Dynamics Between Nonprofit and For-Profit Providers Operating Under the Long-Term Care Insurance System in Japan

Abstract

By studying two municipalities in Tokyo that have different environmental conditions in terms of resource allocations, this article examines whether the relationship between for-profit and nonprofit organizations providing long-term care has changed since the introduction of the Long-Term Care Insurance (LTCI) system in Japan. LTCI allocates most resources based on process control, and thus access to resources is easier by conforming to regulations and standards. Findings indicate that for-profit providers behave like nonprofit providers in such an environment. However, when commercialized services are provided besides legally defined LTCI services, outcome control comes into effect in addition to process control. This study finds that the differences between for-profit and nonprofit providers are maintained in this type of environment.Theoretical as well as policy and management implications are discussed, and this article concludes with the directions for future research.