Among others, I think the folks at the Canadian Centre for Policy Alternatives have been producing stuff on this, but I didn't find a specific title in my quick search at http://www.policyalternatives.ca/bc/index.html. The BC government has set up an agency to promote public-private partnerships in health delivery, e.g. they plan to open a new PPP hospital in Abbotsford, even though the accounting study commissioned projects "savings" of less than 3% (and this does not include lots of costs, e.g., for government planning).
Bill At 07:44 PM 13/06/2002 -0500, you wrote: >According to this guy privatisation increases efficiency in Swedish health >care. I have been looking for a critique of these reforms but can't find >any. Does anyone have URLs pointing to such a critique? I do know that the >re-introduction of copays has increased usage of the system byt he better >off compared to the less well off. Before copays there was little difference > It is interesting that at least some unions support the changes. Also, >the principle of universal coverage is not being challenged. What is >happening is that more and more the system is opening up as an outlet for >private capital and for profit health care and justified in terms of choice >and efficiency. The state is able to serve private capital without >challenging the principle of universal coverage. > > > >Cheers, Ken Hanly > >SWEDISH HEALTH-CARE REFORM: >FROM PUBLIC MONOPOLIES TO MARKET SERVICES >by Johan Hjertqvist* > >For 500 years Sweden has been a uniform and centralized country. Today it is >on the road to pluralism and stronger regional governments. Often the leader >of new trends in Europe, Swedes are making it clear to their politicians >that they want public policies which cater better to individual needs and >preferences. >You can notice this change in the labour markets. Collective bargaining is >in retreat, and Manpower, a temporary-help agency, is now the second-largest >employer in Stockholm. In the education industry, privately operated schools >are doubling their market share every year (though from a low base), and >competitors who offer e-learning solutions for workplace education are >booming. Signs of change are also apparent in the health-care industry: >privatized hospitals, clinics and medical practices of all kinds; increasing >numbers of private insurance companies; Internet-based patient information >and a profusion of well documented opinions in favour of free choice, >competition and diversity. > >Underlying this change of opinion is the success of public policy >experiments that have embraced the principles of competition and choice. In >1992-94, the Greater Council of Stockholm launched a number of competitive >initiatives whose success is now apparent. Competition in public >transportation in the metropolitan area has reduced taxpayer costs by 600 >million SEK, or roughly 25 percent. In one blow, with competitive >contracting, the Greater Council reduced the yearly cost of ambulance >service in the Stockholm region by 15 percent. In all areas service quality >has increased noticeably. > >The results in health care have been just as startling. For example, >privatized nursing homes have reduced costs by 20-30 percent. Or again, a >recent evaluation has shown that private medical specialists are more >efficient than their colleagues in public service. They focus on >"with-patient time", which results in more patient value. Publicly employed >doctors, in contrast, have more staff, spend more of their time on paperwork >and ask for 10-15 percent higher budgets to provide the same treatment >levels. > >By 1994, when the centre-right regional coalition lost the election, 100 >small and medium-size health-care contractors had been established, all of >which had previously worked within the public system. All except one remain >active. The change in government slowed, but did not stop, the process. In >1998, the centre-right grouping returned to power, and they picked up new >steam. They have wide public support in the urban areas, including that of >the largest health-care unions, and plan to turn most of primary care into >contracted services, an irreversible major step. > >Right now, about another 100 health-care units are in the process of leaving >public ownership to become private companies. The Greater Council lends >significant support in the form of free training and start-up consultants. >In general, the new contractors run local health-care stations, GP group >practices, treatment centers for mothers and infants, laboratories and >psychiatric out-of-hospital clinics. When (and if) the Council completes >this transformation, private GPs and other contractors will deliver around >40 percent of all health-care services, and about 80 percent of all primary >health-care in the metropolitan area. > >In 1999, a private company, Capio Ltd., bought one of Stockholm's largest >hospitals, the St. George, from the Greater Council. Since the early 1990s, >Capio has run a hospital in Gothenburg as well as X-ray clinics, laboratory >services and other "infrastructure". The St. George operates at a cost level >10-15 percent below its most efficient public counterpart in Stockholm, the >South Hospital. Compared with the average of public hospitals, the margin is >15-20 percent. According to Greater Council evaluations, the St. George is >well known for implementing new, efficient organizational structures and >treatments. > >This success portends similar changes for the remaining six emergency >hospitals in the Stockholm region. Two have already been turned into >commercially viable, and thus saleable, corporations; two others are slated >to follow next year. The remaining three are candidates for marketization. >In other words, while the sale of all of Stockholm's hospitals seems >imminent, the strategy is to give the public hospitals a chance to prove >their efficiency before any new moves are made. > >REFORM OR EVOLUTION? > >Swedes still have strong egalitarian convictions. In particular, they >believe that good health care should be available to everyone, that incomes >must not decide the level or quality of treatment and that basic care should >be financed by public authorities. Indeed, good health care is considered >intrinsic to democracy. In Sweden, as in Canada, the deficiencies of the >American health-care system are frequently used to divert and confuse the >debate over reform. More and more, Swedes are looking for a more flexible >welfare state, but not the end of the welfare society. > >Nevertheless, the Swedish system will continue to see reform. Or, more >correctly, changes. The word "reform" might suggest a well planned >transition, decreed by Parliament and managed by the civil service. But as >national politics drift away from traditional welfare-state thinking, >regional and local parliaments will gain more power, opening up a broader >pattern of experimentation. Mounting demand for services will be met >increasingly by insurance companies and private care-providers, particularly >in local markets in the major cities and more populated areas. Rather than a >top-down, nationwide series of reforms, we are witnessing an evolution, a >"bubbling up" of localized solutions, a decentralized and spontaneous >"marketization" of the sector. > >THE DEMOGRAPHIC TIME BOMB > >What are the forces driving this evolution? Sweden leads the general >European trend towards aging populations. In the year 2020, four out of ten >Swedes will be over the age of 65. That means not only that demand for >health services and geriatric care will increase, but also that the >productive workforce and the tax base will shrink correspondingly. Rising >individual demand for greater choice, higher quality, more information and >second opinions will compound the challenge. This will push costs even >higher. > >These trends are manifesting themselves in almost every developed country. >In other European countries - as is already the case in the United States - >people are putting such a high priority on being well and maintaining the >quality of their lives that they are becoming more willing to use their own >money for health care and services for seniors. They no longer trust >politicians to use tax money to satisfy their needs; they are sophisticated >enough to want to be in control themselves. > >In post-war Sweden, tax increases made the welfare state work. Over the >longer term this trend proved unsustainable. To meet European Union >requirements and global competition during the coming years, Sweden has had >no choice but to reduce its high tax levels. > >LIKELY TO SURVIVE? > >Sweden's present health-care structure cannot meet the challenge of being >part of a lower-tax environment. Health-care consumers want a customer >focus, no waiting lists and highly motivated service providers. This type of >service is best delivered by small, independently operated enterprises, >particularly employee-owned firms. > >Competition between these entrepreneurs, and between them and government >health-care units, will expose bad operating practices and neglected >opportunities. Allowing entrepreneurs to compete for public contracts will >create an environment conducive to improved problem solving, new approaches >and budget discipline. There is considerable experiential evidence that >competitive organizations tend to concentrate on customer satisfaction and >productivity. This entrepreneurial difference will give them an edge in >solving problems (like waiting lists) over public units, which operate in an >environment in which there is only a vague focus on outputs. > >Many health-care procedures in Sweden involve the participation of the >country's overlapping bureaucracies. Responsibility for social welfare >services is spread among several regional and local authorities, which often >co-operate badly. However, people no longer accept being pushed back and >forth or enduring delays in treatment caused by administrative inertia. >Service entrepreneurs have the tools to solve these severe problems. > >A TORPEDO > >The Swedish health-care sector is suffering increasingly severe recruitment >difficulties, due to both low birth rates and a poor image as a place to >work. The system is harmed by weak leadership, low pay and the lack of >possibilities for advancement. Dramatic organizational changes are needed to >satisfy and motivate employees, especially young people who sympathize with >the ethos of public health care but find the working conditions >unattractive. > >In Sweden, private health-care entrepreneurs generally tend to treat their >employees better. Many nurses have lost their illusions about public >employment and have started their own enterprises. They have benefitted from >public-private competition. Since private companies began competing with >public units, wages in the health-care sector have risen at three times the >earlier rate. Today, very few people - most notably including trade >unionists - believe that public monopolies pay higher salaries. Like a >torpedo launched out of the blue, competition has blown a hole in the hull >of the old system. > >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 90s. The >union runs a special company to promote new ideas and activities in this >field. > >The chairwoman of the Union, Eva Fernvall, has become an articulate advocate >of radical change. "Let the market take over health care!" a 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. On November 25th, 1997 Dagens Nyheter, >Sweden's largest daily, published a discussion of ideas that Fernvall had >co-authored with other opinion leaders-including the chairmen or CEOs of the >National Union of Doctors, four other health-care unions, a large private >health-care company and the Union of Swedish Industry. She wrote the >following points: > >"From different points of view we have come to the conclusion that a >completely different, more independent organization than the present one can >offer very large gains for Swedish welfare - a better function of health >care with the same or lower costs." >"Today, in many fields there are uncertain mechanisms for decision-making >within sometimes-conflicting hierarchies. The system suffers from petty >political interference. Operations therefore ought to be led by >professional, non-political management." >"Of course there would be enormous stimulus to those working within the >health care field to be valued for how they perform, where they themselves - >under independent conditions and professional responsibility - have at their >disposal methods to deliver good quality of health care." >"When it comes to organization, it cannot be very complicated for the >Greater Councils to get rid of most of the parts of the ownership of >hospitals and other health-care institutions. There are great numbers of new >owners ready to take over if price and condition are correct." >"Co-operation and confrontation between enlightened buyers and sellers can >be made a developing force in the system's details as well as its whole. In >today's society the old [health-care] model no longer works. Now there is a >need for flexibility, entrepreneurship and new channels to let loose the >complexity of demand and supply, held back for decades." >Since then, Fernvall has had occasion to repeat her message. "Health-care >pluralism" is today the official standpoint of the nurses' unions. She is >supported in her stand by most other health-care unions. > >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 percent, 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 the >individual competence factor: employers now have the freedom to reward >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, Fernvall >said in an interview earlier this year. How you performed was of no >significance. A wider salary range for differing skill levels is the key. > >Today, she maintains, the 20 percent spread between the highest and lowest >nurses' pay is still far too narrow. It must, she writes grow to at least 50 >percent 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. > >SWEDEN 2010 > >Sweden's future health-care system is developing fast. Many do not like the >new the new arrangements or the side effects of the emerging >welfare-services market, but a growing number of people will not be >satisfied with anything less. > >The trend is towards ongoing reform of the old system, rather than towards a >complete rebuilding from the ground up. There will be no "grand master plan" >imposed by Parliament. Instead, there will be a large number of small- or >medium-scale changes in shifting tempo dispersed around the country. I >suggest that the transition will run along the following lines in two >distinct regions: > >1. Urban Areas >Policies and solutions will become less homogeneous. In the bigger urban >areas, income, education and political trends will favor provider pluralism >and - incrementally - additional financing (private insurance). >Hospitals now owned by the regional authorities will turn into publicly >traded companies; this measure will increase productivity and budget >control. >Private providers will expand as successive sectors (e.g., nursing homes, >public dentistry) are forced to compete. >Public and private producers will build alliances. International companies >will enter the market and operate hospitals that were once publicly owned. > >2. Rural Areas >In more traditionalist parts of the country, generally those with sparser, >older and less well educated populations, you will not see much change. >The regional and local governments will hesitate to contract out services. >These areas will also attract fewer entrepreneurs (who, of course, prefer >environments where competition is welcomed). >Patients will still be willing to stand in line for treatment. >The aggressive consumer will have hardly any impact on the northern parts of >Sweden. >PATIENT VOUCHERS IN A DECENTRALIZED MARKETPLACE >Efficiency will rapidly become the single most important driving factor. Not >from a narrow budget perspective, but from a value-for-money and >quality-of-life viewpoint, "How can I best use my (tax) money to improve my >health and quality of life?" will become an increasingly common question >among young people as private pension funds and other savings grow at high >rates. > >The political system will lose much of its power (not without controversy, >of course). Fewer citizens, as sophisticated consumers, will trust elected >bodies to solve the problems of the individual through collective measures. >With better education and higher levels of "social competence", people will >feel comfortable creating their own solutions within the publicly financed >system. > >The ever more apparent potential for dramatic improvements will keep up the >pressure for change. The combination of pharmaceutical and technological >advancements is already opening new possibilities every day. It's doubtful >that the system will withstand the pressure for better, albeit more costly, >service by saying "no" to individual needs. When patients ask for the latest >treatment, the financial aspect will become crucial. > >In ten years' time, basic health care will still be financed by taxes, but >many services will be for sale in the out-of-pocket or private insurance >markets. Regional authorities will be responsible for most of the hospitals, >but private contractors will operate from within these facilities. > >In large parts of the country, primary health care will be privately owned >and operated but publicly paid for through "patient vouchers". In general, >networking will be the predominant approach; i.e., combinations of public >and private suppliers will be seen in many fields. > >Throughout Sweden, the focus will center on customer satisfaction in a >system that measures and guarantees quality outputs, including >evidence-based routines and best-practice treatments. Working conditions >within the care services will improve noticeably, thanks to stronger owners, >better management, expanding career opportunities and the efforts of manpowe >r companies. > >Care will no longer be looked upon as a basically political question, but as >a matter between well-informed consumers and their partners in the >healthcare field. > > >*Johan Hjertqvist has successively been entrepreneur, consultant, deputy >mayor of the city of Tyreso, author and research director on the reform of >social services in Sweden. He took part in the creation of a Nordic body >tasked with implementing modern health care in the Baltic States. He acts as >adviser to the Greater Stockholm Council on the health system and is >director of "Health in transition", a four-year pilot project whose >objective is to describe and analyze the operation of a competitive market >within the public system. In addition, he is currently writing a book about >how the combination of new consumer values and scientific progress will >change the meaning of health care. > > > > > > > > > > > > >----- Original Message ----- >From: "Michael Perelman" <[EMAIL PROTECTED]> >To: <[EMAIL PROTECTED]> >Sent: Thursday, June 13, 2002 5:23 PM >Subject: [PEN-L:26871] Re: Costly privatizing of firefighting > > > > Does anybody know of any examples where privatization has created any > > efficiencies other than attacking wages and working conditions? Does > > anyone know of any case where it has not increased overhead and > > administrative bloat? > > -- > > Michael Perelman > > Economics Department > > California State University > > Chico, CA 95929 > > > > Tel. 530-898-5321 > > E-Mail [EMAIL PROTECTED] > >
