The reorientation of market-oriented reforms in Swedish health-care

Sweden was an important pioneer of market-oriented reform in publicly funde d healthcare systems. Yet by the mid-1990s the county councils, which fund and manage most health-care, had substantially scaled back reforms based on provider competition while continuing to constrain health budgets. As poli cy makers faced new issues, they turned increasingly to longer-term and mor e cooperative contracts to define relations between hospitals and the count y councils. Growing regionalization of government and hospital mergers furt her reconfigured acute care and limited opportunities for competition betwe en hospitals. We seek to explain this reorientation of market-oriented refo rms between 1989 and 1996 in terms of shifts in the positions taken by powe rful policy actors, and in particular by county council politicians. During this period, elections moved liberal and conservative politicians, who wer e the most enthusiastic supporters of market-oriented reform, in and out of control of most county governments. Meanwhile many Social Democratic polit icians gradually turned from initial support of competitive reform toward o pposition. Politicians and county administrators from all parties were part icularly concerned about controlling health expenditures during a period of recession. In addition, the public, politicians in the counties and munici palities, and health professionals resisted steps that threatened health se ctor employment and would have allowed market mechanisms, rather than gover nments, to determine the prices and distribution of health services. During the years under study Sweden's market-oriented reforms followed a course o f development similar to that taken by other management and policy fashions (Abrahamson E. Management fashion, Academy of Management Review 1996,21: 2 54-85). At first the reforms enjoyed uncritical support by a broad spectrum of stakeholders. Gradually participants in the reform process recognized i nherent tensions among the goals of the reform, conflicts between reform pr ograms and fundamental social and political values, unrealistic assumptions about the effects of competition. technical and organizational obstacles t o implementation, and threats to interest groups. Since 1998, there have be en indications that Sweden may be entering yet another stage of experimenta tion with market-oriented reform. (C) 2000 Elsevier Science Ireland Ltd. Al l rights reserved.