Reforming decentralized integrated health care systems: Theory and the case of the Norwegian reform
2002/7: by Kjeld Møller Pedersen, Department of Public Health, Health Economics, University of Southern Denmark. (PDF 391 kb)
In this essay Kjeld Møller Pedersen presents a conceptual and theoretical scheme for decentralized integrated health care systems of the northern European kind. With small changes it is also applicable to other countries, e.g. Italy, Spain, and Portugal. Three ideas tie together the scheme: + modified fiscal federalism, + principal-agent thinking and + the analysis of discrete structural alternatives from new institutional economics. To illustrate the thinking the recent Norwegian hospital reform is put into context, not only geographically but also theoretically. The geographical context is that of Scandinavia and there is a summary of reforms in the Scandinavian countries over the past 20-30 years. The essay thus serves the double purpose of presenting and evaluating the Norwegian reform in a Scandinavian context and to take part in the neglected discipline of developing a theory of health care reform.
The Norwegian January 2002 reform is described in some detail. It is a reversal of the Scandinavian model of decentralization and a move towards more centralism. The Norwegian reform is both evaluated based on principal-agent thinking and the analysis of discrete structural alternatives. The author predicts that there is no a priori reason to expect large improvements in efficiency - but on the other hand neither should one expect things to get worse. Many effects depend, however, crucially, on (a) the financing system that will be put in place late 2003, and (b) whether or not the political and management cultures change as a result of the reform. In the concluding sections possible implications for Denmark and Sweden are discussed.