Why Private Healthcare Is Booming in Scandinavian Countries
August 26, 2023 | Tags: FEE
In the eyes of young voters and socialists of all creeds, Bernie Sanders is a superhero, passionately advocating for his vision of a socialist utopia in America. With Denmark as a shining example, he champions the idea that the U.S. should draw inspiration from the accomplishments of countries like Sweden and Norway, particularly when it comes to “benefiting the working class.”
During the 2016 presidential debates, he emphatically declared, "We should look to countries like Denmark, like Sweden and Norway, and learn from what they have accomplished for their working people,” continuing the sentiment to this day.
The Nordic healthcare system has often been associated with socialism, but a closer examination reveals that it does not adhere to the definition of socialism. Merriam-Webster defines socialism as an egalitarian economic system wherein the means of production are collectively owned by the state or society. However, the Nordic countries' economic models incorporate both public and private elements.
While the Nordic nations do provide publicly-funded healthcare, they also allow private health insurance options to their citizens. This private insurance allows individuals to bypass long wait times and access higher-quality care. In Sweden, over 643,000 individuals are solely covered by private insurance groups.
Similarly, in Denmark, the private supplementary insurance program, Sygeforsikring Danmark, covers over 14% of the Danish population, with 42% having at least some coverage provided by the private sector.
Notably, private healthcare firms, such as Aleris, have a significant presence in Nordic countries, indicating the growth of the private sector in the region. With seven private companies in Denmark and fourteen more in Norway, Aleris operates throughout numerous countries in Scandinavia, boasting over 4,500 employees and nearly one billion US dollars in annual revenue.
Just to be clear, all of these private healthcare options mentioned above would be eliminated under Medicare for All. The proposal would thus lead to even more government intervention in healthcare, even more so than in the nations democratic socialists praise.
Top politicians in the Nordic countries have also emphasized their market-oriented economic structures, highlighting the blend of public and private elements within their healthcare systems.
While Bernie Sanders and his supporters praised Denmark for its egalitarian socialist policies, Denmark’s Prime Minister Lars Løkke Rasmussen firmly stated that his nation is, in fact, a market economy (albeit one with significant government regulation in the economy, much like the United States).
The classic counter to socialized medicine is the obvious increase in wait times, but many progressives point to the Nordic systems as proof they can be managed effectively by the state. But what do the Scandinavians themselves say?
In 2009, a few years after the peak of the welfare states in the Nordic nations, surprisingly few Danes approved of the wait times in their nations. Almost 50% of the Danes surveyed felt the waiting times were unfair.
The respondents also noted that a primary reason for choosing private healthcare was the decrease in waiting time, or in other words, the decreased risk of dying on a government-sanctioned waiting list.
This is particularly shocking, as the Danish government enacted a bill capping waiting times at one month two years before the survey was complete.
Could it be that the state is incapable of effectively allocating resources, even when it comes to healthcare? It seems like the economic calculation problem applies to all industries, including healthcare.
The inefficiencies of Swedish socialized medicine are clear, too. Even after guaranteeing Swedes would wait no longer than 90 days to receive medical care, over 46% of residents in Jämtland County in Sweden still waited longer. The wait for potentially life-saving prostate surgery was more than double the global average in some Swedish counties at 271 days of waiting.
To combat these inefficiencies, Swedish private medical care has become a booming business. More and more hospitals are being bought out and managed by private equity groups. The entrance of these private equity groups into the healthcare market has allowed additional competition and improved service for all Swedes. The Swedish private equity market has become the second largest in all of Europe, valued at nearly $8 billion, thanks to this privatization.
These observations underscore that the Nordic healthcare systems operate within a market economy framework, despite substantial government involvement and many government-sanctioned monopolies.
Socialized medicine clearly comes with numerous side effects, many of which are extremely unpleasant. The Nordic nations see this, but it seems their admirers in the USA do not.