Fiscal Eugenics at Work in Sweden

The other day I reported on the crumbling retirement system in Sweden, where the national legislature may soon pass a reform to force everyone to work longer. The superficial motivation is that every other newborn is expected to reach the respectable age of 100, a statement that is quite a bit of demographic trickery in itself. The rise in life span in the Western world is actually flattening, which means that the most reasonable prediction is that there will be very small changes over the next century.

On top of that, the retirement system, which is based in part on a pay-as-you-go model and partly a tightly regulated private-accounts system, is performing poorly for two reasons: the high taxes in Sweden is stifling private-sector economic activity, which erodes revenues for the pay-go part; and decades of fiscal-policy mistakes and labor market regulations have effectively halted the rejuvenation of the Swedish business landscape. The corporate performance that lays the groundwork for the stock market is decreasingly profitable, as big, bureaucratic and rather low-productive manufacturing corporations dominate the Swedish stock market.

As a result, retired Swedes are seeing their standard of living decline over time, where their parents saw a decent, steady stream of retirement income.

Today we can report on another downtrodden side of the Swedish welfare state. From the Swedish daily newspaper Svenska Dagbladet (my translation; click link for google translation):

In its assessment of what medical drugs to subsidize, the Swedish government takes into account that retired citizens contribute less to the economy. The National Board of Dental and Medical Drug Subsidies claims that they are only following the law, but the National Organization of Retired People intends to look at a lawsuit over age discrimination.

Readers familiar with QALY can already now see what is coming.

Mr. Calle Waller, 75, from [the town of] Knivsta, says… ‘My first reaction was that I could not wrap my head around it. I paused and thought about it and got a distinct feeling that there was something wrong, they just can’t say this’. … Since nine years he is suffering from prostate cancer, and since the summer of 2012 in his capacity as the vice president of the Organization of Prostate Cancer Patients he has been trying to find out how [The National Board of Dental and Medical Drug Subsidies] reached its decision not to subsidize the drug Zytiga, which gives men beyond treatment more time.

In late 2012 The National Board of Dental and Medical Drug Subsidies notified the socialized Swedish health care system that it was going to subsidize a cheaper alternative, which has significantly more side effects and requires intravenous provision. A main reason for this decision is of course that the Swedish health care system is badly starved for resources and is under serious, constant cost-cutting pressure.

However, there is another important reason:

As part of the reasons for its decisions … the National Board states that the drug does not produce enough of an elevation in the quality of life and extended life span for the patients, compared to how much each Zytiga treatment costs taxpayers. But what really caught Mr. Waller’s attention was a statement hidden away toward the end of the report, explaining that a subsidy would be more expensive because the average patient, in this case 69 years old, cannot start working afterward. … ‘Indirect costs are added for this patient age group since production less consumption results in a deficit. As a result, extension of the life span for this age group results in higher costs to society.’

Translated into plain English, this means that the patients will be paying so little in taxes over the remaining years of their lives that they will never be able to repay government for the cost of their treatment.

What the Swedish National Board of Dental and Medical Drug Subsidies is doing may be entirely immoral, but it is definitely nothing new. The methodology they are applying is called Quality Adjusted Life Years, or QALY. It is an instrument that in the hands of health care bureaucrats becomes a sorting mechanism where the strong win and the weak lose. (For an in-depth explanation of QALY, click here.) Its practice, which every week kills scores of treatable patients in countries with socialized health care, fits with chilling logic into the principle of fiscal eugenics that is increasingly accepted and widely practiced in Europe’s welfare states.

Back to the Svenska Dagbladet story, where we now get to hear from the government:

Mr. Niklas Hedberg, director of the division of new medical drugs at the National Board of Dental and Medical Drug Subsidies, contends that this is a case of unfortunate wording, but that the Board is complying with existing law that requires them to take into consideration every consequence of a subsidy. ‘This is a very complex issue … our nation’s resources are limited and we are charged with making subsidy priorities. Existing law mandates that we shall consider all principles, and put medical drugs in the context of society as a whole.

A nice way of saying exactly what Mr. Waller above quoted the Board as saying, but in words that make everyone feel a lot better about discarding older patients on the grounds of their inability to pay enough taxes.

The newspaper reported on the consequences of subsidy cuts already in September (again my translation; click link for google translation):

At the Karolinska university hospital [in Stockholm] prostate cancer patients are forced to pay out of pocket for a medical drug costing SEK 30,000 per month [$4,500]. If not, they will get an alternative [drug] with more side effects, that must be distributed intravenously. … Patients get on average an extra four months when all other treatment methods have been exhausted. ‘The improvement does not last forever, but at least the patients get an extension of life without any noticeable side effects’ says Ms. Anna Laurell, senior physician at the Akademiska hospital in Uppsala.

It is this extension of life that bothers the government Board. If the patients would be able to back to work and pay a lot of taxes, it would be worth treating them. But in a welfare state in general, and a socialized health care system in particular, a taxpayer’s life is worth more than anyone else’s. Those who are unable to feed government by paying taxes will be discarded.

Fiscal eugenics, for short.

One comment

  1. Cavatus

    What the politicians never mention is that every Swede has to work longer in order to support all the immigrants that do not work. I for one believe that this group is even more expensive that the retired. But this fact cannot be admitten in the face of the Swedes. Then the Sweden Democrats would get even higher percentages in the opinion polls.