“Social Bonds”: An Experiment On The Vulnerable

Leith McLean is not a member of the International Socialist Organisation, but kindly allowed us to reprint his article here in order to spread awareness of this important issue.

Earlier in June, in the middle of a long weekend and amidst the massive FIFA scandal, National announced a pilot scheme for a radical experiment in mental health services. Dubbed ‘social bonds’, the general idea is to open mental health provision to investment from private companies. Once the term of the bond expires, bond-holders will be paid if their service met the agreed targets. The ideal outcome for social bonds is that unsuccessful services lose their funding, and services that work will get it instead. Social bonds are a bold new experiment in social services – and that’s the problem. They are an experiment, carried out without consent or the ability to opt out, on the sanity of society’s most vulnerable members.
Currently, treatment is often piecemeal, partial, and temporary.

Rather than solve these problems, social bonds will make them worse. Services having trouble will be assessed, and simply defunded, without planning or coordination with other (competing) services. Closing services means ending treatments – and because these will be the services that aren’t meeting targets, the people using them will be the ones having the most trouble. Even if sufferers of mental illness are moved to another ‘successful’ program, this means disruption of care, which means delayed and reversed recovery, breakdowns, and the ensuing loss of jobs increasing the load on the mental health system. To safely move from one program to another, the government must provide bridging support and care, and even if these work perfectly they won’t prevent problems. They’ll just make them happen twice instead of once. When your social safety net needs a social safety net, that’s a clear sign of terrible policy.

We have seen from their treatment of Relationships Aotearoa how little National cares about providing a bridge to further treatment. Rather than winding down the service slowly and in line with the needs of consumers, National simply cancelled the funding and barrelled ahead even when the new service providers started to pull out. Kiwis are being hung out to dry. This is a clear demonstration that National does not prioritise effective treatment of sick people. We should be very suspicious of their professed concern. They cut funding, let the service deteriorate, and use the public outcry as an excuse to cut funding altogether. This approach suggests that social bonds are more about privatising mental health and getting the government out of social services, than they are about the well-being of patients. They are driven by ideology rather than outcomes.

This lack of concern with the effects of policy is obvious when we glance at similar programs overseas: they’re not similar at all. Other countries are trying bonds only in areas where success and failure are easy to measure. Even these experiments have not yet concluded. So we don’t yet know whether social bonds work, even in circumstances much more suited to them than mental health. The pilot program is meant to settle some of these questions, but there are inherent problems in measuring the outcomes that persist regardless of what funding mechanism the sector uses.

What counts as ‘success’ for treatment of mental illness varies from person to person, just as the different conditions of ‘mental illness’ do. It is unrealistic to use a system that relies on contractually-agreed, measurable outcomes. Investors understand this, and can only serve their shareholders by funding programs whose outcomes are easily measured. So before the investment even begins, some services will be defunded simply because they’re working in a difficult and murky area. This is why ministers have jumped so readily to promoting ‘jobs’ as the criterion (naturally, without any evidence that this is what success means). Whereas actually the welfare of patients is multidimensional and does not lend itself readily to accountants’ balance sheets.

National’s fundamental lack of understanding of mental health, or even being bothered to deal with it, has been apparent for a while now. Recasting the sickness benefit as the jobseeker benefit shows how they think of chronic illness, and the paucity of psychiatric personnel in the Designated Doctor program shows how seriously they take mental illness.

Many Kiwis consider National to be a neoliberal party (that is, committed to free markets, minimal government intervention, and privatisation of everything). This is not strictly true. Neoliberalism is an influential ideology, as we can see from National having a currency speculator as their leader. But, just like all our governments, whether Labour or National, they love to stick their fingers in. For example in the Chch rebuild they went straight for central planning and micromanaging precinct by precinct. Sticky-fingered bureaucrats won’t actually be removed from the equation by social bonds. Through contract design and setting of targets, they play as great a role as they would under a publically-funded scheme. Investors should beware of the red tape that will grow around social bonds.

The alternative to red tape is incredibly ugly. If the government errs on the side of too-easy targets, the taxpayer will end up subsidising private profit.
At best, social bonds are deliberately designed to disrupt service provision. More likely, they will radically shift provision away from meeting consumers’ needs, in favour of services that fit easily into a contract. Private investment is about private profit, and even socially-motivated investors can’t get away from that.