THE DANISH MODEL

The Danish labour market model has attracted attention from other European countries suffering from high unemployment and sclerotic labour practices. The Government here stays out of the way, allowing employer organisations and trade unions to negotiate labour contracts, which usually last for two years. Individual firms that are not part of the employer organisation tend to follow the negotiated contract. It is relatively easy to fire people (though sometimes expensive, if they have been there a long time). And money is available for education and retraining, if you lose your job.

However, just at the moment when other countries are getting interested in the Danish model, the model itself seems not to be working very well. And not just because unemployment has remained stubbornly high for pretty much the past four years. The bigger problem is a series of labour disputes in the public sector. The model works well if the employees are demanding and the employers (various organs of the state) are grudgingly conceding. It works less well if it is the employers who are doing the demanding.

I have written about the teachers' dispute, which ended recently. However, that was followed up by a dispute between the family doctors and the five regions who employ them. As in the U.K., general practitioners are self-employed professionals organised in practices scattered around the country, who act as gatekeepers to the more specialised (and vastly more expensive) hospital system.

Negotiations on a new contract from 1 September fell apart, just like with the teachers, and for pretty much the same reason; who decides? In particular, the regions had two key demands. First, they wanted to remove the GPs' right to veto where new practices can be set up. It's difficult to get doctors, particularly younger ones, to go and live in the sticks in remote rural areas, and that is becoming more and more of a problem. Norway, a much bigger country with roughly the same number of people, has the same problem, and solves it by giving doctors more money if they agree to go to (say) the far north. A similar arrangement could work here; but not if the doctors can block it.

Secondly, they want GPs to be more flexible, opening in the evenings and at other unusual times, in order to cope with more flexible patterns of employment. This will be good for patients, but of course not necessarily for doctors.

With the breakdown in negotiations, the regions announced that the existing contract would end on 31 August; the equivalent, for self-employed people, of a lockout. However, while it took a month for the Government to step into the teachers' lockout, it took them just a day this time around. Children can stay away from school, but sick patients cannot not be treated (even if the effect won't be felt for some four months). As with the teachers, the Government has acceded to the regions' two principal demands. However, it has also extended the existing contract for one year, and urged the two parties to negotiate the details amongst themselves.

In other words, the Danish model is looking increasingly like Government diktat. The GPs are not happy with this, and have even threatened to work without a contract and simply charge patients, as American doctors do. That would be an extremely un-Danish outcome; watch this space.

Walter Blotscher