Summary 2016:3. Productivity and quality of the administration of the Swedish social insurance system

Transcription

1 Summary 2016:3 Productivity and quality of the administration of the Swedish social insurance system

2 Swedish Social Insurance Inspectorate Stockholm 2016 Inspektionen för socialförsäkringen Authors: Magnus Medelberg and Jonas Thelander 2

3 Summary Productivity and quality of the administration of the Swedish social insurance system The Swedish Social Insurance Inspectorate (Inspektionen för socialförsäkringen, ISF) is an independent supervisory agency for the Swedish social insurance system. The objectives of the agency are to strengthen compliance with legislation and other statutes, and to improve the efficiency of the social insurance system through system supervision and efficiency analysis and evaluation. The ISF s work is mainly conducted on a project basis and is commissioned by the government or initiated autonomously by the agency. This report has been initiated by the agency. Introduction and objectives The ISF continuously monitors the productivity of the administration of the Swedish social security system. Earlier studies focused on the administrative efficiency of the Swedish Social Insurance Agency (henceforth the Social Insurance Agency) and the Swedish Pensions Agency (henceforth the Pensions Agency). In this report the focus is widened. Apart from the Social Insurance Agency and the Pensions Agency, the five buffer funds in the Swedish national income pension system, AP funds 1 4 and 6, are included as well as AP fund 7 and the private fund managers administering the premium pension funds. The parts of the Swedish Tax Agency s and the Swedish Enforcement Authority s operations that form a part of the pension administration are also included in the study. The study covers the development of the costs, productivity and quality of the administration of the social security system during the period Findings Overall administrative costs largely unchanged over the period The total administrative costs for the social security system were more or less the same in 2014 as they were in In real terms, the costs increased by 1 per cent, from 14.7 billion Swedish kronor (SEK) in 2005 to 14.9 billion SEK in The hopes of lower administrative costs due to, among other things, the reorganisation of the Social Insurance Agency in to one centralised, national agency in 2005 and the establishing of the Pensions Agency in 2010 thus were not fulfilled. 3

4 Decreasing, or at least not increasing, productivity for the administration as a whole Overall productivity did not increase. In comparison with 2005, the productivity for the administration as a whole was 7 per cent lower in 2014, i.e. an average case became 7 per cent more costly to administer during the period. It is not always clear, though, what measures should be used when measuring productivity, and there are alternative ways to calculate how the productivity developed during the period. Some of the alternatives are shown in the report, and it is clear that the choice of performance measure does affect the result. Regardless of how productivity is measured, though, the development can hardly be viewed as positive for the administration as a whole. The level of productivity in the administration of the premium pension funds is the one that differs most depending on how it is measured. If the main alternative is used, with the number of pensioners and pension savers as the measure of performance, productivity decreased by 26 per cent over the ten years included in the study. But if the amount of managed capital in the premium pension funds is seen as the measure of performance, productivity increased instead by 88 per cent. If productivity for the whole social security administration is calculated with the amount of managed capital as the measure of performance in the premium pension funds administration, the productivity increased by 2 per cent, instead of the 7 per cent decrease when the main alternative is used. Increased productivity in certain parts of the administration Social security administration is a large area, and includes many different kinds of insurances and benefits. Developments in different parts of the administration can vary from the development in the administration as a whole. Some parts of the administration saw a strong increase in productivity over the studied period, for example the old-age pension administration at the Pensions Agency and the administration of benefits for families and children at the Social Insurance Agency. One probable explanation of the increased productivity in these areas is the increased automatisation of the processing of these benefits. This automatisation, in turn, was possible due to the relatively uncomplicated laws and rules governing these benefits. The resources that were freed through the increased productivity in these areas, however, did not result in lower overall costs, but were instead transferred to other areas within the agencies. In the case of the Pensions Agency, these resources were put to use in increasing the agency s information about the pension system to pensioners and pension savers, in order to heighten their knowledge of, and strengthen their position within, the pension area. In the case of the Social Insurance Agency, the resources made available in this way were primarily transferred to the area of sickness benefits in order to reduce the sickness absence. 4

5 Lack of reliable quality measures One possible result of the fact that the gains in productivity in some parts of the administration were transferred in order to provide extra resources in other parts could be quality improvements in the case-handling process. This may be the case, but such possible improvements are hard to detect due to the lack of reliable measures of quality. The Pension Agency s own survey results show no clear signs of an increased self-rated knowledge of the pension system among pensioners and pension savers. On the other hand, the possible effect of the Pension Agency s increased information is very hard to measure, and is perhaps only possible to evaluate in a longer perspective. When it comes to the Social Insurance Agency, the level of sick leave fell during parts of the studied period, but here too it is not possible to say how much of this, if any, can be contributed to the extra resources transferred to this area. One aspect in which the quality definitely improved, though, is the shortened processing times for the case handling of many of the benefits administered by the Social Insurance Agency. Another self-evident improvement in quality during the studied period was the multiple new channels for clients to get in touch with the case-handling agencies, as a result of technological development. For example, clients could apply for many benefits online. This development may have contributed to the fact that both the Social Insurance Agency and the Pensions Agency have received improved client ratings in recent years. 5