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Executive summary: The New Karolinska scandal

The New Karolinska scandal report was written with the purpose of exploring under what circumstances a new type of procurement model, Public-Private Partnership (PPP), may facilitate the restoration of welfare infrastructure in Sweden. The report constitutes a case study on one of the largest and most innovative projects within Swedish healthcare of all time. It is also a critical review of a mismanaged and, for the taxpayers, very costly political experiment.

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New Karolinska Solna (NKS), the new university hospital in Stockholm, aims at becoming one of the most modern and highly specialised hospitals in Europe. The new facilities will not provide basic healthcare, and as for the previous activities at the old Karolinska Hospital, with the stated objective of providing various kinds of care, they will now be relocated. For the construction of the new hospital a new procurement model, PPP, was adopted. Based on the idea that the private party takes greater responsibility in financing, constructing, maintaining and running enterprises, PPP has gained strong recognition in Great Britain and other Anglo-Saxon countries. There are significant advantages to the model in risk transfer to the private party and the opportunity to finance new investments without forcing the authorities to raise loans.

The report is based on a three part study: an appraisal of the relevant literature examining the research available and the literature on application of the PPP model during hospital construction; a chronological examination of the course of events and the political process; and also an interview study with politicians, civil servants and other experts sharing their perspectives on the project. The author would like to underline that the study was hampered by the fact that the project to a large extent is subject to secrecy.

The study emphasises the importance of securing solid purchasing competency whenever a public party takes charge of complex PPP projects. The prerequisites are interesting, and as the procurement model is most relevant to Swedish healthcare authorities, the ambition is welcome. In its performance and decision making, however, the NKS project can be criticised in many respects. This is primarily due to absence of competitive procurement, but there are other shortcomings as well:

Form was prioritised at the expense of function. With reference to medical progress, the indeterminable nature of the hospital’s provision has been emphasised repeatedly. Instead of focusing on care provision, priority was given to an architectural competition and design, and it is only now, seven years after the hospital was designed, that the provision of care starts to take shape.
All other healthcare institutions in Stockholm are forced to adapt to New Karolinska. The Swedish healthcare system is under severe pressure, and in times when cuts in expenditure and higher efficiency is demanded, enormous resources are tied up in a hospital from which few patients will benefit.
The purchasing competency was overrated. On several occasions during the procurement process, the responsible healthcare authority proved to lack in competency and experience. External consultants were engaged to cover up for these shortcomings, but the County Council chose not to follow essential recommendations.