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The Role of the Private Sector in the Swedish Healthcare System

Oct 16, 2019

Zayed Yasin, MD/MBA

YA Health Solutions LLC

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About Me

US Emergency Physician, formerlyAsst. Director of International Collaborations, Emergency Medicine InternationalInstructor, Harvard Medical SchoolAttending Physician, Brigham and Women’s Hospital

Worked in innovation, clinical care, and medical education in US, Sweden and Asia, involved in Swedish healthcare since 2009

VP Ventures, CPS Medical Group

CEO, YA Health Solutions

Avid hiker & traveler, father of 3 Swedish-American daughters

Physician Entrepreneur

Goals – to understand:

The role of private payers and providers in Sweden

Similarities and difference with US system

Perceived strengths and weaknesses of public vs private care in Sweden

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The US has many ways of paying for care, and many types of private actors

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Taxes

Medicare (old and disabled)

Medicaid (the poor)

Employers/ Individuals

Private insurance companies

Uninsured

Self-pay

Providers

Taxes

Regions / Municipalities

Public providers

Private providers

>95% of Swedish healthcare is paid by the government

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Private insurance (mostly corporate paid, elective care only)

Corporations/employers

21 Regions290 Municipalities

3-4 large private insurance companies

Private health insurance is a corporate benefit for 10% of the population, mostly organized around convenience

Private health insurance in Sweden is mostly offered by diversified insurance providers – who also do property insurance, life insurance, etc

Usually employer paid

Is a “supplemental” insurance, for elective care, to

• Avoid queues in the public system• Access more provider chouce

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Swedish healthcare providers are almost all government or corporate – very little

nonprofit

777 7

Federal gvt, 208Other, 120

Psychiatric, 620

State & local gvt, 972

For-profit,1322

Not-for-profit, 2968

Own government providers

81.30%

Bought from other regions 6.40%

Private providers 12.30%

Swedish regional health

delivery

US hospitals by ownership

Private healthcare delivery is split between large corporate and local entrepreneurial players

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Revenue ca: USD 600M*

Revenue ca: USD 900M*

* Across Nordics

Revenue ca: USD 1B

Account for < 50% of private care in Sweden

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Private specialty care and home is usually bought through public procurement processes

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Region issues a tender for specialty care where there is a shortage/long queues

Elective surgery, high demand outpatient specialties (e.g. cardiology), home nursing most common

There’s a lot of talk about quality, but in the end price usually dominates decisions

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Primary care reimbursement is most similar to the US – leading to high private provider participation

In 2008, a law of “free choice” allowed the right of free establishment for primary care clinics

Each region could develop own reimbursement guidelines, within limits – some mix of

• FFS• Risk-adjusted capitation

40% of primary is delivered privately

% of primary care centers which are private

StockholmVästmanland

HallandUppsala

Västra GötalandSkåne

Hela SverigeVästernorrland

GävleborgBlekinge

KronobergSörmanland

Gotland

JönköpingKalmar

VärmlandÖstergötland

Jämtland HärjedalenVästerbotten

DalarnaNorrbotten

Örebro

0 70

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Stockholm county council has established 34 patient choice systems, opening the way for more private

care

Allergy Pediatrics Maternity care

Podiatry Maternity clinic

Podiatry

Cataract Surgery

Gynecology Hand surgery

Dermatology Joint replacement

Neurophysiology

Child psychiatry

Speech Therapy Orthopedics Reception

Rehabilitation Spine surgery

Specialized palliative care & rehab

Physiotherapy

Ophthalmology ENT

Stockholm county council has established 34 patient choice systems, opening the way for more private

care

Capio St. Görans hospital has a unique public-private model

Since 1994, the only privately owned and operated acute care hospital in Sweden

Fully funded by Stockholm region – accessed the same as public hospitals

341 beds, 100K ED visits/year

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While the private sector takes a larger % of primary care, specialist care is a larger absolute market

PrivatePublic

Primary care

Private

Public

Specialty carePrimary

care

Specialty care

2017 Expense (B SEK)

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30

25

20

15

10

5

0

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In Sweden, single payers with regulatory authority can set prices

In the US, Medicare has a fee schedule for services, but everything else is negotiated “on the market”

Payer concentration and stronger regulation leads to lower prices in Sweden

5,412

14,316

40,000

1,926

5,789

6,316

- 10,000 20,000 30,000 40,000 50,000

1 yearRivaroxaban

CHF hospitaladmission

Hip replacementbundle

Cost in USD

Sweden US

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Sweden deregulated pharmacy ownership in 2009, leading to increased access and customer service

From 1971-2009 a state-owned monopoly was the only pharmacy retailer.

In 2009, a deregulation law pushed by the center-right government led to Apotketselling off ½ of its stores to private entities and allowing free competition.

In the following years, # of pharmacies increased by ca 15%, with expanded hours and ancilliary services, there are over 20 pharmacy owners in Sweden today.

Private companies have revolutionized telemedicine in Sweden – accounting for 3-5% of primary care visits

Kry used an arrangement with one region (Jönköping) to open public-paid access across the country, at primary care parity rates

Followed by multiple competitors

Private primary care is offering a variety of digital visits, public sector is struggling to catch up

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Key takeaways

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Private sector is seen as being strong in service and efficiency, public sector in quality and thoroughness when you’re really sick.

Deregulation over the past 10-15 years has increased the role of the private sector, shortening queues and improving patient satisfaction.

Private providers have led digital transformation, and the public sector is trying to catch up.

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Private providers can thrive in single payer systems where there is a well-designed reimbursement system.

Single payer systems tend to focus a lot on cost, and price aggressively.

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Questions/Discussion

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