The assistance market – profitability and competition

Against the background of continuously rising costs for assistance care, the Swedish Government has requested the Swedish Social Insurance Inspectorate (ISF) to analyse the functioning of the personal care assistance market. Copenhagen Economics has supported ISF with its own analysis of whether conditions for effective competition are fulfilled. Grant Thornton has supported with an analysis of providers’ profitability.

The main conclusion of Copenhagen Economics’ analysis is that the assistance market shows signs of effective competition, despite some deficiencies, mainly because:

• There is a large number of providers of assistance on a flexible market with relatively low profits
• Most users of assistance choose provider actively
• The structure of the benefits system (fixed price) is well-designed for the market

The study is commissioned by The Swedish Social Insurance Inspectorate and forms the basis of part two in this report, published December 2017