CALGARY, AB -- Sweden's universal health care system, which ranks among the world's best in terms of patient outcomes, offers critical lessons for Canada on reducing costs while improving health system performance, argues a new report from the Fraser Institute, an independent, non-partisan Canadian think-tank.
"Canadians are paying for the most expensive universal-access health care system in the developed world, but what we get in return ranges from mediocre to terrible," said Nadeem Esmail, Fraser Institute director of health policy studies and author of Health Care Lessons from Sweden.
"Sweden, on the other hand, is a fine example of a system that provides high-quality health care regardless of patients' ability to pay, and at substantially lower cost than Canada. Canada would be wise to follow Sweden's lead on cost-sharing, activity-based funding, and private-sector involvement."
Health Care Lessons from Sweden is part of a Fraser Institute series
examining the way health services are funded and delivered in other
developed countries. The nations profiled all aim to achieve the noble
goal of Canada's health care system: universal access to prompt,
high-quality treatment (full report:
In comparing the Canadian and Swedish health care systems, the report
notes that Canadian health expenditures (age-adjusted) were 36 per cent
higher than Sweden's in 2009 (Canada's health spending as a share of GDP
was the highest among all developed nations with universal-access health
care). At the same time, Canadians are forced to endure poor access to
medical professionals and medical technologies as well as some of the
longest waits for medical care in the developed world.
Sweden's health policy framework differs from that of Canada in the
following important ways:
- Cost-sharing for all forms of medical services
- Some private provision of acute care hospital services
- Activity-based funding for hospital care
- Broad private parallel health care with dual practice
- Salary payment for physicians
"Sweden has a long history of promoting equality for all its citizens.
In that light, it is valuable for Canada to examine how Sweden has
structured its universal health care system. The Swedes clearly have
valuable lessons to impart," Esmail said.
"A Swedish approach to health care in Canada would primarily require
important changes to financial flows within provincial tax-funded
systems and a greater reliance on competition and private ownership. It
would not require a marked departure from Canada's current tax-funded,
provincially managed, federally supported health care system."
The report suggests the following Canadian health policy reforms based
on Sweden's proven framework for providing high-quality, affordable,
universal health care:
1) Activity-based funding models, possibly with competitive benchmarking
employed to set fees.
Activity-based funding creates incentives for hospitals to treat more
patients and to provide the types of services that patients desire,
while global budgets (the dominant form of hospital funding in Canada)
disconnect funding from service provision. Studies have shown that
activity-based funding can lead to a greater volume of services being
delivered, reduced wait times for patients, improved quality of care,
more rapid diffusion of medical technologies and best practices, and
greater overall efficiency.
2) Private health care for medically necessary treatment; dual practice
for physicians to maximize the volume of services provided to patients
in both public and private settings.
A private parallel health care sector plays several important roles:
first, it provides individuals an option to return to normal life more
rapidly than might be possible through the universal system. Second,
when patients use the private sector they free up resources in the
universal system for patients who have opted not to seek private care.
Third, a private parallel health care sector provides a safety valve for
the public system in the event of a capacity limitation or sudden
increase in demand.
"In addition, a private parallel health care sector creates incentives
for better service in the public system through competition," Esmail
said.
Sweden also allows physicians to work in both the public and private
health care sectors rather than requiring them to opt out of the
universal system. This has the benefit of making more efficient use of
highly skilled medical resources.
"Dual practice for physicians is common in developed countries including
Denmark, England, Ireland, New Zealand, Norway, Spain, Sweden,
Australia, Finland, and Italy," Esmail said.
3) Cost-sharing regimes for universal health care with reasonable annual
limits and automated exemptions for low-income populations.
Cost-sharing encourages patients to be more careful about when and where
to seek health care, thus increasing the cost efficiency of the system
(ultimately reducing total spending) and improving access to treatment
for those in need. A lack of cost-sharing (i.e. when patients are
required to pay for a portion of their insured medical services) has
resulted in excessive demand and wasted resources in Canada's health
care system. Cost-sharing policies have been shown not to have an
adverse effect on health outcomes as long as low-income populations are
exempt.
4) Consider a blended funding approach for primary care with a large
fee-for-service component.
Sweden's reliance on salary payments for physicians will not work in
Canada due to Canada's independent practitioner model and doctor
shortage. However, Sweden's use of a blended payment model for primary
care services, including both capitation and fee-for-service, may be
worth further examination.
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MEDIA CONTACT:
Nadeem Esmail
Director of Health Policy Studies, Fraser Institute
Phone: (403) 216-7175 ext. 422
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