Rise of the User in Social Services

There needs to be a paradigm shift in how Australia thinks about helping people – it‘s time to put the service user at the very heart of the social service system, says strategy and innovation consultant to the social sector Dale Renner.

It is common knowledge that the US health system has been one of the most dysfunctional in the developed world. When President Obama introduced the Affordable Care Act to reform the system, many health industry players opposed it, or waited for it to go away. Obama was reelected with an increased majority late in 2012, and the US Supreme Court has upheld the Act, so now the industry knows it must change – it must act to reduce costs and increase outcomes equitably.

The journey of change for healthcare in the US has some important lessons for Australians looking at their social services industry in an era of reform.

Healthcare (especially in hospitals) has traditionally been a ‘B2B’ or business-to-business driven system. Governments or health insurers contract with hospitals or pharmaceutical companies to deliver services for a set of third parties – the patients. Similarly, in social services, governments or private funders typically contract with social services organisations to deliver services to a third party – the low income or disadvantaged people who have a need.

Despite incredible goodwill and a strong desire to do the right thing by the client, the system means social services organisations have their ‘face’ turned to the funders. The contractual relationship is with the funder, and the operational focus is to deliver to the service agreement. Like in the health system, the people receiving the service often have no formal role or responsibility around their care, and aren’t in a position to make choices that improves that care or reduces its costs.

And yet, the choices that those clients or service users make have a huge effect on the effectiveness of the service provided. How perverse that the social impact we are seeking is on individuals with disadvantage or low income, yet those very people are often not involved in designing or producing the service. Both the health system and social services are now slowly moving towards an era of ‘B2C’, or business-to-consumer (or business-to-client), where it is in their interests to more closely meet the needs of the service user, regardless of the funding source.

To make this era possible, there needs to be a paradigm shift in how we think about helping people – it is time to put the service user at the very heart of the social service system. We need a shift to build social service organisations from the ground up, around the service user. This means social service organisations will have to behave differently (roles, functions) and look different (structure, systems). We need to provide the information and knowledge to enable more control and active choice-making by service users.

In healthcare, there is ample evidence that the actions of the patient has huge impact on their health outcomes. This is not just a matter of ‘behavioural’ diseases such as smoking or obesity, but goes down to how well patients adhere to prescribed treatment (ie do they take their pills?), how much detail of medical history is communicated between health professionals, and how active patients are in their treatment and healing. A US Department of Health & Human Services study estimated that lack of adherence to prescribed treatment was the cause of 125,000 deaths and 10% of all hospitalisations in the US.*

In social services this interaction between service user choices and the social service provided is a more complex one. Certainly there are many social ills created through ‘poor choices’ from crime to relationships, to financial decisions. But even when a person suffers disadvantage or vulnerability through no direct personal choice, the involvement of that person in co-creating and co-directing the solutions to their problems can be a powerful driver of better outcomes.

One reason microfinance has been so successful around the world (through organisations such as the Grameen Bank and BRAC in Bangladesh), is the role that individuals and communities play in supporting each other and creating the social conditions that encourage repayment of the loans. The borrower groups keep each other on track with repaying loans and use social pressures to ensure others repay their loans. This role of reducing bad debts is therefore user-directed and the ability to service this market is therefore ‘co-produced’ with the users, reducing costs of delivery.

Australian microfinance players such as Good Shepherd Microfinance have developed products (such as No-Interest-Loans and Adds-Up matched savings program) that are user-focused because they provide practical solutions to the financial problems that low income people face. Low income people have been ‘under-served’ in financial services for years, as the commercial bank model considers them too high risk, and therefore too expensive to serve. Meanwhile ‘pay-day lenders’ have filled that small short-term loan gap, but with crippling interests rates that ultimately magnify financial problems for their clients – they clearly are not user-focused. Microfinance products help low income people get done what they are already trying to do (ie save more money, buy critical items to enhance life or health, avoid exorbitant interest rates of pay-day lenders), but find it difficult to get done.

The increasing shift to user-based funding is helping to drive this shift – from community care packages for the aged, to NDIS and disability funding. In theory, by enabling the individual to choose the services that best help them get done what they are already trying to get done, we will move to higher impact on problems at a lower cost, because it is now in the user’s interest and power to reduce the costs of care and increase its impact on their problems.

* See Booz & Co’s Strategy + Business magazine Putting the I in Healthcare, Feb 2013

About the author: Dale Renner is a strategy and innovation consultant to the social sector with experience in Australia and internationally. He has advised senior management across a wide variety of industries from health, banking and education to energy, tourism and social services. A former lawyer, Dale founded Iconic Consulting to help social sector organisations increase impact on social problems and build sustainable futures. Dale is a Board Member of VCOSS and Hagar Australia, and a Fellow of the Williamson Community Leadership Program. www.iconicconsulting.com.au dale@iconicconsulting.com.au