More Swedish Healthcare Reform

Commentary, Healthcare & Welfare, Frontier Centre

It is fair to say that Swedish Health Care is undergoing several, interrelated processes of change at the moment, and this includes a revision of the traditional public-private line of demarcation. However, to talk about “revolution” is a bit too strong. On the whole, the public responsibility for health care is retained, and investigations show that this is also very highly valued by the Swedes. Some of these changes are clearly connected to a more relaxed view of Swedish Social Democracy on these matters but others are linked to specific social and political forces.

Traditionally, Swedish Social Democracy has been very restrictive about private provision of health care, but during the 1990s, mainly under pressure to improve public sector efficiency, the issue has become less controversial. Health care continues to be financed predominantly by tax money (also most “private” health care is publicly financed), and the principle of equal access, independent of personal economic resources, is held very high. The idea is that as long as equal access is guaranteed through comprehensive public financing, services may be provided also by others than public authorities. Private alternatives include not only private companies on the market, but also cooperatives and other arrangements which involve those who work in a clinic or a health centre.

The extent to which health care is provided by private entrepreneurs varies among different parts of the country. The privatizations in Stockholm, which are mentioned in the article, is pursued by a Conservative (Moderate Party) governed County council, which is very strongly committed to privatization. In other parts of the country changes are more marginal. In my northern county of Västerbotten (ruled by Social Democrats), there is a general problem of attracting doctors to the rural communities. In an attempt to counteract that, a regional health centre was opened to bidding by private contractors, but this did not attract any interest. Privatization seems to be mainly a big city movement.

It needs to be added that the Social Democrats have emphasized that there is an outer limit for its acceptance of privatization. The financing of health services should remain public, through taxes. Also, the government has emphasized that it will not accept that any further hospitals are sold. The argument is that this would open up for a dual system of health care: One for those who can pay (through private insurances) and another for the rest of the people. This would challenge basic principles of a general welfare commitment, which is central to the Swedish welfare model.

It is correct that the chairperson of the nurses’ union, Eva Fernvall, was one of the signers of an article proposing more private provision of health care in Sweden. However, this resulted in an intensive debate among her own members. Therefore, it is not fair to claim that she was supported by 120 000 members. Private provision of health care can be a way for nurses to improve their wages, in particular if they are specialized and highly demanded, but it must be kept in mind that the amount of resources available for the health care sector is not increasing very much. Hence, this is more or less a zero-sum-game, with some gaining and others losing out. In practice, some of Eva Fernvall’s members might get large increases, but others will receive even lower wages in a more competitive system. As a general strategy for wage increases, it is dubious, unless the system of financing health care in Sweden is changing (with possibilities to “top up” public financing with private insurances). However, there are very few signs that this could be on its way.

When it comes to assessing the gains of contracting out services it should be kept in mind that the health services provided by the public sector have also undergone dramatic improvements in efficiency during the 1990s. The initial considerable economic gains from utilizing private entrepreneurs are by now much reduced. There are also non-economic gains. It is clamed by doctors and nurses who change from public to private employment that their autonomy becomes greater and that they have more roomfor contacts with patients (i.e. less administrative tasks). In addition, also Social Democrats agree that some private provision for health units within the public sector is useful, since their example may stimulate change and development.

To summarize: Yes, the previously public monopolies in term of provision of health care (and also of primary and secondary education, care for the elderly and kindergartens) is broken up, and private alternatives are being developed. This offers an extended range of alternatives, in particular in the urban areas. However, the key elements of the Scandinavian welfare model are being retained: Equal access, independently of economic means; tax financing of the services and democratic control through elected bodies at local and regional levels.