Swedish Long-Term Eldercare: A Retreat from the Welfare State

Amy Bergstraesser, Vol. 36 Associate Editor

Legal History of Care Sweden is known for being a successful and happy welfare state where lifetime benefits are funded by high taxes from Sweden’s sizable workforce.[1]  The well-being index places Sweden among the four happiest countries in the world.[2]  Keeping this expansive and expensive welfare model in mind, Sweden faces a rapidly aging population.[3]  Proportionally, Sweden has the highest number of elderly citizens in the world[4] – in 2011, 19 percent of Sweden was 65 or over, and the Organisation for Economic Co-operation and Development (OECD) predicted that by 2050 that number would rise to 24 percent.[5]  Sweden is therefore confronted with one of the highest life expectancies and the challenge of supporting elderly citizens who are accustomed to government care.[6] Germanic law provided the basis by which Sweden established the country’s historical continental law system, a structure based on written law, not case law.[7]  In the 1800s, adult children were legally required to take care of their parents if needs arose.[8] A few families and underprivileged elders without family received assistance from local poor relief boards and/or municipal poorhouses, but those services were extremely limited.[9]  As this Swedish legal system of codifications morphed away from the Germanic template, the central government took on increasingly more responsibility for the wellbeing of its citizens.[10] In the 1950s, pensions were raised, five percent of the GDP was allocated to the elderly, and adult children were relieved of formal parental care obligations.[11] For the first time, the elderly received institutional governmental care and even home care.[12] This move not only allowed seniors to receive care in the comforts of their own homes, it also had an unexpected benefit of cutting costs.  Cutting costs allowed for a greater breadth of coverage, and by 1975, 30 percent of those 80 years of age and older received care in nursing homes and 38 percent at home.[13] The government codified these provisions with the 1982 Social Services Act (SSA) that guarantees the right to claim access to public services including home and institutional care.  Even further, the 1983 Health and Medical Services Act (HMSA) provides universal healthcare for everyone including the elderly.[14] Fewer than ten years after the SSA and HMSA were passed into law, Sweden experienced its worst financial recession since the 1930s.  To address the budget crisis, the central government implemented the Community Care Reforms, commonly known as the Adel Reforms, in 1992.[15] These reforms represented a complete restructuring – all eldercare responsibilities were delegated to municipal governments.[16] Long-term care was to be financed almost fully by municipal taxes with marginal central government subsidies.[17] The Adel Reforms alleviated some costs and helped Sweden escape its financial crisis, but the central government effectively shifted the eldercare burden onto municipalities instead of addressing the ballooning housing and medical costs of the aging.  The recession had also financially wounded municipalities; increased unemployment led to fewer tax dollars at the same time as the central government restricted municipal tax hikes.[18] Instead of accruing debt, local governments had to decrease the number of care recipients and services by introducing stricter needs assessments and raising copayments.[19] When the central government then restricted copayments, municipalities then had to turn to a cheaper method of care – outsourcing.[20] In 100 years, Sweden’s eldercare system transitioned from compulsory family care, to comprehensive central government care, to an amalgamation of local government, private, and family care. Current Eldercare Laws Although Swedes still have the same statutory rights to care and services under the SSA, current Swedish eldercare looks very different than it did 25 years ago. Municipalities have almost full autonomy – they decide how much priority to give the elderly over other groups, what the services are, and who can use them.[21] Because the SSA merely requires municipalities to provide for elders, there is no requirement that municipal governments must also administer programs and services, so most municipalities outsource care to the highest bidder.  The state personally provided 98% of home care in 1993, but only 19% in 2010, indicating that most older people had to rapidly transition from state to private care in only seven years.[22] This abrupt change to “marketization” of care has spurred serious quality concerns that the central government is obliged to address.[23]  In 2009, Parliament passed the Act on Free Choice Systems to remedy inefficiencies created by the Local Government Act. [24]   The new Act allows municipalities to provide vouchers for care so that elderly persons can choose care providers.[25]  Providers no longer compete for government contracts; instead every provider pays the same amount, making it easier for smaller companies and non-profits to participate in the market.  Increased market participation is designed to promote competition and in turn prioritize quality of care over price.  So far, most municipalities have adopted the choice model, but changes have not yet impacted the elderly.  In fact, in 2009 only four percent of users chose new providers.[26]  In addition to, and to be used in conjunction with, the freedom of choice model, the Swedish government implemented the 2007 household services and personal care tax deductions.[27] These deductions are not exclusive to elders, but they are largely aimed at the demographic – one third of users are currently 65 or older.[28]  Those who want to hire private companies for such things as shopping and cleaning can deduct fifty percent of those household services off of their taxes.[29] Although these reforms are designed to increase quality of care, they do not remedy the fact that Swedish municipalities still do not have enough money to provide comparable eldercare to the 1970s.  Informal care has to fill that gap despite the lack of legal family obligation.  Studies estimate that relatives now provide twice the amount of care given by local governments, a reverse of the statistics in the 1970s.[30] This obvious dearth of necessary care is worsened by recent government pension reforms, a source of income that older people rely on and 0.6 percent of Swedes depend on.[31]  Not only is there now a pay-as-you-go structure that bases the elder’s pension on lifetime earnings instead of a uniform set amount as it was before,[32] one must also live in Sweden for fifty years to be eligible,[33] an extremely detrimental change for immigrants. Post-Reform Impacts The current eldercare legal landscape has affected everyone.  Budget cuts and reorganization schemes have led to lesser coverage, quality control concerns, and lower user satisfaction.  The recession of the 1990s did not just restructure Swedish eldercare; it overhauled the entire system.  A restrictive approach was implemented, and as more people need care, the coverage ratio has continued to decline.[34] In 1993, 24 percent of those 80 and above were covered – that number is now 15 percent.[35] There was a 50 percent reduction in the number of hospital beds available between 1992 and 2005, and Sweden currently has the fewest hospital beds and shortest average lengths of stay in the European Union[36] On the other hand, not all Swedish care recipients view the recent changes as negatively.  Swedish National Board of Health and Welfare statistics found that most older people rate their home services positively.[37] In addition, Sweden’s individualized home care model seems to be working, for the most part, better than other states’ models.  In 2008, more people received home care in Sweden than in any other OECD state, and Sweden had the highest proportion of eldercare workers to elders.[38]  Sweden spent 3.6 percent of its GDP on long-term care in 2010, where the OECD average was 1.6 percent.[39] The cutbacks also decreased costs as planned – between 1990 and 2000 eldercare spending fell by six percent.[40] But severe cutbacks have larger implications for the Swedish welfare state, a value system based on equality and universalism.  Recent eldercare laws and policies disproportionately impact elders with lower amounts of education and wealth, and family care has only increased for those with lower levels of education.[41]  These statistics become troubling when looking at care preferences, because elders from all educational backgrounds prefer government care to family care.[42]  In addition, high-income elders disproportionately use out-of-pocket private services and the new tax deductions to supplement government care.[43] This kind of socioeconomic divide challenges the very framework of universalism.  Sweden could be headed for a dualist care model, where the poor are faced with lower standards of eldercare than the rich.

[1] National Research Council, Preparing for an Ageing World: The Case for Cross-National Research 71 (2001) (referring to the graphs).