Wednesday, June 20, 2001
The Chronicle Herald

Health care system needs Swedish massage

By Brian Lee Crowley

AS IN SO MANY other fields of social service delivery, Sweden is a leader in reforming the health care system. And what they have done is especially relevant to us in Nova Scotia as we wrestle with the problem of low pay in the public system, and the parlous state of public finances.

Sweden used to have a system very like Canada’s: a virtual public sector health care monopoly, totally financed out of tax dollars. Monopolies being what they are, the service was indifferent, waiting lists were long, the management poor, employee motivation and pay were both low, and recruitment difficulties were widespread.

Sound familiar?

One of the key reforms has been to begin to break up the public monopoly. In Sweden, health care is the responsibility of local governments. This has created scope for experimenting with different service delivery models. In Stockholm, the capital, hospitals are being sold, and private operators have been encouraged to go into competition with the old public monopoly providers in a host of fields, including lab testing, nursing services, surgery and more. Health care consumers can go online and see at a glance where the waiting lists are the shortest for the medical service they need. The public sector still pays the bill, but taxpayers are getting much better value for each dollar spent through the discipline of competition. No longer must the sick accept whatever quality of service they are given because they have a choice of where to go, and the competitive providers of health care services do well by doing good. When their patients are happy, they make a better living.

Perhaps the most striking of the changes, given our present labour troubles in the health care system, is that in Sweden, private health care entrepreneurs generally tend to treat their employees better. Many nurses have abandoned the public sector and started their own nursing enterprises. They have benefited 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 – including few Swedish trade unionists – believe that public 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 have started careers as contractors. A union-run company promotes new ideas and activities in this field.

The chairwoman of the union, Eva Fernvall, has become an articulate advocate of radical change. Newspaper headlines repeat her call to “Let the market take over health care!” She makes the case for more patient focus, flatter organizational structures, stronger incentives for workers and increased numbers of producers and employers.

Fernvall’s argument on behalf of her members has certainly been vindicated if you look at nurses’ pay. Contrary to the claims of many public sector unions elsewhere, bringing in private sector operators and managers didn’t mean profit at the expense of workers, nor did it mean the hollowing out of the public sector in favour of the private. Between 1995 and 1999, publicly employed nurses’ pay went up 26 per cent. This performance was three times better than in the previous round of negotiations, when private alternatives were still weak. What explains the better pay? Employers now have the freedom to reward initiative and responsibility, and they use it. This development becomes possible only when increasing numbers of employers compete for nurses and other staff.

Canadian health care workers, take note: According to Fernvall, 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, she maintains, the 20 per cent spread between the highest and lowest nurses’ pay is still far too narrow. It must, she writes, grow to at least 50 per cent 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.

In 1999, Fernvall and the heads of the National Union of Doctors, four other health-care unions, a large private health care company and the Union of Swedish Industry wrote an opinion piece for Sweden’s largest newspaper. They wrote, “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.”

“Health care pluralism” is today the official standpoint of the nurses’ union, a stand supported by most other health care unions.

Forget “U.S.-style” health care. Sweden is blazing the trail for health care reform with a human face for patients and health care workers.

Brian Lee Crowley is president of the Atlantic Institute for Market Studies, a public policy think tank in Halifax. E-mail: BrianLeeCrowley@aims.ca