Marketization in Scandinavian welfare states: The role of large corporations in residential care for older people

presenter(s)

ABSTRACT

In the context of the Scandinavian tradition of universal, tax-financed care services, centred on public provision, the recent wave of marketisation and the increasing role of for-profit companies in residential care for older people might be unexpected. However, Sweden and Norway, with fairly similar welfare models are not affected to the same extent. In Norway, 6 per cent of a total of 41,000 beds in residential care are run by for-profit providers, in Sweden around 18 per cent of 90,000 beds. Even if the proportions are comparatively small in an Anglo-Saxon context, the growth is considerable given that were no for-profit actors in Scandinavia before the beginning of the 1990s. Of particular importance is that in both countries, large international corporations increasingly dominate the market. Starting in Sweden in 2005, these corporations were bought up by private equity firms but more recently there has been a gradual shift away from a dominance of private equity. Objective: The aim of this paper is to describe and analyse the largest for-profit actors in Norway (4) and Sweden (5)residential care for older people with a focus on size, activities, ownership and revenues from 2000 to 2015. Data and metods: Multiple sources of data are investigated, such as annual reports, union reports, national statistics, third party research and mass media reports. Results: In Sweden, half of the beds in for-profit homes are run by the two largest corporations, Attendo (95 homes, 4250 beds) and Ambea (86 homes, 3940 beds). After those two biggest companies, the next group includes Aleris (34 homes), Förenade Care (32 homes) and Norlandia (11 homes). In Norway, the four largest corporations run 3/4 of the for-profit beds, Aleris (9 home, 544 beds), Unicare (6 homes, 543 beds), Norlandia (5 homes, 424 beds) and Attendo (6 homes, 308 beds). Several companies are running businesses in both countries: Three of the five largest companies in Sweden are among the top four in Norway (Attendo, Aleris and Norlandia), and in both countries, the big actors are increasingly active in other areas such as health care, disability services or recently arrived minors seeking asylum. Taking these different activities and the Nordic countries together, the largest actor Attendo has 14,000 employees, the second largest Ambea has 10,000 and the third largest Aleris 6,600. Policy implications: All the companies have a complex ownership structure, and the mother company is usually based in a tax haven. As a result, all the large companies report low return on assets and low profitability, and they all pay very little tax in Scandinavia. This has raised political concern in both countries; in Norway a shift in political majority (to the left) in some of the larger muncipalities has led to local decisions to stop out-sourcing to for-profit actors, and in Sweden a government commission is investigating possibilities to limit profit making in welfare services. In contrast to Sweden, no companies own buildings or other material assets in Norwegian residential care which makes it easier to end contracts in Norway.


date 5 September 2016



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