Lessons learned in the Netherlands:

1. Lessons learned in the Netherlands: Measures, challenges and impact of market development in the Vocational Rehabilitation sector in the Netherlands

2. Aim of the meeting To explore opportunities for defining a policy on market development in the Rehabilitation Sector in Estonia by sharing and exchanging experiences of market development in European Member states.

3. Overview of presentation • An economic reintegration market: the reason behind • Vocational rehabilitation: definition and target groups • Measures since the start of market development • Impact of measures on target groups, on the market and on government • Lessons learned

4. Starting an economic reintegration market: the reason behind • Almost two million persons out of the labour market • Up untill 2000, the number of persons out of the labour market is increasing • There should be a turn, the number should diminish • An economic market is expected to ‘solve’ this • By being more result oriented • By being more cost-effective • By being more efficient • The effectiveness and result oriented acting of vocational rehabiliation activities will increase when there is a market of question and answer

5. Activating one million persons • Activating services aimed to integrate or re-integrate a person into work • Two million persons with ‘a distance to the labour market’: • People with physical, sensory, psychological and psychiatric disabilities • People with low economic and social status • Unemployed people • People on social benefit • Ethnic minorities

6. Structure of reintegration market Services fortwomillion persons out of the labour market VocationalRehabilitationCompanies Government Activities: Intake, Diagnosis, Training / Education and Mediation and After Care

7. How does it work? Procedure year 1 and 2 • Reintegration companies apply for specific target groups • Target group and numbers per target group • Instruments to be used during four activities • Price per activity • Minimum number of placements • Planned period of activities • Expertise on target group and region • Selection of reintegration companies by public buyer • Public buyer sends clients to company • Companies can refuse clients if no fit and return to sender • Intake, development of plan, accepted by public buyer, start • Vocational rehabilitation activities last a maximum of 2 years

8. An economic reintegration market:Key questions • Are services delivered by those who offer the best? - Efficient and Cost-effective • Is there a match between persons and services? • Do those who need the services most, actually receive services?

9. Characteristics of a competitive market • A competitive market is there when a potential buyer can choose freely between different products or services • There is a balance via the price: the price is the mirror of the differences between products or services • Important is the balance in transparency in information: those who ask and those who offer have a complete and clear view in all aspects of the offered products or services

10. The Dutch vocational rehabiliation market: a quasi market • In a ‘real’ market those who ask are the users of the products or services • If the one who is asking is not the user, then we speak about a quasi market • In the Netherlands, it started in 2002 with a quasi market • Public agencies bought products and services of private reintegration companies

11. Why not a ‘real’ competitive market? • There is hardly any transparency of products and services for those who use them • Too many providers • Too different services • Difficult to make a balanced choice • To prevent selection and creaming of ‘the best’ • Because of the interaction between social security and rehabilitation services: • A smaller number of benefit users means a decrease of the collective social security costs

12. A quasi market in vocational rehabilitation: starting points • Stimulating re-integration • Competition between reintegration companies • Effective use of reintegration instruments • Balanced attention between target groups

13. Advantages of the quasi market in vocational rehabilitation • For the client: • A better efficiency • A better client satisfaction • A larger proportion of choices • For the government: • Competition leads to incentives to be cost-efficient • Less costs and cheaper products and services • Also, quasi markets increase the allocated efficiency: scarce sources can be found where there is a need from the client • And competition increases innovation because of differentiation

14. Disadvantage of a quasi market • The one who is buying the rehabilitation products and services is not the one who is using them • No real insight in quality • The user has a decreased commitment • Decrease in efficiency and effectiveness

15. Who is ‘the market’? • Who is buying? • Social Security Services • Municipalities • Who is ‘selling’? Who are the suppliers of services andproducts? • Private (vocational)rehabilitation companies • More then 650 in 2003

16. The Dutch vocationalrehabilitation market: A buyers market • There is one ‘buyer’ and many companies who sell services • Not much differentiation in products and services • But also no homogeneity in products and services • The buyer does not base his choice on only the price • Monopolistic competition • The power is at the buyer • Huge competition between providers

17. The first year: results • 32% of the clients found a job for at least six months • Half of them expected to find a job on their own account • A small increase compared to before the open market • Much more money compared to before: 50% more

18. 2002 – 2003 The answer of the buyer • Year 1 Paid on the base of used products • Year 2 Partly paid on the base of result • No cure, less pay • The more easy, less money

19. Critique from reintegration companies • No clear selection criteria • Good writing skills and good relationships work! • Only the process is important, not the content • Definitions change all the time and without notifying • Long bureaucratic procedures • No guarantee on the actual number of clients • No possibilities for expertise, innovations and quality • No chances for newcomers to enter • Tailor made activities not possible

20. The answer of the companies:A benchmark • Private reintegration companies develop personal benchmark in order to guarantee quality • Price • Period of activities and placement • Placement results • ……

21. Critique from buyer • No insight in quality, only in processes • High costs, low results • Creaming

22. 2004 • Companies are paid by results • No cure, no pay for the ‘easy’ • No cure, less pay for the ‘difficult’ • Only paid after a contract of 6 months • Bonus for number of placements, bonus for speed • Advance paying for companies • No extra money for education • No results, no new clients

23. 2005 A partly real market • Individual Reintegration Budget • Social participation • Training and education • Job finding • real freedom of choice of the user • Results • Huge increase in contracts: from 50 to 800 • 25% increase in placements • Higher satisfaction and higher motivation of clients

24. 2006 • 1800 private companies carrying out the ‘IRB’ • A healthy competitive market • Still long bureaucratic procedures to get a contract • Difficult for the buyer to distinguish on quality • The price of the product is leading • Low price leads to less results • The buyer creates benchmark, including quality aspects • The buyer knows the quality of the large companies • and has no idea of the quality of the small companies

25. 2006 Results • PRB - Goodresults - Efficient - Cost - effective • Bulk Contracts - Low results - Notefficient - High costs

26. 2006 The answer of the buyer • Additional criteria: • Recognised network • Attention for demands of employers And • Increased attention for dual learning activities • Education is financed apart from reintegration costs • Increased possibilities for tailor made services • Yearly audits • Investments are introduced • Special protocols for difficult target groups • Price differentiation

27. 2006 - 2008 • A more professional market • A competitive market • Quality of private reintegration companies difficult to judge • Still many mismatches • Increased activity of the buyer • Reintegration coaches are hired to do the work • Incentive for private reintegration companies • the better the results, the more clients

28. 2009 - 2011 • 2000 private reintegration companies • Decreased activities at private market • Increased activities of public body (= buyer) • Private reintegration companies: • The market is not attractive • too competitive, too much bureaucratic procedures • Consider to leave the market

29. Ten years of private market Lookingback…..

30. Results of a competitive market There is not enough information available to decide whether the introduction of a competitive market had a positive influence on reintegration What do we know: • Since ‘the market’ more people were offered products • Much more transparency compared to public activities • It seems to have no effect in terms of placement • ‘Difficult’ groups drop out of the system

31. What did we learn • The effectiveness of reintegration services is strongly dependent on match between instruments and target group • The word is: Professionalization • Invest in adequate management tools • Include the employers’ demand • Define adequate quality criteria for private companies • Invest in IRB’s • Invest in good evaluation and monitoring