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Demographic shifts in China pose unprecedented challenges in the care of a rapidly growing older population. Sporadic reports suggest the recent emergence of institutional elder care in China, but little is currently known about this phenomenon. This study documents the growth, ownership, financing, staffing, and resident characteristics of elder care institutions using survey data collected in 2009 from Nanjing, China, supplemented with government registry data from seven additional major Chinese cities. Between one-half and two-thirds of facilities operating in these cities were founded in the last decade, primarily in the non-government sector. In Nanjing, government ownership dominated homes built before 1990 (96%) but was increasingly rare in the 1990s (60%) and in the 2000s (23%), a pattern observed in the other seven cities as well. In Nanjing, the average home now draws more than 80% of its daily operating revenues from private-pay or other non-government sources, and this share increases sharply with the recency of facility establishment. The majority (85%) of non-government-owned homes are receiving ongoing per-bed subsidies from the government. The lack of clinical staff characterizes the majority of study facilities; most care staff are rural migratory workers. There is considerable variability across facilities in the case-mix of residents in terms of functional dependence and acuity levels. These findings portray the emergence and rapid growth of a nascent industry of institutional long-term care in urban China and a fundamental shift in institutional ownership, financing, and clientele.
Upon its centennial anniversary, the Dongzhimen Elementary School in Beijing closed in 2003 and joined two other closed elementary schools in the same district to form a new one.1 In 2006, a private company renovated the school's old buildings to become the Three Harmonies Senior Citizens' Home.2 The transformation of Dongzhimen Elementary School into a retirement home symbolizes several profound sociodemographic shifts in China—the shrinking of younger generations, a burgeoning older population, and accordingly, escalating needs for care of older adults that increasingly strain the Chinese family and engender new forms of elder care outside the traditional informal support network.
The prospects of population aging and its unprecedented challenges for elder care in China have been well documented.3–5 Current demographic projections suggest that the older population (≥65) in China will increase rapidly in the next 30 years, from 8.3% of the total population at present to 22.6% in 2040; the oldest old (≥80) will grow the fastest, from 1.4% today to 5.0% by 2040.6 Given China's enormous population base, these percentages translate into the largest absolute numbers of older people in the world, from roughly 112 million aged 65 and older and 19 million aged 80 and older today to 329 million and 73 million, respectively, by 2040. The older population is also living longer: at age 65, older Chinese today can expect to live an average of 16 additional years for women and 14 additional years for men.7
Traditionally, elder care in China has been confined to the familial sphere, long enshrined by the Confucian norm of filial piety. The Constitution of the People's Republic of China stipulates that “Parents have the duty to rear and educate their minor children, and children who have come of age have the duty to support and assist their parents” (Article 49),8 but demographic shifts and rapid socioeconomic changes have fueled growing concerns about whether the family alone will still be able to care for the rapidly increasing elderly population in China.9–12 In urban areas, the emerging “4:2:1” family structure, which consists of four grandparents, two adult children both without siblings, and one grandchild—a consequence of the one-child policy having been in effect since 1979—compounds these concerns.
Currently, no national health insurance program for older people (e.g., Medicare in the United States) or publicly funded safety net program covering health and long-term care (LTC) for the needy (e.g., Medicaid in the United States) exists in China. Hospital care for older Chinese is paid for primarily through fee-for-service, and after long hospital stays patients are discharged home without institutional or community-based postacute care.11 As is the case in the United States and elsewhere, most elderly Chinese prefer living in their own homes than in institutions.13 Despite recent government policy initiatives promoting the development of home- and community-based elder services, such as cash allowances for paid home care, community health centers, senior housing, recreational facilities, and adult day care programs,8,14 such services have not yet emerged as a viable LTC option for most elderly Chinese.
Until recently, institutional elder care was virtually unknown in China. The few facilities that existed were social welfare institutions run by the government, serving mentally retarded, deficient adults without families and childless older adults.8,15 Recent reports suggest that elder care homes owned and operated by non-government entities have proliferated across major urban centers in China,13,16–18 yet little is known about the characteristics of these institutions.
The objectives of this article are to document the growth, ownership, financing, staffing, and resident characteristics of elder care institutions using survey data recently collected from the city of Nanjing, China, and to use supplemental data from seven additional major cities in China to determine whether patterns seen in Nanjing are similar to those in other parts of the country.
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Results from this study are significant in many respects. In this section, the discussion is focused on matters related to institutional ownership and financing—two salient characteristics that define the nature of Chinese elder care institutions and have undergone dramatic transformations over the past 2 decades. Patterns of staffing and resident case-mix are also commented briefly on, followed by study limitations.
The data document the rapid growth of elder care homes in recent years, especially over the last decade, in urban Nanjing and a number of major urban centers. In Nanjing, the government owns 44% of facilities, and most of the growth in recent years is in the non-government sector. In a significant number of these homes, planned expansions are underway. This phenomenon represents a fundamental shift from the not-so-distant past, when institution-based elder care was rare and dominated by government ownership for a highly select social welfare–dependent population.16,17 Looming on the horizon is a rapidly developing industry of formal LTC institutions in urban China.
Accompanying the ownership shift are significant changes in the patterns of financing of institutional elder care. In Nanjing, current facilities rely on private-pay and other non-government sources for more than 80% of their daily operating revenues. The revenue share of private-pay and other non-government sources is much higher in the newer facilities (92%) than in homes built in the 1990s (81%) or before 1990 (39%). These findings suggest that elder care institutions have been increasingly financed through consumers' private payments and less by government funding, which used to support institutional services.16,20
Regardless of ownership, the majority of homes receive subsidies per occupied bed from the government. Some 85% of non-government homes receive subsidies, although these constitute merely 2% of their daily operating revenues. These seemingly contradictory results are consistent with recent government policy shifts in Nanjing and other Chinese cities. In recent years, the central and local governments have actively encouraged the development of elder care institutions by the private sector through increased financial inducements per bed built for new construction and the aforementioned ongoing subsidies per occupied bed, regardless of type of residents.8,21 The government has implemented welfare reform since the mid 1990s to decentralize the financing and operation of welfare institutions to reduce the cost burden.17,22 The Nanjing municipal government provides financial inducement for new construction in the amount of roughly 2,000 yuan to 4,000 yuan ($300–600) per new bed and an ongoing operating subsidy of approximately 80 yuan (∼$12) per occupied bed per month,23,24 but the amounts allocated may vary across districts within the city. These amounts, especially the operating subsidies, are small, but because most residents are paying privately as well, these construction and operating inducements are enough to underpin much of the observed growth.
For non-government facilities, an additional, important dimension of ownership pertains to whether a facility is for profit or not for profit, a distinction that may have a bearing on the quality of care provided, as demonstrated in numerous studies in the West.25 How this distinction is going to affect care quality will probably become an important matter in the future of Chinese LTC. In Nanjing, all non-government facilities are licensed as not-for-profit entities, but in reality, distinguishing between for-profit and not-for-profit operations is complicated, given difficulties in monitoring financial flows within and outside of the facility and because property rules and definitions are different and more nuanced in the Chinese context than is the case in the West.
As with staffing, the data reveal a high proportion of direct-care staff who are rural migratory workers, suggesting that urban elder care homes are becoming an outlet for internal migration. What is unique about these staff is that the majority of them are being housed in the facilities, a finding not surprising given their temporary residence status in the city. By providing housing, it would appear that elder care homes serve an important social solution to the urban housing shortage for rural migrants, consistent with the on-site housing of construction workers routinely seen in Chinese cities.
Few facilities have clinical staff, such as professional nurses and physicians, available. Meanwhile, the sickest residents are more likely to be found in the newest, non-government homes. This suggests that the private sector is meeting the new market demand for seriously impaired older adults who can no longer be cared for at home by families. Furthermore, there are no large differences in staffing levels across different types of homes, suggesting that non-government homes have a higher-acuity case-mix that may not always be appropriate given their current staffing levels.
This profile of current elder care home residents in Nanjing reveals considerable variability across facilities in residents' functional dependence and acuity levels. Thus, “nursing home,” as generally used in several recent reports on Chinese LTC,11,13,26 would appear to be a poor catch-all term for existing LTC institutions in China. Nonetheless, in historical perspective, the observed heterogeneity in case-mix in today's elder care homes in Nanjing would represent a close view of what U.S. nursing homes were early in the 1960s or 1970s, before the advent of Diagnosis Related Groups, when hospital length of stay was longer and a postacute industry had yet to develop.
This study has several limitations. The primary survey data are restricted to one city, which, like the seven additional cities providing supplemental information, is located in eastern China, limiting the generalization of the findings to other metropolitan areas in the country. Nevertheless, similarities in the observed pattern of growth and ownership shifts across multiple major cities suggest that the findings in Nanjing are likely to be broadly representative of facilities in many other major cities across China. Furthermore, elder care home administrators were relied upon to respond, but it was not possible to audit each facility's finances, although because they did not see the data collectors as part of the government system, and there was not much of a formal inspection process, the administrators had no reason to be wary of their responses. In addition, resident-level data, particularly information about residents' family situation, social support, and individual circumstances leading to institutionalization, were not collected.
Despite its rapid growth, this new industry of institutional LTC in urban China is smaller than in Europe and the United States, both in terms of the number of facilities and bed supply. Because China's population is aging rapidly, the demand for institutional LTC services will increase, further fueling their development in the decades to come. Based on findings from this study, the greatest growth is anticipated in private and proprietary facilities. Meanwhile, if government construction inducements and ongoing operating subsidies continue, Chinese policy-makers will soon face mounting pressures to develop a more-formal regulatory structure such as that in the United States and other industrialized countries.
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The authors appreciate the assistance of the 12 graduate students at the School of Social and Behavioral Sciences, Nanjing University, in the collection of study data.
Conflict of Interest: The editor in chief has reviewed the conflict of interest checklist provided by the authors and has determined that the authors have no financial or any other kind of personal conflicts with this paper.
This study was supported, in part, by a grant from the National Institutes of Health Fogarty International Center (R03TW008142).
Author Contributions: All authors contributed to the study concept and design and participated in analysis and interpretation of data. ZF drafted the manuscript. HJZ, XF, CL, MS, and VM contributed to critical revision of subsequent drafts of the manuscript and agreed on the final version.
Sponsor's Role: The funder had no role in the design or conduct of the study; in the collection, management, analysis, or interpretation of the data; or in the preparation, review, or approval of the manuscript.
IRB Approvals: The institutional review boards of Brown University and Nanjing University approved this study.