"Free Market" Social Services Fail to Deliver

Where do you turn when your aging mother can't be by herself anymore, or you notice your baby seems a little delayed.  Imagine that your teenager starts  skipping school and staying out all night or imaging you are suddenly diagnosed with a serious illness or disabled in an accident?  Where do you go for help?

Sooner or later we all knock on the door of our community's social service network.  What greets us may be far less than we expect.  And sadly, the help available to us will depend a lot on where we live and how much money we make.   The confusing patchwork of private, public and non-profit social service agencies through which we must navigate is the natural, unintended consequence of the free market model we've created to deliver social services.

We are all only temporarily able bodied.  When don't give much thought social services.   We are content knowing that free market competition is efficiently keeping down the cost of publicly financed services for the needy.

It isn't until we seek help ourselves that we encounter a labyrinth of agencies with confusing components and cutesy sounding acronyms for their name.  Agencies often list the types of services they offer (counseling, for example) without listing the types of problems they serve (such as adolescent issues).   Consumers are expected to know which services work best for their problems.  Some agencies over promise results in their marketing or take on people with problems that would be bettered resolved elsewhere.   Access to services are often restricted by bewildering eligibility requirements based on age, gender, geography, diagnosis, income, insurance provider, religion, ethnicity, funding source or hours of operation.

If your family has  one or two very common problems, chances are you will find the help you need.  But if your problems are uncommon or complex your search will not go smoothly, and if you also happen to be poor, live in an under served community or don't have transportation, the prospects for getting effective help are slim.

This is character of our social service networks today.  They are not based on matching service availability and capacity to the needs of local communities.  They are loosely coordinated networks created by free market forces and competition between private or non-profit agencies scrambling for dollars.

For over thirty years we have been privatizing public social services in the belief that free markets are more efficient than government in providing the best services at the lowest cost.    Little attention is given to the inescapable fact that market driven systems create uneven results by their very nature.  This is true in commerce but especially true in public social welfare.  Larger agencies are more politically connected and better positioned to compete for public dollars.  Wealthier communities have a higher profit potential so they attract more and better competitors.   Smaller agencies and program models that incorporate innovative ideas are less able to compete for government money.

Innovative approaches to helping people are usually funded in  small trials by private foundations.  Even when these trials prove successful, bringing them up to scale is almost impossible.  Agency competition actually works against it because social service providers are competing on an artificial playing field.

Governments create the playing field on which agencies compete, but the government departments responsible for developing and funding social service contracts are often under staffed and ill equipped to monitor service outcomes.  They also lack the personnel and special expertise it takes to design better programs.  The time and effort involved in researching literature, writing contract proposals, putting contracts out for bid and guiding the implementation of new programs is enormous .  Politicians don't what to spend what it would cost to create real free market competition for high quality services.

To overcome the uneven distribution of services problem,  governments develop specially targeted service contracts with extra financial incentives to serve specific areas.  But these initiatives are expensive and tax revenues are declining.  Targeted service contracts are usually limited in size and scope because of their higher costs.

We have come to the point where the availability and quality of essential services, to treat an abused child for example,  becomes an accident of birth.  How often have I seen children getting excellent services in one county while children with identical needs have  no such services in another.  

Commercial markets are efficient in distributing products according to demand when profits are distributed according to merit.   This method breaks down when applied to funding social services.  Competition discourages inter-agency coordination and inadequate  funding increases agency competition in more profitable locations while discouraging them from entering less profitable communities.  This causes unacceptable inequalities in meeting the basic human needs of our people.  

There are many pressing issues that demand attention.  How we fund social services is rarely among them, yet the wisdom of distributing social services through artificially created free markets cries out for public debate.