Commissioning of Social Care Services: Municipal commissioning approaches for social care services – evidence from a countrywide live experiment

Abstract

Social care services aimed at supporting elderly people and people with an impairment are a fundamental element of welfare states. Governments face challenges in the efficient organization and outsourcing of social care services. Understanding ways to efficiently coordinate and outsource social care services is paramount for a long term sustainable social care system. This research first explores EU and Dutch legislation concerning the outsourcing of social services by governments. In the EU directives on public procurement, there is a light regime for social care service contracts. Case law of the EU Court of Justice recently clarified conditions under which ‘open contracting schemes’ fall outside the scope of the EU Directive for public procurement. This research combines the legal perspective with an empirical study on the outsourcing practices of Dutch municipalities in the advent of the 2015 reform of the AWBZ to Wmo 2015 and in the first years after this reform. Combining both a public management perspective and a purchasing and supply management perspective, this research analyses how each of the Dutch municipalities commissioned services such as personal assistance and day care for adults. The procurements for all Dutch municipalities for four years in a row were studied by collecting and analyzing the actual procurement documents used by municipalities. Besides the strategic choices discussed in the ‘archetype’ commissioning models, the analysis also included the procurement procedures and reimbursement methods used by municipalities. The research combines theoretical lenses of agency theory and service triads. In a service triad, the commissioner or buyer of the service is not the end user (such as a municipality buying services for their citizens), which is associated with increased buyer risks because of increased difficulty to monitor service quality control and identify supplier opportunism. After the decentralization, most municipalities abandoned the commissioning of a limited number of care providers on the basis of annual (maximum) budgets and nationally standardized services. Most municipalities adopted open contracting schemes, contracting every qualifying care provider in a framework agreement with ‘ex post’ competition over every new client. Despite strong budget cuts, only a small minority of the Dutch municipalities used ‘ex ante’ competitive tendering, although this is often discussed in the literature as the main advantage of externalizing social care. At the time of the reform, half of the Dutch municipalities chose for relational dialogue-based procurement procedures. Also a move towards more outcome-based contracting of social care is visible, although this seems to conflict with legal certainty for social care clients. A study comparing regulations and outsourcing practices between Finland and the Netherlands evidences that Finland adopted open contracting schemes in their legal system much earlier, although Finnish municipalities (still) provide the majority of social care services in house. Finally, a study combining the commissioning data with data on the satisfaction of care clients demonstrates that clients in municipalities that adopted open contracting schemes are more satisfied with social care compared to clients in municipalities that stuck to the former ‘AWBZ’ system of contracting care providers.