Reimbursement of Hospital Services and Hospital Financing

Abstract

Our main concern are the effects on quality and efficiency of so-called “prospective reimbursement systems”. Since there are large differences between the Swiss and the Swedish hospital systems in many ways, we have to use a model which allows us to analyze systems which are more or less competitive. Therefore, we will base our investigation of the transformation of the Swedish and Swiss hospital regulation on a model presented by Ma (1994), which is able to accommodate both systems. The move towards prospective reimbursement in Sweden also induces a move towards more competition between hospitals. This will make Swedish hospitals more similar to their Swiss counterparts as time goes by. In other words, the move towards prospective reimbursement triggers a transformation of the Swedish and Swiss hospital industries, with a common outcome but quite different starting points. While in some parts of the Swiss hospital industry we find a degree of quality competition, the Swedish system has traditionally been characterized by a lack of competition and the formation of local monopolies. Patients were referred to but one hospital, the hospital of their community of residence. Thus each hospital had its area of responsibility (upptagningsområden). The lack of competition implied by this way of organizing health care is evident.