Changing

governance in social and

health care sectors

Ingo Bode

GermanyMaster course in SOCIOLOGY AND SOCIAL

SERVICE, University of Bologna

Structure

Talking about governance in social and health care

The political side of governance

Governance and networks

Subsidiarity on the move: the role of the Third sector

Government-Third-sector relations today : The case

of Germany

International moves: The example of elderly care

What all this does to nonprofits?

Conclusion

Talking about (the) governance (of

welfare)‘ in social and health care

Governance: Making sense of a trendy catch-all concept

the non-sense of evolutionary concepts of governance:

empirically, the co-organization of social welfare does not follow a

simplistic movement from government over markets to

governance/networks

however:

historically and in current times, social and health care provision is

being organized by a multitude of societal actors at different levels

and by several means

- bureaucracies

- professionals

- local or national civic forces and interest groups

- volunteers (in different roles)

From the perspective of the social sciences, a key challenge is to

understand changes in this ‚welfare mix „ and to infer conclusions from it

Programme Service Developemt

social support to the

disabled

services to support the daily living of the

handicapped

+

long-term care to the

frail elderly

nursing and personal care +

child rearing day care ++

social empowerment

(youth help, ...)

counselling, company -

economic integration

health care

poverty relief activities

job integration services

medical services

-

+

-

What are we talking about: Major social and health care services in Europe

Welfare provision und governance theory

the role and nature of various actors

Institution Family State Market Third sector

Productive core domestic work public

bureaucracy

commercial

practice

(intermediary

zone)

dominant

unit of action

families & friends administration private entreprise associations

dominant

mechanism of

social

coordination

personal

obligation /

mutual exchange

hierarchy competition voluntarism

rules for access ascription legal rights solvency (group-related)

needs

key value reciprocity /

altruism

equality freedom

(of choice)

(group-related)

solidarity

„currency“ personal

recognition

law money communication

Leaning on: Evers, A. / Olk, Th, Wohlfahrtspluralismus, Opladen 1996

Why does a „productive“ Third sector exist?

Three popular models

Theory

(authors)

Summary Key Concept Focus

Public Goods

Theory

(Weisbrod)

Public sector provides goods

on demand by the median

voter, leaving special

demands unmet; nonprofit

organizations respond to the

latter

Public good;

heterogeneity in group

claims

nonprofits as „gap fillers‟ for

government failure

Trustworthiness

Theory

(Hansmann)

Where monitoring expensive

and windfall profits likely,

mission makes nonprofit

organizations more

”trustworthy” than for-profit

firms

Nondistribution constraint;

trust; opportunistic behavior;

transaction costs;

information asymmetry

Structural difference between

private for-profit and nonprofit

undertakings; nonprofit

organizations as a response to

market failure

Heterogeneity

Thesis and

Entrepreneurship

Theories

(James)

Nonprofit organizations are a

reflection of societal

heterogeneity that is dealt

with by entrepreneurs who

maximize nonmonetary

benefits

Pluralism in society;

entrepreneurs; nonmonetary

benefits

Culture matters: Religious and

ideological entrepreneurs as most

crucial driving forces

Voluntarism:The critical factor of Third sector agency

Boards: collective (democratic) and non-interested decision

making

Day-to-day practice

- where organisations handle a lot of money and professional

services

- complementary volunteer work of rank and file members

- financial add-on (donations…)

- networking (local politicians etc.)

- in social movement & small initiatives

- as a cornerstone of organisational agency

- with creativity and innovation as a critical resource

Who?Experience in UK (as an example)

How?The example of UK

Change underway?

Developments are inconcistent internationally, but, overall:

There is a rise of active participation in non-work activities, yet

predominantly in the fields of leisure, culture, and sports

Long-lasting and regulary commitments are decreasing why

spontaneous action is becoming more important

(in mature voluntary / nonprofit organisations)

Tendencies of decoupling between professional and volunteer

members

- at the top, in management

- on the grounds, between professional work and

complementary services

Governance and networks

In some concepts, governance = networks

However, governance understood as a way of organizing a

pluralised system of social and health care contains hierarchy

and markets as mechanisms of social coordination

Hence: networks are one mode of coordination (among

others) in the complex world of governance

As noted earlier: There is no such thing as a move from

government to governance in the sense of networks replacing

hierarchy or market in most European welfare states

And : networks are not necessarily a “silver bullet” for good

governance

Administration

The example of child protection in Germany(how networks should work…)

health office

(family) midwives

psychotherapists

pediatrists

hospitals

…

Öffentliche und freie Träger Anbieter von Hilfen zur Erziehung(z.B. Sozialpädagogische

Familienhilfen (SPFH)) Sozialräumliche Angebote BeratungsstellenInobhutnahmestellen und KinderheimeKindertagesstätten …

police

family court

legal guardians

forensic consultants

coroners

…

Youth welfare office (ASD)health care justice

youth welfare

Public/third sector

educational aid „socio-spatial“ services educational counselling children‘s homes nurseries …

...and what it’s really like

youth welfare office

family court

federal youth welfare office

police

pediatrist

hospital

midwife

health office

third sector

lawyer

"central agency"

coordinators nursery

private agencies

"family pilot"

politics

the mediastakeholders

sponsors

parents

relatives

"child protection agency"

psychotherapist

"child protection service"

forensic consultantlegal guardian

coroner

"qualified person"

foster parents

social assistance office

authorities/administration

"child emergency service"

"ASD"

academic experts

"family midwife"

"social-pediatric center"

district office

bailiff

job center

educational counsel

social elites

custodian

school/teachersCenter

Peripherals

Child protection system

citizens/neighbors

charities

criminal court

children

doctor

The political side of governane

Programs in social and health care are not

exclusively carved out by central Government

Rather, they grow in a complex landscape of

- different layers of the political system

- intermediary agencies (regulators; commissions…)

- diverse purchasing bodies

- different service providers

- and in some instances: active users

social groups from these different layers and parties as well

as form the wider society (want to) participate in opinion-

building, provide expertise and sometimes have critical

resources at their disposal to make their voice heard

The ‚energy supply‘ of Third sector co-governance

or: Why do people invest in collective action?

The classical answer of Mancur Olson:

selective incentives

- exclusive advantage

- active control / avoidance of sanctions

and if this is not enough

- feeling to be part of a criricial mass

- seeing oneselgf as a politicl entrepreneur

- being irrational

Sociologists have a different answer I

Identity

- People live in sense-making worlds (groups, milieu, classes,

belief communities…)

- social action is influenced by social norms, e.g. those related

to feelings of fairness, but also those fostering social

opportunism

- common experiences and collective action produce group

identities to which people tend to conform

II

values

- human beings are driven not only by personal interests, but

also by values (which shape interests): religion, justice, belief in

authority etc.

- personal belief systems influence human action, e.g.

convictions regarding merit, dignity, superiority….

- common communicative action can build collective values

Driving forces behind a certain way of governance

(in the social and health care field)

National culture

Vested Interests and their organization

Identity of collective actors

Values of core groups

Developments in the field as such

- rising complexity in public administration

- changing social needs

- new social problems

How society is governing social and health

care

Movement

Think Tanks,

Initiatives

State/government

Interests

Identities

Co-governance

„round tables“

quasi-market

goverance NPO/provider

consultancy

protest

Associations/

interest groups

Values

Society

The German ‚welfare governance‘ model

Public sector

National public

administration

Regional public

administration

Local authorities

State-related self-

administered agencies

• Social Security

(e.g. sickness funds)

• Job centre

(national headquarter

& regional agencies)

Independent

voluntary

organisations

„Wohlfahrts-

Verbände„

Sellf-help

groups

Welfare state Civil society

Others (mutuals)

For-profit

providers

: corporatist

culture

Subsidiarity and governance

Relevant aspects….

Subsidiarity on the move

The organisation of subsidiarity with „Third parties‟:

Options and trends

Government-Third-sector relations today : The case

of Germany

Why marketization?

Subsidiarity on the move

Subsidiarity as a concept

- catholic background: let the smallest social unit do the

job unless it is unable to do so

- the next higher level of social intervention steps in if the

lower level is failing (= subsidiarity of the higher level)

- importantly: the job has to be done, no one should be

left behind the state has a role to play

… in the EU context: national states remain sovereign in their

social and health care policies

.. As „new subsidiarity‟: some argue the smaller units should

be „reempowered‟ given the strong rise of bureaucracies and

of professions in modern society

however, there is little evidence for strong professions and

states disempowering people per se

Corporatist mode Quasi-market mode

Regulated social market modeBlock-long term contracting

• Commissioning: making others deliver on consensual terms = corporatismProcurement: a logic of purchase and competition = quasi-market(after tender/comparative assessments and output evaluation)

The organisation of subsidiarity with ‘Third parties’:Options and trends in social and health care provision

Technical devises for the 2 forms of governance

Leaning on: Enjolras, B., Le marché providence, Paris 1995, S.204

Forms of regulation for services of

public interest

Welfarist (in French: „tutélaire“)

consensual commissioning

quasi-market oriented, competitive

procurement

Funding Global budgets

Fees per day

(Tax exemptions, incl. for users)

Fees per consumer / act of consumption

Seed money

Contracts

Investment Authorisation -

- funding for investment Continuous / occasional subsidies -

Cost control Approval of collective agreements -

Capacity control Planification

Admissions

Provider competition

Demand control Need assessments

(for a given population)

-

Consumer protection Licence ‘Job descriptions‘

quality standards / quality assurance

Price policy Reimbursements

Fixed co-payment of users

Market price

• In some European countries, public bodies or para-statutory entities (socialinsurance funds/Sozialversicherungen) have involved non-statutory providersfor the provision of social and health care services quite early (in the 20th century) …

market relations were exceptional overall, even though established implicitlyin some fields where users could resort freely to various providers and wherepublic control of the supply side was limited

in Germany e.g. outpatient health care / some areas of social care

• things are different now, in many countries and sectors

in Germany (see below)- ‚implicit‘ procurement / purchase has been extended …

- … a fully-fledged version of procurement can be found in some sectors

elsewhere (see section on elderly care below)

• the debate in the academic field adresses vices and virtues (see below)

The wind of change

Government-Third-sector relations

today : The case of Germany

Procurement and (quasi-) markets on the rise

No relevance: core services for endangered young people

or for the disabled (block-long term contracting is prevailing)

implicit relevance: health care provision, elderly care, youth help

the mechanism here is not procurement per se, but ‚direct

payment„: providers attract/get users, money follows users, state makes

users purchase services

elsewhere, contracts specifying outputs are setup with various providers,

yet with garanties for the latter to get theirexpenses reimbursed

High relevance:

extra-vocational training

purchased after tender from job centres (Bundesagentur für Arbeit);

some small-scale, fixed-term projects run by nonprofit pioneers such

as low-threshold services in various fields of community care

… overall: mixed governance yet more market

What can be observed in the current German welfare mix:

market-driven micro-governance, without interference of public actors:

sell-and-buy operations, competitive agency, `winners-take-it-all„-

‚contexual‘ macro-governance enforced by political/legal authorities

specific regulatory devices setting frames for this

(prices, output norms, procedural provisions for contracting etc.)

infused with ideas, interests, and inputs from providers and advocacy

groups = meso-governance BUT

- a lower level of direct public steering

- with weaker inputs from nonprofit forces

- stronger influence from for-profit welfare industies

overall, welfare governance today is not about more pluralistic political

steering (networks, participation etc.); rather, it is

less direct macro, less coordinated meso, more market-driven micro

The mainstream model: Regulated social markets

… vices and virtues (when the objective is: providing ‘trouble-free‘/inclusive social care)

traditional German model(corporatism)

today‘s configuration(with Anglo-saxon flavour)

NOTE

charac-teristics

social partner model• collaborative planning

with little rivalry• input funding /

reimbursements ofactual expenses

shared economic risk

hybrid (post-corporatist) model • quasi-business relationships

& contextual interpartydeliberation

• implicit procurement/fee-for-service without planningof the supply side economic risk devolved

regional & sectoral differences matter considerably

virtues • outcome logic: ‘tireless‘efforts for meeting ends

• high organisational slack/ ‘security‘ for civic &conceptual work

• transparency, openess tonewcomers, diversification

• high accountability & pressure toperform/conform

few data on outcomes, but also few data on actual cost-efficiency

vices • potential waste ofpublic money

• closed shop networks

• short-termism• instrumental collaboration• high transaction costs

social & economiccontext matters

Problems with marketization

With provider competition and economic risks devolved

on providers

- incentives to lower quality where possible (and unnoticed)

- rising needs for quality control (which can be costly and bureaucratic,

and tends to reduce the operational flexibility of service workers)

- stronger differences among providers regarding the capacity to deliver

(as markets create winners and losers)

with for-proft and non-profit providers put on equal footing, sectoral

virtues are ignored (greater importance of the logic of procurement =

fewer volunteers, limited interest in advocacy and developing the public

good)

with nonprofit agencies conceived of as business partners rather than

social partners… less trust, sincere information, dialogue, hence:

disruption in planning and organizing tailor-made services

… making the (welfare) workforce flexible (and often vulnerable)

- more legal options for precarious work

- greater pressures on unemployed citizens

- deregulated collective agreements (segmentation & less security)

31

Less expensive?

* yes: with economic pressures, there may be less ‘open loop’ (waste of time….) and more energy spent in resource management and innovation

* but (empirically), this pressure translates into an reallocation of income (low wages for most, windfall profits for some)

* in addition: much of what is saved in terms of resources gets lost for transaction costs (the effort of reorganizing thingspermanently and for controlling shirking behaviour ofthose geared towards saving their business)

Why marketization?

32

Better quality?

* possibly: provider inspection and accountability obligations create more transparency over results

* in the same vein however: providers spend much of their energy for marketing, selling and ‘whitewashing’ activities, as well as forcreating new projects just for the sake of ‘newness’

* and there are many incentives and options for gaming the system: for instance, providers are enticed to concentrate on things that are ‘easy to manage’ (‘creaming’) or may not tell the full story (about performance, problems, insights) to other stakeholders

if it is not cost-efficiency nor better quality, why thenthe trend towards marketization?

societal developments do matter….

-crisis of interest groups

- new patterns of

mobilisation/volunteering

- ‚post.democracy„ in

interest intermediation

employment

politics

gender

civil society

economy

family & life

course

-new models for

private life

- demographic

change

- new patterns of

social mobility

- fragmentation of

labour markets

- new/modified types of

knowledge workers

- precarious

employment

- equal opportunities

everywhere (as a

social expectation)

- work-life-balance

pressures

- social division of

emancipation

- financial capitalism

- marketization

- knowledge-based

service economy

- New Public

Management

- downsizing of states

- changing elites

International moves:

The example of elderly care

Western European care regimes by tradition: gender roles & fordist

socio-economical regime & charitable civil society

Change in the three spheres independently of evolving care needs

new care regimes on the horizon

- marketized within a semi-professional, precarious service economy

- re-gendered (based on part time arrangements in most places)

post-charitable nonprofit sector, with decreasing „mission„ and

increasing commercialization

Major background: developments in politics (NPM) and in life course

models (desire for mobility and choice in the upper middle classes)

… yet with some notable international differences in all this

Domiciliary elder care as an entangled welfare mix:The home care system in Germany

additional

services

for-profit provider units

professional

exchange

Municipality

individual households

counselling

services

care provision

nonprofit

provider units

Federal government and „Laender“

hospitals

voluntary initiatives

civil society private doctors

long-term care

insurance funds

(federated agencies)commercial

home help

nursing

associations

complementary

services

counselling

Developments in four different home care systems

The outcome: embedded marketization

What all this does to Third sector welfare providers

Old Hybridity a certain range of ‘social’ goals: (socializing, supporting a

cause or a group of people, ‘making a better world’…) multiple stakeholders

civic communities, politics, employees … diversity of resources:

civic inputs, public funding, ‘fee for service‘ …and nowthe market as a place for ‚making money‘(sales, marketing, economic investment, …)

new hybriditynonprofits as ‚social enterprises‘- cost-efficient like (successful) for-profit undertakings? - pro-social like ‘good old charity’?

Environmental change and options for coping with it

Change in the societal position of nonprofitsmuch less ‘voice’ and ‘loyalty’, much more exit

typical contemporary Third sector providers subject to public sector managerialism and market processes

Social enterprises as a solution?Limits set to ‘double bottom line management’

- product/user market as a moving target, with strong (often for-profit) competitors, ephemeral niche market positions, little scope for strategic development hybrid nonprofits as weak market players

- public bodies as major clients, driven by managerialist orientations(contracting out ‘by numbers’, ‘on the spot’, devolving risk onproviders while controlling the quasi-market….) hybrid nonprofits as managerialised market players

Three major risks

• commercialisation: mainstream social service prividers reinvent themselves as ‘market entrepreneurs‘ selling services to ‘quasi-customers‘, with less energy devoted to their social mission

• marginalization of civic involvement: intraorganisational separation of mere service delivery functions and classical ‘nonprofit sector‘ roles (advocacy, concept building, societal perspective) which however allow for social innovation and ‚voice‘ given to other than economic stakeholders

• pressure on organizational slack (Organisationsreserven)‘: human cuts in salaries, growing job insecurity and greater expectations regarding ‘organisatinal citizenship‘

Managerial options

The good old days are over…

• permanent tensions between goals, means, stakeholders … likely to occur

‘old hybridity’ under strain – much has to be done simultaneously- supervision / mission-based evaluation- sustainable financial management- civic participation in government consultations and

campaigning- coordination of stakrholder communities

(volunteers, members)- participative board governance

• excellence in double bottom line management impossible to achieve(the exception prove the rules, but can also be delusive…..)

Muddling through management as ‘one best way’

real-type (Third sector) social enterprises are

- permanently urged to search for second-best solutions - hectically drawing on prior experience and available routines,tweaking them here and there in an evolutionary way

- evaluating alternatives only occasionally and speculating on‘return-on-investments’ in complex environments

- highly dependant on post-modern adventurists who forego a classical career track, accept biographical insecurity, and believe in a precariousmission

whether this is a sustainable foundation for a welfare mix based on a well-performing Third sector is another question…

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enterprises’ in contemporary Europe, in: Denny, Simon & Fred Seddon (ed.), Social Enterprise:

Accountability and Evaluation around the World, London: Routledge 2013, 196-212

• Bode, I., B. Champetier and S. Chartrand, Embedded Marketization as Transnational Path Departure.

Assessing Recent Change in Home Care Systems Comparatively, in: Comparative Sociology (12) 6,

2013, 821-850

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Non­profit Relations in Continental Europe, in: Phillips, Susan D. & Steven Rathgeb Smith (ed.),

Governance and Regulation in the Third Sector, London: Routledge 2011, 115-141

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the Voluntary Sector, in: Voluntary Sector Review (1) 2, 2010, 139-161

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in: Comparative Journal of Social Work [online journal] (5) 1, 2010

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Programmes in Germany and the UK, in: Social Policy and Administration (43) 3, 2009, 209-225

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Perspective on the Evolution of Domiciliary Elderly Care, in: Public Management Review (8) 4,

2006, 551-566

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Western Europe, in: Journal of European Social Policy (19) 4, 2006, 346-359