Transcript The marketisation of care before and after austerity

The marketisation of care before
and during austerity
Susan Himmelweit
[email protected]
Paper presented at IIPPE conference
Naples, 16th-18th September, 2014
Plan of presentation
• Feminist economics, the welfare state and
long-term care
• Trends in long-term care provision: growing
marketisation
• A gender/care-inflected view of the financial
crisis and austerity
• Long-term care and the effects of its
marketisation under austerity
– UK case-study
Feminist economics, the welfare state and longterm care
• Materialist analysis must be of social relations around all “provisioning”
which includes:
– provision for care needs as well as for material consumption
• Care is the provision of hands on services to enable a care recipient have
socially endorsed capabilities (or as near as possible)
– “care needs” socially constructed and thus subject to change in social norms
– for all but the poorest, this is true of material “needs” too
• Welfare states contribute to social reproduction of the working class
– the contribution of “capital in general”
– care for children and temporarily disabled adults sometimes seen as an
investment (eg in phrase “social investment state”)
• Long-term care
– although equally part of the social infrastructure
– is less easily perceived as an investment
– therefore particularly subject to varying social constructions and changing social
norms
Marketisation of long-term care
Growing use of market to provide care:
• Addition to direct state and family provision, through:
– Those with care needs and their families using their own funds to buy care
– State contracting out care to private sector providers
– State allocating publicly funded care budgets to those judged to have care
needs to spend themselves
• Either from corporate provider or employing own care assistants;
• Either direct cash payments or control of personal budget administered by state
(local authority)
• Sometimes with restrictions on use
• All three forms of marketisation have been increasing throughout Europe,
– all can be seen as attempts to reduce/contain costs for capital of reproduction
of working class
– though with a variety of ideological justifications
Why the growing marketisation?
• Self funding – traditional informal care less viable
– because of women’s employment and less stable, more mobile families
– tightening of eligibility for state support
• Contracting out – notion of public sector less efficient, needs competition
to achieve value for money
– Should mean higher quality but price competition dominates due to
difficulties in assessing quality
• When measured, private sector quality typically inferior to non-profit and public
provision
– Not necessarily much competition in market, often dominated by large
providers, complicated financial structures etc
– Lower costs typically achieved only by employing fewer and less well-trained
staff
• Personal budgets – empowers users, locates choice where it should be,
should work markets most efficiently
– To empower users to choose differently requires funding for more than basic
needs
– Market works badly when high costs of exit and difficulties in assessing quality
– Users in weaker position than state vis-a-vis large providers
– Lower costs often achieved only by employing particularly disadvantaged
untrained workers
The financial crisis and inequality in developed
countries
• Increasing inequality within developed countries can be seen as an
immediate cause of the crisis
• Real wages hadn’t increased – fallen at the bottom
• Households borrowed to maintain or increase standard of living
– Expanding notions of socially necessary standard of living fuelled by
conspicuous consumption of the rich
• Could do so because of:
–
–
–
–
Deregulation of banking system
Perverse incentive structure within banks
Sharp practices and mystification involved in securitisation
Risk taking by lenders ie lending to households who could not afford
repayments
• Defaults led to collapse of some lenders, contagion to others, bank
bailouts etc.
• Crisis conditions not only within capitalist expansion but also in its
relationship to the reproduction of the working class
– differently in different parts of the world
Gender/care inflection on this view of the crisis
• Welfare state provision of services and benefits (including in-work
benefits) one strategy to maintain households’ living standards
• Dual earning was another
• Care costs, previously absorbed by (largely women’s) unpaid labour
within households, then paid through:
– Double shift (largely by women)
– Expansion of public sector services (largely employing women) that
enabled those with care responsibilities (largely women) to take
employment
– Some state benefits and allowances for carers (largely women)
• Welfare state expansion and dual earning did not cause crisis but
may have delayed it (and consequently made it more severe?)
Austerity
• Austerity was not the only possible response to the crisis:
– Or even the one that would re-establish “business as usual” the fastest
• It was the only response consistent with a view that:
– global competitiveness required lowering the costs of reproduction of
the metropolitan working class
• that is, that everyone should adopt the German model
• This required:
– Not only lower real wages (widely recognised) but also
– Cuts in state spending on these reproduction costs
• Budget deficits taken as an indication that they were too high
• Disengagement of financialised and internationally mobile capital
from national states and thus the reproduction of any particular
national working-class?
“Never let a good crisis go to waste”
• Falls in living standards therefore not an unintended consequence
but a measure of the success of such policies
• Required a change in norms concerning acceptable living standards
– including acceptable standards of care provision
– and acceptable conditions for workers
• LTC is seen as less of an investment than other social spending:
– Expenditure on it might already be at lowest level consistent with
current norms
 Expenditure on LTC should fall less than on other social spending (especially
given rising need)
• LTC is more subject to social norms than other social spending:
– Austerity might be an opportunity to change current norms
 Expenditure on LTC might fall more than on other social spending
Why might marketisation help in reducing costs?
• Private sector employers can achieve cost reductions more readily than
public:
– Workers less likely to be unionised and therefore less likely to be able to:
• Protect own working conditions
• Protect care standards
– Even more so when employer/purchaser is isolated care recipient
• Can transfer risks to:
– workers eg zero-hour contracts
– care recipients themselves
• Providers or care recipients can be blamed for failures rather than lack of
funding
• Even easier to cut funding (or just not raise it in line with costs) to
personal budgets
• Despite this, receiving own budgets may appear attractive if quality of
pubic provision is falling through lack of funding
– New recipients may accept being given less than would have previously have
been spent on their care
• Germany 2001, 75% of home care users chose to receive a cash payment worth less
than half the value of services in kind
• By 2009, it not been increased and many were trying to opt back into receiving
public provision
Among European countries, the picture is mixed:
• None of the countries forced into austerity cut expenditure on long-term
care as much as social spending in general (proportionately as % of GDP)
– Eg Neither Greece nor Iceland cut LTC as much as other social expenditure
– Where cuts were dictated, need determined that LTC was not the first to go
• Among countries not forced into austerity, those who cut expenditure on
long-term care more (or raised it less) than social spending in general
were:
– Belgium, Denmark, Norway and Sweden where expenditure on LTC care was
relatively high
• Austerity, even elsewhere, enabled norms to change
– France and Finland, although not particularly high spenders, which had
systems that were already marketised
• Marketised systems allowed cuts to be implemented more easily
• Some countries cut their expenditure on benefits in kind in general much
more than on cash benefits, so became more marketised (though no data
on this specific to long-term care):
– For Slovakia and Switzerland, this was combined with particularly severe cuts
in spending on LTC,
– Though Austria, with an already more marketised system, had a small growth
in expenditure on long-term care
Case study: England, managing LTC through
marketization in a period of austerity
• Right leaning coalition government elected May 2010
• Self-imposed austerity, planned severe fiscal deficit reduction through:
– 80% cuts in spending, 20% through tax rises
– in practice has been slightly more through cuts
• Local authorities (LAs) responsible for provision of LTC, but largely on
basis of central government funding
– 26% cut from centre led to a 14% cut in LA budgets in October 2010
– 10% further cut in June 2013
• LA responses with respect to LTC varied:
– One third cut LTC spending by more than 20%
– A handful increased spending
– Most implemented cuts of 0 - 20% with average cut of 15%
• How did they do this?
– Tightened eligibility conditions
• 87% receiving any publicly funded care had “substantial” or “critical” needs in
2013/4 compared with 65% in 2006/7
– Reduced payments to providers (tenders)
– Increased user fees (greater means-testing)
Figure 1: Change in real net spending on older people’s services in England: 2005/6 – 2012/3
•
By 2009/10 public expenditure on most services for older people (whether provided by public or
private sector) was already falling;
•
•
But counteracted by an increase in spending on direct payments
Between 2009/10 and 2012/3 spending on such services fell much faster:
•
On residential care fell by 13%:
•
•
On home and day care by 23%;
•
•
•
•
Implemented through cuts in fees paid to residential care providers, numbers receiving services
unchanged
By cutting numbers of recipients and payments per hour
Expenditure on direct payments rose only at similar rate to before 2009/10
Net fall in expenditure on LTC overall of over £1billion
Unit costs overall fell by 5% raising concern with Care Quality Commission about quality sustainability
Figure 2: Numbers receiving care services in the community, numbers doing so through
personal budgets and numbers whose personal budgets are received as direct payments:
England, 2009/10 – 2012/13
•
Most of the cuts were in practice
implemented through restricting eligibility
for home care, despite increasing need
•
Between 2009/10 and 2012/3:
• Numbers receiving any publically
funded services fell by 26%
• While those covered by personal
budgets rose by more than 300%
• And those receiving direct payments
by 20%
•
Increasing numbers were having to use own
funds or rely on relatives if needs were to
be met
• 2012 Health Survey found one third of
women and one fifth of men had
unmet needs
• Increased number of unpaid carers
reported caring for more than 20
hours per week
Conclusion
• In a period of austerity containing LTC expenditure by the state, despite
rising need became a priority:
– Continuing a trend occurring before the crisis – though with some exceptions
– LTC expenditure a particular focus for cost containment since seen as less of
an investment than other social spending
– Greater use of marketisation in the delivery of state funded LTC may have
made it easier to implement cuts, and thus:
• Reduce expectation and social norms about acceptable standards of care
• And/or impose the costs on the working conditions of paid and unpaid carers
• Austerity thus a means by which weaker expectations of LTC systems, and
other aspects of working class conditions, are generated:
– Along with falling real wages, part of reducing conditions of reproduction of
the metropolitan working class in order to producing conditions for profitable
expansion
– Like falling material living standards, more likely to be accepted while
unemployment is high and crisis conditions are allowed to continue to prevail
– Has occurred as part of disengagement of financialised and internationally
mobile capital from the reproduction of any particular national working-class
Table 1: Total public expenditure on long-term care (LTC) as % of GDP:
home care, residential care, and cash benefits (around 2008)
Country
Switzerland(5)
Denmark
Germany
Spain
France(4)
Italy
Netherlands(6)
Austria(1)
Slovenia(5)
Slovakia(2)
Finland(3)
Sweden
UK
•
•
•
•
% of total expenditure on LTC
Total expenditure
on LTC (% of GDP)
Residential care
Home care
Cash benefits
1.0%
2.7%
0.9%
0.3%
1.2%
1.7%
2.2%
1.3%
0.8%
0.5%
1.8%
3.9%
1.2%
73.9%
26.7%
57.7%
59.0%
57.4%
26.2%
55.8%
42.7%
25.7%
69.0%
69.0%
58.7%
47.4%
26.1%
73.3%
17.8%
27.0%
(0.7%)
24.4%
13.9%
42.6%
31.7%
33.6%
42.1%
10.6%
57.3%
74.3%
4.9%
31.0%
38.1%
24.2%
(27.5%)
26.1%
3.3%
28.5%
EU countries vary a great deal in the extent of marketisation.
This table shows extent of cash benefits for selected countries for which data is available
• mainly payments to informal carers
• not (except where noted) the contributions that recipients are expected to make from their cash
benefits to formal residential or home care services
France: It is currently not possible to delineate the share of beneficiaries who choose services in‐kind and
those who choose purely cash benefits;
Austria: LTC allowance is used by beneficiaries to also pay for residential care (about 20% of recipients) or
home care services (about 25%) – or for informal care arrangements with migrant carers (about 10%)
Table 2: Typology based on organisation and financing of long--term care
Nature of the system Countries
Characteristics
Oriented towards
informal care, low
private financing
Low spending, low private funding, high IC
use, high IC support, cash benefits modest
Belgium,* Czech Republic,
Germany, Slovakia
Generous, accessible Denmark, The Netherlands,
and formalised
Sweden
High spending, low private funding, low IC
use, high IC support, cash benefits modest
Oriented towards
informal care, high
private financing
Austria, England, Finland,
France, Spain
Medium spending, high private funding,
high IC use, high IC support, cash benefits
high
High private
financing, informal
care seems a
necessity
Hungary, Italy
Low spending, high private funding, high IC
use, low IC support, cash benefits medium
• As the devisers of this typology note, this Table shows :
“surprising results as, for instance, the German and Slovak LTC systems result as similar, while countries as
different as Austria, England, Finland, France and Spain seem to show the same pattern of LTC service use and
financing. As a corollary, these results may yet again underline that LTC as a system is just emerging in most
European countries” (Allen et al, 2011: p17).
Table 3: Real public social expenditure, real GDP and various categories of social
expenditure as % of GDP, % change 2009 -2013 (except LTC % change 2009 -2013):
selected European OECD countries for which data exists
% change 2009 -2013
Country
Austria
Belgium*
Czech Republic
Denmark*
Estonia
Finland*
France*
Germany
Greece
Iceland
Luxembourg
Netherlands
Norway
Poland
Slovakia*
Slovenia
Sweden*
Switzerland1
public social
real public
on cash
on benefits in
expenditure
real GDP
social
benefits
kind
as % of GDP
expenditure
0.3%
5.9%
6.2%
2.7%
-4.6%
8.6%
4.2%
12.8%
6.1%
13.0%
6.2%
2.3%
8.5%
3.2%
11.0%
7.6%
2.5%
10.2%
4.5%
10.7%
-10.4%
17.8%
7.4%
-12.8%
-4.9%
7.1%
3.8%
10.9%
8.0%
5.9%
6.2%
4.0%
10.2%
3.4%
10.5%
-2.3%
8.7%
6.4%
-6.2%
3.2%
-7.2%
-21.0%
-28.2%
-1.5%
-18.3%
-6.9%
3.1%
-3.8%
-5.7%
-7.8%
1.2%
7.1%
8.3%
2.0%
-0.1%
10.4%
0.4%
10.8%
4.6%
16.7%
0.4%
5.5%
5.8%
5.3%
-4.8%
0.2%
12.4%
12.6%
-4.5%
12.8%
-3.0%
10.5%
7.5%
4.0%
-14.0%
6.6%
-1.7%
4.9%
6.9%
6.1%
-0.2%
12.5%
12.3%
-1.8%
1.2%
-7.08%
8.0%
0.02%
-0.08%
-14.63%
Low spending countries, modest use of cash benfots modest
Medium spending countries, high use of cash benefits
High spending, modest use of cash benefits
on long-term
care*
1.5%
6.8%
8.9%
-3.9%
-14.4%
1.7%
-26.6%
0.7%
16.5%
-3.1%
7.4%
11.0%
-2.3%
10.9%
-6.8%
7.0%
-2.0%
5.8%