Despite Elections: Health Reforms Continue

Commentary, Healthcare & Welfare, Johan Hjertqvist

The outcome of the September 15 Swedish elections – the Social Democrats, a Centre-Left coalition, retained power nationally and recaptured some important regional councils, including Stockholm’s – has been labelled here and in Canada as ”a breakdown for market ideas” in health care. ”The Stockholmers said ’No’ to systems change”, is a common remark. Nothing could be further from the truth.

It is understandable that the anti-reform Left in Canada might misread the tea leaves. During the campaign, the incumbent Minister of Health, Lars Engqvist, proposed a ”grand trans-Atlantic coalition” between his party and Jean Chrétien’s Canadian Liberals against ”privatization” and ”neo-liberalism” in health care. This was a nice bit of electioneering rhetoric. But health care in Sweden operates in quite a different fashion than ten years ago. Decentralization, economic incentives and consumer influence have changed the landscape – for good. There will be no roll-back, and the elections will not solve the problems that remain in Swedish health care.

In the late 80´s, the management of Swedish health policy was dominated by political influence, with a strong perspective towards production and a weak focus on the patient. Public providers were compensated not by fee for service but by global budgets, which revealed little of what was really delivered or of its real costs. It was self-evident that the local Council authorities were the sole employer and provider. A private entrepreneur willing to work within the system was labelled ”unsolidaristic” or a ”profiteer”. You could choose any colour as long as the car was black.

Today the situation is quite different. Large parts of Sweden have shifted to systems which rely on patient power, provider pluralism and market incentives. Half of the 20 Councils and many of the close to 300 municipalities built organizations that split the purchaser from the provider and offered freedom of action to professional managers in hospitals and other facilities.

As many providers are now compensated according to what they deliver, the stress has moved to attracting and serving consumers. Most evident in Stockholm and more populated areas, this pattern is accepted by all trade unions and political parties, except the Left Party. The Social Democrats have moved to the political centre. They have become accustomed to competition in the public procurement of services and to the practice of contracts to for-profit providers in health care.

In fact, during the election campaign Prime Minister Göran Persson promised a national framework of guarantees, of the kind suggested in Canada’s recent Kirby report. Swedes will have the right to take public funding from their local Council to another part of the country to obtain treatment unavailable at home, whether because of long waiting lists or a lack of specialists. The same kind of guarantee implemented in Stockholm in the 90´s – a maximum of three months’ waiting time – will become the national standard in 2004, promises the Minister of Health.

Nationally, about 10 percent of health-care services rely on private providers operating on public contracts funded by taxes. In the Stockholm region, 25 percent of all health care and 55 percent of primary care are delivered by contractors. The national government welcomes for-profit players in elderly and primary care but wants to stop their use in acute and emergency care because it fears opening that market to private insurance companies. Worried about a middle-class opt-out, the Social Democrats turn down every alternative to tax funding. But they do not intend to roll back existing reforms, just prevent further marketization.

They can’t argue with success. Britain’s Tony Blair has been looking to Stockholm for inspiration in reforming his country’s National Health Service. He plans to import elements like hospital fees for service, independent hospitals, treatment guarantees and the use of the Internet to inform health consumers. Both Denmark and Norway are also bringing home ideas from Stockholm to launch health-care reform proposals.

The private providers are here to stay, offering freedom of choice not only to consumers but co-workers as well. Trade unions in health care strongly defend the changes, which offer nurses and other providers the opportunity to make more money by working harder and better. A mix of collective and individual bargaining is in force. Central wage policies, a reality less than ten years ago, are now a distant memory.

It is hard to exaggerate the public response to market reforms in health care. Well–educated, middle-class Swedes no longer accept the low standards they used to tolerate in health care. The impact of reduced waiting lists and increased consumer influence has been too strong to allow a return to what reactionaries describe as ”more solidaristic” care. In the next few years, despite the electoral turn, there will be no dramatic changes. The new regional councils will just slow down the tempo of reform.

In the Stockholm Council, a reformed procurement process for acute and emergency care, the next step planned by the previous Centre-Right majority, will not be implemented. But existing private contracts in primary care will be honoured and likely continue to expand, but at a slower pace. The enterprised hospitals will likely remain independent.

The Social Democrats will have their hands too full to worry about cancelling past reforms. They want a permanent national ban on mixing private and public funds in health care, excluding the option of private insurance, and a prohibition on further sales of acute and emergency hospitals to for-profit operators. But other problems, like rising pharmaceutical costs and systematic lack of co-operation and best practices among the players in health care, are more likely to occupy their time


The outcome of the elections has not cancelled the growing tide of consumer pressure in Swedish health care. The need for reform remains, but its course will merely be slowed, not stopped or reversed.