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EXPLAINED: Will the Social Democrats really crack down on profit-making in education and healthcare?

EXPLAINED: Will the Social Democrats really crack down on profit-making in education and healthcare?
Education Minister Anna Ekström is ready to end profit-making in the schools sector. Photo: Erik Simander/TT
The Social Democrats this week proposed to ban free schools from making profits, and limit many of the advantages enjoyed by private health providers. Here's a look at what the proposals mean.

What’s happening?

The board of the governing Social Democrats has prepared proposals to put to its party congress which would aim to “ban profiteering” in schools, as well as to impose some limits on privately run healthcare companies.

If passed at the November party congress, the proposals would then form part of the party’s manifesto in the run-up to next year’s election.

This is part of a long-running political debate on what in Sweden is called vinst i välfärden or “profit-making in the welfare sector”.

How does profit-making work in the education and healthcare sectors at the moment?

Free schools are state-funded (and free to attend) but privately-run schools that educate a massive 400,000 pupils in Sweden. Sweden pioneered opening up education to the private sector, with the free school reforms brought in by the government of Carl Bildt in 1993. 

What are the Social Democrats’ new tougher policies towards private providers of health and education? 

In a policy announcement made on Tuesday, the party promised to: 

  • ban publicly funded but privately run schools from taking out profits 
  • reduce the amount of money given to privately run schools per pupil so that they had a level playing field with municipal schools 
  • end the separate queue-system free schools use to choose their pupils, with free schools instead having to share a common school application system with municipal schools which is not based around a queue 
  • a ban on private companies operating the 1177 regional health advisory lines 

When it comes to health, the proposals were less far-reaching, but included: 

  • a ban on private healthcare providers and insurance companies from signing deals with regional health providers allowing their customers to jump queues for treatment
  • a ban on “aggressive healthcare marketing” from private providers 
  • a ban on healthcare providers treating patients whose healthcare is paid by insurance companies and also patients whose treatment is funded by the government 

Why do the Social Democrats want these changes?

“Profit-making and education don’t mix,” Finance Minister Magdalena Andersson told TT. “It’s no coincidence that none of the world’s best universities are profit-driven. They’re all trusts or publicly run. It creates the wrong incentives in the education system, both when it comes to schools and to universities.” 

Education Minister Anna Ekström said that under the current system, profits all too often came at the expense of children’s education. 

“The needs of children and young people should be put above profit-making, and the tax money we together put towards pupils should go to pupils and not to private profits,” she said at a press conference announcing the move.   

The party’s healthcare minister, Lena Hallengren, said that people should be treated on the basis of what they need, not on the basis of their ability to pay. 

“You should be given healthcare at the right time and according to your need, and not just because you have the right insurance,” she said.  

She said that “aggressive healthcare marketing” also meant that care providers were encouraging patients to seek treatment that was not absolutely necessary, simply because they wanted to earn more money from the state for carrying out treatment. 

What would it take for these new policies to come into effect? 

A lot.

This is a policy proposal from the Social Democrats’ party board, not from the government itself (although a small number of politicians hold positions in both). 

Assuming the policies are voted into the party programme at the conference in November, the party then needs to stay in power after next September’s election to be able implement them. 

Even if it manages this, it is likely that the party would need to negotiate with other parties in order to pass its proposals — after the 2018 election, for example, the Social Democrat-Green Party government was able to take power after agreeing to an extensive policy deal with the Centre and Liberal Parties.

It is likely that in future the Social Democrats may still need the support of the Centre Party, which has historically been a supporter both of free schools and of the private provision of publicly funded healthcare, although there are growing voices within the party calling to rethink this. 

In negotiations over a support agreement, however, the Social Democrats’ proposals are quite likely to be weakened, watered down, or simply rejected by the Centre Party. 

If the Centre Party were to support a move to a profit-free school system, or if the Social Democrats gathered enough support from other parties, the policy would still have to be put out to consultation and its legality assessed before becoming reality.

Given that banning profits would be a significant incursion into the business operations of some quite sizeable private companies, it is by no means certain that the legal hurdles could be overcome. 

What’s the reaction to the proposals so far?

The schools company AcadeMedia, however, dismissed the profits move as little more than an election-year gambit. 

“You have to remember that this is about political positioning,” said Marcus Strömberg, the company’s chief executive. “I have a very hard time seeing that there is anyone who would like this to disappear, because we are such an incredibly large sector.”

In a statement issued on Tuesday evening, AcadeMedia noted that no inquiry had been held into the matter, no bill had been published, and that it would take a long time to turn the proposal into policy even in the unlikely event that parliament voted it through. 

Daniel Suhonen, who co-founded the Reformisterna group of left-wing Social Democrats, said that he believed that the party leadership was genuinely determined to push through reforms limiting the ability of school operators to make profits. 

“I think this is for real, not fake,” he told The Local of the Social Democrats’ new vision of a profit-free school system. “I think schools minister Anna Ekström really wants to fight for this.”

The Confederation of Swedish Enterprise is against the idea.

“What the Social Democrats are proposing is in practice a ban on companies in this area. If efficient companies are not allowed to contribute to delivering welfare services, school, care and nursing will be both worse for users and more expensive for taxpayers. Additionally, freedom of choice will be abolished in practice,” the organisation’s CEO, Jan -Olof Jacke, told the TT newswire in a written statement.

Suhonen said that he was sure that companies would use every means at their disposal to stop the proposal becoming law. 

“These firms are run by greedy people, and I don’t think that they will be like nice guys if we regulate them or stop their business. So, we have to take that fight,” he said.  “The struggle will be hard and tough and long, but I think we actually taking baby steps to make a real difference on the ground, and I think this is good.” 

How would the proposals affect foreigners living in Sweden if they did come into effect? 

Many foreigners living in Sweden send their children to free schools, which include most international schools, and 27 percent of free school pupils have a foreign background. 

If the Social Democrats’ proposal to ban private companies from making profits on operating free schools succeeds, some of the country’s biggest chains, such as Internationella Engelska Skolan or AcadeMedia might be forced to close their schools. 

Many foreigners also use publicly funded but privately run healthcare providers, either physical primary care companies like Capio, or one of the new digital healthcare providers, such as Kry, or Min Doktor. 

What do the proposals mean for Swedish politics? 

Nicholas Aylott, an associate professor in politics at Södertörn University, said that it was hard to know for certain how seriously to take the proposals.   

“All political proposals are strategic, in some sense, and it’s always difficult to tell the difference between the purely strategic and the purely sincere,” he said. “But I’m sure a lot of Social Democrats feel very strongly about this.” 

He said he thought there were three reasons why the party was suddenly releasing eye-catching policy proposals: the threat from a newly assertive Left Party; the likely arrival of Magdalena Andersson as party leader and prime minister; and a shift in the political climate around privately provided welfare and education. 

“It’s not very difficult to interpret this latest gambit from the Social Democrats as some sort of response to the successful manoeuvre of the Left Party just a few months ago,” he said. “The second thing, of course, is that we’re about to have a change of guard in the Social Democrats.” 

He said that under Prime Minister Stefan Löfven, the party had appeared to have “no political agenda whatsoever” beyond staying in power, and that this now seemed like it was about to change. 

Finally, Aylott pointed to growing signs that even the government’s support party, the Centre Party, was weakening in its traditional support for private sector involvement in education, health and welfare. 

“I get the feeling that the whole debate about private actors delivering welfare services has moved on a bit in the last year or two,” he said. “It may just that the Social Democrats now see a realistic chance of moving public policy towards this sort of position without meeting an immovable object in the shape of the Centre party.” 

Suhonen pointed out that a public opinion survey carried out by his think tank, Katalys, had shown that a large majority of the public was now opposed to profit-making in the school sector, including a majority of Centre Party voters. 


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