Managing the Human Service Market: The Case of Long-Term Care in Japan

Providing human service through competitive markets is inherently problematic. On one hand, quality care is critical; unsatisfactory human service greatly influences people’s quality of life. On the other hand, profit for human service providers is essential for sustainable service provision. This thesis focuses on striking a balance between human services’ need for quality assurance and market providers’ need for profit. The research primarily examines the provision of long-term care for the elderly in Japan, which has the biggest share of aged population among the OECD members. Two research questions guide the empirical research: 1. How should governments design the human service market in order to keep the capacity to ensure the quality of service? 2. How should governments set the performance measurement for quality care? The research presents and tests two models. The first model addresses market competition practices and offers an alternative care quality model, called Ideal CQM. Ideal CQM seeks to overcome deficiencies in the existing care quality model, which allows the market to accommodate poor quality care. To this end, Ideal CQM presents a theoretical market design in which quality of care is the sole basis for market competition. By implementing Idea CQM, governments can direct the market competition to enhance the quality of care and poor quality service can be automatically eliminated from the market. The second model addresses performance measurement and is a process-based model, which values the experiences of front-line care workers. The process-based performance measurement seeks to overcome deficiencies in the existing outcome-based performance measurement, which is rendered ineffectual by two unique features of human service: ambiguous policy goals and a considerable amount of front-line worker discretion. This thesis, thus, modifies the existing concept of market competition utilising public administration theory to accommodate the process-based performance measurement model. The research supports the use of market competition to provide human service for long-term care. Approving the workability and the practicability of the presented two models, the thesis concludes that governments can achieve balance between quality assurance and sustainable provision, if they are willing to meet the required conditions for implementation of the two models