Setting Priorities in Health Care: A Cost Containment Strategy?

Abstract: The discussion regarding priorities in health care has been intense in Sweden for more than a decade. Policy makers are worried that the growing need for health care in the future is going to outpace the resources in the national economy. It has become commonplace to argue that priorities and rationing of health care is required to solve the constraints of limited funding. This has led to the formulation of the priority law which took legal force in 1997. In this thesis I will investigate the future financial needs for the Swedish health care sector and the factors that influence cost development. In order to answer the key question; if rationing of health care services can limit the cost expansion, the theoretical and empirical evidence of the priority process is studied. Not surprisingly, there are strong indicators suggesting that there will be a substantial lack of financial resources for the health-care sector for the next two decades, caused by a complex interaction between demographic changes and advances in medical technology. Theoretically, the priority process is a sound method that promotes an efficient resource allocation and brings cost savings. In practice, there are complicating factors that may compromise the cost containing effect more than expected.