Is Sweden Doomed to Repeat U.S. Errors?

Sweden’s Health Care

Sweden has a long and admirable history of providing publicly supported, quality health care for all its citizens. Swedes have access to a wide variety of services (Ham, 1994; Stjerno, 2005) and statistics suggest that it is of high quality. A Swedish boy born in 2009, for example, can anticipate 79 years of life (76 in the United States) and his sister born the same year can look forward to reaching age 83 (81 in the United States). Only 3 of every 1,000 Swedes born that year will not reach their fifth birthday. In contrast, 8 of the 1,000 U.S. youngsters will die before the age of 5. On most health indicators, Sweden does a better job than the United States. For example, 97% of Swedes are immunized against measles by age 1 (the figure is 92% in the United States). The maternal mortality rate per 100,000 live births in Sweden is only 5; the U.S. rate is 24. The Caesarean section rate in Sweden from 2000 to 2010 was 17.2 per 100 births; the U.S. rate during the same period was 31.8 (World Health Organization, 2011).

Sweden leads the United States even on matters for which one might assume that the United States would do a better job. For example, much higher earnings for medical professionals in the United States, capitalist ideology suggests, should attract greater numbers of physicians and nurses than Sweden; Sweden’s medical doctors generally earn between 50,000 and 100,000 U.S. dollars, while U.S. doctors annually are paid approximately 3 to 4 times that amount (Allied Physicians, 2006; Borgström, 2007). Yet, during the period 2000–2010, Sweden had 35.8 medical doctors for every 1,000 citizens; the rate in the United States was 26.7. The discrepancy is similar for other health care personnel, except for dentists, where the U.S. rate of 16.3 per 1,000 is twice that of Sweden’s (World Health Organization, 2011).

Swedish health care is a bargain compared to the United States. There are some differences between the ways the two countries categorize health care, which makes the comparisons somewhat problematic. But the differences in expenses between the countries are large enough to strongly suggest that the disparities are real. Health and medical care, for example, accounted for 9.4% of Sweden’s Gross National Product in 2008—about $3,600 United States for each of its more than 9 million citizens. In contrast, the same statistic for the United States was more than 15%—a bit more than $7,000 for each of its 300 million inhabitants. And, surprisingly, health care is a bigger portion of government expenditures in the United States than in Sweden; in 2008, 18.7% of total government U.S. expenditures were for health care compared to 13.8% in Sweden.

Particularly notable about Sweden and U.S. statistical comparisons is their demographics suggest the numbers should be the opposite. The United States has a younger population, which should be healthier. The median age in the United States is 36 compared to 41 in Sweden; 20% of Americans are under the age of 15 compared to 17% of Swedes and 25% of Sweden’s population is older than 60 compared to 18% of Americans (World Health Organization, 2011).

Sweden’s single-payer system is likely responsible for the low cost of Swedish health care. For the most part, services and equipment are paid for by the county councils and usually provided by entities, such as hospitals, which are owned by the same councils. County councils are elected officials, similar to county board of supervisors in the United States. Medical professionals can usually only turn to the local county governments for reimbursement and those who lack a contract with the county council will find it difficult to make a living (personal interview).

In recent years, there has been some movement toward competitive markets, including private ownership of health care facilities, particularly in Stockholm. There is a belief among many Swedish politicians that this policy will improve quality of care while reducing costs. Ignored in their analyses is the fiscal incentive inherent in competitive systems that will lead to illegal and unethical behaviors that, if left unattended, will undermine any benefits.

Method

The research reported in this article relies on interviews conducted with health care and enforcement personnel in the United States during the past 30 years and, since the year 2000, with Swedish health care officials. The general methodologies used to collect the U.S. data are described in other publications (Jesilow, Geis, & Harris, 1995; Jesilow, Pontell, & Geis, 1993).

The methodology used to study the Swedish system has not been described elsewhere. The work began during a 2-month stay in Sweden during 2000. Printed materials in English were obtained from government agencies and key institutional players were identified. A half-dozen interviews were conducted with individuals in the system to identify issues of concern to them and to ascertain if there was interest in a larger project. This information was then used to prepare a successful Fulbright application. Additional support was provided by internal grants from the researcher’s home university and personal funds.

Before returning to Sweden in 2002, contacts with officials within as many parts of the system as possible were established and permissions to conduct interviews were obtained. The cooperative nature of the Fulbright Fellowship likely increased subjects’ willingness to participate; the Fulbright indicated that the research was supported by the United States and Sweden (a fact noted in the recruitment materials sent to potential subjects). Further face-to-face interviews, and the collection of additional printed materials, were conducted in Sweden in 2003, 2004, and 2010. All interviews were conducted in English.

Interviews were obtained with:

Only one group, which represents the interests of Swedish physicians, when asked chose to not participate in the research.

Specific Swedish subjects were identified for recruitment because of their positions or by referral from another subject. As many people as possible were interviewed in order to gain a more complete picture of Sweden’s health care regulation. Individuals, who appeared to be particularly knowledgeable, were interviewed in more than 1 year to gain a better understanding of the changes that were being instituted. The first decade of the new millennium was a dynamic one for the delivery of Swedish health care. A single year’s data would not have revealed the many changes that were taking place or the logic for such changes.

Approximately 55 individuals were eventually interviewed. It was difficult at times to keep an exact count of the number of subjects. Supervisors often brought one or two other members of the office into the interviews. Sometimes these individuals provided substantial information. Sometimes they were in the room to provide support for their supervisors. At such moments, with people coming in and of the offices, it was easy to forget to track the number of subjects in favor of paying attention to their descriptions of their activities.

Most interviews were conducted in the subjects’ offices or in a conference room at their places of work, although a handful were conducted at homes. Almost all interviews were face to face and audio recorded; a couple were done by phone and e-mail. Subjects were not asked to provide controversial information. The goal during the interviews was to learn how things are done and why they are done in that manner. People were asked about their jobs and items that may affect them. Specific interview questions differed from individual to individual, but there were some commonalities. Interviews usually began with questions about the subjects’ backgrounds and their job duties. Subjects were all asked, at some point, about the impact of privatization on the Swedish system and their jobs.

The use of open-ended questions in the interviews is a major advantage for this study. Open-ended questions allowed participants to answer in their own words and to decide on their own what factors were of importance. Problems, or complaints, or praise that came spontaneously to mind were more likely to reflect the issues the respondents found most pressing. Open-ended questions provided the opportunity to probe for answers. When participants gave incomplete, unhelpful, or vague answers, they were asked to clarify or provide examples to prevent any misinterpretation. Open-ended questions also allowed participants the opportunity to ask questions of the interviewer and to indicate whether they had information on the subject area. Participants were also free to provide more than one answer to questions. It was also possible for participants to respond to questions by not providing any answer. Subjects were asked to clarify unclear responses or to better ascertain the participant’s meaning but not to extract answers from the participant when there were none to give.

There are limitations to the method used here. Only a small portion of Swedish health care officials were interviewed and individuals from smaller counties were not interviewed in favor of officials from more populated urban areas and the national government. The use of open-ended questioning also presents some difficulties. Respondents may be less likely to fully disclose negative matters, particularly about themselves, when talking to interviewers. The participants, however, appeared open in their answers and were willing to provide information that did not always reflect well on them. They were amused by the researcher’s home university’s rules that, for example, prevent revealing the source of information obtained during interviews, without written consent. They noted that Sweden was an “open society” and that they were accustomed to providing information to “outsiders.” It was decided, however, to not obtain consent to publish names. It was believed that more complete and honest information could be obtained by promising confidentiality. As a result, interview subjects are identified in this article by their occupational status, for example, “middle-level manager in a hospital” or “high ranking official within the system.”

A major advantage of the method used in this study stems from the forward looking nature of the work. Most subjects did not know the system was being victimized. Neither Sweden nor any of its counties had units to uncover fraud and there were no news stories prior to 2010 that suggested any sizable problem existed. Most participants did not know who within their organizations might even handle such matters (this was likely due to the fact that no one within the organization was assigned the responsibility). Those few participants who knew of illegalities had learned of the behaviors because of who they personally knew, and not because of their location within the system. For example, in response to a query about whether health care fraud existed, a nurse, who was a member of a hospital’s quality control committee, started to answer that the behavior would not exist in Sweden. Her mouth fell open when the head of the same committee, a surgeon, responded that he personally knew physicians who were cheating. The snowball nature of sample selection allowed the uncovering of information that was known by a limited number of people, such as the fact that people were cheating the system or who, if anyone, might know how the organization dealt with fraud.

Background of Privatization

During the 1950s, Sweden built large hospitals in counties to dispense universal health care to its population. The large institutions were perceived by government officials to be the most efficient means for the task. The hospitals were owned by the various counties and personnel were county employees. Funding for health care and other county services was obtained by a sales tax and it still is.

Financial problems in Swedish health care, beginning during the recession of the early 1990s, were the impetus for numerous changes that nudged the Swedish system toward privatization. One factor, mentioned in the literature (Reizenstein, 1991) and by almost everyone interviewed for this research, is an aging population, which will cost more to care for in the future. Also mentioned by interviewees is competition from other Scandinavian countries for doctors and nurses, which translates into upward pressure on salaries and fuels rising costs. Also mentioned by Stockholm officials were efforts by (at-the-time independent) geographic subunits of its county council to do too much, which resulted in lots of “red ink” for the county’s budget. The most visible outcome of the financial crunch, noted by some interviewees and elsewhere (Bergman, 1998; Ham, 1994), has been an increase in the waiting time for nonemergency services.

Competition as a Solution

Competitive markets are seen by some as a means for increasing efficiency in Swedish health care, while holding down costs. A high-ranking member of one county council’s quality assurance office provided anecdotal evidence as to why some people feel this way. Several years ago, she had been a doctor in a hospital that was audited. Such audits, new at the time, are different than those found in the United States. The officials in Sweden are interested in all aspects of the hospital’s health care delivery. She had been very impressed by the suggestions the auditors had made for improving things in the institution. She approached the administrator, following the auditors’ visit, to learn which changes were going to be implemented. She was surprised and disappointed to learn that nothing was to be altered. “We passed,” exclaimed the administrator. Having met the standards, he saw no reason for improvement. Competition, some believe, is the antidote for such sentiments and several officials provided anecdotal evidence in support of the belief.

Stockholm’s county council’s office has been a leader in the introduction of competition into the health care system. Beginning in the 1990s, the council asked its health care operations to compete with each other to lower costs. The experiment, dubbed the Stockholm model, was to provide an avenue for employees to become more aware of the expenses associated with their jobs. The authorities hoped that once the public servants know what things cost, they would make efforts to reduce expenses (personal interview).

Probably, the most controversial act in Stockholm was the transfer of St. Göran’s Hospital into private ownership. Nationally, it is one of the four hospitals (of 91) that have been privatized. Overall, subjects interviewed on the topic had only praise for the hospital and how it conducted business. A quality assurance member of the Stockholm county council, for example, noted that to improve quality, she needed information from providers, such as hospitals and other health care entities. Without it, she asked, “how can we, as purchasers, support and stimulate quality improvement and how can we assess the quality that we purchase and how can we specify what we want in contracts?” She believed that individuals, who were employees in competitive businesses (particularly private business, such as St. Göran’s Hospital), better understood the need for information. She explained:

The private business would really do the measurements and aggregate the figures and present them. The other hospitals claim that they measure. How they measure it—if they measure every patient, [one doesn’t know]. Certainly, if you ask, “well, what is your outcome?”, they can’t give you an answer. They have to go back and dig into databases and so on. … But, the privatized would actually be prepared with the figures, because they would follow it. (personal interview)

The county council official explained that the public and private hospitals may have similar outcomes, although the council-owned hospital cannot show this because they do not keep the records. “But, very soon they may not be the same,” she explained. The private hospitals will try to improve their outcome record in order to secure more business. “If the privatized hospital really continues on improving, it will go ahead, and this is what the politicians expect to see in Stockholm” (personal interview).

A quality assurance nurse at St. Göran’s Hospital provided an example of improved outcomes associated with competitive business. She had worked with patients to develop a course of care for a certain procedure. Her bosses implemented her suggestions to improve outcomes, despite the fact that they increased costs. In the long run, such changes, the business managers believed, worked to the company’s benefit and helped others (personal interview).

The Dark Side

Swedish health care officials interviewed for this research seemed unaware that the fiscal incentive inherent in competitive systems might lead to illegal and unethical behaviors in their health care system. They understood illegalities committed in the United States but chalked the behavior up to national character. Swedes, they felt, were bound together by their almost unwavering support for solidarity, which negated individual greed (personal interview).

Swedes may be more honest than Americans. Swedes, an Uppsala University law professor noted, are slow to adopt new ideas and rules. Innovative concepts undergo long study in which experts are relied upon. When a decision is finally reached, the population quickly adopts it. A good example of this was the debate over right-of-way. Sweden, after a lengthy debate, granted pedestrians the right of way over vehicles (personal interview). Pedestrians also have the right of way in California. But unlike California, where pedestrians best look before they leap, Swedish drivers do stop for pedestrians. They may even stop if they suspect one is about to cross the street. This is true for bus drivers and the operators of smaller vehicles. During nearly a year living in Sweden, the author only witnessed one driver who violated the pedestrian first maxim. But, his violation shows that not everyone will follow the rule. Similarly, Swedes may adopt rules for health care that almost all will follow. But there will be some who will disobey.

Sweden’s efforts to introduce competition have lacked controls that might rein in the darker side of competitive markets. Many of the subjects believed that such efforts were unnecessary because of their national character. A quality assurance director of a Swedish university hospital (where most people in the county received health care), for example, answered a query about whether it would be possible in Sweden for people to manipulate figures in order to obtain contracts, with the following reply:

That would not happen in Sweden. That would be impossible, because you cannot hide things in this country. It is very open. We have problems with the European Union because the Nordic countries are so very open with everything. You can’t hide anything … Corruption is very low in this country. It is very difficult and you cannot change people’s minds by trying to buy them. And that is according to all people who deal with Sweden. They know that is the case in Sweden, Denmark, Norway and Finland. It is disastrous to try and bribe people because they will tell the press you tried to bribe them. We have immigrants here now who bring a bottle of wine [to the clerk because they believe it necessary in order to see the doctor; it was so in their country]. But in Sweden it is very different.

The hospital official fails to recognize that the immigrants, of whom he speaks, are indications that Sweden is no longer the completely homogeneous country of his youth and that his expectation of universal conformity may not hold. Immigration, urbanization, and other matters, have changed Sweden (Ohlander, 2010). Such social changes weaken the ability of society to maintain social control and leads to norm violating behavior (Durkheim, 1893/1984). There is sufficient evidence that indicates the hospital director and others who were interviewed are incorrect in their belief that Swedes obey all laws (“Swedes steal most of the Nordic countries,” 2010).

Recognizing Fraud in the Swedish System

Fraud and abuse in the Swedish insurance system has recently become a topic of discussion in newspapers and among politicians and government officials (personal interviews). The concern stems from official studies and individual cases that focus on payments to beneficiaries, as opposed to the providers of services. Early concern with fraud in the U.S. system was the same. There the media focused on the problem of welfare recipients, who were illegally obtaining government funds (Jesilow et al., 1993).

A recent report to the Swedish government highlighted the cost of illegalities in the country’s system; it estimated that more than Swedish krona (SEK) 16 billion (more than $2 billion U.S.) had been incorrectly paid in 2009 (Carlsson, 2010a; during most of the past 5 years, the value of US$1 has varied between SEK 6 and SEK 8). The cumulative cost, however, did not spark great outrage. It is the individual cases that have proved dramatic and attracted media and public attention.

A well-known case came to Halmstad police attention by accident. They were searching a man’s apartment on another matter when they came across photographs of him dancing at an amusement park (Håkansson, 2009). The pictures caught their attention because the man claimed to be paralyzed and unable to walk. Further investigation revealed that the man’s family was involved in a scheme to defraud taxpayers. He had hired his relatives with the more than 3 million kronor paid to him from public assistance during a 4-year span. He claimed that he needed help eating, turning in bed, and getting from place to place. His claims were untrue and he and his father were recently sentenced to 3 years imprisonment and his mother and sister received suspended sentences (O’Mahony, 2010).

The Halmstad police investigation revealed additional, connected cases that involved a company in the community that provided tax-supported, personal attendants to the disabled. Fraudsters faked serious illnesses and the company provided assistants, usually family members or friends of the supposedly ill individual. One family claimed to have three disabled children and was paid SEK 500,000 per month. A couple in another case was paid SEK 220,000 per month to care for an individual who falsely claimed to have cerebral palsy. The company and its clients are estimated to have stolen more than SEK 75 million (more than $1 million U.S.) from Sweden’s social security system, which compensated the crooked company (“Faked cerebral palsy netted millions in benefit,” 2010; “Faked illnesses netted fraudsters 75 million,” 2010).

Physician Involvement

The recent attention in major Swedish newspapers to insurance frauds hinted at physician involvement and possible misbehavior by them. The most profitable of the illegal schemes were the result of faked long-term injuries or illnesses that would have had no chance for success without the approval of medical doctors. Illustrative, the physicians who examined the man who danced at the amusement park and the patient who faked cerebral palsy could not find any reasons why either man could not walk but accepted the fraudulent claims anyway and certified their disabilities (“Faked cerebral palsy netted millions in benefit,” 2010; O’Mahony, 2010; see also Linde, 2010).

Sweden’s physicians produce documents, which certify the patients’ illnesses for Försäkringskassan, the country’s Social Insurance Agency. These documents are included in the materials that are examined by the social insurance agents who decide eligibility. Without the certification, there is no chance for a successful fraud. Until recently, a doctor’s judgment was rarely questioned by insurance agents and the physician’s signature just about guaranteed approval. There are suggestions that the situation has changed and that physicians’ recommendations no longer go unquestioned (“Fortsätt flåsa bara,” 2010), but there is little evidence that would indicate that Swedish physicians are now less likely to certify a suspect patient.

There are numerous reasons why a physician might agree to certify a patient as unable to work, even if the physician is not totally convinced of the disability. The first stems from a physician’s pledge to place patients’ interests above other matters. Doctors are sympathetic to the needs of their patients and, at least in the United States, willing to put false information in patients’ medical records so that treatments will be compensated by third-party payers instead of out-of-pocket (Bogardus, Geist, & Bradley, 2004). One survey found that about half of the physician–participants were willing to deceive health insurers in this manner (Freeman, Rathore, Weinfurt, Schulman, & Sulmasy, 1999). The practice allows physicians to collect payments for services that would not otherwise be covered by the insurance companies, while arguing that their behaviors are selfless actions taken on behalf of patients. When officials question the doctors about their conduct, the physicians blame the patients or others for the actions. The physician, for example, in the case of the individual who faked cerebral palsy, stated that the man would not sit still and as a result he was unable to conduct tests that were needed to determine whether the individual actually was disabled (“Faked cerebral palsy netted millions in benefit,” 2010). The physician saw himself as innocent; his certification of the disability, from his perspective, was due to the patient’s behavior and that he had been duped. The physician could have acted differently; he could have noted his inability to certify the disability, but he did not do this. Rather, he acquiesced to the patient’s wishes and blamed the patient for causing the certification. Such excuses allow the physicians to “neutralize” the negative definitions that they know others might apply to their questionable behavior (Jesilow et al., 1993). Neutralizations allow delinquents to remain committed to law-abiding norms but to “qualify” them in order to make their violations excusable (Sykes & Matza, 1957). Such neutralizations by physicians are often accepted by officials and others in Sweden and elsewhere, who believe that medical doctors are more honest than other groups (personal interview).

Some physicians may knowingly certify suspect patients as disabled because the doctors have convinced themselves that organized crime is involved in the scheme and that the doctors have no choice except to go along with the fraud (Carlsson, 2010b). Physicians may also drift into colluding with fraudsters. The doctors may accept gifts or provide illegal services to members of a crime ring. The criminal group then threatens the physician with exposure of the minor acts if the physician fails to go along with the fraud. The physician acquiesces to the certification in order to maintain respectability and avoid legal problems.

The extent and complexity of many of the illegal activities certainly indicate that organized crime is involved. The offenses, for the most part, involved communities of middle-aged immigrant men, the members of which had previously come in contact with legal authorities (Odefalk, 2005). Their offenses were not minor mistakes or the result of carelessness. They were sophisticated activities that required extensive planning and a large number of individuals who were trained to play various needed roles. One fraud grouping, for example, involved 70 people who staged 33 accidents (Korsell & Hansen 2005). Physicians may rightly recognize that the suspect patients are part of an organized crime group and fear that a lack of cooperation will trigger physical retaliations.

Barriers to Uncovering Criminal Activities

We do not know how extensive illegal acts are among Swedish physicians. Health care fraud is a hidden crime and suppositions about it must be based on what we know and see. Whether these suppositions represent sizable or small segments of physicians is often impossible to ascertain and is a problem faced by students in the field of white-collar crime since Edwin Sutherland introduced the concept (Sutherland, 1949).

There are elements in Swedish laws that protect physicians and other health care practitioners from scrutiny and keep some criminal activity hidden. The National Board of Health and Welfare has initial responsibility for reviewing physicians’ medical behavior. Confidentiality laws, however, prevent the board’s review of all the patient files of physicians who are suspected of certifying fake patients (Carlsson, 2010a; “Fortsätt flåsa bara,” 2010). Agents are unable to determine, without such a review, if the suspect practitioner made a single innocent mistake or if the behavior is part of a pattern of illegal behavior and indicative of criminal intent.

Sweden’s Social Insurance Agency also provides a hurdle to uncovering fraud. It is unwilling to release the names of problem doctors to others. An insurance official told a reporter that the number of problem doctors was fewer than 10 and so the problem was small and not needing much correction. The official saw no reason to reveal the names of the suspect individuals, arguing that it was not the job of his office (Carlsson, 2010b). Authorities, as a result of the secrecy, are once again prevented from determining if a single errant certification was an innocent error by a physician or part of a systematic practice.

Physicians, who do come to the attention of the National Board of Health and Welfare and are reported to the Medical Responsibility Board (HSAN) for further investigation, are likely little concerned; the most the licensing body will normally do is to caution the physician to not repeat the behavior that caused the problem (Carlsson, 2010a; personal interview). It takes repeated poor behavior by a physician for HSAN to take further action. It did, for example, recently take away a physician’s license who had certified a fraudulent patient for sick leave, but the doctor had made the diagnosis without examining the patient. The physician had also given patients inappropriate, prohibited, and dangerous treatments. Moreover, he prescribed narcotics without complying with the rules for their use and made diagnoses without sufficient evidence. HSAN had previously warned him to change his behavior, but he had not complied (“Läkare gav c-vitamin mot elallergi,” 2010). He likely was not too concerned with HSAN’s bite.

Physicians who cheat the system or certify suspect patients as disabled are unlikely to get into any trouble. Physicians do not see other doctors getting into trouble for the activity and neither does the public. Clear parameters of acceptable behavior are not established and the stated problem is diminished.

Making Matters Worse?

Sweden’s most recent move toward privatization in health care will likely increase fraud. Vårdval, as it is known, involves primary care (as opposed to hospital treatment). It is a government attempt to secure “seamless” care for patients at a nearby location and hopefully reduce health care costs. The new program gives citizens the right to freely choose between different health care providers. Private physicians and clinics can establish themselves in primary care at a location of their choosing, and, if they meet the requirements of the local county council, receive tax-financed compensation from the county for patients. The law, among other things, calls for the private clinics to promote: health and disease prevention activities; patient accessibility to health care delivery; and a coherent (seamless) treatment process. The law notes that primary/local health services should be a natural first choice for citizens seeking health care (Albertsson, 2010).

In the very recent past, a not acutely ill person would likely have visited a primary care clinic that was owned and operated by the county council. Staff members were paid a salary. The geographic location of the clinic was established by the county council. Private physicians, who were paid on a national scale by the county, existed but there were not many of them. Their numbers have grown substantially since the new millennium (personal interviews). In 2010, there were more than 1,000 doctors and 1,500 physiotherapists in Sweden who received payments based on the national scale. They have a state contract but are compensated by the county in which they operate (Aschan, 2010). Vårdval will enlarge the number of private providers (Albertsson, 2010).

Privatization in health care is not without critics. Health care is a much different market than the type envisioned by Adam Smith (1776/1937) in his classic treatise on The Wealth of Nations. People do not shop for health care providers in the same fashion as shopping for a car. Informed decision making in health care is not an easy task. It is difficult, for example, to learn information about a physician. The Swedish Board of Health and Welfare recently requested permission from the government to publish online the names, qualifications, and current professional status of certified health care workers. But, the information will not much help a consumer trying to select a provider. There will be no information on accusations of malpractice or official warnings from HSAN. It will tell those who consult it whether the individual is licensed to practice medicine and in what medical areas. That information is already available by phone from the local branch of the National Board. Provide the name of the suspect doctor and the agency will eventually inform the caller if the physician has been reported for negligence, and if yes, how many times. An e-mail or phone call to HSAN will reveal whether the physician received an official reprimand. Answers, however, are not immediate and can take several weeks to be provided. People seeking medical attention likely would prefer a speedier answer and a private, for-profit company is attempting to fill the market. The site “provides rankings of doctors, clinics, hospitals, and county councils based on votes from patients. The site isn’t connected to any official state health agency and remains somewhat limited in scope, with rankings for only 75 doctors as of May 2009” (Landes, 2010).

There have been efforts to introduce market conditions in Sweden prior to Vårdval. Officials, for example, worried that patients may unnecessarily visit health care providers if there were no costs to them. Copayments were introduced as a means to limit demand by creating a cost to patients. Swedes pay to go to doctors. The amount differs between counties and regions since the matter is decided by the local governments. The fee for a visit to a general practitioner is about SEK 100–120 (less than US$20); to visit a specialist costs about SEK 300. Hospital care is a bargain to the patient at around SEK 80 a day. Swedes also enjoy a yearly “high-cost” limit; no Swede pays more than around SEK 3,000 (less than US$500) during a year for health care services and medications (personal interview).

Copayments, however, do not suffice as a sufficient cost in the calculations of fraudulent patients who cheat the insurance system. A few thousand kronor spent in a year on health care is nothing when compared with the millions that can be illegally obtained by faking a disability.

Illegal drug sales and use are also areas where copayments likely have had little effect. A recent government report estimated that about 65,000 Swedes abuse prescription drugs (“Drug abuse on the rise in Sweden,” 2010). Not all of these individuals receive their drugs from medical doctors, but it is reasonable to assume that the majority do. A percentage of these individuals do not seek the best care, but rather want a provider who will write a prescription without asking too many questions. A private Swedish physician, for example, supplied prescriptions to patients who then sold the drugs. A review of 14 of the doctor’s patients revealed that two of them had four convictions for drug offenses and a third had been convicted 7 times. The physician’s records lacked any detail as to why these individuals received prescriptions (“Socialstyrelsen vill stoppa knarkdoktor i blekinge,” 2010). The conclusion must be reached that the doctor did not care that much about the medical necessity of the drugs and was more interested in the extra money and favors he might obtain by providing the patients with the desired prescriptions.

Vårdval has not created a capitalistic market, in which those buying the product are looking to acquire the needed services at the lowest price. For one matter, the actual purchasers of the health care services—taxpayers via the county council offices—are not making the purchasing decisions. They are being made by individual patients who are basing their selection of providers on a wide array of matters, most of which have nothing to do with purchasing the best services at the lowest cost. Distance to a health care provider, length of time until an appointment, or ease of securing prescriptions may prove much more salient to patients.

Vårdval payments will be partly fee-for-service (based on visits) and partly capitated (i.e., paid a certain amount for each person registered with the provider). A much lower fee is paid for visits to a nurse and this has led to a shift away from visits to nurses and toward visits to doctors. The share paid via fee-for-service varies between counties. The most market-oriented systems, such as Vårdval Stockholm, have the highest shares of fee-for-service payments (personal interview).

Vårdval’s fee-for-service component will increase the number of patients and providers, who are stealing from Sweden’s taxpayer-financed programs (Pettersson, 2010). Fee-for-service providers are reimbursed for each patient visit; the more they see, the more money they make. Some of them, however, may illegally increase their incomes by charging for patients they did not see, billing twice for the same visit, sending patients back and forth between other providers for unnecessary visits, examining all members of a family who are present during a visit by one of them, requiring unnecessary visits, and by prolonging treatments. These are all common illegal practices in fee-for-service programs (Liederbach, 2001).

A surgeon in Stockholm is illustrative of the ability for fee-for-service providers to illegally enlarge their incomes. She charged the county council for removing tumors, for which she was paid more than SEK 2000 (about US$300) per visit. She actually was treating warts and acne and should have received no more than SEK 600 per visit (Aschan, 2010). Worse, the treatments were often provided by staff members who had no formal medical education. During 3 years, she fraudulently received 7.7 million kronor (“Surgeon convicted for bogus billing,” 2010). In a similar case, a surgeon at a private clinic in Gothenburg is suspecting of billing for operations which never took place and for more costly procedures than those that were actually provided. The surgeon’s patients also benefited from the frauds; they received insurance payments for conditions that they did not have. During a 5-year period, the physician supposedly overcharged the system 5.7 million kronor (“Surgeon accused of faking operations,” 2008).

Increased fraud will also result from current efforts in many county councils to relate Vårdval payments to specific diagnoses; the sicker the patient, the more kronor per visit the provider will receive. A similar mechanism exists in Sweden, the United States and elsewhere for payments to hospitals; they receive a flat sum for a patient based on the individual’s illness (diagnosis). Generally, the more ill the individual, the more the hospital is paid. This payment scheme has resulted in “upcoding.” Upcoding is billing by a provider for a “sicker” (more expensive) patient than the one actually seen (Jesilow, 2005). A physician, for example, may see a patient, who she believes has the flu. The doctor, because the patient is elderly, decides to provide the patient with a prescription for antibiotics in order to prevent pneumonia. Antibiotics are a proper treatment for pneumonia, but not for the flu. The doctor’s employer eventually bills the county for treating an elderly person with pneumonia. The clinic, in this example, would receive more money than if it had billed for a diagnosis of the flu. There is substantial evidence that upcoding in U.S. hospitals is common (Brown, 1994, 1999; Harrington, 2003; Psaty, Boineau, Kuller, & Luepker, 1999; “United States Files Suit Against Tenet Health Care Alleging False Claims Billing to Medicare,” 2003; United States General Accounting Office, 2001).

The financial incentive to upcode in Vårdval goes beyond the initial payment for treating sicker patients. There is within Vårdval the potential for providers to earn extra income by having positive results for the patients they see. The final method for this matter is yet to be decided. This much is known; the bonus is to be paid on a graded scale to providers, based on their reaching certain targets to be specified in their contracts with the county council. The contracts will also include financial penalties if minimum targets are not reached (personal interview). It may be that health care companies, which claim that patients are sicker than they actually are, will have the potential, if the bonuses are based on outcome measures, to receive extra income if the patients recover from the upcoded diagnoses; the data will reflect that the patients recovered from more serious illnesses than the ones they actually had.

There is also the potential for other unethical and illegal schemes to grow under Vårdval. Fee-splitting, for example, may become a concern. Fee-splitting can occur between general practitioners and specialists, who await referrals from them. The fee-splitting physician sends his patients to the surgeon (or facility) who will pay the largest, illegal referral fee, rather than to the one who will do the best work. Less-skilled surgeons must pay larger kickbacks in order to get business. Split-fee cases thus gravitate to the highest bidders, the most dangerous surgeons (Jesilow, 2011). The fee-for-service nature of Vårdval provides the incentive for fee-splitting and other fraudulent and abusive practices that have already been described.

Some illegal behaviors that will be encouraged by Vårdval are less evident than those already discussed in this document. Most individuals likely go to the doctor because they need to, and not for some fraudulent reason. For these individuals, location probably plays a major role in the selection of a health care provider and Vårdval supposedly takes advantage of this aspect of the health care market by allowing certified providers to set up shop wherever they please. The idea is that the providers will respond to the market and establish businesses where they are needed, but lessons from the United States and Sweden suggest caution.

Vårdval providers likely will establish business in areas where profits are highest and avoid communities that have potential patients who will take substantial time but offer little monetary reward. A provider who spends 5 minutes with a patient may receive the same compensation as one who must devote considerably more time because the patient’s problems are complex (Dahlgren, 2010). The business may attempt to drive away time-consuming, unprofitable customers, while accepting the most profitable; such behaviors have been uncovered in the United States (Jesilow et al., 1995). The activities are against Sweden’s rules, but in a system based on trust, they are bound to occur, particularly in large, urban centers, such as Stockholm, where there are neighborhoods of great wealth and others that are very poor (“Stockholm illustrates growing wealth divide,” 2011).

The evidence suggests that Vårdval will increase fraud by expanding the opportunities for it. Private health care entities will be motivated to participate in frauds in order to increase their incomes. And, as already discussed, the potential cheaters have already established neutralizations for themselves, which will allow them to defraud the system while maintaining a positive self-image.

Cost of the Frauds

We do not know whether the frauds discussed here and in Sweden’s news media are the tip of a very large but mostly invisible problem or whether they represent a minor hitch that does not need attention. Government estimates of the yearly theft from Swedish insurance programs indicate losses of billions of kronor (Carlsson, 2010a), substantial for a country with only 9 million residents. These, however, are just estimates; no one knows the actual extent of erroneous payments or what percentage of these payments is due to accidents and what portion is due to fraud. Minimum U.S. estimates of fraudulent payments range from 5% for private insurers (Maltin, 2004) to 10% for government-run programs (Daly, 2009; General Accounting Office, 1992), although some educated guesses for government losses are as high as 40% (Sparrow, 2000). It is unlikely that the problem of insurance fraud in Sweden is currently as bad as it is in the United States. There is much more money to steal in the United States and those who would cheat Sweden’s system may decide to move there, rather than stay in Sweden.

U.S. law makers ignored fraud in its government-supported program for more than a decade and even after that only the blatantly indiscreet, seemingly totally disorganized, or astonishingly thoughtless providers were being caught (Jesilow et al., 1993). Dishonest Swedish patients and providers who are detected are similar; it is the “stupid” or “unlucky” ones who are caught. The extent of theft in the Swedish insurance programs is likely greater than the few fraudsters who have surfaced. The current extent of such frauds in Sweden, however, is not the focus of the current article. Rather, the concern here is with the potential for illegal activities to grow in the changing Swedish system.

Feeding Fraud

Smarter crooks, in Sweden, the United States and elsewhere, likely victimize taxpayer-supported programs by ordering unnecessary visits and tests. They are not easy to detect and nearly impossible to prove in criminal courtrooms. Medicine is not an exact science and there are few iron-clad rules. Physicians and other providers often have differences of opinions about the proper treatment for the same set of symptoms and there are considerable variations in medical practice (Wennberg, 2002).

Providers’ decision making when dealing with the uncertainty of medical practice may be influenced by a number of factors. Concern for their patients and society plays some role, but self-interest often seems to also be a factor. Provider choices on some occasions, at least in the United States, appear to be little more than neutralizations, or rationalizations, to excuse self-interest. In these instances, the lack of agreed upon rules allows providers to excuse their selfish behavior as the fault of their patients, billing clerks, enforcement officials; in short, anybody but themselves (Jesilow et al., 1993). The situation is likely the same in Sweden. A 2008 study by the Swedish Junior Doctors’ Association, for example, noted that Sweden’s doctors were spending 16% of their time on unnecessary examinations. The association, however, freed the physicians from blame; the cause, according to the group, was worry by the medical doctors that they would be erroneously reported by patients to the government agency responsible for licensing physicians (HSAN; Landes, 2008). Perhaps, indicative of the power of the profession, beginning January 1, 2011, patients were no longer allowed to complain directly to HSAN but must report to the National Board of Health and Welfare (“Socialstyrelsen nu har tagit över hanteringen av patientklagomål,” 2011).

Might Sanctions Make Matters Better?

Criminal convictions are one means to establish clear boundaries of behavior and eliminate some of the “gray” areas that give rise to neutralizations and bad behavior by some providers. The recent conviction and sentencing of the Stockholm surgeon, who had billed the county for more expensive services than she had provided, illustrates the point. She was sentenced to 4 years in prison for aggravated fraud. The lawyer for the county council called the conviction unique. She told a newspaper reporter, “We’ve never had a case like this before. It’s a very clear ruling which shows gross violations of the reimbursement rules. And it concerns a large sum of money” (“Surgeon convicted for bogus billing,” 2010). Her point was that the conviction had clearly established that the surgeon’s actions were unacceptable and blameworthy. Providers were put on notice that similar behaviors would not be tolerated and would result in severe punishment.

Criminal convictions may also deter providers from committing illegal and unethical activities. Deterrence—the idea that individuals will be less likely to violate the law if they think that there is a good chance that they will be caught and punished—is believed to work best with businesspeople and health care professionals because they have much to lose from being caught (Braithwaite, 1985; Chambliss, 1967). Officials of a private hospital in Sweden, for example, reported that they made great efforts to follow all laws, rules, and regulations. They believed, because they were a private company, there would be particularly bad results (such as losing their contract with the county council, bankruptcy, and unemployment) if they were caught doing anything wrong (personal interview).

The criminal law has some advantages over other methods to control illegal behavior in health care. But it also has several disadvantages. U.S. and Swedish authorities have found it difficult to prove criminal intent, particularly by physicians, who enjoy great prestige in both societies and are able to cast the best light on behaviors that would be considered “shady” if done by others (personal interview). Health care fraud is not an expertise of Sweden’s prosecuting attorneys and investigators. They are accustomed to daily handling the unsophisticated offenses that occur in poor communities (such as burglaries). Specially trained investigators and attorneys are seen as needed in the United States in order to obtain convictions for insurance fraud and similar efforts are likely needed in Sweden.

Overall, Sweden relies on a nonpunitive system for controlling illegal and unethical activities. Rather than deterring bad behavior by punishing miscreants, Sweden promulgates rules that, if followed, will prevent the behaviors from occurring. The United States is not much different in this regard; lacking criminal convictions, state and federal authorities in the United States often rely on regulatory rules in their attempts to control illegal behavior (Jesilow et al., 1993).

Regulatory Rules

There is a problem with trying to control illegal behavior with rules. Honest providers reject them as unnecessary intrusions upon their independent practice of medicine. They rebel against the regulations. Meantime, fraudsters quickly find ways to get around the new criteria (Jesilow et al., 1993; personal interviews).

Sweden’s reaction to the involvement of physicians in insurance fraud is illustrative of the problems with rules. Stringent requirements have been enacted for physicians who certify a medical basis for sick leave, with predictable results; physicians have criticized the new rules. A psychiatrist at Karolinska Hospital in Stockholm complained, for example, that the new regulations would take time away from her treatment of patients. She noted that the new rules required a much longer text and more detail than she had previously needed to submit (“Läkare kritiska till Försäkringskassans hårdare krav,” 2010).

The new rules for physicians may improve the accuracy of their certifications for sick leave. They may, however, also provide some physicians with additional neutralizations that may lead to more criminal behavior. At least that is what examples from the United States suggest. There, attempts to control illegal behavior among physicians have involved increased paperwork for the doctors. Some of the physicians have used this as an excuse to defraud insurance programs. They argue that they steal in order to make back the money they lose by spending extra time completing forms (Jesilow et al., 1993).

There is reason to expect the same sort of neutralizations among Swedish providers as exist in the United States. They may cheat and blame their behavior on the authorities. The Swedish surgeon, for example, who was convicted of charging for more expensive services than the ones she actually gave to patients, argued that she needed to do this because the billing form did not include the services she had actually provided (and which, under the government’s rules, were not entitled to additional reimbursement). She was not to blame for her cheating, she reasoned. It was due to the authorities, who had failed to include the treatments on the form (Aschan, 2010).

What Is Needed?

The extent of fraud associated with Sweden’s increasingly privatized health care system is likely to grow. Swedish authorities need to be active before then to minimize its growth. For one, the government should gain the aid of honest physicians in the fight against fraud. As professionals, the doctors have a duty to help prevent unethical behavior. Rules may also help in some matters (e.g., rules that require a physician to maintain medical records). But, rules also upset diligent providers, who react against the government intrusion into their health care practices. Such providers will likely be unwilling to join the government in its efforts to fight fraud.

The establishment of criminal laws, with reasonable prison terms, may be a more effective method to control fraud than regulatory rules. Such laws can help establish parameters of behavior. Moreover, prison terms for the guilty help reinforce law-abiding attitudes. As Emile Durkheim (1893/1984) noted, sending violators to prison further highlights that the fraudsters’ behaviors are unacceptable and blameworthy.

Efforts to enforce criminal laws against members of powerful groups will meet obstacles. Members of the Swedish Medical Association, for example, are already unhappy with additional regulations placed upon them and will likely be less happy to have authorities suggest that some physicians are criminals. There is reason, however, to believe that they might have their minds changed.

Talcott Parsons (1951), in a classic analysis, noted the importance for the medical profession of the ideal of “selflessness.” The ideology emphasizes the physician’s obligation to put the patient’s welfare above the doctor’s personal interests. The “profit motive” is supposed to be excluded from the physician’s decision making. In Parsons’s (1951) view, “it is to a physician’s self-interest to act contrary to his own self-interest—in an immediate situation, of course, not in the long run” (p. 468). By embracing the ideology of “selflessness” in immediate situations, physicians could ensure their long-term self-interests of professional hegemony, high-financial rewards, and relative autonomy. Parsons argued that as long as medicine remained beyond the oversight of other self-interested and powerful agencies, its reputation would stay untainted, and its procedures could serve practitioners’ interests and those of most patients (Parsons, 1951).

For Swedish health care providers, Vårdval increases the opportunities for financial self-aggrandizement; left unattended, this may undermine the ability of physicians to control the practice of medicine. Increasing reports of illegalities by Swedish providers will chip away at the image of physicians as selfless and undermine their reputation and power. Increasing government oversight will likely be quick to follow.

American Medical Association officials early on claimed that health care frauds were a government problem and should not be dealt with by the association (personal interview). The organization finally spoke out against fraud by doctors when its officials realized that the behaviors were undermining the profession’s claim that physicians acted in the best interests of patients (Todd, 1991). Perhaps, the Swedish Medical Association’s officials will see the wisdom of early involvement in the battle against insurance fraud if they realize the negative impact of the behaviors on the practice of medicine—more rules and declining professional prestige.

Conclusion

Efforts to examine illegalities by health care professionals almost always bring reflexive comments that most doctors are honest and doing their best to improve the health of the population. Most of the individuals interviewed for this research, for example, were physicians who were actively involved in trying to improve their occupation and the health of patients. The fact that most doctors may be honest, however, does not mean that we should ignore the illegal behavior. Most people do not kill, but we pay attention to the behavior because it causes great harm when it does occur. Similarly, misdeeds by physicians can injure society by undermining the trust that patients must have in their health care provider, by stealing needed funds from a nation’s health and welfare system, and by causing harm to individual patients.

The research presented here is not intended to be a systematic study of fraud in the Swedish health care system. Rather, the intent of the study was to explore the impacts of privatization on the regulation of Swedish health care. One of those impacts, it is argued, will be a need for Swedish officials to attend to a growing crime problem.

The projected increases in illegal behavior are not based solely on privatization. Immigration and other changes in Sweden likely will play some role; but these matters are outside the purview of health care regulators. Nor are the negative impacts of privatization solely associated with crime. Negative behaviors have arisen that seem more closely associated with malpractice than crime. In November 2011, for example, corporate-owned elderly care facilities in Sweden made headlines for paying bonuses to its managers for holding down costs. The results were staff shortages, broken equipment, and suspected neglect at the facilities (“‘Secret' bonus scheme,” 2011). These will be matters for health care regulators. They, however, fall outside the realm of criminal behavior, which is the focus of this article.

It is impossible to know the extent of illegalities in the current Swedish health care system. The behaviors, as with most white-collar crimes, are largely hidden from view. Most victims, including state-run health care programs, are likely unaware that a crime has even occurred. It is, as a result, impossible to currently know whether the cases described in this article are idiosyncratic occurrences or representative of a much larger, albeit invisible problem. The research was not intended to establish these matters.

The current research is meant to be forward looking. The insurance fraud problem in Sweden and in other nations’ third-party payment programs should be recognized and steps implemented to control its growth. Fee-for-service payment systems, such as Vårdval, increase opportunities for theft. Other European countries have recognized the necessity for action against fraud and 12 of them have organization members within the European Health Care Fraud and Corruption Network (n.d.).

The United States ignored the potential for health care fraud in its taxpayer-financed system for nearly a decade and it grew to a level that was unmanageable (Jesilow et al., 1993). Enforcement officials in the United States today complain that they are always a step behind the fraudsters (personal interview). The government enacts a new rule or develops a new mechanism to uncover the frauds. But the perpetrators are sophisticated and they quickly outmaneuver the government efforts, leaving enforcement agents at a disadvantage. Swedish officials, and those in other countries that ignored the problem, will likely face similar difficulties if they fail to now take action.