A superior public health system based on solidarity is suffering from accounting methods imported from Leningrad by Swedish conservatives
    
          
Diagnosis Related Dogma 

Töres Theorell


During the decades leading up to the 1980s, Sweden was widely regarded as the most advanced general-welfare state in the world. The basic principles involved were accepted by the vast majority of Swedes, including many of those on the political right. Since the benefits of the system were available to everyone, regardless of income, it was in everyone‘s interest to contribute to it with their taxes-- although there were some complaints from a relatively small, and generally conservative, minority.
The effects of social class on citizens’ access to physicians and medication were very slight in Sweden, but very great in the U.S.. . . The Swedish system was clearly superior in terms of human ethics, democracy and economics.
     
The very undogmatic Töres Thorell
         
Education and health-care were financed and operated almost exclusively within the public sector. According to a variety of opinion surveys conducted over a long period of time, this arrangement was never seriously questioned by the general public. The widespread availability of affordable high-quality day-care and supportive labour-market policies made it possible for women, including single mothers, to earn a living. This helps to explain why Sweden never experienced the United States‘ pattern in which single women with children were forced to rely on public assistance-- to the extent that many of them even chose to earn a living by having children.

A 1970 comparison of Sweden with the United States showed that the distribution of health care was much more equitable in Sweden. Among other things, the effects of social class on citizens’ access to physicians and medication were very slight in Sweden, but very great in the U.S. (Andersen et al.). Furthermore, the total cost of health care as a percentage of Gross National Product was much higher in the U.S. than in Sweden (Peterson et al.). Thus, the Swedish system was clearly superior in terms of human ethics, democracy and economics.
A group of economists and health-care administrators travelled to Russia in order to study a management system for the allocation of health-care expenditures which had been introduced in Leningrad.











A number of politicians, health-care administrators and influential journalists seemed determined to impose the new model, regardless of the consequences.
The Leningrad model

All that started to change in the 1980s, as neo-liberal doctrine gained a foothold in Sweden. In connection with a public debate on accelerating costs of health care, a group of economists and health-care administrators travelled to Russia in order to study a management system for the allocation of health-care expenditures which had been introduced in Leningrad. The Swedish delegation was favourably impressed, and its findings-- supported by political currents then gaining strength-- inspired similar experiments in the regions of Stockholm and Dalarna.

The existing health-care system was based on local centres that dispensed primary care to residents within defined geographical boundaries. But the Dalarna and Stockholm models, as the experiments came to be known, adopted the principle that “clients“ (i.e. patients) should be free to choose among primary-care centres, which were now expected to compete with each other in attracting as many “clients“ as possible. The new system was still publicly funded; but budget allocations were now to be adjusted annually in accordance with patient-load. Each centre could purchase services such as X-rays and operations from hospitals, which were also to compete with each other. All of this was supposed to yield greater efficiency and lower costs.

A number of politicians, health-care administrators and influential journalists embraced these ideas with great enthusiasm and vigorously defended them. Many of these enthusiasts seemed determined to impose the new model, regardless of the consequences. For example, the conservative politician Ralph Ledel, who was in charge of Stockholm County‘s finances at the time, responded to demands for small-scale trials by declaring that no such precautions and evaluations were necessary. If something goes wrong, he assured sceptics, it could simply be fixed afterwards.
DRG can be regarded as a system for attaching “price labels“ to various kinds of surgical operations, clinical examinations, psychiatric treatments, etc.








The aim was to enable comparisons between hospitals with regard to their cost-structures, taking into account the various services provided.

The price of health care

A key concept of the new model is the unit cost of each specific service within the health-care sector. This is the central component of the management system known as Diagnosis-Related Groups (DRG), which was adopted in many areas of the U.S. during the 1970s and ‘80s. DRG is a classification system for patient care that was developed at Yale University during the 1960s and ‘70s. It can be regarded as a system for attaching “price labels“ to various kinds of surgical operations, clinical examinations, psychiatric treatments, etc. The aim was to enable comparisons between hospitals with regard to their cost-structures, taking into account the various services provided. DRG was used by the U.S. Medicare programme in order to halt rising expenditures through the application of fixed rates.

In Sweden, the Institute for the Production and Rationalization of Health Care (“SPRI“) was the driving force behind the introduction of DRG, a process that began in the mid-1980s. The goal was to permit the calculation of costs for various treatments and procedures, thus making it possible to compare costs in different clinics, counties and health-care regions.

As SPRI explained in a report: “The goal of this management system is to influence the organisation, and to show the way toward the efficient use of resources.“ This was in keeping with views of the Swedish Finance Minister at the time, Kjell-Olof Feldt, who had questioned the efficiency of the public sector-- in particular, the lack of accounting for health-care “production“ and costs. The Board of Health and Social Welfare is still working on the development of such accounting procedures.
Not much attention has been paid to the fact that DRG has been strongly criticized in its country of origin. Warnings have been raised that the system may reward and stimulate the provision of care which does not meet the real needs of the population, and that it is difficult to apply fairly and reliably.









There is a demonstrable risk that any new paradigm that becomes popular among politicians and other opinion-makers may dominate public debate.
 Questionable benefits

DRG is just one of several new systems, methods and assessment procedures being used today in Swedish health care. The benefits are questionable and there is increasing criticism at the local and regional levels. In 1998, for example, the accounting bureau of Västra Götaland County warned that, “Large, expensive systems for information processing are being built up. . . . If this does not lead to increased productivity, it might be just as well to use older measures of production, such as the number of patients.“

Not much attention has been paid to the fact that DRG has been strongly criticized in its country of origin, the United States. There, warnings have been raised that the system may reward and stimulate the provision of care which does not meet the real needs of the population, and that it is difficult to apply in a fair and reliable way. But the national agencies involved still defend DRG and other new management devices as instruments that can be used to create incentives for increased productivity.

It is not always easy to discuss such issues in Sweden, a small country where the available space for competing theories and ideas is sometimes limited. There is a demonstrable risk that any new paradigm that becomes popular among politicians and other opinion-makers may dominate public debate.

To some extent, that is what happened during the late 1980s, and it can be illustrated by a little episode from personal experience. A few years ago, my colleague Eva Bejerot discovered that DRG is similar to a system that had been applied to public dentistry in Sweden, with a bonus system for dentists based on the same kind of standard price list.

A major study of dentists and dental assistants showed that this system had created many problems, including conflicts between dental nurses and dentists. For example, the nurses were assigned the task of recording all procedures and other information related to the accounting system, but did not share in the bonus system whose effects on income were felt only by the dentists. We decided to issue a warning about these drawbacks in one of Sweden‘s leading newspapers. Soon after publication, the head of our institute received a phone call from a high government official who demanded that we desist from such activities.
It appears that ethical and humanistic principles are in serious conflict with management systems developed in industry and then superimposed on health care.












Certain politicians and administrators rushed through the initial phases without considering the many special problems of competition when applied to health care.








Related article:
From Solidarity
To Privatization
 Diagnosis: inadequate debate

This episode may illustrate that advocates of the new health-care model were so eager to convince themselves of its advantages that they were unwilling to tolerate evidence to the contrary. They had placed their faith in the belief that competition increases efficiency in the delivery of health care, including a reduction of costs. While this may certainly be true under certain conditions, such solutions may be difficult to apply in a number of health-care sectors.

In fact, it appears that ethical and humanistic principles are in serious conflict with management systems developed in industry and then superimposed on health care. For example, an unconscious patient in need of intensive care will cost less if a supporting respirator is switched off. Or consider the question of who should receive the higher income: a primary physician who listens empathetically to patients who leave the office in a good mood and may thus have less of medical treatment in the future, or a physician who processes many more patients on an average day but creates a stressful and uncaring atmosphere?

A vigorous open debate would have made it possible to explore workable alternatives, but such a debate never took place on any significant scale. Instead, certain politicians and administrators rushed through the initial phases without proper consideration of the many special problems of competition when applied to health care.

One such problem is the economic bias against co-operation which may arise. When the health-care system had only one employer, the county council, conditions for collaboration between various units and departments were very favourable. If one laboratory needed a special piece of equipment for a seldom-performed procedure, it was easy for to borrow from another laboratory with the necessary equipment. Under conditions of competition, however, that becomes much more problematic, since laboratories are competing with each other on the ”health-care market” and are reluctant to help each other out. Such situations can lead to increased costs and delays that pose threats to human health and life.

The economists involved in all this may not have realized that the competition which was so thoughtlessly introduced became a threat to the basic concepts of solidarity underlying the Swedish model of general welfare-- or perhaps at least some of them did realize this, all too well.

    — 24 July 2001

* * *
          
Dr. Töres Theorell
is a stress researcher
at the Institute for
Psycho-social Medicine
in Solna, Sweden


By the same author:
 Stress on the Job
The present state of
occupational health
in Sweden 
 References

Revisionsenheten Västra Götalandsregionen (1998). Granskning av DRG i västsverige.

Socialstyrelsen (1998). Förutsättningar för den svenska hälso- och sjukvården.

SPRI (1989). Vad kostar patienten? Spri-rapport 262.

Andersen R, Smedby B and Anderson O W (1970). Medical care use in Sweden and the United States: A comparative analysis of systems and behavior. Chicago, University of Chicago Center for Health Adminstration Studies. Research Series 27.

Peterson O L, Berfenstam R, Logan R F, Burgess A M, Smedby B & Pearson R J C (1967). What is value for money in medical care? The Lancet, 1 (493) 771-776.
  
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