Scandinavian Working Papers in Economics

HERO On line Working Paper Series,
Oslo University, Health Economics Research Programme

No 2009:10: Why is there such a gap between health expenditures and outcomes in Norway compared to Finland?

Hans Olav Melberg ()
Additional contact information
Hans Olav Melberg: Institute of Health Management and Health Economics, Postal: P.O. Box 1089 Blindern, NO-0317 Oslo, Norway

Abstract: According to the OECD Norway spends 47% more on health care per capita compared to Finland and about 30% more than the other Nordic countries. At the same time indicators of health status show that Norway is not better on important indicators of health. This raises the question of why there is such a gap between spending and outcome in Norway compared to the other Nordic countries. This paper lists a number of possible explanations and quantifies their importance. The conclusion is that higher wages may explain up to 38% of the difference between Norway and Finland and differences in staff levels explain about 25%. Data errors are difficult to quantify, but the data on in long term care suggests that it accounts for at least 20% of the difference. Diminishing or zero marginal return is a controversial explanation for the lack of difference in outcomes despite higher spending and a brief review of the literature shows conflicting evidence. Finally, the last section argue that a convincing explanation of the growth of health spending should be based on a model that takes into account the fact that health care to a large extent is provided outside the free-market and that people seems to have special moral intuitions when it comes to the provision of health services as opposed to many other goods.

Keywords: Health expandures; OECD; wages; Norway

JEL-codes: H51; I10; I12

26 pages, December 14, 2009

Full text files

2009_10.pdf PDF-file 

Download statistics

Questions (including download problems) about the papers in this series should be directed to Anbjørg Kolaas ()
Report other problems with accessing this service to Sune Karlsson ().

This page generated on 2018-01-23 23:37:07.