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Electronic Vouchers and the Structural Change in Social Service Market: Focusing on the Case of Post-partum Care Providers

Author Hyun-Seung Cho, Dae-Young Koh, Moon-Soo Park Date 2013.03.26 Issue No 554
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○  The introduction of electronic vouchers for social services in 2007 has significantly enhanced the range of social service providers from which individuals may choose, while increasing the competition among the social service providers.

 

The number of electronic vouchers for social services is continuously on the rise.

 

- The total amount of transactions over the post-partum care services increased from KRW 32 billion in 2008 to KRW 37 billion in 2011.

 

○ While the post-partum care market tends to be concentrated on a few providers, the market is rapidly expanding and level of competition is concomitantly rising.

 

- An analysis of the market concentration reveals that the monopoly rate has decreased from 77.2 percent in 2008 to 54.6 percent in 2011.

 

- An analysis on the Herfindahl-Hirschman indices also shows that the level of competition is relatively increasing, while the level of concentration is relatively decreasing.

 

The number of cases in which consumers switch service providers, an alternative variable to the variable of consumer choice, is also sharply rising.

 

- The ratio of consumers switching service providers to overall consumers increased from 0.12 percent in 2008 to 7.13 percent in 2011.

 

○ These figures indicate that the electronic voucher system has achieved its stated objective of fostering competition in the social service market by enhancing consumers’ freedom of choice.

 

-  In order to protect consumers’ rights and interests, it is required of continuous monitoring and supervision of obstacles that prevents fair competition.