Organization of public/private health care in Sweden

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1 Organization of public/private health care in Sweden Erik Svanfeldt Health and Social Care Division Swedish Association of Local Authorities and Regions 21 September 2015

2 Regional and local authorities different responsibilities Municipalities and county councils/regions are responsible for much of the public services 290 municipalities: - social care - social assistance 20 county councils/regions: - health and medical care - dental care (free dental treatment for children and young people aged 3 to 19) 2 2

3 Local self-government The health and social care systems are mainly tax-financed and decentralised and covers all residents dental care for adults (aged 20 and over) is mainly financed by the patient Strong local self-government Right to levy taxes on incomes and charge users for their services Each municipality/county council/region decides on - its own income tax rate (~70 % of the budget) - user and patient fees (national high cost protection/maximum fees) - mechanisms for paying providers The share of private providers of welfare services varies significantly between different municipalities and county councils

4 Structural changes in Swedish health care In the last years we have seen: reduction of full scale emergency hospitals and hospital beds increase of health care centres development from inpatient care to outpatient care and from hospital care to home care increased differentiation and specialization growing proportion of elderly people but many are active and healthy increased opportunities for patients to choose provider increase of private providers

5 Increase of private providers The private production of welfare services has increased since the 1980s Today about 15 percent of the tax-financed welfare services are provided by private providers In several cases, national reforms have been preceded by local initiatives Large differences between different municipalities and county councils/regions The approach to private production of welfare services is a right-left issue in Swedish politics

6 Political initiatives In 2006, Sweden got a new Government that wanted to stimulate new private enterprises and entrepreneurs working within the Swedish taxfinanced health and social care system: Repeal of the stop law allowing healthcare provided for profit (2007) Act on free choice systems (2009): - the user/patient chooses provider - requires competitive neutrality - the compensation follows the user s/patient s choice Abolition of the State monopoly on the sale of pharmaceuticals (2009) New legislation on patient s choice in primary care (2010) - all patients have the right to choose a private or public primary care centre - all providers which meet the requirements are free to establish and receive public funding

7 LOU and LOV (1) Different models for local and regional authorities to choose between: - contract model based on the Public Procurement Act (Lagen om offentlig upphandling, LOU ) - free choice model based on the Act on free choice systems (Lagen om valfrihetssystem, LOV ) The purpose of LOU (first introduced in 1994) was to encourage innovation, efficiency and cost reduction The economically most advantageous bid (one or more) is accepted LOU has been used in e.g. primary care, psychiatry, surgery, entire hospitals and nursing homes

8 LOU and LOV (2) The Act on free choice systems ( LOV ) is an optional tool for local and regional authorities that want to introduce a free choice system in health care or in social services such as elderly care and care of the disabled NB. Free choice is compulsory in primary care Municipalities and county councils/regions set the requirements LOV is used for e.g. home-help, home care, nursing homes, day care for elderly and disabled, family counselling Political, economic and geographic factors influence the growth of private alternatives: - Private providers are rare in small municipalities - Economic factors, in particular remuneration levels, important when companies choose where to establish

9 More private providers of health and social care 53 percent of the municipalities had introduced LOV in April 2015 (especially in home-help services) including those municipalities that have taken the decision to introduce LOV the figure is 61 percent An increasing part of the special housing for elderly people is provided by private providers almost 21 percent in percent of all home-help services are provided by private providers Primary care provided by private providers now represents 35 percent of the total costs for primary care 7 percent of the somatic care and 9 percent of the psychiatric care are provided by private providers (share of costs) Private providers provide 17 percent of the dental care that the county councils are responsible for (share of costs) 60 percent of dental care for adults is provided by private providers

10 Share of private primary care centres in Swedish county councils (2010) 100% 90% 80% 70% 60% 50% Public Private 40% 30% 20% 10% 0%

11 Challenges Municipalities and county councils/regions combine several roles funder, purchaser and one of several providers Designing useful information to users/patients Designing quality assurance systems

12 New Swedish Government 2014 Government inquiry on - limiting the rights of the owners to withdraw profits from private forprofit companies providing welfare services - abolishing the compulsory free choice systems in primary care - requiring companies acting in the tax-financed welfare sector to openly declare their accounts at unit level Prevent sale or privatization of university or regional hospitals