Hejsan Hej, welcome back to A Swedish Fika, the podcast where I compare Sweden and the US. I am PixelPia, born in Sweden, and in my 40s, I moved to the US, where I have been living for 22 years. I am now getting very close to turning 65, and with that comes the time to apply for Medicare if you are an American citizen. With this came my interest in comparing healthcare in Sweden and the US, which is what we will do in this episode.
General overview
The U.S. health system is a mix of public and private, for-profit and nonprofit insurers and health care providers. The federal government provides funding for the national Medicare program for adults age 65 and older and some people with disabilities, as well as for various programs for veterans and low-income people, including Medicaid and the Children’s Health Insurance Program. States manage and pay for aspects of local coverage and the safety net. Private insurance, the dominant form of coverage, is provided primarily by employers. The uninsured rate, 8.5 percent of the population, is down from 16 percent in 2010 when the landmark Affordable Care Act became law. Public and private insurers set their own benefits packages and cost-sharing structures within federal and state regulations.
And now, let’s look at Sweden
Sweden’s universal health system is nationally regulated and locally administered. The Ministry of Health and Social Affairs sets overall health policy, the regions finance and deliver health care services, and the municipalities are responsible for the elderly and disabled. Funding comes primarily from regional- and municipal-level taxes. The central government also provides grants. Enrollment is automatic. Covered services include inpatient, outpatient, dental, mental health, long-term care, and prescription drugs. Regions set provider fees at all care levels and copayment rates for services such as primary care visits and hospitalizations. Dental and pharmaceutical benefits are determined nationally and are subsidized. Approximately 13 percent of employed residents have private supplemental coverage, mostly for improved access to private specialists.
From here on, I will take a closer look at parts of the healthcare system and compare the two countries side-by-side, and we will start with the US in all comparisons.
How does the health care system work?
The United States does not have universal health insurance coverage. Nearly 92 percent of the population was estimated to have coverage in 2018, leaving 27.5 million people, or 8.5 percent of the population, uninsured.
Employer-sponsored health insurance was introduced during the 1920s.
In 1965, the first public insurance programs, Medicare and Medicaid, were enacted through the Social Security Act, and others followed.
Medicare ensures a universal right to health care for persons aged 65 and older. In 1972, individuals under age 65 with long-term disabilities or end-stage renal disease became eligible.
The Medicaid program first gave states the option to receive federal matching funding for providing health care services to low-income families, the blind, and individuals with disabilities. Coverage was gradually made mandatory for low-income pregnant women and infants and later for children up to age 18.
Today, Medicaid covers 17.9 percent of Americans. As a state-administered, means-tested program, eligibility criteria vary by state. Individuals need to apply for Medicaid coverage and to re-enroll and recertify annually. As of 2019, more than two-thirds of Medicaid beneficiaries were enrolled in managed care organizations.
Children’s Health Insurance Program. In 1997, the Children’s Health Insurance Program, or CHIP, was created as a public, state-administered program for children in low-income families who earn too much to qualify for Medicaid but are unlikely to be able to afford private insurance. Today, the program covers 9.6 million children.5 In some states, it operates as an extension of Medicaid; in other states, it is a separate program.
Affordable Care Act. In 2010, the passage of the Patient Protection and Affordable Care Act, or ACA, represented the largest expansion to date of the government’s role in financing and regulating health care. Components of the law’s major coverage expansions, implemented in 2014, included:
- Requiring most Americans to obtain health insurance or pay the penalty (the penalty was later removed)
- extending coverage for young people by allowing them to remain on their parents’ private plans until the age of 26
- opening health insurance marketplaces, or exchanges, which offer premium subsidies to lower- and middle-income individuals
- expanding Medicaid eligibility with the help of federal subsidies (in states that chose this option).
The ACA resulted in an estimated 20 million gaining coverage, reducing the share of uninsured adults aged 19 to 64 from 20 percent in 2010 to 12 percent in 2018.
Now to Sweden
The Health and Medical Services Act states that Sweden’s health system must cover all legal residents.1 Coverage is universal and automatic. Emergency coverage is provided to all patients from the European Union, European Economic Area countries, and nine other countries with which Sweden has bilateral agreements. Asylum-seeking and undocumented children have the right to health care services, as do children who are permanent residents. Adult asylum-seekers and undocumented adults have the right to receive care that cannot be deferred, such as maternity care.
Three basic principles apply to all health care in Sweden:
Human dignity: All human beings have an equal entitlement to dignity and have the same rights regardless of their status in the community.
Need and solidarity: Those in the greatest need take precedence in being treated.
Cost-effectiveness: When a choice has to be made, there should be a reasonable balance between costs and benefits, with costs measured concerning health and quality of life.
The Government’s role in the healthcare systems
The federal government’s responsibilities include the following:
- setting legislation and national strategies
- administering and paying for the Medicare program
- cofunding and setting basic requirements and regulations for the Medicaid program
- cofunding CHIP
- funding health insurance for federal employees as well as active and past members of the military and their families
- regulating pharmaceutical products and medical devices
- running federal marketplaces for private health insurance
- providing premium subsidies for private marketplace coverage.
The federal government has a negligible role in directly owning and supplying providers, except for the Veterans Health Administration and Indian Health Service.
The states co-fund and administer their CHIP and Medicaid programs according to federal regulations. States set eligibility thresholds, patient cost-sharing requirements, and much of the benefits package. They also help finance health insurance for state employees, regulate private insurance, and license health professionals. Some states also manage health insurance for low-income residents in addition to Medicaid.
Now let’s look at Sweden
All three levels of the Swedish government are involved in the health care system.
- The Ministry of Health and Social Affairs is responsible for overall healthcare policy and regulation at the national level. It sets budgets for government agencies and grants to regions, working with eight national government agencies.
- At the regional level, 21 regional bodies are responsible for financing and delivering health services to residents.
- At the local level, 290 municipalities are responsible for caring for the elderly and the disabled, including long-term care.
The local and regional authorities are guided by local priorities and national regulations in their decisions. Nationally the Swedish Association of Local Authorities and Regions (SALAR) represent them.
Eight independent government agencies are directly involved in medical care and public health:
- The National Board of Health and Welfare supervises and licenses all healthcare personnel, disseminates information, develops norms and standards for medical care (e.g., national guidelines for specific therapeutic areas), and, through data collection and analysis, ensures that those norms and standards are met. The agency also maintains health data registries and official statistics.
- The Swedish eHealth Agency promotes information-sharing among health and social care professionals and decision-makers. It stores and transfers electronic prescriptions issued in Sweden and is responsible for transferring electronic prescriptions abroad. The agency is also responsible for statistics on drugs and pharmaceutical sales.
- The Health and Social Care Inspectorate supervises health care, social services, and activities concerning support and services for people with disabilities. It is also responsible for issuing permits in those areas.
- The Swedish Agency for Health and Care Services Analysis analyzes and evaluates health policy and the availability of healthcare information to citizens and patients.
- The Public Health Agency provides the national government, government agencies, municipalities, and regions with evidence-based knowledge regarding infectious-disease control and public health.
- The Swedish Council on Technology Assessment in Health Care promotes using cost-effective healthcare technologies. The council reviews and evaluates new treatments from medical, economic, ethical, and social points of view.
- The Dental and Pharmaceutical Benefits Agency is the principal agency for assessing pharmaceuticals. Since 2002, it has been mandated to decide whether particular drugs and medical devices should be included in the National Drug Benefit Scheme; in part, prescription drugs and medical devices are priced based on their value. The agency’s mandate also includes dental care.
- The Medical Products Agency is the Swedish national authority responsible for regulating and surveillance the development, manufacture, and sale of drugs and other medicinal products.
The role of health insurance in these systems
In 2017, public spending accounted for 45 percent of the total healthcare spending or approximately 8 percent of GDP. Federal spending represented 28 percent of total healthcare spending. Federal taxes fund public insurance programs, such as Medicare, Medicaid, CHIP, and military health insurance programs (Veteran’s Health Administration, TRICARE). The Centers for Medicare and Medicaid Services is the largest governmental source of health coverage funding.
Medicare is financed through a combination of general federal taxes, a mandatory payroll tax that pays for Part A (hospital insurance), and individual premiums.
Medicaid is largely tax-funded, with federal tax revenues representing two-thirds (63%) of costs and state and local revenues the remainder.7 The expansion of Medicaid under the ACA was fully funded by the federal government until 2017, after which the federal funding share gradually decreased to 90 percent.
CHIP is funded through matching grants provided by the federal government to states. Most states (30 in 2018) charge premiums under that program.
Spending on private health insurance accounted for one-third (34%) of total health expenditures in 2018. Private insurance is the primary health coverage for two-thirds of Americans (67%). Most private insurance (55%) is employer-sponsored, and individuals purchase a smaller share (11%) from for-profit and nonprofit carriers.
Most employers contract with private health plans to administer benefits. Most employer plans cover workers and their dependents, and the majority offer several plans. Both employers and employees typically contribute to premiums; much less frequently, the employer fully covers premiums.
And in Sweden
Health expenditures accounted for 10.9 percent of GDP in 2016. About 84 percent of this spending was publicly financed, with regions’ expenditures amounting to almost 57 percent, municipalities’ up to 25 percent, and the central government’s to almost 2 percent.2 In 2016, 88 percent of regions’ total spending was on health care.3 The regions and the municipalities levy proportional income taxes on their populations to help cover health care services. In 2016, 70 percent of the region’s total revenues came from local taxes and 16 percent from subsidies and national government grants financed by national income taxes and indirect taxes. General government grants are designed to redistribute resources among municipalities and regions based on need. Targeted government grants to finance specific initiatives, such as reducing wait times.
In the form of supplementary coverage, private health insurance accounts for less than 1 percent of health expenditures. It is purchased mainly by employers and is used primarily to guarantee quick access to an ambulatory care specialist and to avoid wait lists for elective treatment. In 2017, 633,000 individuals had private insurance, representing roughly 13 percent of all employed individuals ages 16 to 64 years.
The different services
There is no nationally defined benefit package; covered services depend on insurance type:
Medicare. People enrolled in Medicare are entitled to hospital inpatient care (Part A), which includes hospice and short-term skilled nursing facility care.
Medicare Part B covers physician services, durable medical equipment, and home health services. Medicare covers short-term post-acute care, such as rehabilitation services in skilled nursing facilities or in the home, but not long-term care.
Part B covers only very limited outpatient prescription drug benefits, including injectables or infused drugs that need to be administered by a medical professional in an office setting. Individuals can purchase private prescription drug coverage (Part D).
Coverage for dental and vision services is limited, with most beneficiaries lacking dental coverage.
Medicaid. Under federal guidelines, Medicaid covers a broad range of services, including inpatient and outpatient hospital services, long-term care, laboratory, and diagnostic services, family planning, nurse midwives, freestanding birth centers, and transportation to medical appointments.
States may choose to offer additional benefits, including physical therapy, dental, and vision services. Most states (39 as of 2018) provide dental coverage.
Outpatient prescription drugs are an optional benefit under federal law; however, currently, all states provide drug coverage.
Private insurance. Benefits in private health plans vary. Employer health coverage usually does not cover dental or vision benefits.
The ACA requires individual marketplace and small-group market plans (for firms with 50 or fewer employees) to cover ten categories of “essential health benefits”:
- ambulatory patient services (doctor visits)
- emergency services
- Hospitalization
- maternity and newborn care
- mental health services and substance use disorder treatment
- prescription drugs
- rehabilitative services and devices
- laboratory services
- preventive and wellness services and chronic disease management
- pediatric services, including dental and vision care.
In Sweden
There is no defined benefit package. Because the responsibility for organizing and financing health care rests with the regions and municipalities, services vary to some extent throughout the country. Broadly, however, the publicly financed health system covers the following:
- Public health and preventive services
- Primary care, including maternity care
- Inpatient and outpatient specialized care
- Emergency care
- Inpatient and outpatient prescription drugs
- Mental health care
- Rehabilitation services, including physical therapy
- Disability support services, including durable medical equipment such as wheelchairs and hearing aids
- Patient transport support services
- Home care and long-term care, including nursing home care and hospice care
- Dental care and optometry for children and young people
- Adult dental care with limited subsidies.
Let’s talk a bit about money
In 2018, households financed roughly the same share of total healthcare costs (28%) as the federal government. Out-of-pocket spending represented approximately one-third of this or 10 percent of total health expenditures. Patients usually pay the full cost of care up to a deductible; the average for a single person in 2018 was $1,846. Some plans cover primary care visits before the deductible is met and require only a copayment.
Out-of-pocket spending is considerable for dental care (40% of total spending) and prescribed medicines (14% of total spending).
In addition to public insurance programs, including Medicare and Medicaid, taxpayer dollars fund several programs for uninsured, low-income, and vulnerable patients. For instance, the ACA increased funding to federally qualified health centers, which provide primary and preventive care to more than 27 million underserved patients, regardless of their ability to pay. These centers charge fees based on patients’ income and provide free vaccines to uninsured and underinsured children.
To help offset uncompensated care costs, Medicare and Medicaid provide disproportionate-share payments to hospitals with mostly publicly insured or uninsured patients. State and local taxes help pay for additional charity care and safety-net programs provided through public hospitals and local health departments.
In addition, uninsured individuals have access to acute care through a federal law that requires most hospitals to treat all patients requiring emergency care, including women in labor, regardless of ability to pay, insurance status, national origin, or race. Consequently, private providers are a significant source of charity and uncompensated care.
And in Sweden
In 2016, about 16 percent of all health expenditures were private; 92 percent were out of pocket. Most out-of-pocket spending is for drugs and dental care.
The regions set copayment rates for outpatient visits and hospital stays, leading to variations across the country (see table below). However, the national government determines pharmaceutical and dental benefits and apply to all residents.
In general, all social groups are entitled to the same benefits. Ceilings on out-of-pocket spending (see table below) apply to everyone, and the overall cap on user charges is not adjusted for income. Some targeted groups, such as children, adolescents, and the elderly, are exempt from user charges. In addition, preventive services, such as maternity care, immunizations, and cancer screenings, do not have copayments.
Now we have somewhat of a picture of the two countries, and before we end today’s episode, let me give you some comparison in numbers from the 2019 OECD Health Data
| USA | Sweden |
| DEMOGRAPHICS 325.7M Total population 16.0%Population age 65+ HEALTH SYSTEM CAPACITY & UTILIZATION 2.6 Practicing physicians per 1,000 population 4.0 Average physician visits per person 11.7 Nurses per 1,000 population 2.8 Hospital beds per 1,000 population 125 Hospital discharges per 1,000 population SPENDING $10,586 Healthcare spending per capita $1,122 Out-of-pocket health spending per capita $1,220 Spending on pharmaceuticals (prescription and OTC) per capita HEALTH STATUS & DISEASE BURDEN 78.6 Life expectancy at birth (years) 40.0% Obesity prevalence’ 10.8% Diabetes prevalence 28% of Adults with multiple chronic conditions (2 or more) | DEMOGRAPHICS 10.1M Total population 19.8%Population age 65+ HEALTH SYSTEM CAPACITY & UTILIZATION 4.1 Practicing physicians per 1,000 population 2.8 Average physician visits per person 10.9 Nurses per 1,000 population 2.2 Hospital beds per 1,000 population 131 Hospital discharges per 1,000 population SPENDING $5,447 Healthcare spending per capita $807 Out-of-pocket health spending per capita $515 Spending on pharmaceuticals (prescription and OTC) per capita HEALTH STATUS & DISEASE BURDEN 82.5 Life expectancy at birth (years) 13.1% Obesity prevalence 4.8% Diabetes prevalence 18% of Adults with multiple chronic conditions (2 or more) |
