Privatization, Competition and Primary Health Care Utilization - A study of the Swedish Patient Choice Reform

Abstract: During the last decades, the issue of increased health care utilization and expenditures in the western world has been a highly debated topic in health economics. One potential explanation to this growth is the increased privatization and competition in the health care sector, which we have seen in many countries in the later years. In this paper, I study the impact of the Swedish Patient Choice Reform which for the first time introduced equal competition for private and public providers in the primary health care sector on health care utilization. To estimate the causal effect of the reform and hence estimate the effect of increased competition and privatization, I exploit the staggered implementation across regions over time in a difference-in-difference framework. The chosen outcome of interest is health care utilization, measured as primary health care visits to doctors and nurses. Additionally, other outcomes of the reform such as public trust, self-reported health, total costs and the doctor density have been investigated. The results of this paper show strong evidence that the Swedish Patient Choice Reform has increased the number of visits in the primary health care and consequently, also the primary health care utilization. Primarily, this increase comes from a surge in doctor visits. Moreover, the reform does not seem to have increased the total cost share of the primary sector and the public trust in the primary care has improved.