Effects of Increased Competition on Quality of Primary Care in Sweden

In the last decades, many health systems have implemented policies to make care providers engage in quality competition. But care quality is a multi-dimensional concept, and competition may have different impacts on different dimensions of quality. The empirical evidence on competition and care quality is scarce, in particular regarding primary care. This paper adds evidence from recent reforms of Swedish primary care that affected competition in municipal markets differently depending on the pre- reform market structure. Using a difference-in-differences strategy, we demonstrate that the reforms led to substantially more entry of private care providers in municipalities where there were many patients per provider before the reforms. The effects on primary care quality in these municipalities are modest: we find small improvements in subjective measures of overall care quality, but no significant effects on the rate of avoidable hospitalizations or patients’ satisfaction with access to care. We find no indications of quality reductions.