Countries of the World/COUNTRYS.BIN/dp/0345/03458.txt

Text File | 1991-06-25 | 25KB | 450 lines

$Unique_ID{COW03458}
$Pretitle{441}
$Title{Sweden
On Sweden.    Health care}
$Subtitle{}
$Author{Stig Hadenius and Ann Lindgren}
$Affiliation{Swedish Institute}
$Subject{sweden
system
education
swedish
care
income
research
percent
countries
programs}
$Date{1990}
$Log{Various Views of Swedish Life*0345801.scf
Research*0345802.scf
Table B.*0345801.tab
}
Country:     Sweden
Book:        On Sweden
Author:      Stig Hadenius and Ann Lindgren
Affiliation: Swedish Institute
Date:        1990

On Sweden.    Health care

     All residents of Sweden are covered by the national health insurance
system, which provides medical care, pharmaceuticals, hospitalization and a
variety of other services free or at very modest cost to the patient. Dental
care is also largely covered.

     The low level of infant mortality is sometimes cited as an indicator of
Sweden's high living standard. At 5.9 per 1,000 live births, infant mortality
is among the world's lowest. One contributing factor is that practically all
mothers and their infants take advantage of the free preventive health care
available at prenatal and child health care centers.

     Like other countries, Sweden built many big hospitals during the 1960s
and 1970s that were designed to provide a good health care infrastructure to
large regions. As it turned out, however, these facilities were often
expensive and impersonal, even though they maintained high medical standards.
During the 1980s there was a trend toward decentralizing the health care
system as much as possible. This has included expanding the availability of
non-hospital outpatient care by building more community health care centers,
staffed by district nurses and physicians.

     All employees in Sweden are entitled to cash benefits that compensate
them for lost income during illness. This means that the Social Insurance
Office pays them 90 percent of their normal income (up to a certain ceiling).
To qualify for such payments, a person merely has to phone and tell the office
that he or she is sick. There is no waiting period, and the benefit is paid
from the first day of illness. If a person is ill for more than a week,
however, a doctor's certificate is required as evidence of illness.

     In 1988 the average number of sick-call days per employee was 26.1, a
clear increase from 19.6 in 1983. According to statistics, the level of
absenteeism due to illness is higher in Sweden than in comparable countries.
This has caused major problems both for the health insurance system and
employers. Short-term absences are the main cause of serious disruptions in
production. But people with longer-term illnesses account for the highest
costs to the sick pay system, which is jointly financed by employers and the
central government. Self-employed people pay their own social insurance fees,
not only for sick pay, health care and parental insurance, but also for
pensions and other benefits.

Old Age Care and Pensions

     Average life expectancy at birth is 74 years for men and 80 years for
women in Sweden - among the highest such longevity figures in the world.
Although elderly people are healthier and better able to take care of
themselves than ever before, the growing number of "very elderly" - those over
80 - places a heavy burden on the medical care system.

     A complicating factor in the situation of the elderly is the recent trend
toward closing old age homes and other institutions that previously cared
full-time for the frail and infirm elderly, in favor of providing an
increasing proportion of practical and medical care in their own homes.

     Many elderly people are thus able to continue living outside of
institutions, thanks to home help (personal care) services. Every municipality
employs workers who help the elderly as necessary with such chores as
cleaning, grocery shopping, cooking and personal hygiene. Pensioners pay a fee
for this service which varies according to their financial situation. As
indicated earlier, the expansion of these home care programs has been hurt by
labor shortages.

     Other benefits aimed at enabling the elderly to live as independently as
possible are housing allowances, home adaptation grants or an apartment in a
building where on-call services are available.

     Everyone in Sweden who reaches age 65 is entitled to a basic pension,
regardless of whether he or she has been gainfully employed. Most people also
receive an income-related supplementary pension (ATP). There are limited
provisions for some employees aged 60-65 to work shorter hours and receive
partial pensions. People who have physical or psychological disabilities are
eligible for public pensions at even earlier ages, provided that sheltered or
semi-sheltered employment is unadvisable or unavailable.

     In the ATP system, employers pay a fee equal to a specified percentage of
each employee's income into a national pension fund. The employee earns
inflation-indexed pension points related to income level. Like the basic
pension, ATP is usually payable from age 65. The amount of ATP is calculated
using a person's 15 best years of income as a benchmark. A basic pension plus
full ATP should provide a total income equivalent to two thirds of a person's
buying power while employed.

Taxes

     Through a process of political decision-making, the Swedes have chosen to
create a very large public sector. It provides them with free education,
heavily subsidized health care and social welfare services as needed. Many
people are also eligible for generous cash grants and allowances at different
times during their lives. Most of these benefits are taxpayer-financed.

     Not surprisingly, then, Sweden has a reputation for high taxes. In 1988
the overall tax burden was 55 percent of GDP - among the highest such levels
in the world.

     This tax burden has been the subject of extensive debate in recent years.
Public opinion surveys indicate that the Swedes generally accept the fact that
they have to pay for the benefits they expect from the public sector. But
there has been broad criticism of high marginal taxes on personal incomes and
their distorting effects on the economic situation of both individuals and the
country.

     Even at ordinary income levels, marginal taxes have eaten up 60-70
percent of any nominal pay increases in recent years. In the view of many
economists, Sweden's steeply progressive State income taxes have created a
disincentive for creative or ambitious people to work harder. They have thus
harmed the national economy, especially during periods of labor shortages like
the late 1980s. They have also created a built-in temptation to conceal income
and to exchange services without reporting them.

     In some ways, the tax system also contradicts Sweden's traditional
egalitarian principles. Ordinary employees are hard-hit by marginal taxes,
while company owners and others whose income consists largely of capital gains
have sometimes been able to limit their taxes by strategic planning.
Homeowners and other borrowers have enjoyed windfalls, while the supposed
income-leveling effects of the tax system have been limited to people unable
to claim deductions or buy real estate.

[See Table B.: Central government revenue and expenditure, national budget
1990/91, in billion kronor]

     In response to these and other criticisms, late in 1989 the Social
Democratic Cabinet reached agreement with the Liberals on a major tax reform
package scheduled to take effect in two steps during 1990 and 1991. Its main
feature is to exempt more than four out of five Swedish employees from all
State income taxes. Instead they will pay only local income taxes, which
average about 30 percent. There will be a 50 percent ceiling on the marginal
tax rate.

     The capital gains tax will be a uniform 30 percent, thereby eliminating
minimum holding periods that have distorted securities markets. Corporate
income taxes will be cut from 52 percent to 30 percent, but the investment
reserve system