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Free Market Enterprise Is No Way to Distribute Social Services

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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 quality and availability of essential social services, to treat an abused child for example,  becomes an accident of birth.  So often I have seen that a child can get this great service if she lives here but not if she  happens to live a few towns away.   Free markets are very efficient at distributing profits according to

Not surprisingly, the free market approach to social service delivery mirrors what we see today in our free market economy.  Larger corporations have tremendous advantages over smaller, more local businesses.  Most of the mom and pop store that once served local communities have been driven out of business.  Chain stores that replace them tend to locate in more profitable communities and away from less profitable or economically blighted areas, further adding to the decline of poorer communities.

Another consequence of our particular brand of free market capitalism is the tendency of large corporations to optimize profits by catering to the average, hence largest segments of the population.  For example, big retail clothing outlets carry a range of sizes that is narrower than the population as a whole.  This forces some customers to shop in higher priced specialty stores and settle for less fashionable clothing.  In another example,  privatized bus and rail services tend to drop less profitable routes isolating those who can’t drive.  This  can have a disproportional impact the poor or elderly living in commercially less viable areas. In fact, the free market model is efficient, in part, because it discriminates between profitable and less profitable geographic markets or market segments.

What then makes the free market model the best approach for dispensing publicly funded social services, especially since the distribution of need for services is so often found in commercially unviable communities?

This is a question I hope to explore in future posts.  I hope to elaborate on this discussion of our social service delivery model.

For now, however, please consider a minor example of how a alternative system might look. The example below may serve as a window into a different ways of thinking about social services.

Imagine the benefit of a seamless partnership between public health, education and community social services conveniently located in public buildings distributed throughout cities and local communities across America.   Imagine if each of these public facilities provided modern classrooms, resources and teachers to educate our children during the day and provide remedial and secondary educational services to adults in the evening. These facilities would also provide after school and evening sport and recreational opportunities for the community.  Imagine each of these facilities having community health clinics or screening centers staffed to meet the local public health needs of these children and families.  Imagine each of these facilities serving as comprehensive social service intake and referral centers for families and the surrounding community .  Each of these local facilities could be configured, staffed and funded to best meet the local needs of the immediate surroundings.  A network of these local facilities would have among its goals the elimination of health, educational and social inequality and the provision of equal access to all public services.

This might seem like a grandiose plan, but much of the bricks and mortar infrastructure already exists to support it… our public schools.  Public schools are located in the communities they serve and more accessible than most social service agencies serving the same community.

This concept above is a small start, yet it goes well beyond what is currently under construction in the field of Education today, for example.  Some work is being to to develop what is being called “full-service community schools”.  An example of this can be found on the Website of Steny Hoyer, a Congressman from Maryland and from the OaklandUnified School District, in California, which is attempting, with some success, to implement this model.

Full-Service Community Schools – Thinking Outside the Classroom

Why do so many schools have auditoriums? Why do they have athletic fields?

We take features like those for granted today, but there was a time when a school building with anything more than classrooms and chalkboards was considered wildly unorthodox. But, more than a hundred years ago, educators came to realize that schools can be more than simply places for instruction: they can be the center of their communities.

Indeed, classroom education is only one piece of the puzzle when it comes to ensuring that all children succeed. The notion of building a future of opportunities for our children through community partnerships that give them and their families the tools they need to grow and thrive is at the heart of the full-service community schools movement.

Full-service community schools work with local organizations and the private sector to coordinate a wide range of services for students and families. At a full-service community school you might find health clinics or dental care, mental health counseling, English lessons for parents, adult courses, nutrition education, or career advice. For high-need communities that require social services, there is no more welcoming — or efficient — place to house them than in a public school. Schools like these quickly find a place at the heart of their communities, staying open long after school hours and on weekends, giving neighbors a place to come together and participate in the education of their children.

Here in Maryland, we have seen the success of such a model in our state’s Judith P. Hoyer Early Child Care and FamilyEducation Centers, or “Judy Centers.” The 24 Judy Centers throughout Maryland promote school readiness through collaboration among community-based agencies and organizations located within each Center. State evaluations of theJudy Centers have shown increased access to high-quality programs and services for low-income and special needs children and that they improve school readiness and minimize the “achievement gap” at the start of first grade.

A decade of research on full-service community schools has consistently shown that they promote higher student achievement and literacy, stronger discipline, better attendance and parental participation, a reduction in dropouts, and increased access to preventive health care (a factor that is especially urgent as we face a possible flu epidemic).

With these benefits in mind, Congress is considering legislation I have introduced that could greatly expand the number of full-service community schools in America — one of the most important pieces of school legislation in recent years. It would provide grants for states and school districts to work with community organizations and businesses to create the kind of programs that have had so much success at schools across America. Strengthening services in schools also has the potential to save our country money on everything from prison systems to emergency room visits.

Oakland Unified School District:

A Full-Service Community School in Oakland serves the whole child; it invites the community in and extends its boundaries into the community in order to accelerate academic achievement; it shares responsibility for the student, family and community success.



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