Balancing Health Care Quality and Cost Containment

In recent years, a series of wide-ranging reforms designed to make greater use of market mechanisms hassucceeded in eliminating shortages, raising efficiency and improving citizen satisfaction. Nevertheless, spendingaccelerated 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 cannotbe justified on cost-benefit grounds. Co-payments by patients are modest, and the background of swelling oilwealth may have sapped willingness to control costs. Diagnosis related group (DRG) procedures are arguablytoo 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 toover-refer patients to hospitals. Although cost controlling mechanisms exist in Norway, they are too oftensidestepped by pressure by citizens on politicians to approve new drugs and treatments. Thus, future healthreforms 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).