6 - MARKETS IN ELDERLY CARE

Summary

While all human societies have had to broach the challenge of caring for the elderly, public funding and provision of high-quality care services are a recent and often uncertain development. Across the OECD, there is no single model for care services, with countries varying widely in how much they spend, how many services they offer, and what mix of institutional, home, and family care they encourage (OECD 2005). While this diversity in cross-national experience is striking in itself, different national models are not fixed, with some countries (most prominently Germany and Japan) recently introducing or expanding long-term care benefits. Indeed, markets and public responsibility for care are growing in tandem. Most countries lack a halcyon past of public-sector dominance, or a fully private market against which they are either privatizing or expanding the public sector. Instead they are developing care services for the first time in an era of markets, and often through markets.

However, countries have done so in sharply differently ways. In England, the Conservatives introduced early reforms in the care sector allowing more private provision in a weakly regulated environment, with the emerging Pork Barrel market insulating users from heavy costs while putting producers in a position to earn extra revenue from the state. As the costs of this market exploded, these same policymakers cut funding but kept the orientation towards producers, moving to a Private Power market.