SAINT GORAN’S hospital is one of the glories of the Swedish welfare state. It is also a laboratory for applying business principles to the public sector. The hospital is run by a private company, Capio, which in turn is run by a consortium of private-equity funds, including Nordic Capital and Apax Partners. The doctors and nurses are Capio employees, answerable to a boss and a board. Doctors talk enthusiastically about “the Toyota model of production” and “harnessing innovation” to cut costs.
Welcome to health care in post-ideological Sweden. From the patient’s point of view, St Goran’s is no different from any other public hospital.
Treatment is free, after a nominal charge which is universal in Sweden. St Goran’s gets nearly all its money from the state. But behind the scenes it has led a revolution in the relationship between government and business. In the mid-1990s St Goran’s was slated for closure. Then, in 1999, the Stockholm County Council struck a deal with Capio to take over the day-to-day operation of the hospital. In 2006 Capio was taken over by a group of private-equity firms led by Nordic Capital. Stockholm County Council recently extended Capio’s contract until 2021.