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Centralized or decentralized? A case study of Norwegian hospital reform

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  • Magnussen, Jon
  • Hagen, Terje P.
  • Kaarboe, Oddvar M.

Abstract

In recent years, decentralization of financial and political power has been perceived as a useful means to improve outcomes of the health care sector of many European countries. Such reforms could be the result of fashionable policy trends, rather than being based on knowledge of "what works". If decentralization is the favored strategy in health care, studies of countries that go against the current trend will be of interest and importance as they provide information about the potential drawbacks of decentralization. In Norway, specialized health care has recently been recentralized. In this paper, we review some of the evidence now available on the economic effects of recentralization. Although recentralization has been associated with improvements in both cost efficiency and technical efficiency this may have been caused by the increasing role of activity-based funding methods used in the allocation of health care resources. However, recentralization was also associated with an increase in the rate of growth of real resources and the proportion of total costs being met by supplementary funding. As a result, recentralization failed to address the issues of cost containment and reductions in budget deficits.

Suggested Citation

  • Magnussen, Jon & Hagen, Terje P. & Kaarboe, Oddvar M., 2007. "Centralized or decentralized? A case study of Norwegian hospital reform," Social Science & Medicine, Elsevier, vol. 64(10), pages 2129-2137, May.
  • Handle: RePEc:eee:socmed:v:64:y:2007:i:10:p:2129-2137
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    References listed on IDEAS

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    Cited by:

    1. Carlsen, Fredrik & Kaarboe, Oddvar Martin, 2015. "The relationship between educational attainment and waiting time among the elderly in Norway," Health Policy, Elsevier, vol. 119(11), pages 1450-1458.
    2. Halsteinli, Vidar & Kittelsen, Sverre A. & Magnussen, Jon, 2010. "Productivity growth in outpatient child and adolescent mental health services: The impact of case-mix adjustment," Social Science & Medicine, Elsevier, vol. 70(3), pages 439-446, February.
    3. Carlsen, Fredrik & Kaarboe, Oddvar M., 2010. "Norwegian priority guidelines: Estimating the distributional implications across age, gender and SES," Health Policy, Elsevier, vol. 95(2-3), pages 264-270, May.
    4. Izabela Karpowicz, 2012. "Narrowing Vertical Fiscal Imbalances in Four European Countries," IMF Working Papers 12/91, International Monetary Fund.
    5. Miika Linna & Unto Häkkinen & Mikko Peltola & Jon Magnussen & Kjartan Anthun & Sverre Kittelsen & Annette Roed & Kim Olsen & Emma Medin & Clas Rehnberg, 2010. "Measuring cost efficiency in the Nordic Hospitals—a cross-sectional comparison of public hospitals in 2002," Health Care Management Science, Springer, vol. 13(4), pages 346-357, December.
    6. Oddvar Kaarboe & Fredrik Carlsen, 2014. "Waiting Times And Socioeconomic Status. Evidence From Norway," Health Economics, John Wiley & Sons, Ltd., vol. 23(1), pages 93-107, January.
    7. Masayoshi Hayashi, 2011. "The effects of medical factors on transfer deficits in Public Assistance in Japan: a quantile regression analysis," International Journal of Health Economics and Management, Springer, vol. 11(4), pages 287-307, December.
    8. repec:kap:ijhcfe:v:17:y:2017:i:1:d:10.1007_s10754-016-9201-9 is not listed on IDEAS
    9. Kornai, János, 2008. "A puha költségvetési korlát szindrómája a kórházi szektorban
      [The soft budget constraint syndrome in the hospital sector]
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(12), pages 1037-1056.
    10. Askildsen, Jan Erik & Holmås, Tor Helge & Kaarboe, Oddvar, 2010. "Prioritization and patients' rights: Analysing the effect of a reform in the Norwegian hospital sector," Social Science & Medicine, Elsevier, vol. 70(2), pages 199-208, January.
    11. Kristensen, Troels & Olsen, Kim Rose & Kilsmark, Jannie & Lauridsen, Jørgen T. & Pedersen, Kjeld Møller, 2012. "Economies of scale and scope in the Danish hospital sector prior to radical restructuring plans," Health Policy, Elsevier, vol. 106(2), pages 120-126.
    12. János Kornai, 2009. "The soft budget constraint syndrome in the hospital sector," International Journal of Health Economics and Management, Springer, vol. 9(2), pages 117-135, June.
    13. Anthun, Kjartan Sarheim & Kittelsen, Sverre Andreas Campbell & Magnussen, Jon, 2017. "Productivity growth, case mix and optimal size of hospitals. A 16-year study of the Norwegian hospital sector," Health Policy, Elsevier, vol. 121(4), pages 418-425.
    14. Oliver Reich & Cornelia Weins & Claudia Schusterschitz & Magdalena Thöni, 2012. "Exploring the disparities of regional health care expenditures in Switzerland: some empirical evidence," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 13(2), pages 193-202, April.
    15. Tediosi, Fabrizio & Gabriele, Stefania & Longo, Francesco, 2009. "Governing decentralization in health care under tough budget constraint: What can we learn from the Italian experience?," Health Policy, Elsevier, vol. 90(2-3), pages 303-312, May.
    16. Jurgita Januleviciute & Jan Erik Askildsen & Oddvar Kaarboe & Luigi Siciliani & Matt Sutton, 2016. "How do Hospitals Respond to Price Changes? Evidence from Norway," Health Economics, John Wiley & Sons, Ltd., vol. 25(5), pages 620-636, May.
    17. Martinussen, Pål Erling & Magnussen, Jon, 2011. "Resisting market-inspired reform in healthcare: The role of professional subcultures in medicine," Social Science & Medicine, Elsevier, vol. 73(2), pages 193-200, July.
    18. Park, Sungchul & Lee, Jason & Ikai, Hiroshi & Otsubo, Tetsuya & Imanaka, Yuichi, 2013. "Decentralization and centralization of healthcare resources: Investigating the associations of hospital competition and number of cardiologists per hospital with mortality and resource utilization in ," Health Policy, Elsevier, vol. 113(1), pages 100-109.
    19. Januleviciute, Jurgita & Askildsen, Jan Erik & Holmås, Tor Helge & Kaarbøe, Oddvar & Sutton, Matt, 2010. "The Impact of Different Prioritisation Policies on Waiting Times: A Comparative Analysis of Norway and Scotland," Working Papers in Economics 07/10, University of Bergen, Department of Economics.
    20. Socha, Karolina, 2014. "Mixed reimbursement of hospitals: Securing high activity and global expenditures control?," COHERE Working Paper 2014:3, University of Southern Denmark, COHERE - Centre of Health Economics Research.
    21. Sumah, Anthony Mwinkaara & Baatiema, Leonard & Abimbola, Seye, 2016. "The impacts of decentralisation on health-related equity: A systematic review of the evidence," Health Policy, Elsevier, vol. 120(10), pages 1183-1192.
    22. van der Geer, Eric & van Tuijl, Harrie F.J.M. & Rutte, Christel G., 2009. "Performance management in healthcare: Performance indicator development, task uncertainty, and types of performance indicators," Social Science & Medicine, Elsevier, vol. 69(10), pages 1523-1530, November.

    More about this item

    Keywords

    Norway Health reform Decentralization Economic effects;

    JEL classification:

    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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