Marketisation and human service providers: an industry study

There has been a significant marketization of human services in many nations over the last 30 years, driven by government acceptance of orthodox economic theory. However, there is substantial inherent market failure in these types of ‘products’, which has major implications for the structure and operation of markets. This chapter discusses the methodology used for a case study of the impact of marketization on service providers in one human services industry in one location, namely home care for older people in one Australian state. A major theme of the chapter is how the distinctive features of human services influence methodology. At one level, a number of conceptual questions had to be addressed, including the value of approaches used in conventional industry studies, how to obtain meaningful measures of concepts such as efficiency when applied to human services, and how to identify the motivation of human services providers and the incentives they face. The chapter also outlines the methods and data used, which included quantitative data at an industry and provider level; document analysis; qualitative data based on 45 interviews with providers, funding agencies, and other industry bodies; and participant observation via the researcher as a board member of one provider.