To begin today’s interview, I would like to ask about the healthcare environment in Japan. As Mr. Can Provency mentioned earlier, Japan’s healthcare environment faces extremely significant challenges. Japan is the most rapidly aging country in the world, and healthcare has become a major national issue. First, could you share your perspective on the current state of Japan’s medical and healthcare market?
As you mentioned earlier, the Japanese market appears to be at a major turning point and is facing a wide range of challenges, including long life expectancy, an aging society, and various systemic constraints.
Within this context, what do you see as the most difficult and challenging issues Japan faces today, and how can technologies and platforms contribute meaningfully within the healthcare sector? Would it be better to address this step by step as we go?
Yes, I think it makes sense to address this step by step. The single biggest challenge Japan faces is, without question, its aging population. Japan has both a large population and an extremely high and still-rising aging ratio. As a result, the number of people who support society is steadily declining, while the number of people who need support continues to increase. That imbalance is, in my view, the most fundamental challenge.
Japan is a society with a large overall population that is aging simultaneously. This means that the younger generations who support the elderly are shrinking, while the number of people requiring support continues to grow. As you are probably well aware, Japan experienced rapid population growth in the postwar period, eventually exceeding 120 million people. However, despite the fact that the total population is now projected to decline toward around 80 million, the proportion of elderly people will continue to rise. This expanding elderly segment is the core of the issue. The question we must confront is whether society can sustain this structure. Japan has the highest aging rate in the world, and this makes the challenge especially severe.
It is often said that Japan’s population will eventually return to around 80 million. However, there is a fundamental difference between an 80-million-person society dominated by younger people and an 80-million-person society dominated by elderly people. The economic and social impact is entirely different. Looking at the data, the population aged 65 and over is expected to peak in 2042, while the population aged 75 and over will not peak until 2054. This means Japan is entering a prolonged period of significant strain.
I previously worked as a researcher at the University of Tokyo and also worked at the University of Tokyo Hospital. I spent around five years working with the National Cancer Center and the University of Tokyo, and during that time I frequently conducted this type of analysis. Based on that experience, I strongly recognize this as Japan’s most serious structural challenge.
In particular, the population aged 75 and over presents a critical issue. Long-term care refers to a condition in which a person cannot live independently without assistance. The rate at which people are certified as requiring long-term care increases steadily with age. In Japan, what is known as the 2025 problem refers to the point at which the largest generation enters the 75-and-over category.
Until now, when this generation was in the 65 to 70 age range, the certification rate was around 3 to 6 percent. That meant roughly 94 percent of people were still healthy, so the overall impact was not as visible. However, once people reach 75 and older, the certification rate rises to around 14 percent. This means that roughly one in five or one in six people begins to require some level of long-term care.
Looking ahead, the situation becomes even more severe. By 2030, approximately 30 percent of people in this age group are expected to require care. By 2035, when they reach around 85 years old, roughly half of the population will require long-term care. In other words, within the next decade, Japan will move from supporting only a few percent of the population to supporting nearly half of it. A massive wave is clearly visible on the horizon, and Japan must now decide how to overcome it.
In 2025, the population aged 75 and over will reach its largest size. When people are between 65 and 72 years old, the proportion requiring support is about 3 to 6 percent, meaning roughly 94 percent can still support others. Once people exceed 70 years old, that figure rises to around 14 percent, meaning five to six out of every hundred people begin to require assistance. These patterns are consistent across groups with similar life experiences, and the scale of this shift is unprecedented.
Japan will likely be the first country in the world to experience this massive wave. That is precisely why I believe that if Japan can successfully overcome this challenge, the solutions developed here can be applied globally. This belief is what motivates our work.
Japan has a healthcare system that is admired around the world. Under the universal national insurance system, everyone is covered by three major pillars: medical care that treats illness, long-term care that supports daily living, and pensions that provide financial security. Medical care, long-term care, and pensions together form a comprehensive safety net in which everyone supports everyone else, and no one is left behind.
However, this model relies heavily on people supporting other people. As the population declines, this approach becomes increasingly difficult to sustain. As a result, Japan is now facing a situation where major innovation is unavoidable.
Japan is home to world-class industries, including the automotive sector and many globally recognized manufacturers such as Sony and Panasonic. There are many companies Japan can be proud of. However, compared to the recent growth of global manufacturers, including automobile and electronics companies, Japan’s growth has been relatively weak. When the population is shrinking, it becomes extremely difficult to grow the overall economy. That is why Japan must focus on dramatically improving productivity per person through innovation.
When considering which industries Japan should invest in next and where future profits should come from, I believe healthcare and long-term care represent an opportunity through a reversal of conventional thinking. Because Japan operates under a social security system, as the aging rate increases, national spending on medical and long-term care continues to rise.
When long-term care insurance was introduced in 2000, the aging rate was 17.4 percent, medical spending was 26 trillion yen, and long-term care spending was 3.6 trillion yen. By 2025, with an aging rate of around 30 percent, medical spending will reach approximately 50 trillion yen and long-term care spending will reach around 16 trillion yen.
The combined total will reach roughly 67 trillion yen, surpassing Japan’s largest industry, the automotive sector. By around 2040, when Japan’s aging population reaches its peak, this figure is expected to rise to approximately 100 trillion yen. These are public funds, meaning they represent tax revenues used to support citizens. Generating this level of tax revenue is extremely challenging, especially as the working-age population continues to decline.
Even if demand continues to grow, it does not mean services can automatically be provided. The number of doctors, nurses, care managers, and caregivers is expected to decrease. This means the only viable solution is to significantly increase productivity per person.
If current trends continue, Japan is expected to have more than 10 million people requiring long-term care by 2040, while the number of healthcare workers continues to decline. Under these conditions, a system in which people support people purely through labor is no longer viable. Japan has already entered that reality.
This leads to several areas we must address, but the most important is enabling each doctor, nurse, and care manager to support 1.2 times, 1.5 times, or even more people than they can today. Increasing the effective capacity of healthcare professionals is essential, and this is the challenge we must solve.
In fact, we have already achieved this. The data shows how productivity can be increased by factors such as 1.2 or 1.5 times. This is a time-study analysis that breaks down how healthcare workers allocate their time across different tasks. It distinguishes between direct time spent with patients and care recipients, and indirect time spent on administrative work.
The data shows that nursing staff spend approximately 24 hours per month, or about 14 percent of their time, on administrative tasks. Nurses spend roughly 25 percent of their time, or around 40 hours per month, on administrative work. Care managers spend about 40 percent of their time, more than 60 hours per month, on paperwork.
By reducing this administrative burden, that time can be redirected to direct medical and caregiving work. If someone who previously supported 10 people can now support 12 or 13, then even as the elderly population grows, the system can absorb the increase.
Before you continue, I have one question. When it comes to reducing administrative work, what are the advantages of the Kanamic Cloud Service, and how can it be effectively utilized?
When it comes to reducing administrative work, the Kanamic Cloud Service offers significant advantages and practical methods of utilization.
For more information, visit their website: www.kanamicnetwork.co.jp