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Public health care services in the advanced welfare state
348
PUBLIC HEALTH CARE SERVICES IN THE ADVANCED WELFARE STATE Observations from the Swedish futures study Care in Society Marten
Lagergren
In 1978 the Swedish Secretariat for Future Studies-a government advisory body for long-term issues of broad societal significancebegan its project “Care in Society”. The final project report was published in May 1982. The original purpose of the project was to study how conditions in society affect needs for care in different forms and how these needs are formal institutions. More met- informally or through broadly, the study came to be a general assessment of the welfare state and its growing problems. This article examines findings and proposals from the Swedish report. Keywords: welfare state; future studies; Sweden; health care
FORMAL and informal care are heavily dependent on societal conditions. Demographic and social patterns, women’s propensity to work outside home, working hours etc, shape the conditions for informal care. Economic resources and technological advance, concepts of manhood and solidarity, professional ambitions and power relations etc, together mould the formal care services systems. This connection between society and the formal and informal systems of care makes it necessary to discuss the future of the public care services in a broad context as in the ‘Care in Society’ study. When the capacity of informal care systems is insufficient-in quality or quantity-a need for formal care arises. On the other hand, the formal care systems might have a tendency to deplete the informal; for example, it might be claimed that care of a certain kind or for a certain group of recipients demands special knowledge or techniques which can only be provided by professionals. BOTH
Dr Marten Lagergren is at the Secretariat for Future Studies, PO Box 6710, S-l 13 85 Stockholm, Sweden.
00163287/85/040348-12$03.000
1985 Butterworth
& Co(Pub1isher.s)
Ltd
FUTURES August 1985
Informal care
Form01core
Society
Figure 1. The interaction
between the formal and informal care systems.
interaction between formal and informal systems of care can be illustrated by the ‘care triangle’ shown in Figure 1. In Sweden, formal organized care is essentially part of the public sector. The costs of providing it are predominantly classified as public consumption and financed by taxes. The principle of making organized care services a public responsibility rests on the premise that everybody in society shares responsibility for those in need of care and welfare, and everybody must therefore contribute according to their means. From this perspective, care is not seen as a private service: one does not pay tax for one’s own care. Instead, tax is to be regarded as a contribution towards the care of all people in need, just as it is a contribution towards national defence, the police and so on. Thus public care and welfare might be regarded as a collective benefit in the sense that when some people receive the care they need, this also contributes towards the quality of life enjoyed by others, in that everybody acquires a better, more decent community. The many different types of care needed by various groups are an important reason for adopting this premise. Moreover, the need for care varies in more or less inverse proportion to payment capacity. This approach is also responsive to general efforts made by the community aimed at improving general living ( onditions and thus reducing the need for care-a goal which the conception of care as a private service might preclude. In principle, it is clearly possible to achieve broadly the same goal through other means -privately organized care financed by a publicly-funded insurance system etc. However, this does not alter the essential dilemma facing the advanced welfare state. The fundamental dilemma is that the social development of the advanced welfare state brings with it an increasing need for The
FUTURES August 1995
350
Publrc health care scru~ces tn the advanced meljare state
organized care services, while at the same time the costs of providing a certain volume of services are increasing. The result is that organized care services, as a seemingly automatic consequence of industrial development, require a steadily rising share of total resources. Financing these services and other public responsibilities thus requires rising taxation rates until a point is reached where further increase seems impossible. The combination of growing needs and increasing prices has been manageable in the post-war period due to rapid economic growth. The result has been a swift increase in cost and volume of the public care services (see Table 1). The new situation facing the welfare state is slower economic growth, which makes it impossible to increase public consumption at the same rate as before without severely restricting or even reducing private consumption. There is an obvious need for a rethink of the organization and financing of the care services in the advanced welfare state. The preferred solution will of course be dependent on political values. One thing seems inevitable-it is not possible to continue the path hitherto chosen for much longer. Below I discuss in more detail the social and economic forces lying behind growing needs and growing costs. In the next section calculations are presented based on the assumption that the present structure and standard of services should be maintained. In the last part of this article I discuss possible structural changes that seem to lie within the realm of the Swedish welfare state concept. The growing needs for public care services The growing needs for public care services seems to be connected three factors: l
0 l
primarily
to
a growing number of elderly people; diminishing possibilities of receiving the care needed in existing social networks; and increased expectations and possibilities depending on economic, medical and technical developments and professional and political ambitions.
Between 1960 and 1980, the proportion of people in Sweden aged 65 and above increased from 12 % to 16%. In the following 20 years this proportion is expected to remain constant but there will be a shift within the group. The number of people aged 85 and over will rise by SO%, from 100000 to 160000. Elderly people constitute a large proportion in the care system. People over 65 account for two-thirds of bed-days in somatic medical care, half of all mental care and one-third of the consumption of pharmaceuticals. It is obvious, then, that the growing number of elderly people constitutes a major reason for growth of the care services sector if the standard of services is to be maintained. However, the increasing number of elderly is not the only problem. The amount of care services per person in the oldest age groups is also increasing. The primary reason behind this development seems to be changes in the social environment-especially the increasing number of working women. This means that less women are available for taking care of older relatives. Around 70% of women in Sweden are now gainfully employed-half of them part-time -as against only 50% in 1960. The development from 1970 and a prognosis to the year 2000 are shown in Figure 2. FUTURES August 1995
! f f
s
Source: Swedish National Accounts.
GNP at market prices Gross operating cost of public care as % of GNP Relation between growth of public care services and GNP No of employees (103) Public care services Labour force No of employees in public care as % of iabour force % of the growth of the labour force to public care services
Totsl public csre services
Social care
Health care
Gross operating cost of
4.99%
783.8 3683
4.33%
13.82 319.1
10.02 3.80
1963
80.1%
2.68
C11*5% + 4.3%
+ 10.5% + 14.1%
Annual growth 1963r70
9.39%
367.2 3912
6.93%
29.70 426.8
9.55
20.15
1970
+ +
$
62.7%
2.74
7‘3% 2.7%
8.0%
-b 7.0%
Annual growth 197om
12.2%
503.3 4129
6.64%
42.26 489.1
28.25 14.00
1975
4.8% 9.3%
89.3%
5.91
+ 6.4% + l.t%
+ +
Annual growth 1976i82
703.4 4353 16.2%
12.4%
65.40 527‘7
39.35 26.05
1982
TABLE 1. THE GROWTH OF THE SWEDISH PUBLIC CARE SECTOR IN RELATION TO GNP AND LABOUR FORCE, 1963~82,1960 PRlCE LEVEL _“”““1”1”““~“___“” ~_-l~-.-__.-_--___-_______ _____~“_ _______ - _.__ - ____“___ _-_____ _““” -.
55-59 20-24
-_-*rz
-.-;I;-
20
1
---
_
-
-’ -_
-
0
z
65-74 I
1
---.# I
t
i
I
-
-
_
-
-
---_____
1970
Figure 2. Percentage of women gainfully employed in different age groups 1970-2000. Source: Swedish National Bureau of Census.
The feasibility of everyday care is also closely connected with social structure and dwelling patterns. Households have grown smaller in recent decades. The shrinking household pattern applies particularly to elderly people. In 1945, about 15 % of men and 30 % of women over 65 in Sweden were living together with their children, as against 3% and 5% respectively today. Small households are vulnerable because they tend to need outside help more often. For example, it is established that divorced people have higher mortality, are ill rnoI2 frequently and use the care services more often than married people. A third reason for the growing needs for care services is increasing political and professional ambitions connected with expanding economic and technical possibilities. Obviously the fast-growing economic resources in the post-war period have had a great influence on the development of the public care services. This is illustrated by the high correlation between care expenditures and GNP in different countries (see Figure 3). But international medical-technical developments act also as a force per se, pushing up the need for health care services by offering possibilities for care and relief to people who have previously had to suffer or die without expectations of any change. This type of development has shown to be politically difficult to handle, even in a constrained economy. Growing
costs for satisfying
a certain
need
Not only is the need for public care services increasing because of social development factors outside the sector itself, but the costs for satisfying a certain volume of needs are also increasing through the operation of similar mechanisms. The basic underlying factor behind this development is the changing price relationship between goods and services due to differences in productivity growth. Productivity increases due to rationalization, and automation of FUTURES August 1985
700
t 600
loo
3ooo
4000
5ooo
6OCQ
7ooo
GNP($/capita) Figure 3. Health care expenditures and GNP in 19 OECD countries in Sweden 1928-1975. Reference: OECD 1974 national accounts.
(1974) and the development
production in the goods-producing sector of the economy, make it possible to raise wages in that sector. If wage relationships between different sectors in the wages must also increase in the serviceeconomy are to be maintained, producing sector even if no such productivity increase occurs. The effect-after adjusting for inflation-will be that the price of goods will fall and the price of services rise. In addition to this development, the cost of a certain output from the public (‘are services, eg a bed-day in an emergency hospital, has increased because more and more man-hours are used for the same output. There are many reasons for this development, such as: 0 l
l
improved quality of care, in many cases as a consequence of professional ambitions, and more onerous and more intensive care; amended legislation concerning, among other things, the working environment (eg the right to rest periods, safety etc), co-determination (the right to hold trade union meetings in working hours, etc), and security of employment; the greater need for coordination and communication in an increasingly complex organization for care and treatment.
Calculations show that throughout the public care services sector the input of man-hours per unit of output (bed-days, visits to doctors etc) increased by 2 %-3%/year during the 1970s in Sweden (see Table 2). Together with the automatic price increase mentioned above, this meant that costs-adjusted for inflation-were increasing by 4% -5 %/year for a constant volume of services. Can
the standard of services be maintained?
Growing needs for care services and increasing resource inputs for a given volume of services have been the engine for the growth of the care services
FUTURES August 1985
354
Public health core servtces m the advanced welfare state
TABLE 2. SUMMARY ANALYSIS OF THE GROWTH IN THE COST OF PUBLIC CARE SERVICES DURING THE PERIOD 1970-1979 (ANNUAL % CHANGE, FIXED PRICES) _ Change in numbers Of;ersolS
Change in service standard (output per person)
Change in man-hours unit of output
Change in cost/ man-hour
Total changes in costs
+ 1.4 - 1.1
- 0.5 + 14.2
+2.7 + 2.6
+ 3.0 + 2.5
+ 6.7 + 18.8
+ 2.5
+
1.2)
( -I-5.5)
+
+ 0.3 + 0.3 + 0.3 +1.2
-I- 1.4 + 5.4
+ 3.7 - 0.6
+ 3.8 + 3.6 (2.4) + 2.8
+ +
Health services Child care Care of the aged and the handicapped Care of the mentally handicapped Dental service Other social services Total public care Relative proportion of the total Increase In cost
This
has been
made
This important requisite, 197Os, economic growth decades
solution needs
1.3
possible
30
by the rapid
economic dilemma-
government
a significant
a problem Further
that I approach from various expansion of the care services
and 1970s
scarcely
appears
9.6 9.1 (+ 2.8) •r- 7.8
37
100
growth
of the total economy.
has now changed. Since the middle of the modest, and the prospects for the coming
services
prices,
taxes while still permitting
8.6
values.
different-although
care
relative
+ 2.3
17
are uncertain 4, 1981.
when limited
to the public
and higher
+
however, has been
do not look much
the past decade. What will happen
(-
( + 0)
16
Note: Figures within parentheses Source: Lagergren, text reference
sector.
1.6
perhaps
not quite
as bad as for
growth no longer permits the easy expansion to meet increasing being
growth
able to collect
in private
the necessary
consumption?
This
is
perspectives below. sector at the same rate as in the 1960s
to be practicable,
and is perhaps
not even desirable
for reasons other than economic ones. But what would it mean, as regards finance and employment, if we tried to maintain the standard of service that we have today? This means that we should expand the health care service, the care of the elderly
and other
fields of care at the rate required
to correspond
to the
changed age structure, but not more than that. Of course, this general aim does not exclude the possibility of expanding more rapidly in a certain field, but in that case it will have to be done at the expense of some other field, within the framework of a total rate of increase which corresponds to the population change. We may then ask ourselves what such a rather moderate level of ambition will entail, as regards costs and the numbers of employees required for the care sector in the next 15 to 20 years (see Figure 4). The concept of volume of service refers to a weighing of various measures of care and treatment-bed-days, places in day homes, etc-and the standard of service is the volume of service in relation to the size of the group in need. In calculating the volume of service, it is assumed that the volume of service per hour worked will fall by lO/o/year, which is roughly half the rate which applied during the 1970s. This fall may be connected with an increase in quality or may have
some
other
cause.
FUTURES August 1985
2m
I50
Volume of services Stondord of services
loo
I 199s
I
1982
I 1994
I 2ooo
Figure 4. Growth of gross costs, number of employees, man-hours and services for the public care sector with an unchanged standard of service 1982-2000. Assumptions: 1.1% annual reduction of working hours; 3.4% annual growth of productivity in enterprise; and 1.5% growth of output in private enterprise.
The somewhat depressing observation is that, at the turn of this century, the goal of retaining the present standard of services-given the assumptions cited above-will result in an increase of almost 70% in the number of employees in the public care sector and an increase of over 100% in cost. This means that almost all the economic growth during the coming two decades would be devoted to public consumption. The private standard of living for the gainfully employed would be reduced by 10% and the tax quotient pushed up to almost 60%. It must be regarded as highly unlikely that the Swedish people would accept such a development, and it is likely that the cost curve of the public care services will be pushed down. The question then arises of how this will be achieved and what consequences it will have. Using the system of graphs presented in Figure 2 it is possible to discuss item by item the different components that comprise the cost growth. The first component is cost per employee. Increasing costs per employee are the consequence of the national unified wage policy that gives employees in the care services and other public sector employees the same level of wage rises as employees in the private sector. In the current Swedish debate there are frequent calls for this policy to be abandoned. It is argued that public employees must stand back to make it possible to curb growth in taxation and to increase employment. Naturally the trade unions in the public sector have hitherto shown little sympathy to this demand. It also seems difficult to maintain that the fruits of automation, computerization and use of robots, should remain among those still employed in the sectors involved rather than being distributed among the people at large. It is doubtful whether substantial savings could be achieved in this way. Curbing the increase of employees per man-hour amounts to the same as putting a brake on the reduction of working hours. The important question then FUTURES August
1985
356
Publtc health care ~emce~ tn the advanced welfare state
is whether this will have an effect on unemployment. This is clearly debatable. Many observers argue that ending the reduction of working hours will, in the long
run,
only
serve
to distribute
the available
work
among
fewer
increase unemployment. According to this argument there seems gained from such a policy since the unemployed have to be supported
people,
ie
little to be in any case
in the welfare state. Taxation levels will be about the same and the only result will be social unrest and a reduction in the quality of life for the people concerned. Trying
to cut down-or
perhaps
more appropriately
curb the increase
of-the
number of man-hours per unit of output may be a more realistic possiblity. As was pointed out above, this ratio increased by 2 % -3 %/year in the 1970s. The assumption
in
significant
change
even reversing brought problem
the
calculations
above
for the better
was
has been
the trend might be possible
about
an
overstaffed,
lies in determining
1%.
Thus,
already,
a
Reducing
this to zero or
if the rapid expansion
in the 1970s has
inefficient
whether
a mere
assumed. care
the present
services is the result of inefficient organization consuming, eg care for older, more dependent
services
organization.
level of employment
The
in the care
or of the work itself being more patients, or an improved quality
of services. Two factors suggest that expectations should not be set too high in this area. First, the continuing reduction of the mean time of stay in acute somatic and psychiatric as
less
care has meant dependent
that the average
patients
are
treated
patient
requires
outside
the
more and more care institutions.
Second,
medical-technical development leads to more staff being engaged in activities not directly connected with patients, eg laboratory services of different kinds. An increase
in the number
of man-hours
per bed-day
or visits to the doctor
will
then ensue automatically-all things being equal. Since neither of these two developments is likely to disappear, it would be unwise to place too much hope on reversing
the trend
concerning
even
that
a development
certain
such
‘productivity’ is desirable,
in the care
services.
the output
It is not
measurements
being what they are. The last item on the list is the difference between ‘volume of services’ and ‘standard of service’. This depends on the changing demographic structure of Swedish society. As can be seen from the figures, the effect is not very significant, occurring mainly in the 1980s. The underlying demographic forecast must A slight tendency towards decreasing old-age be judged as fairly reliable. mortality might lead to an even higher number of people in the oldest age brackets. More important, however, is that the ratios used in the calculations, ie bed-days etc per person in the respective age group, are increasing rapidly in the oldest age groups due to the social changes described above. The more uneven the consumption of care services becomes with respect to age, the more significant the demographic change will be. To preserve the standard of services in a real sense will then In summary we distance between possibility, then, is
require more services. must conclude that the possibilities for compressing the the curves in Figure 2 seem limited. The remaining to cut down on the standard of service. That means closing
down hospitals, residential homes, day homes, etc. Before one bemoans these prospects it is essential to take a closer look at the notion ‘standard of service’. It
FUTURES August 1995
is supposed to mean that each group of patients and clients in each age group will have access to the same amount of care services as today-the same number of bed-days in different forms of care, the same number of visits to doctors of different specialities etc. Access to care of a certain form is, however, not an end in itself. The goal of care must be expressed in terms of improved health or some other aspect of the quality of life. There is no impediment to the same effects of care, measured in these relevant terms, being achieved with a lower ‘standard of service’ if the structure and content of the care services are changed. In fact, there is a lot of evidence to suggest that structural changes in the care services can lead to much higher efficiency, measured in terms of results achieved compared to resources used. Moreover, judging from the preceding discussion, such a change seems absolutely necessary in order to handle the future dilemma of the public care services. In the following, final section I explore further some of these possibilities. The need for structural
change -satisfying
the present
need is not enough
As shown above it is doubtful whether it will be possible to maintain the present ‘standard of services’ of the Swedish public care service system in the coming decades. But this is only part of the problem. The same forces that have been instrumental in increasing the need for care services during the past two decades will no doubt continue-even if not as forcefully-during the rest of this century. In Sweden we are still only little more than haif-way through the ‘sexual revolution’ -the ratio between the sexes of gainfully employed is not projected to reach equivalence until the middle of the 1990s according to present trends. The remaining housewives-predominantly in older age brackets-play an important part in the care of elderly relatives, a part which must gradually be taken over by society as these women disappear. Medical-technical developments are obviously unlikely to come to a standstill. Enormous research resources and a powerful drug and equipment industry guarantee the likelihood of new advances. These advances, however, notwithstanding their possible usefulness to mankind, will in many cases lead to higher costs of care and to more difficult problems of determining priorities. The need for structural changes in the public care services system is then highlighted. In the following paragraphs I outline some important options. Substituting
expensive
institutional
care for less expensive
forms of care
Sweden has more hospital beds per inhabitant than any other country. In part, I his might be due to the demographic structure, but the most important (explanation probably lies in Swedish traditions and culture combined with the availability of sufficient economic resources in the past. Especially for old age patients, there has been a rapid increase in the number ofbeds for long-stay care at nursing homes. However, there is growing evidence that this form of care for the elderly is not only expensive, but also tends to make patients more dependent. By using more
FUTURES August 1985
358
Publtc health care services in the advanced welfare state
care resources than necessary, the need for these very resources is created. Studies have repeatedly shown that old people in institutions rapidly lose their ability to cope with the activities of daily life unless vigorous (and expensive) attempts are made to rehabilitate and restore their capacity. By changing the criteria for admission and deploying more resources for social and medical help in the home, it has been possible to reduce significantly the need for nursing-home beds and at the same time lower operating costs. The same arguments apply in principle to psychiatric care. It has been estimated that at least 30%-35% of psychiatric hospital patients in Sweden could be better cared for as out-patients. A continuing reduction in the number of psychiatric beds is occurring but the process is hampered by union resistance due to fear of unemployment. Also important in this context is that appropriate out-patient care resources are deployed. Many psychiatric hospital patients have spent a long time in hospital and need assistance to cope with life outside the hospital. There has been much debate whether primary out-patient care could act as a cheaper substitute for acute somatic in-patient care. Some evidence exists for this, although most studies of the problem seem to be inconclusive. Sometimes the opposite case is argued: well-developed primary care will detect a lot of health problems which will need hospital resources for their treatment. One solution-following the idea of a pre-payment plan-could be to let the primary care centre act as a kind of ‘profit centre’ with a total budget to be used either for primary or for hospital care. In the latter case the centre would have to pay the hospital for its services. In this way a powerful incentive is created for not using hospital care more than is absolutely necessary. The hospital would get no direct funding and would have to adjust its development to the need as perceived by a competent buyer-the primary care centre. It is sometimes argued that disease prevention and healthy lifestyles are the key solution to the increasing cost of care and welfare. It is worth looking at this more closely. For example, it has been estimated that one-third of the hospital beds in Sweden are occupied by patients whose illness is directly or indirectly connected with alcohol abuse. Does that mean we can reduce the number of beds accordingly if alcohol abuse is eradicated? In theory perhaps, but in practice the situation looks very different. First, the methods for eliminating alcohol abuse are not known. Second, there is general acceptance of what is called Roemer’s law for hospital care, namely that supply creates demand. If alcohol-induced diseases disappear, other patients will compete for the beds and the net effect will be zero if deliberate political action is not taken to reduce the number of beds. Prevention and healthier lifestyles do certainly hold the promise of improving health and the quality of life, but it generally seems more doubtful whether the effect will be a reduction in the volume and cost of the care services. After all, an increasing majority of that care is absorbed by the elderly. Even if preventive measures resulted in decreasing mortality and morbidity in the middle-age years, the effect of this would only be to shift mortality and morbidity to older age groups, since mortality in life is 100%. In addition to that, the number of dependents in the highest age groups will increase, adding to the burden of the social care services. Thus, summing up, we can hardly expect to find the solution to the care services problem in disease prevention and promotion of
FUTURES August 1995
Publrchealthcare serotc~~in the advancedwe&e state 359
healthy lifestyles. These activities must be evaluated on another basis. The dilemma of the public care services system in the advanced welfare state is to a large exent a problem of transfer. We have to transfer a growing amount of resources from one sector and one part of the population to another sector and population group. The transfer is made in terms of monetary resources by way of taxation. The problem arises because it is doubtful whether the taxation level can be raised indefinitely within the realms of a mixed economy. One solution to this dilemma might be to think of the transfer in another way -in terms of labour rather than in terms of money. Solidarity with people in need can be expressed by personal action and participation rather than by impersonal taxpaying. Different modes for this participation can be conceived. The previous mode was that housewives and other female relatives undertook unpaid work by caring for their family. Voluntary work outside that area does exist in Sweden but has never had the same tradition and magnitude as eg in the UK. Voluntary work in Sweden carries a pejorative connotation and has been actively resisted by the trade unions. However, it may be time to change this attitude. The analysis above makes it clear that taxation problems will make it difficult to continue expansion of the paid care services. At the same time reduced working hours will increase the time available for unpaid work. Voluntary care work contains many attractive features. It offers an opportunity for commitment and personal development while doing valuable work. However, the question is whether voluntary efforts can be sufficiently comprehensive to cope with the problem of resources in the care sector. Another method is to oblige citizens to do unpaid work for the community-to tax time instead of income. Taxing citizens’ time instead of their money means the introduction of a compulsory social service. This may sound radical and strange; however, it is not actually a new idea. Demands for unpaid work by citizens in the public interest have been made in various forms in many societies from time immemorial. At present, compulsory military service is one example of an extensive and, on the whole, generally accepted social service in many countries. Social service in the field of care and treatment can, like compulsory military service, also be supported by many kinds of argument besides the financial. Summing up, we find that preserving the organized care services as a public responsibility certainly requires new thinking and an open mind towards new, perhaps radical solutions. Many political and economic forces are acting towards the dismantling of the welfare state. Sticking to the old solutions will, however, not help the efforts to preserve it. Bibliography 1. M. Lagergren et al, Time to Cure (London, Pergamon Press, 1984). 2. M. Lagergren et al, Care and We+re at the Crossroads, abridged version of above (Stockholm, Secretariat for Futures Studies, 1982). 3. J. McKnight, “Professionalized service and disabling help”, in I. Illich er al, Disubling Professzons (London, Marion Boyars, 1977). 4. M. Lagergren, The Costly Cure (Stockholm, Secretariat for Futures Studies, 1981). 5. J. Elinson, “Lifestyles, longevity and quality of life”, Public Opinion Quarters (Elsevier, North Holland, 1980).
FUTURES August 1985
PUBLIC HEALTH CARE SERVICES IN THE ADVANCED WELFARE STATE Observations from the Swedish futures study Care in Society Marten
Lagergren
In 1978 the Swedish Secretariat for Future Studies-a government advisory body for long-term issues of broad societal significancebegan its project “Care in Society”. The final project report was published in May 1982. The original purpose of the project was to study how conditions in society affect needs for care in different forms and how these needs are formal institutions. More met- informally or through broadly, the study came to be a general assessment of the welfare state and its growing problems. This article examines findings and proposals from the Swedish report. Keywords: welfare state; future studies; Sweden; health care
FORMAL and informal care are heavily dependent on societal conditions. Demographic and social patterns, women’s propensity to work outside home, working hours etc, shape the conditions for informal care. Economic resources and technological advance, concepts of manhood and solidarity, professional ambitions and power relations etc, together mould the formal care services systems. This connection between society and the formal and informal systems of care makes it necessary to discuss the future of the public care services in a broad context as in the ‘Care in Society’ study. When the capacity of informal care systems is insufficient-in quality or quantity-a need for formal care arises. On the other hand, the formal care systems might have a tendency to deplete the informal; for example, it might be claimed that care of a certain kind or for a certain group of recipients demands special knowledge or techniques which can only be provided by professionals. BOTH
Dr Marten Lagergren is at the Secretariat for Future Studies, PO Box 6710, S-l 13 85 Stockholm, Sweden.
00163287/85/040348-12$03.000
1985 Butterworth
& Co(Pub1isher.s)
Ltd
FUTURES August 1985
Informal care
Form01core
Society
Figure 1. The interaction
between the formal and informal care systems.
interaction between formal and informal systems of care can be illustrated by the ‘care triangle’ shown in Figure 1. In Sweden, formal organized care is essentially part of the public sector. The costs of providing it are predominantly classified as public consumption and financed by taxes. The principle of making organized care services a public responsibility rests on the premise that everybody in society shares responsibility for those in need of care and welfare, and everybody must therefore contribute according to their means. From this perspective, care is not seen as a private service: one does not pay tax for one’s own care. Instead, tax is to be regarded as a contribution towards the care of all people in need, just as it is a contribution towards national defence, the police and so on. Thus public care and welfare might be regarded as a collective benefit in the sense that when some people receive the care they need, this also contributes towards the quality of life enjoyed by others, in that everybody acquires a better, more decent community. The many different types of care needed by various groups are an important reason for adopting this premise. Moreover, the need for care varies in more or less inverse proportion to payment capacity. This approach is also responsive to general efforts made by the community aimed at improving general living ( onditions and thus reducing the need for care-a goal which the conception of care as a private service might preclude. In principle, it is clearly possible to achieve broadly the same goal through other means -privately organized care financed by a publicly-funded insurance system etc. However, this does not alter the essential dilemma facing the advanced welfare state. The fundamental dilemma is that the social development of the advanced welfare state brings with it an increasing need for The
FUTURES August 1995
350
Publrc health care scru~ces tn the advanced meljare state
organized care services, while at the same time the costs of providing a certain volume of services are increasing. The result is that organized care services, as a seemingly automatic consequence of industrial development, require a steadily rising share of total resources. Financing these services and other public responsibilities thus requires rising taxation rates until a point is reached where further increase seems impossible. The combination of growing needs and increasing prices has been manageable in the post-war period due to rapid economic growth. The result has been a swift increase in cost and volume of the public care services (see Table 1). The new situation facing the welfare state is slower economic growth, which makes it impossible to increase public consumption at the same rate as before without severely restricting or even reducing private consumption. There is an obvious need for a rethink of the organization and financing of the care services in the advanced welfare state. The preferred solution will of course be dependent on political values. One thing seems inevitable-it is not possible to continue the path hitherto chosen for much longer. Below I discuss in more detail the social and economic forces lying behind growing needs and growing costs. In the next section calculations are presented based on the assumption that the present structure and standard of services should be maintained. In the last part of this article I discuss possible structural changes that seem to lie within the realm of the Swedish welfare state concept. The growing needs for public care services The growing needs for public care services seems to be connected three factors: l
0 l
primarily
to
a growing number of elderly people; diminishing possibilities of receiving the care needed in existing social networks; and increased expectations and possibilities depending on economic, medical and technical developments and professional and political ambitions.
Between 1960 and 1980, the proportion of people in Sweden aged 65 and above increased from 12 % to 16%. In the following 20 years this proportion is expected to remain constant but there will be a shift within the group. The number of people aged 85 and over will rise by SO%, from 100000 to 160000. Elderly people constitute a large proportion in the care system. People over 65 account for two-thirds of bed-days in somatic medical care, half of all mental care and one-third of the consumption of pharmaceuticals. It is obvious, then, that the growing number of elderly people constitutes a major reason for growth of the care services sector if the standard of services is to be maintained. However, the increasing number of elderly is not the only problem. The amount of care services per person in the oldest age groups is also increasing. The primary reason behind this development seems to be changes in the social environment-especially the increasing number of working women. This means that less women are available for taking care of older relatives. Around 70% of women in Sweden are now gainfully employed-half of them part-time -as against only 50% in 1960. The development from 1970 and a prognosis to the year 2000 are shown in Figure 2. FUTURES August 1995
! f f
s
Source: Swedish National Accounts.
GNP at market prices Gross operating cost of public care as % of GNP Relation between growth of public care services and GNP No of employees (103) Public care services Labour force No of employees in public care as % of iabour force % of the growth of the labour force to public care services
Totsl public csre services
Social care
Health care
Gross operating cost of
4.99%
783.8 3683
4.33%
13.82 319.1
10.02 3.80
1963
80.1%
2.68
C11*5% + 4.3%
+ 10.5% + 14.1%
Annual growth 1963r70
9.39%
367.2 3912
6.93%
29.70 426.8
9.55
20.15
1970
+ +
$
62.7%
2.74
7‘3% 2.7%
8.0%
-b 7.0%
Annual growth 197om
12.2%
503.3 4129
6.64%
42.26 489.1
28.25 14.00
1975
4.8% 9.3%
89.3%
5.91
+ 6.4% + l.t%
+ +
Annual growth 1976i82
703.4 4353 16.2%
12.4%
65.40 527‘7
39.35 26.05
1982
TABLE 1. THE GROWTH OF THE SWEDISH PUBLIC CARE SECTOR IN RELATION TO GNP AND LABOUR FORCE, 1963~82,1960 PRlCE LEVEL _“”““1”1”““~“___“” ~_-l~-.-__.-_--___-_______ _____~“_ _______ - _.__ - ____“___ _-_____ _““” -.
55-59 20-24
-_-*rz
-.-;I;-
20
1
---
_
-
-’ -_
-
0
z
65-74 I
1
---.# I
t
i
I
-
-
_
-
-
---_____
1970
Figure 2. Percentage of women gainfully employed in different age groups 1970-2000. Source: Swedish National Bureau of Census.
The feasibility of everyday care is also closely connected with social structure and dwelling patterns. Households have grown smaller in recent decades. The shrinking household pattern applies particularly to elderly people. In 1945, about 15 % of men and 30 % of women over 65 in Sweden were living together with their children, as against 3% and 5% respectively today. Small households are vulnerable because they tend to need outside help more often. For example, it is established that divorced people have higher mortality, are ill rnoI2 frequently and use the care services more often than married people. A third reason for the growing needs for care services is increasing political and professional ambitions connected with expanding economic and technical possibilities. Obviously the fast-growing economic resources in the post-war period have had a great influence on the development of the public care services. This is illustrated by the high correlation between care expenditures and GNP in different countries (see Figure 3). But international medical-technical developments act also as a force per se, pushing up the need for health care services by offering possibilities for care and relief to people who have previously had to suffer or die without expectations of any change. This type of development has shown to be politically difficult to handle, even in a constrained economy. Growing
costs for satisfying
a certain
need
Not only is the need for public care services increasing because of social development factors outside the sector itself, but the costs for satisfying a certain volume of needs are also increasing through the operation of similar mechanisms. The basic underlying factor behind this development is the changing price relationship between goods and services due to differences in productivity growth. Productivity increases due to rationalization, and automation of FUTURES August 1985
700
t 600
loo
3ooo
4000
5ooo
6OCQ
7ooo
GNP($/capita) Figure 3. Health care expenditures and GNP in 19 OECD countries in Sweden 1928-1975. Reference: OECD 1974 national accounts.
(1974) and the development
production in the goods-producing sector of the economy, make it possible to raise wages in that sector. If wage relationships between different sectors in the wages must also increase in the serviceeconomy are to be maintained, producing sector even if no such productivity increase occurs. The effect-after adjusting for inflation-will be that the price of goods will fall and the price of services rise. In addition to this development, the cost of a certain output from the public (‘are services, eg a bed-day in an emergency hospital, has increased because more and more man-hours are used for the same output. There are many reasons for this development, such as: 0 l
l
improved quality of care, in many cases as a consequence of professional ambitions, and more onerous and more intensive care; amended legislation concerning, among other things, the working environment (eg the right to rest periods, safety etc), co-determination (the right to hold trade union meetings in working hours, etc), and security of employment; the greater need for coordination and communication in an increasingly complex organization for care and treatment.
Calculations show that throughout the public care services sector the input of man-hours per unit of output (bed-days, visits to doctors etc) increased by 2 %-3%/year during the 1970s in Sweden (see Table 2). Together with the automatic price increase mentioned above, this meant that costs-adjusted for inflation-were increasing by 4% -5 %/year for a constant volume of services. Can
the standard of services be maintained?
Growing needs for care services and increasing resource inputs for a given volume of services have been the engine for the growth of the care services
FUTURES August 1985
354
Public health core servtces m the advanced welfare state
TABLE 2. SUMMARY ANALYSIS OF THE GROWTH IN THE COST OF PUBLIC CARE SERVICES DURING THE PERIOD 1970-1979 (ANNUAL % CHANGE, FIXED PRICES) _ Change in numbers Of;ersolS
Change in service standard (output per person)
Change in man-hours unit of output
Change in cost/ man-hour
Total changes in costs
+ 1.4 - 1.1
- 0.5 + 14.2
+2.7 + 2.6
+ 3.0 + 2.5
+ 6.7 + 18.8
+ 2.5
+
1.2)
( -I-5.5)
+
+ 0.3 + 0.3 + 0.3 +1.2
-I- 1.4 + 5.4
+ 3.7 - 0.6
+ 3.8 + 3.6 (2.4) + 2.8
+ +
Health services Child care Care of the aged and the handicapped Care of the mentally handicapped Dental service Other social services Total public care Relative proportion of the total Increase In cost
This
has been
made
This important requisite, 197Os, economic growth decades
solution needs
1.3
possible
30
by the rapid
economic dilemma-
government
a significant
a problem Further
that I approach from various expansion of the care services
and 1970s
scarcely
appears
9.6 9.1 (+ 2.8) •r- 7.8
37
100
growth
of the total economy.
has now changed. Since the middle of the modest, and the prospects for the coming
services
prices,
taxes while still permitting
8.6
values.
different-although
care
relative
+ 2.3
17
are uncertain 4, 1981.
when limited
to the public
and higher
+
however, has been
do not look much
the past decade. What will happen
(-
( + 0)
16
Note: Figures within parentheses Source: Lagergren, text reference
sector.
1.6
perhaps
not quite
as bad as for
growth no longer permits the easy expansion to meet increasing being
growth
able to collect
in private
the necessary
consumption?
This
is
perspectives below. sector at the same rate as in the 1960s
to be practicable,
and is perhaps
not even desirable
for reasons other than economic ones. But what would it mean, as regards finance and employment, if we tried to maintain the standard of service that we have today? This means that we should expand the health care service, the care of the elderly
and other
fields of care at the rate required
to correspond
to the
changed age structure, but not more than that. Of course, this general aim does not exclude the possibility of expanding more rapidly in a certain field, but in that case it will have to be done at the expense of some other field, within the framework of a total rate of increase which corresponds to the population change. We may then ask ourselves what such a rather moderate level of ambition will entail, as regards costs and the numbers of employees required for the care sector in the next 15 to 20 years (see Figure 4). The concept of volume of service refers to a weighing of various measures of care and treatment-bed-days, places in day homes, etc-and the standard of service is the volume of service in relation to the size of the group in need. In calculating the volume of service, it is assumed that the volume of service per hour worked will fall by lO/o/year, which is roughly half the rate which applied during the 1970s. This fall may be connected with an increase in quality or may have
some
other
cause.
FUTURES August 1985
2m
I50
Volume of services Stondord of services
loo
I 199s
I
1982
I 1994
I 2ooo
Figure 4. Growth of gross costs, number of employees, man-hours and services for the public care sector with an unchanged standard of service 1982-2000. Assumptions: 1.1% annual reduction of working hours; 3.4% annual growth of productivity in enterprise; and 1.5% growth of output in private enterprise.
The somewhat depressing observation is that, at the turn of this century, the goal of retaining the present standard of services-given the assumptions cited above-will result in an increase of almost 70% in the number of employees in the public care sector and an increase of over 100% in cost. This means that almost all the economic growth during the coming two decades would be devoted to public consumption. The private standard of living for the gainfully employed would be reduced by 10% and the tax quotient pushed up to almost 60%. It must be regarded as highly unlikely that the Swedish people would accept such a development, and it is likely that the cost curve of the public care services will be pushed down. The question then arises of how this will be achieved and what consequences it will have. Using the system of graphs presented in Figure 2 it is possible to discuss item by item the different components that comprise the cost growth. The first component is cost per employee. Increasing costs per employee are the consequence of the national unified wage policy that gives employees in the care services and other public sector employees the same level of wage rises as employees in the private sector. In the current Swedish debate there are frequent calls for this policy to be abandoned. It is argued that public employees must stand back to make it possible to curb growth in taxation and to increase employment. Naturally the trade unions in the public sector have hitherto shown little sympathy to this demand. It also seems difficult to maintain that the fruits of automation, computerization and use of robots, should remain among those still employed in the sectors involved rather than being distributed among the people at large. It is doubtful whether substantial savings could be achieved in this way. Curbing the increase of employees per man-hour amounts to the same as putting a brake on the reduction of working hours. The important question then FUTURES August
1985
356
Publtc health care ~emce~ tn the advanced welfare state
is whether this will have an effect on unemployment. This is clearly debatable. Many observers argue that ending the reduction of working hours will, in the long
run,
only
serve
to distribute
the available
work
among
fewer
increase unemployment. According to this argument there seems gained from such a policy since the unemployed have to be supported
people,
ie
little to be in any case
in the welfare state. Taxation levels will be about the same and the only result will be social unrest and a reduction in the quality of life for the people concerned. Trying
to cut down-or
perhaps
more appropriately
curb the increase
of-the
number of man-hours per unit of output may be a more realistic possiblity. As was pointed out above, this ratio increased by 2 % -3 %/year in the 1970s. The assumption
in
significant
change
even reversing brought problem
the
calculations
above
for the better
was
has been
the trend might be possible
about
an
overstaffed,
lies in determining
1%.
Thus,
already,
a
Reducing
this to zero or
if the rapid expansion
in the 1970s has
inefficient
whether
a mere
assumed. care
the present
services is the result of inefficient organization consuming, eg care for older, more dependent
services
organization.
level of employment
The
in the care
or of the work itself being more patients, or an improved quality
of services. Two factors suggest that expectations should not be set too high in this area. First, the continuing reduction of the mean time of stay in acute somatic and psychiatric as
less
care has meant dependent
that the average
patients
are
treated
patient
requires
outside
the
more and more care institutions.
Second,
medical-technical development leads to more staff being engaged in activities not directly connected with patients, eg laboratory services of different kinds. An increase
in the number
of man-hours
per bed-day
or visits to the doctor
will
then ensue automatically-all things being equal. Since neither of these two developments is likely to disappear, it would be unwise to place too much hope on reversing
the trend
concerning
even
that
a development
certain
such
‘productivity’ is desirable,
in the care
services.
the output
It is not
measurements
being what they are. The last item on the list is the difference between ‘volume of services’ and ‘standard of service’. This depends on the changing demographic structure of Swedish society. As can be seen from the figures, the effect is not very significant, occurring mainly in the 1980s. The underlying demographic forecast must A slight tendency towards decreasing old-age be judged as fairly reliable. mortality might lead to an even higher number of people in the oldest age brackets. More important, however, is that the ratios used in the calculations, ie bed-days etc per person in the respective age group, are increasing rapidly in the oldest age groups due to the social changes described above. The more uneven the consumption of care services becomes with respect to age, the more significant the demographic change will be. To preserve the standard of services in a real sense will then In summary we distance between possibility, then, is
require more services. must conclude that the possibilities for compressing the the curves in Figure 2 seem limited. The remaining to cut down on the standard of service. That means closing
down hospitals, residential homes, day homes, etc. Before one bemoans these prospects it is essential to take a closer look at the notion ‘standard of service’. It
FUTURES August 1995
is supposed to mean that each group of patients and clients in each age group will have access to the same amount of care services as today-the same number of bed-days in different forms of care, the same number of visits to doctors of different specialities etc. Access to care of a certain form is, however, not an end in itself. The goal of care must be expressed in terms of improved health or some other aspect of the quality of life. There is no impediment to the same effects of care, measured in these relevant terms, being achieved with a lower ‘standard of service’ if the structure and content of the care services are changed. In fact, there is a lot of evidence to suggest that structural changes in the care services can lead to much higher efficiency, measured in terms of results achieved compared to resources used. Moreover, judging from the preceding discussion, such a change seems absolutely necessary in order to handle the future dilemma of the public care services. In the following, final section I explore further some of these possibilities. The need for structural
change -satisfying
the present
need is not enough
As shown above it is doubtful whether it will be possible to maintain the present ‘standard of services’ of the Swedish public care service system in the coming decades. But this is only part of the problem. The same forces that have been instrumental in increasing the need for care services during the past two decades will no doubt continue-even if not as forcefully-during the rest of this century. In Sweden we are still only little more than haif-way through the ‘sexual revolution’ -the ratio between the sexes of gainfully employed is not projected to reach equivalence until the middle of the 1990s according to present trends. The remaining housewives-predominantly in older age brackets-play an important part in the care of elderly relatives, a part which must gradually be taken over by society as these women disappear. Medical-technical developments are obviously unlikely to come to a standstill. Enormous research resources and a powerful drug and equipment industry guarantee the likelihood of new advances. These advances, however, notwithstanding their possible usefulness to mankind, will in many cases lead to higher costs of care and to more difficult problems of determining priorities. The need for structural changes in the public care services system is then highlighted. In the following paragraphs I outline some important options. Substituting
expensive
institutional
care for less expensive
forms of care
Sweden has more hospital beds per inhabitant than any other country. In part, I his might be due to the demographic structure, but the most important (explanation probably lies in Swedish traditions and culture combined with the availability of sufficient economic resources in the past. Especially for old age patients, there has been a rapid increase in the number ofbeds for long-stay care at nursing homes. However, there is growing evidence that this form of care for the elderly is not only expensive, but also tends to make patients more dependent. By using more
FUTURES August 1985
358
Publtc health care services in the advanced welfare state
care resources than necessary, the need for these very resources is created. Studies have repeatedly shown that old people in institutions rapidly lose their ability to cope with the activities of daily life unless vigorous (and expensive) attempts are made to rehabilitate and restore their capacity. By changing the criteria for admission and deploying more resources for social and medical help in the home, it has been possible to reduce significantly the need for nursing-home beds and at the same time lower operating costs. The same arguments apply in principle to psychiatric care. It has been estimated that at least 30%-35% of psychiatric hospital patients in Sweden could be better cared for as out-patients. A continuing reduction in the number of psychiatric beds is occurring but the process is hampered by union resistance due to fear of unemployment. Also important in this context is that appropriate out-patient care resources are deployed. Many psychiatric hospital patients have spent a long time in hospital and need assistance to cope with life outside the hospital. There has been much debate whether primary out-patient care could act as a cheaper substitute for acute somatic in-patient care. Some evidence exists for this, although most studies of the problem seem to be inconclusive. Sometimes the opposite case is argued: well-developed primary care will detect a lot of health problems which will need hospital resources for their treatment. One solution-following the idea of a pre-payment plan-could be to let the primary care centre act as a kind of ‘profit centre’ with a total budget to be used either for primary or for hospital care. In the latter case the centre would have to pay the hospital for its services. In this way a powerful incentive is created for not using hospital care more than is absolutely necessary. The hospital would get no direct funding and would have to adjust its development to the need as perceived by a competent buyer-the primary care centre. It is sometimes argued that disease prevention and healthy lifestyles are the key solution to the increasing cost of care and welfare. It is worth looking at this more closely. For example, it has been estimated that one-third of the hospital beds in Sweden are occupied by patients whose illness is directly or indirectly connected with alcohol abuse. Does that mean we can reduce the number of beds accordingly if alcohol abuse is eradicated? In theory perhaps, but in practice the situation looks very different. First, the methods for eliminating alcohol abuse are not known. Second, there is general acceptance of what is called Roemer’s law for hospital care, namely that supply creates demand. If alcohol-induced diseases disappear, other patients will compete for the beds and the net effect will be zero if deliberate political action is not taken to reduce the number of beds. Prevention and healthier lifestyles do certainly hold the promise of improving health and the quality of life, but it generally seems more doubtful whether the effect will be a reduction in the volume and cost of the care services. After all, an increasing majority of that care is absorbed by the elderly. Even if preventive measures resulted in decreasing mortality and morbidity in the middle-age years, the effect of this would only be to shift mortality and morbidity to older age groups, since mortality in life is 100%. In addition to that, the number of dependents in the highest age groups will increase, adding to the burden of the social care services. Thus, summing up, we can hardly expect to find the solution to the care services problem in disease prevention and promotion of
FUTURES August 1995
Publrchealthcare serotc~~in the advancedwe&e state 359
healthy lifestyles. These activities must be evaluated on another basis. The dilemma of the public care services system in the advanced welfare state is to a large exent a problem of transfer. We have to transfer a growing amount of resources from one sector and one part of the population to another sector and population group. The transfer is made in terms of monetary resources by way of taxation. The problem arises because it is doubtful whether the taxation level can be raised indefinitely within the realms of a mixed economy. One solution to this dilemma might be to think of the transfer in another way -in terms of labour rather than in terms of money. Solidarity with people in need can be expressed by personal action and participation rather than by impersonal taxpaying. Different modes for this participation can be conceived. The previous mode was that housewives and other female relatives undertook unpaid work by caring for their family. Voluntary work outside that area does exist in Sweden but has never had the same tradition and magnitude as eg in the UK. Voluntary work in Sweden carries a pejorative connotation and has been actively resisted by the trade unions. However, it may be time to change this attitude. The analysis above makes it clear that taxation problems will make it difficult to continue expansion of the paid care services. At the same time reduced working hours will increase the time available for unpaid work. Voluntary care work contains many attractive features. It offers an opportunity for commitment and personal development while doing valuable work. However, the question is whether voluntary efforts can be sufficiently comprehensive to cope with the problem of resources in the care sector. Another method is to oblige citizens to do unpaid work for the community-to tax time instead of income. Taxing citizens’ time instead of their money means the introduction of a compulsory social service. This may sound radical and strange; however, it is not actually a new idea. Demands for unpaid work by citizens in the public interest have been made in various forms in many societies from time immemorial. At present, compulsory military service is one example of an extensive and, on the whole, generally accepted social service in many countries. Social service in the field of care and treatment can, like compulsory military service, also be supported by many kinds of argument besides the financial. Summing up, we find that preserving the organized care services as a public responsibility certainly requires new thinking and an open mind towards new, perhaps radical solutions. Many political and economic forces are acting towards the dismantling of the welfare state. Sticking to the old solutions will, however, not help the efforts to preserve it. Bibliography 1. M. Lagergren et al, Time to Cure (London, Pergamon Press, 1984). 2. M. Lagergren et al, Care and We+re at the Crossroads, abridged version of above (Stockholm, Secretariat for Futures Studies, 1982). 3. J. McKnight, “Professionalized service and disabling help”, in I. Illich er al, Disubling Professzons (London, Marion Boyars, 1977). 4. M. Lagergren, The Costly Cure (Stockholm, Secretariat for Futures Studies, 1981). 5. J. Elinson, “Lifestyles, longevity and quality of life”, Public Opinion Quarters (Elsevier, North Holland, 1980).
FUTURES August 1985