Adaptation of Service Organizations to the Competition Mechanism in the Long-Term Care Insurance System in Japan

Abstract

This study explored how for-profit and nonprofit service organizations adapt to the Long-Term Care Insurance （LTCI） system, focusing on the exit patterns of these organizations. LTCI is the very first privatized public human service system in Japan. The analytical framework was developed drawing on the theory of resource allocation and competition mechanism. The data were collected based on a panel survey from 2005 to 2018 to follow these organizations. The results demonstrate that the service organizations were directed to adapt based on the strategic choice of exit, as they have little room to transform themselves for adaptation due to the LTCI’s strict regulations. The overall number of service organizations had been increasing, suggesting that new service organizations actively participate in LTCI at the same time. Meanwhile, some service organizations continued to exist. The difference in the response was related to legal status and also other organizational characteristics. The observation is discussed from the viewpoint of the complementary-organizational relationships and the stability of the services provided. This study concludes with directions for future studies.