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Private health insurance threatens the Swedish welfare model

News: Sep 17, 2019

More than 10 percent of Swedes in working age have signed up for private health insurance. The rapid emergence of private – or rather semi-private – welfare solutions threatens the Swedish model, says John Lapidus, researcher and author of The Quest for a Divided Welfare State: Sweden in the Era of Privatization.

- The insurance market is a parallel and partly publicly funded system that international welfare research has termed The hidden welfare state, says John Lapidus. It is aimed at certain classes of society while others remain in an increasingly malfunctioning public system. In this way we get two very different welfare states in one and the same country, The divided welfare state.

General trust in the public health system is weakened when some people get quicker access at the very same clinic, and tax willingness decreases among those who think they pay twice for healthcare. Further, the pressure on politicians to solve problems is reduced when vocal groups leave the public system and no longer care about how it functions. In economic terms, public funds are transferred to policyholders and their employers through favorable tax breaks. Besides, publicly funded infrastructure and human resources are utilized by policyholders, a factor that makes insurance cheaper and, hence, makes it possible to sell more of it.

- Gradually, it becomes a self-fulfilling prophecy that public healthcare is not good enough, says John Lapidus. We see the same tendency in several European countries. The insurance companies’ business concept is based on people’s distrust of the public system, and everywhere there are lobby groups claiming its country to have the worst public health system and the longest waiting times.

The insurance system is driven by profits in welfare, that is, by the increasing number of private healthcare providers in the new welfare market. Without private providers, there would be no room for private health insurance, as public providers do not receive policyholders. At the same time, private caregivers are increasingly interested in revenue from insurance companies. Thus, there is a mutual dependence between private provision and private funding of welfare, where insurance companies and private providers strengthen each other and pave the way for a divided welfare state.


John Lapidus
PhD Economic History
University of Gothenburg
Phone: +46 702-044857
E-mail: john.lapidus@econhist.gu.se
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Link to Researchgate
Book: Lapidus, John (2019). The Quest for a Divided Welfare State: Sweden in the Era of Privatization. London: Palgrave Macmillan. https://www.palgrave.com/gp/book/9783030247836

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Photo: Agneta Muregård


Originally published on: www.handels.gu.se

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