Political Process and its Effect on Price. Analysis of the effect of price setting process on public dental prices in Sweden

Abstract

Since the deregulation of prices in 1999 discrepancies in prices for public dental care exist across counties in Sweden, which cannot only be attributed to differences in cost. The political process differs across counties and this paper explores the possibility that the complexity of the political processes in a county has an increasing effect on prices for public dental care. The results show a positive correlation between the number of political steps in the price setting process and public dental prices. Further these public prices have a positive correlation with private prices, showing an effect that carries across into all actors within the Swedish dental care market. Therefore, it is proposed that a delayering organizational strategy can reduce prices for both public and private dental providers and thus reduce cost for the end consumer.