programs for Telemedicine Policies Targeting Elderly Care Institutions.”. The main research contents include formulating operational standards for telemedicine and methods for determining liability. Research will be conducted to establish a green channel for two-way referrals between medical institutions within elderly care facilities and their partner hospitals, as well as for referrals following remote consultations. Studies will be undertaken to formulate pricing for telemedicine services. Research will explore the inclusion of telemedicine costs within the reimbursement scope of the basic medical insurance pooling fund and the New Rural Cooperative Medical Scheme (NRCMS). Efforts will be made to establish mechanisms for protecting patient privacy and to advance supporting policies related to talent and funding guarantees for the application of telemedicine. Third-party professional service organizations with extensive experience in the implementation and operation of telemedicine may be selected to research and establish market-oriented telemedicine service models, operational mechanisms, and management systems based on third-party involvement.
In June 2014, the Ministry of Education and eight other departments issued the “Opinions on Accelerating the Cultivation of Talent for the Elderly Care Service Industry”. The primary tasks are to expand the scale of vocational education and talent development in elderly care services, accelerate the development of undergraduate education in elderly care services, actively promote graduate education in elderly care services, support the construction of practical training bases for elderly care services, advance the establishment of specialized programs related to elderly care services, strengthen the development of teaching materials for elderly care-related disciplines, enhance the faculty workforce in elderly care-related fields, and extensively carry out international exchange and cooperation.
In June 2014, the Ministry of Civil Affairs and three other departments jointly issued the “Notice on Promoting the Construction of Urban Elderly Care Service Facilities.” The Notice requires that elderly care services and the construction of related facilities be incorporated into plans for economic and social development, overall land use plans, and relevant urban and rural planning. Based on specific targets for the development of home- and community-based elderly care service facilities and various types of elderly care institutions, the required construction scale and land needs shall be estimated, annual land use plans shall be determined and allocated in accordance with the planning, and implementation shall be ensured on a year-by-year basis. For newly built residential (small) districts, home- and community-based elderly care service facilities shall be planned, constructed, accepted, and delivered for use simultaneously with residential housing. For large-scale residential development projects, home- and community-based elderly care service facilities may be distributed in a appropriately decentralized manner; for small-scale residential development projects, such facilities may be concentrated in nearby adjacent areas as appropriate.
April 2014, General Office of the Ministry of Land and Resources Issued the "Guiding Opinions on Land Use for Elderly Care Service Facilities"Notice. Reasonably define the scope of land for elderly care service facilities. Land occupied by buildings and site facilities specifically dedicated to providing life care, rehabilitation nursing, custodial care, and other services for the elderly may be designated as land for elderly care service facilities. Land occupied by commercial facilities such as senior hotels, guesthouses, clubhouses, shopping malls, and clubs does not fall under the category of land for elderly care service facilities as defined in these Opinions. The land use purpose and term for elderly care service facilities shall be determined in accordance with the law.
In April 2014, the State Council issued opinions on establishing a unified basic old-age insurance system for urban and rural residents., with the goal of fully establishing a fair, unified, and standardized basic pension insurance system for urban and rural residents by 2020.
In February 2014, the State Council issued the Opinions on Establishing a Unified Basic Old-Age Insurance System for Urban and Rural Residents. The Opinions adhere to and improve the institutional model combining social pooling with individual accounts, consolidate and broaden funding channels that integrate individual contributions, collective subsidies, and government subsidies, refine the benefit payment policy that combines basic pensions with individual account pensions, and establish a normal adjustment mechanism for basic pensions.
In January 2014, the Ministry of Housing and Urban-Rural Development and other departments issued a notice on strengthening the planning and construction of elderly care service facilities. Local housing and urban-rural development authorities shall, in accordance with the requirement of “home-based care as the foundation, community-based care as the support, and institutional care as the backbone,” define plans for the construction of elderly care service facilities by taking into account the size of the elderly population and the demand for elderly care services. They shall incorporate relevant content into the master plans of cities and towns, strengthen coordinated planning of regional elderly care service facilities, and promote the integration of urban and rural elderly care services.
2013: Standardized Management, Enhanced Collaboration
Notice of the General Office of the Ministry of Civil Affairs on Launching Pilot Projects for Comprehensive Reform of the Elderly Care Service Industry (December 2013). The main tasks are to improve the elderly care service system, guide social forces to participate in elderly care services, refine policies for the development of elderly care services, strengthen the layout of urban elderly care facilities, innovate modes of elderly care service supply, cultivate clusters of elderly care service industries, enhance the workforce for elderly care services, and strengthen market supervision of elderly care services.
In December 2013, the Ministry of Civil Affairs issued opinions on establishing a mechanism for collaboration and paired assistance in elderly care services. The main initiatives include conducting personnel training and strengthening mutual cooperation, such as fostering partnerships between elderly care institutions with varying occupancy rates, sharing management expertise, providing technical guidance, and enhancing equipment support. These measures aim to enable assisting parties to provide targeted support to recipient parties in areas including personnel, technology, management, and hardware facilities.
October 2013, "Several Opinions of the State Council on Accelerating the Development of the Elderly Care Service Industry"The primary tasks are to comprehensively plan the development of urban elderly care service facilities, vigorously expand home-based elderly care service networks, significantly strengthen the construction of elderly care institutions, and effectively enhance rural elderly care services.
In September 2013, the State Council issued the "Several Opinions on Promoting the Development of the Health Service Industry," which emphasized accelerating the development of health and elderly care services. It called for strengthening collaboration between medical institutions and elderly care facilities, and for coordinating chronic disease management and rehabilitative nursing care for the elderly. The policy also promoted referral systems and cooperation between secondary-level or higher hospitals and specialized institutions such as geriatric hospitals, elderly nursing homes, and rehabilitation and convalescent centers. Furthermore, it advocated for the development of community-based health and elderly care services by enhancing communities’ capacity to serve the elderly, gradually enriching and improving service offerings, and providing extended health services such as home visits.
In June 2013, the Ministry of Civil Affairs of the People's Republic of China issued the Administrative Measures for Elderly Care Institutions. The Ministry also promulgated the Measures for the Licensing of Establishment of Elderly Care Institutions, which came into effect on July 1.
2012–2011: Introduction of Social Participation in Elderly Care
Opinions of the Ministry of Civil Affairs and China Development Bank on Implementing the “Cooperation Agreement to Support the Construction Plan for the Social Elderly Care Service System” and Jointly Promoting the Development of the Social Elderly Care Service System (November 2012)The Agreement explicitly points out that building a social elderly care service system is an arduous task. Fiscal funds alone are insufficient to meet construction needs, resulting in a significant funding gap and an urgent need to increase capital investment. Given the long implementation cycle and substantial capital requirements of the social elderly care service system, there is a pressing need for medium- to long-term financial support from developmental finance institutions. Comprehensive planning cooperation should be carried out to cultivate and plan projects on a large scale, assess investment and financing needs, explore financing models aligned with actual demands, and establish channels for credit fund injection. Efforts should be made to promote the development of investment and financing platforms for elderly care services, provide medium- to long-term loans, and deliver comprehensive financial services.
In September 2011, the State Council issued the Notice on Printing and Distributing the 12th Five-Year Plan for the Development of Causes for the Elderly in China. The basic principles are to align the development of causes for the elderly with economic and social development, and to combine addressing immediate needs with taking a long-term perspective.Combining government guidance with social participation, and integrating family-based elderly care with community-based elderly care,Combining overall coordination with classified guidance, and integrating ethical norms with legal constraints.
In December 2011, the State Council approved and issued the "Plan for the Construction of the Social Elderly Care Service System (2011-2015).", this Master Plan Outline clearly defines the connotation and functional positioning of the social elderly care service system. Key construction tasks include improving the home-based elderly care environment and strengthening the support system for home-based care services. At the home-based care level, support is provided for age-friendly modifications to accommodate the needs of older adults. At the urban and rural community care level, priority is given to developing community-based facilities such as day care centers, elder care stations, activity centers for older adults, and mutual-aid elderly care service centers. At the institutional care level, emphasis is placed on advancing the construction of facilities dedicated to residential care, long-term custodial care, and medical-nursing combined care. The equipment standards for social elderly care services will be enhanced by encouraging the research and development of professional nursing equipment and assistive devices, and by actively promoting the deployment of vehicles specially designed for elderly care services. Furthermore, informatization in elderly care services will be strengthened, leveraging modern technological means to provide efficient and convenient services for older adults.