New commission to set profit limits for Swedish private sector
The new Swedish government led by the Social Democrats (SDs) has reached an accord with the Left party, which is likely to see much tighter controls over the use of private capital in healthcare, including profit limits and specifying staffing levels.
The SDs have agreed to the setting up of a commission to look at what limits should be applied to private operators in education, care and healthcare in exchange for the Left supporting its immediate budget proposals. The commission will not report until 2016, so some observers see this as a tactic to win the support of the Left whilst postponing decisions.
Left Party economic spokeswoman Ulla Andersson said the new rules will mean profiles would have to be reinvested and that profits would also be limited. She added: “Some private equity companies will probably get the hiccups today, and so they should. It will no longer be possible to enrich yourself on the Swedish welfare.”
To get the proposals through parliament would, however, call for the support of at least one of the centre parties.
This looks like bad news. It puts a miasma of uncertainty over the sector for the next two years. The fact that the commission is talking about staffing levels and profitability is also worrying. As Investor AB, the owners of Aleris, have pointed out, at alternative route would be to focus on quality of care and patient outcomes where the private sector tends to do better than the public sector.
Meanwhile, it is hard to see how existing investors in groups like Attendo, Humana and Ambea can sell their shares either through secondary deals or IPOs.
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