The availability, cost and quality of care services have a wide-ranging impact on society. Across the OECD, the cost of long-term care services represents about 70% of an older person’s income while childcare costs account for 10% of family income. What are areas where competition authorities can advocate for pro-competitive regulation and policies to help ensure that people have access to good quality and affordable care service?
In December 2024, the OECD held a discussion on Competition and regulation in the care industry to explore how competition can drive quality and market outcomes while addressing market failures, equity concerns and regulatory challenges within the industry and explore the role competition authorities can play.
KEY TAKEAWAYS
Equity considerations. Long-term care and early childhood education and care services are important for citizens’ well-being. As large numbers of family carers are women, these services also contribute to women’s participation in the labour force. However, markets for these services do not work well, with unsatisfied demand and expensive services.
Market imperfections. Consumers have limited information when choosing service provider, with families from low social economic status especially challenged. This is compounded by difficulties to switch provider and to assess quality of service. Most providers are private and suffer from staff shortages. Competition does not deliver good outcomes in certain markets, such as low-income areas or special needs.
Government intervention. Governments intervene with a mix of regulation, funding and, less frequently, direct service provision. These interventions significantly affect demand and supply, leading to great heterogeneity across countries.
Advocacy for access, affordability and quality. Competition authorities can advocate for measures to:
- Support informed consumer decisions, including by publishing quality indicators
- Ensure that licensing requirements do not create barriers to entry and are tailored to the actual needs
- Monitor labour markets, especially when local markets are concentrated.
A detailed summary of the discussion and an executive summary with key findings will be issued in 2025.
