The Swedish nurse

Commentary, Healthcare & Welfare, Peter Holle

With nurses’ unions squaring off against their government employers across the country, it might be worthwhile to consider how Sweden’s nurses’ union benefited from an injection of competitive choices into its publicly funded health care model.

Weak leadership, low pay and the lack of possibilities for advancement also held back nursing and health care professionals. Dramatic organizational changes were needed to satisfy and motivate employees, especially young people who sympathized with the ethos of public health care, but found the working conditions unattractive.

In Sweden, private health care entrepreneurs generally tend to treat their employees better. Many nurses, having lost their illusions about public employment, started their own enterprises. They benefited from public-private competition. Since private companies began competing with public units, wages in the health care sector overall have risen at three times the earlier rate. Today, very few people — most notably trade unionists — believe public-sector monopolies pay higher salaries.

The National Union of Nurses, with 120,000 members, actively supports nurses who want to leave public employment and emulate the success of their colleagues who started new careers as contractors in the early 1990s. The union runs a special company to promote new ideas and activities in this field.

Eva Fernvall, the chairwoman of the union, has become an articulate advocate of radical change. “Let the market take over health care!” one headline has quoted her as saying. She makes the case for more patient focus, flatter organizational structures, stronger incentives for workers and increased numbers of producers and employers.

And Ms. Fernvall is supported in her stand by most other health care unions. “Health care pluralism” is today the official standpoint of the nurses’ union.

Looked at from the aspect of nurses’ salaries, the Fernvall arguments are based on solid ground. Between 1995 and 1999, publicly employed nurses increased their salaries by 26%, second only to civil engineers. This gain is three times greater than what was won during the previous period, when private alternatives were still weak.

The trigger turned out to be rewarding individual performance. Employers now have the freedom to compensate initiative and responsibility. This development becomes possible only when increasing numbers of employers compete for nurses and other staff.

During the old greater council monopoly, very little happened. It turned out to be impossible to raise salaries through central negotiations. How you performed was of no significance. A wider salary range for differing skill levels is the key. Today, Ms. Fernvall maintains, the 20% spread between the highest and lowest nurses’ pay is still far too narrow. It must, she argues, grow to at least 50% to promote individual competence.

It’s clear that competition from the independent contractors has simultaneously bid up nurses’ wages across the system and raised the quality of care. This explains the attraction markets exert on Sweden’s health care unions — even though they are opposed by virtually every union in the field in most Western countries.