Balancing Health Care Quality and Cost Containment: The Case of Norway

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Balancing Health Care Quality and Cost Containment: The Case of Norway

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Alexandra Bibbee
Flavio Padrini

Abstract

In recent years, a series of wide-ranging reforms designed to make greater use of market mechanisms has succeeded in eliminating shortages, raising efficiency and improving citizen satisfaction. Nevertheless, spending accelerated after the reforms, and per capita spending on health is now one of the highest in the OECD. Centralisation of hospital ownership may have increased political influence, encouraging spending that cannot be justified on cost-benefit grounds. Co-payments by patients are modest, and the background of swelling oil wealth may have sapped willingness to control costs. Diagnosis related group (DRG) procedures are arguably too well-remunerated in some areas, leading to supply-driven interventions, while their absence in others (e.g. psychiatry) may have resulted in sub-optimal supply. Generalist doctors have a gatekeeper role, but are said to over-refer patients to hospitals. Although cost controlling mechanisms exist in Norway, they are too often sidestepped by pressure by citizens on politicians to approve new drugs and treatments. Thus, future health reforms in Norway should concentrate on value for money. This paper relates to the 2005 OECD Economic Survey of Norway (www.oecd.org/eco/survey/norway).

Trouver l'équilibre entre qualité des soins et maîtrise des coûts : Le cas de la Norvège
Ces dernières années, une série de réformes de grande ampleur visant à davantage utiliser les mécanismes de marché ont permis d'éliminer les files d'attentes, d'accroître l'efficacité du système de santé et d'améliorer la satisfaction des citoyens. Néanmoins, les dépenses ont accéléré, conduisant la Norvège à un des niveaux les plus élevés des pays de l'OCDE en terme de dépenses de santé par habitant. Le transfert de la propriété des hôpitaux aux administrations centrales a peut-être permis de laisser la place aux pressions politiques et encouragé les dépenses qui ne peuvent se justifier du strict point de vue de l'efficacité économique. La participation financière des patients est peu élevée et l'accroissement de la richesse pétrolière a sans nul doute nui à la volonté de maîtriser les coûts. Le système des groupes homogènes de malades aboutit probablement à des rémunérations excessives dans certains domaines, entraînant des interventions induites par l'offre, alors que l'absence de groupes de ce type dans d'autres domaines (comme la psychiatrie) a donné lieu à une offre insuffisante. Les généralistes jouent un rôle de filtrage, mais auraient tendance à trop orienter les malades vers les hôpitaux. Bien que des mécanismes de contrôle des coûts existent en Norvège, ceux-ci sont trop souvent court-circuités, les citoyens exerçant des pressions sur les élus pour approuver de nouveaux médicaments et traitements. Ainsi, les futures réformes du système de santé en Norvège devraient davantage se concentrer sur les aspects efficacité - coûts. Ce document de travail se rapporte à l'Etude économique de la Norvège 2005 (www.oecd.org/eco/etudes/norvege).

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Paper provided by OECD, Economics Department in its series OECD Economics Department Working Papers with number 481.

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Date of creation: 17 Feb 2006
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Handle: RePEc:oec:ecoaaa:481-en

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Find related papers by JEL classification:
I10 - Health, Education, and Welfare - - Health - - - General
I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

This paper has been announced in the following NEP Reports:

NEP-ALL-2006-03-05 (All new papers)
NEP-EEC-2006-03-05 (European Economics)
NEP-HEA-2006-03-05 (Health Economics)

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Jonathan Sussex & Shelley Farrar, 2009. "Activity-based funding for National Health Service hospitals in England: managers’ experience and expectations," The European Journal of Health Economics, Springer, vol. 10(2), pages 197-206, May. [Downloadable!] (restricted)

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