Private equity investment in Sweden's primary care sector and regulatory responses to avoid risk selection

Abstract

Abstract Background Until the 1990s primary care centres in Sweden were almost exclusively public and operated by the country's regions. A primary care reform in 2010 that increased competition between approved providers for public funding led to a rapid growth of private providers. Concerns were raised that profit-driven providers would select patients with lower risks. Methods We analysed contracts between county councils and private care providers and reviewed strategies employed by local governments to avoid risk selection and whether there were any differences between left- and right-wing governments. Results By 2020 over 270 new private primary care centres had been established, most of which were for-profit. Of the overall approximately 1200 primary care centres, about 60% are still owned by the regions and about 40% are privately owned. About a third of the private for-profit practices were owned by international private equity firms in 2018. Three main strategies were used by local governments to avoid risk selection: risk adjustment of the financial reimbursements on the basis of health and/or socio-economic status of listed patients; design of patient listing systems; and regulatory requirements regarding the scope and content of the services that had to be offered by all providers. Left-wing local governments were more prone than right-wing governments to adopt risk adjustment strategies at the onset of the reform but these differences diminished over time. Conclusions A variety of regulatory instruments can be used to avoid risk selection by private providers. However, due to a lack of systematic research, no firm conclusions can be drawn so far on the overall impact of private equity ownership on primary care provision in Sweden.