The Marketization of Long-Term Care – the Interaction of Culture, Institutions and Actors in Explaining Cross-National Differences

Since the 1990s, many welfare states in Europe have restructured their policies towards long-term care for senior citizens. On the one hand the social rights of care recipients were expanded, while at the same time market principles were strengthened (Bode 2008; Clarke 2006; Knijn & Verhagen, 2007; Lundsgaard, 2006; Rostgaard, 2006; Vabø, 2006; Burau et al. 2007; Pavolini & Ranci, 2008; Pfau-Effinger & Eichler, 2009; Jensen et al., 2011; Clarke et al. 2007).  One main element of the care policy marketization was the introduction of “consumerism” on the demand side of long-term care (Clarke et al., 2007; Pfau-Effinger & Eichler, 2009; Newman & Vidler, 2006; Yeandle et al. 2012). People in need of care are no longer regarded as passive care recipients but become more and more constructed as “care consumers” which have to actively choose a suitable care option between different competing care providers (Rostgaard, 2006; Vabø, 2006, Anttonen & Meagher, 2013; Brennan et al., 2012). Another important element of marketization was the strengthening of competition between public and private care providers on the supply side (Meagher & Szebeheli, 2013; Anttonen & Meagher, 2013; Brennan et al., 2012; Kröger, 2011; Anttonen & Häikiö, 2011) including the introduction of the option to buy care by their family members or personal assistants as care consumers (Frericks et al., 2014; Geissler & Pfau-Effinger, 2005; Jensen et al., 2011; Ungerson, 2004). In this paper, we put our main focus on the explanation of cross-national differences of the marketization of the demand side, which is mainly characterized by the fact that people in need of care have to act as “consumers” of care services on “care markets”.

Several studies have shown that there are substantial differences concerning the forms and strength of marketization between European welfare states. Our main research question is: How can we explain cross-national differences in the degree of welfare state marketization on the demand side of care services? So far, there are only relatively few studies that try to explain international differences in terms of marketization of long-term care policies. While some studies assume that differences can be explained according to Esping-Andersen’s (1990) types of welfare regimes (Bode, 2005; Brennan et al., 2012), other studies observe considerable differences between welfare states of the same regime type - for example the social democratic welfare states of the Nordic countries (Meagher & Szebehely, 2013).

The paper is based on a comparison of the care policies in the German and the Austrian welfare state. Both countries are representative for Esping-Andersen’s “conservative” welfare regime type and experienced a paradigmatic policy change in the 1990s (Behning, 1999; Naegele, 2014), which strengthened the social rights of the patient on the one hand and expanded market principles on the other hand. We introduce an innovative methodological framework for the measurement of the degree of marketization of welfare state policies for long-term care. According to our definition, the degree of care policy marketization differs depending on the degree to which the institutional regulation principles of such policies construct an ideal-typical consumer with freedom of choice concerning prices and providers. The paper shows that the German and the Austrian welfare state differ substantially in their degree of marketization in terms of the demand side, although both countries belong to the “conservative“ welfare regime type.

As theoretical basis we use the „welfare arrangement” approach by Birgit Pfau-Effinger (2005), which emphasizes the interaction of cultural change and institutional change in welfare states. According to the approach cross-national differences in the care policies can be explained with reference to the institutional and cultural foundations of previous care arrangements, as well as with reference to power constellations of relevant actors and their usage of the cultural ideas in political processes.

With respect to the recent comparative historical sociology we assume that both path dependency and contingency can interact and contribute to the explanation of institutional change (Clemens, 2005). We will apply the method of “process tracing” (Hedström & Ylikoski, 2010; Deters, 2012; Mahoney, 2004, 2012; Martin, 2010)  in order to analyze the role of cultural ideas in the historical processes, as well as contradictions and conflicts that have led to welfare state reforms which strengthened market principles in care policies. The investigation is based on the tracing of the political processes of the historical sequence in each of the two countries, ranging respectively from concept development to the introduction of new care policies.

The findings show that the differences in the degree of marketization can be explained with differences in the main cultural ideas in the policy process and differences of marketization in the previous care policies.

The paper provides an innovative contribution to the international comparative theory and research of welfare care policies. The study is part of a comparative cross-national research project about the institutional framing of family care between market logic and family solidarity (FamiCap) which is funded by the German research council (DFG). The empirical study is based on document analysis and secondary analysis of qualitative empirical studies. In harmony with the main research question of the paper, the empirical analysis is restricted to the institutional foundations of care policy marketization. The specific implementation of long-term care and its imprint on structures and practices will not be investigated.