Unmasking Complex Companies in the Spanish residential care sector: The imperative of increased accountability

• In Event: Accountability and Contestation in Social Work

Abstract

The European Union is experiencing a significant demographic shift with the proportion of individuals aged 65 and over projected to increase from 20% in 2020 to 30% in 2070. This aging population has led to a growing demand for geriatric care services, including residential care homes. These care homes combine a social mission with economic sustainability, a concept known as the double bottom line (DBL) in previous literature (Defourny & Nyssens, 2017; Gupta et al., 2020; Van der Auwera et al., 2023). Companies in this sector adopt different structures, being from Third Sector organizations to public companies (Bode, 2017). However, the European Commission (2021) identifies how the proportion of private for-profit providers is generally increasing and exceeds 50% in some European countries. Among these entities, the named Big13 group is especially highlighted as it covers a broad proportion of beds in the Spanish sector. Therefore, this study aims to analyze whether the concentration phenomenon that has taken place in Spain has influenced the economic and social outcomes in this sector.

To do so, we accessed a sample of 1,978 residential care homes in the Spanish sector during 2014-2020. Using a regression analysis, we evidence that the Big13 group's ownership and funding structures impact their performance and outcomes. Certain care homes managed by the Big13 are characterized by the presence of complex ownership structures and the use of public funding. They prioritize economic return over the organization's social objective, compromising the provision of quality services to the elderly. However, it is important to note that this is not a general characteristic of the entire residential care sector, but rather a consequence of specific configuration in some care homes in Spain.

This study contributes to the academic literature by unraveling the unique characteristics of the Spanish residential care sector, distinct from other Mediterranean models. It demonstrates the economic and social effects of the concentration phenomenon within publicly funded large corporate chains and highlights the coexistence of the social enterprise model of the Third Sector with entities whose behavior does not align with their social mission. Practitioners can benefit from this research by gaining insights into the need for enhanced regulation, oversight, and accountability. Employees and users should be aware of the impact of concentration within large business groups on service quality, while regulators and authorities should work toward clearer definitions and evaluations of social enterprises. Stricter inspections and accountability measures can ensure transparency and prevent the misallocation of public funds.

References

Bode, I. (2017). Governance and performance in a “marketized” nonprofit sector: The case of German care homes. Administration & Society, 49(2), 232-256.
Defourny, J., & Nyssens, M. (2017). Fundamentals for an international typology of social enterprise models. Voluntas, 28, 2469-2497. https://doi.org/10.1007/s11266-017-9884-7
European Commission (2021). The 2021 Ageing Report. Underlying Assumptions and Projection Methodologies.
Gupta, P., Chauhan, S., Paul, J., & Jaiswal, M. P. (2020). Social entrepreneurship research: A review and future research agenda. Journal of Business Research, 113, 209-229. https://doi.org/10.1177/1534484320936812
Van der Auwera, E., D’Espallier, B., & Mersland, R. (2023). Achieving Double Bottom-Line Performance in Hybrid Organisations: A Machine-Learning Approach. Journal of Business Ethics, 1-23. https://doi.org/10.1007/s10551-023-05410-3

Authors

• Ana Verónica Cadima Bustos, Public University of Navarra

• Fermín Lizarraga, Public University of Navarra

• Francisco López-Arceiz, Public University of Navarra

• Santiago Sanchez, Public University of Navarra