Scandinavian Working Papers in Economics

Working Papers in Economics,
University of Bergen, Department of Economics

No 02/06: Centralized or decentralized? A case study of Norwegian hospital reform

Jon Magnussen (), Terje P. Hagen () and Oddvar M. Kaarbøe ()
Additional contact information
Jon Magnussen: Department of Public Health and General Practice, NTNU and Health Organization Research Program Norway (HORN), Postal: NO-7489 Trondheim, Norway
Terje P. Hagen: Institute of Health Management and Health Economics, University of Oslo and Health Organization Research Program Norway (HORN), Postal: NO-0317 Oslo, Norway
Oddvar M. Kaarbøe: Health Economics Bergen (HEB), University of Bergen, Department of Economics, Postal: Hermann Fossgt. 6, N-5007 Bergen, Norway

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. Such reforms are often a result of fashion, 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 its economic effects. The most striking observation is that recentralization did not affect the variables related to cost containment and soft budgeting.

Keywords: Health care system; decentralization; recentralization; Norway.

JEL-codes: H77; I11; I18

24 pages, February 4, 2006

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