Norwegian General Hospitals, 1970–2002: County Ownership—An Interlude between Welfare Localism and State Direction

Abstract

Over the last three decades, Norway has experienced two fundamental reforms in hospital organization and direction. In 1970 the nineteen county authorities took over ownership and budget responsibilities for hospitals within their areas, replacing a highly varied and complex structure of ownership, typically generated locally. In 2002 hospitals were transferred to the state and amalgamated into five regional government enterprises. These, in turn, have organized all hospitals in their region under local health enterprises. Both regional and local enterprises are separate legal entities, with their own executive boards and managing directors. The Minister of Health appoints the boards of the regional enterprises, while their directors and the boards of the local enterprises are appointed by the regional boards. Both regional and local enterprises are supposed to have full autonomy for day-to-day operations, while being subject to strategic and political decisions by the Minister of Health as the ultimate authority of the enterprise assembly (foretaksmote).1 The “enterprise” concept is, of course, borrowed from private business, modelled on companies of limited liability. The choice of this organizational model must be understood at least partly within the context of a general politico-administrative reform, inspired by the worldwide New Public Management movement. Each enterprise is a separate economic entity with a clear responsibility for balancing its budgets. Privatization (or part-privatization) and bankruptcy, however, are out of the question, as the state in the end retains full economic responsibility. The objective of this article is to contribute towards an understanding of this pattern of reform. I will suggest three explanations. First, ownership and organization in the hospital sector falls nicely into a long line of development in the creation of the Norwegian welfare state—with the emphasis on “state”. This can be described as the development from “welfare localism” to central direction with the aim of equalizing welfare provisions nationally. The desire to secure equal rights, care and benefits nationwide has always been a concern of the state, but I will argue that this concern has greatly increased over the last few decades. From this perspective, the two reforms in 1970 and 2002 could even be considered as two steps in one and the same process. This theme of centralization versus decentralization is, of course, a general and common one in international hospital history,2 and in the on-going reform debate on hospital organization in several countries in the western world. It is also an important theme in ongoing social science research on current hospital reform. A central question in this respect, which calls for a broader comparative approach than is possible within the scope of this article, is whether developments in Norway—from a decentralized towards a centralized system of hospital organization—run counter to a general trend towards decentralization of hospital management and direction, and if this is the case, why?3 Secondly, both the reorganization of the 1970s and that of 2002 fall neatly into a broader picture of fundamental Norwegian political and administrative government reform. Important factors behind both hospital reforms are thus at least as much connected to the problems of reorganization of government and administration in general, as they are specific to hospital politics. Thirdly, the fundamental problems and tensions that inspired reform at the beginning of the new millennium were basically the same as those that made reform necessary thirty years earlier. Several problems in hospital politics were probably greater at the end of the three decades of county ownership than at the beginning. I will therefore argue that it is possible to see the phase of general county ownership as an interlude in a hundred-year-long search for the “right” way of organizing Norwegian hospitals. Circumstances and what are considered good and appropriate organizational solutions probably change more than the fundamental problems of hospital politics, which have turned out to be surprisingly consistent and recalcitrant. State regional enterprise is just as much the hegemonic politico-administrative “solution of today” as county ownership was in the 1960s and 1970s.