The Effect of Ownership on Reimbursement Incentives - Evidence From a 2016 Primary Care Reform in Stockholm County

Abstract: Private care providers play an important role in Swedish healthcare provision, but their place in the Swedish welfare state remains a contentious issue. This study utilizes a difference-in-difference regression model and a 2016 reimbursement reform in Stockholm County to investigate how private ownership affects sensitivity to reimbursement incentive effects among primary care providers. It finds that private primary care providers are more likely to decrease patient contact compared to public primary care providers, following a reduction in fee-for-service reimbursement. While public primary care providers replace general practitioner (GP) visits with auxiliary nurse visits when compensation is lowered for GPs, private care providers are more likely to reduce GP contacts without replacing them. Additionally, multi-site providers are more likely to reduce GP visits when compared to providers operating a single primary care centre. This paper concludes that there are important differences in how private and public providers respond to reimbursement incentives.