For-Profit and Nonprofit Dynamics and Providers' Failures

Despite the assumption that privatization promotes nonprofits' commercialization in the area of human services, it was identified that, under the Long-Term Care Insurance (LTCI) system in Japan, either the difference between for-profit and nonprofit providers remained or for-profit providers behaved like nonprofits. This study followed the LTCI providers for two years and demonstrated that the pre-existing for-profit and nonprofit dynamics do not influence the subsequent providers' failure patterns. It appeared that LTCI's highly regulated environment mitigated selection pressure, and it led to different provider failure patterns from what was predicted based on the ecological evolutionary perspective of organizational theories.