Norwegian Hospital Sector Research Articles

Economies of scope in the Norwegian public hospital sector.

This study investigates the potential economies of scope in the Norwegian public hospital sector after a major structural and organizational reform. Economies of scope refers to potential cost savings occurring from the scope of production rather than the scale. We use a data driven approach to distinguish between relatively specialized and differentiated hospitals. Using registry data spanning the period 2013-2019, we use non-parametric data envelopment analysis with bootstrapping procedures to investigate the potential presence of economies of scope. This is done separately for three different dimensions of which hospital production can be either specialized or differentiated. The findings suggest that economies of scope are present in the Norwegian hospital sector, meaning that there are cost savings related to the optimal differentiation of the activity. It is difficult to conclude on how these findings relate to the reform.

New Public Management and hospital efficiency: the case of Norwegian public hospital trusts

New Public Management-inspired reforms in the Norwegian hospital sector have introduced several features from the private sector into a predominantly public healthcare system. Since the late 1990s, several reforms have been carried out with the intention of improving the utilization of resources. There is, however, limited knowledge about the long-term, and sector-wide effects of these reforms. In this study, using a panel data set of all public hospital trusts spanning nine years, we provide an analysis of the efficiency of hospital trusts using data envelopment analysis (DEA), as well as a Malmquist productivity index. Thereafter we use the efficiency scores as the dependent variable in a second-stage panel data regression analysis. We show that during the period between 2011 and 2019, on average, efficiency has increased over time. Further, in the second-stage analysis, we show that New Public Management features related to incentivization are associated with the level of hospital efficiency. We find no association between degree of competition and efficiency.

Institutional Work for Enterprise Architecture

Enterprise architecture (EA) is a systematic approach used for designing and implementing changes in technological systems and processes to improve organizational performance and align technology with business. This paper unpacks the process through which EA moves from strategic-level endorsement to diffusion across organizations. The insights provided are based on a longitudinal case study within the Norwegian hospital sector. An institutional work lens is adopted to analyze the purposeful activities carried out to introduce EA in Norwegian hospitals providing a granular view on diffusion. The paper provides a rich description of the institutional work employed by the key actors involved mapping them to different turns in EA’s trajectory. Drawing from this analysis, we contribute to Information Systems literature with a conceptual model that illustrates how institutional work can mitigate the challenges of moving from the strategic-level endorsement of novelty to its diffusion and institutionalization smoothing downturns along the way. The findings indicate ways to facilitate the introduction of EA within complex organizations, providing insights for practitioners involved in EA initiatives, and advancing extant EA research through an institutional perspective.

Enterprise architecture operationalization and institutional pluralism: The case of the Norwegian Hospital sector

AbstractEnterprise architecture (EA) is a systematic way of designing, planning, and implementing process and technology changes to address the complexity of information system (IS) landscapes. EA is operationalized when architecture visions move towards realization through concrete projects. We report a case study on the dynamics of operationalizing EA in the Norwegian hospital sector by exploring different EA project trajectories. Our empirical context is an institutionally pluralistic setting where multiple logics coexist. We show that the distinct logic of EA is added to the institutional context and we find that tensions among existing medical, technical, and managerial logics and EA principles and assumptions emerge. We contribute to the under‐researched topic of EA operationalization by suggesting a model that demonstrates how the meeting of multiple institutional logics can lead to varying degrees of differentiation or even disassociation from EA visions during decision‐taking in projects. Furthermore, we advance extant research on IS projects' implementation in institutionally pluralistic settings by providing an empirical account of actors' interactions and project leadership arrangements that contribute to the persistence of coexisting logics in a dynamic equilibrium.

Health Institutions, Temporary Work Agencies, and the Mobility Power of Nurses

The objective of this article is to explore how the mobility power of nurses (the ability to move between employers or leave the labor market) contributes to changing relations between health institutions and temporary work agencies in the Norwegian welfare state. Based on case study as the research strategy, the article contributes to the political economy of labor relations approach and the debate over the role ofTWAs and temporary nursing in the health sector.The mobility power of Swedish nurses who shift from agency nursing to direct temporary nursing in health insti- tutions (bank nursing) partly explains the constrained growth of agency nursing in the Norwegianhospital sector. However, contracting flows of Swedish nurses to Norway since 2015 challengeinternal labor hire and could make health institutions more agency-dependent in future.The dataemployed are semi-structured interviews, official statistics, reports, and news clippings.

Productivity growth, case mix and optimal size of hospitals. A 16-year study of the Norwegian hospital sector

Background and objectivesThis paper analyses productivity growth in the Norwegian hospital sector over a period of 16 years, 1999–2014. This period was characterized by a large ownership reform with subsequent hospital reorganizations and mergers. We describe how technological change, technical productivity, scale efficiency and the estimated optimal size of hospitals have evolved during this period. Material and methodsHospital admissions were grouped into diagnosis-related groups using a fixed-grouper logic. Four composite outputs were defined and inputs were measured as operating costs. Productivity and efficiency were estimated with bootstrapped data envelopment analyses. ResultsMean productivity increased by 24.6% points from 1999 to 2014, an average annual change of 1.5%. There was a substantial growth in productivity and hospital size following the ownership reform. After the reform (2003–2014), average annual growth was <0.5%. There was no evidence of technical change. Estimated optimal size was smaller than the actual size of most hospitals, yet scale efficiency was high even after hospital mergers. However, the later hospital mergers have not been followed by similar productivity growth as around time of the reform. ConclusionsThis study addresses the issues of both cross-sectional and longitudinal comparability of case mix between hospitals, and thus provides a framework for future studies. The study adds to the discussion on optimal hospital size.

Hairy Goals and Organizational Fit: A Case of Implementing ICT-Supported Task Planning in a Large Hospital Region

ABSTRACTMost studies on goal-setting practices and organizational change examine their effects on employee motivation and performance. Goal-setting practices are treated as an independent variable, stimulating some social or individual response. Relatively few studies of organizational change have considered requirements of goal-setting practices linked to the characteristic features of the organization. In this study, we examined the significance of a fit between characteristic features of the organization and goal-setting practices. Empirical studies suggest that characteristics of the organization should be considered to fully understand the effects of goal-setting practices. A large hospital region in Norway indicated that the goal-setting practice resembles what is commonly known as ‘hairy goals’. These goals were well adapted to the characteristics of the case organization. In particular, they reduced the risk of a collision of rationalities among hospital employees. The low level of resistance and conflict in the case studied here stands out from the experience of other major organizational changes in the Norwegian hospital sector. The study adopts a mixed-methods approach utilizing governing documents from the health sector, interviews of key personnel, and an employee survey.

Hybrid controls and accountabilities in public sector management

Purpose – The purpose of this paper is to discuss why public sector reforms hybridize during implementation processes, consequences on accountability relations and practitioners’ and policymakers’ reactions to these changes. Design/methodology/approach – The paper considers experiences from three initiatives related to the governance reform in the Norwegian hospital sector. Data were collected via interviews and document studies, and all three cases were longitudinal studies. Findings – Unexpected consequences of reform initiatives and contextual changes are causing controls to hybridize and having profound effects on accountability relations. However, the gradually alignment of controls in a dynamic pattern of hybridization enables the balancing of conflicts in the chain of accountabilities. Hybrid controls are observed to emerge as stronger than the initial ideal control models. The longitudinal studies of control hybridization illuminate the sector’s survival in the long run, as they allow for adaptation to changes in contexts. Practical implications – This work augments leaders’ understanding of how governmental strategies may follow diverse paths and yield results that diverge from intentions. Narrow accountability bases inhibit the government from implementing political decisions through agencies. Conversely, agents must relate to direct control from authorities. The predictability of agents’ decision space is reduced, and the control process becomes more ambiguous. Originality/value – Through connecting what happens in agencies with accountabilities in the political level, it is possible to study the flexible nature of accountability relations and why controls hybridize. The paper underlines the need for longitudinal studies to describe complex patterns of reform initiatives.

Reforms and clinical managers' responses: a study in Norwegian hospitals

This paper seeks to explore the legitimacy of budgets as management control processes in hospitals after comprehensive reforms were implemented in the Norwegian hospital sector in 2002. The paper employs qualitative interviews with top level clinical managers in three large hospitals. The study shows a variety of practices among the clinical managers as to management control adjustments. The managers use different strategies in order to cope with the budget frames. This paper contributes to the current debate and research relating to the budgeting and performance management practices in hospital settings. These findings contribute to contextual knowledge that is relevant in understanding the diverse practices of clinical managers in hospitals as complex service producing organizations. The findings give information to decision makers as to the diversity in management practices within knowledge intensive organizations. The paper challenges the idea that the strategies used by managers can be understood by the concepts of the means-end rationality prescribed in most of the reforms introduced into the hospital sector.

Resisting market-inspired reform in healthcare: The role of professional subcultures in medicine

The reorganisation efforts of the hospital sector in many Western countries in recent decades have challenged the role, identity and autonomy of medical professionals. This has led to increased focus on the role and impact of physicians who are also managers and on the unique discourse being formed through the integration of medical and managerial knowledge. Following the line of studies addressing the professional subcultures in medicine, we investigated whether assessments of health reform differ between medical doctors with managerial responsibilities and their colleagues at the clinical level as well as between those involved in direct patient care and those who are not. The analysis was performed within the context of the Norwegian hospital sector, where a major reform was implemented in 2002, and it was based on a survey of a representative sample of hospital physicians in 2006. The analysis focused on how the respondents viewed the overall effect of the reform and on the reform’s effect on three central health policy goals: equity, quality and productivity. Combining data from the survey with organisational and financial data from the hospitals, we employed multilevel techniques to control for a number of individual and hospital-specific factors that could explain the physicians’ views. As expected, respondents with managerial responsibilities were more positive in their evaluations of the reform, whereas respondents who spent time on direct patient-related work showed the opposite pattern. Of the hospital-specific factors of interest, the share of department managers with medical backgrounds and the economic situation positively affected the evaluations. Our findings support the view that, rather than managerialist values colonising the medical profession through a process of hybridisation, there is heterogeneity within the profession: some physician managers are adopting management values and tools, whereas others remain alienated from them.

Generic substitution: a potential risk factor for medication errors in hospitals

Efforts to restrain pharmaceutical costs in the Norwegian hospital sector have focused on putting pharmaceuticals out to tender with resultant frequent changes in medicine inventories. Due to the extent of physicians failing to prescribe from the hospital drug list, the nurses have to perform generic substitution on the wards. The objective of the present study is to investigate the hospital nurses' experiences with generic substitution and to explore their views on this strategy as a risk factor for medication errors. Personal interviews with 100 nurses who were employed in a large Norwegian hospital were conducted using a semistructured questionnaire. In all, 75% of nurses thought it was problematic that the hospital's drug inventory was subject to frequent changes, and 91% believed that the high number of generic products may contribute to erroneous dispensing. Nevertheless, three out of four admitted that they seldom or never verified the feasibility of the substitution with the physician, and that it was seldom documented in the medical charts. In total, 42% of the nurses had experienced mistakes that occurred as a result of substitution. They claimed that the medication errors relating to generic substitution derived from difficult drug names, frequent changes in the drug inventory, and the increasing number of generic drugs, as well as from heavy workload and insufficient training. The present study shows that generic substitution is often carried out by nurses on the wards. The nurses feel insecure about the situation and report that they do not have the necessary training for the task. They clearly believe that a high number of generic drugs and frequent generic substitutions are risk factors for medication errors. Hence, hospital managers should be aware that such strategies to reduce costs may interfere with patient safety.

Prioritization and patients' rights: Analysing the effect of a reform in the Norwegian hospital sector

The right to equal treatment, irrespective of age, gender, ethnicity, socio-economic status and place of residence, is an important principle for several health care systems. A reform of the Norwegian hospital sector of 2002 may be used as a relevant experiment for investigating whether centralization of ownership and management structures will lead to more equal prioritization practices over geographical regions. One concern was variation in waiting times across the country. The reform was followed up in subsequent years by some other policy initiatives that also aimed at reducing waiting lists. We measure prioritization practice by a method that takes departure in recommended maximum waiting times from medical guidelines. We merge the information from the guidelines with individual patient data on actual waiting times for the period 1999-2005. This way we can monitor whether each patient in the available register of actual hospital visits has waited shorter or longer than what is considered medically acceptable by the guideline. The results indicate no equalization between the five new health regions, but we find evidence of more equal prioritization within four of the health regions. Our method of measuring prioritizations allows us to analyse how prioritization practice evolved over time after the reform, thus covering some further initiatives with the same objective. The results indicate that an observed reduction in waiting times after the reform have favoured patients of lower prioritization status, something we interpret as a general worsening of prioritization practices over time.

Deficits, Soft Budget Constraints and Bailouts: Budgeting after the Norwegian Hospital Reform

In the 1990s, the Norwegian hospital sector was characterized by soft budgetary constraints and increasing budget deficits. This was one of the main antecedents of the 2002 hospital reform, where the central state took over ownership of the hospitals from the counties. Arguably, the centralization of ownership, financing and production would harden the budget constraints and increase the budgetary discipline. This analysis shows that this has not been accomplished. Instead, the production has been far above what was planned, and the deficits higher than ever. Two stages of the post‐reform budget processes are analyzed: first, the stage where the central state set the budgets and sends signals of budgetary rules (whether the state sends signals of soft or hard budget constraints), and second, how the central state handled deficits in the hospital sector as they emerged (whether the hospitals was bailed out or not). The conclusion is that the central state neither set a hard budget constraint nor managed to stay firm as deficits turned up. It is argued that three mechanisms explain the prevailing problems of managing the hospital sector: uncertainty of the hospitals’ financial situation during the transition phase; minority governments; and specific features related to the organization of the budgetary process in parliament.

Management and control of public hospitals—the use of performance measures in Norwegian hospitals. A case‐study

This paper investigates the use of performance measures in the management control and decision-making processes in the Norwegian hospital sector. The motivation for the study is to understand the implementation of performance-based management systems which is an element in the international New Public Management (NPM) reforms waves now affecting the hospital sector. The theoretical framework is based on the description of hospitals as complex and decoupled organizations. The use of benchmarking is discussed, and the focus is put on the information biases that exist in such data. The main finding in the empirical study is that the ambiguous information which exists in the performance measures used at the hospital department level, maintains the decoupling between the clinical activities and the management control practices. This decoupling creates management control problems because it hampers the knowledge on the cause-effects of actions, which is important in order to undertake strategic decisions and diagnostic action. In order to increase transparency, cost information should be decomposed as to develop practical indicators for interactive control purposes in clinical departments.

Hospital waiting time in Norway: What is the role of organizational change?

During the last five years the Norwegian hospital sector has experienced massive reorganization efforts. The aim of this study is to establish whether two such initiatives - the introduction of ring fencing of elective surgery and activity-based budgets at department level - have had any effects on one of the most profiled objectives on the health political agenda: reduction in waiting time. The sample studied includes 41 hospitals observed at two points of time, 1999 and 2001. Waiting time is expected to be a result of imbalance between demand and supply. Measures representing the supply side (ring fencing, activity-based budgets at departmental level, physician rate, share of emergency admissions, technical efficiency, and hospital type) and the demand side (living conditions and share of persons aged 67 or older) are included in the operationalized model. The model is estimated via stepwise OLS regression. The results document a negative relationship between ring fencing and waiting time, with the estimated waiting time reduction amounting to 22 days. Both the demand side variables also exert significant effects on waiting time. Although information on ring fencing, living conditions, and age distribution renders possible some predictions concerning waiting time, the current research topic should be revisited when a longer time period has elapsed. When the organizational changes have become more thoroughly embedded in the hospitals, more refined conclusions regarding hospital organizations' behaviour and effects of reorganization can be drawn.

Hesitation and rapid action: the new public management reforms in the Norwegian hospital sector

This paper focuses on the transition of governmental management innovations from the national, political level to the local, institutional level. In order to throw some light on the complex process of two-level reforms in public sector financial management, I discuss the case of introducing prospective payment systems in Norwegian hospitals during 1987–1999. The empirical studies are based on official documents and statistics at the national level together with surveys and case studies with a view to understand how hospitals adjust to the new payment systems. The main finding can be described in terms of slow adjustments on the institutional level, and slow and rapid action on the political level. These systemic interactions between different logics at the different levels may obstruct the implementation of reforms.

Accountable Management Reforms: Why the Norwegian Hospital Reform Experiment Got Lost in Implementation

There is an international tendency to replace governmental funding based on fixed grants by different reforms implying accountable management methods. In this article we focus on the implementation problems of New Public Management reforms in the Norwegian hospital sector. These reforms are built on a belief that more accountable methods will improve efficiency and better resource allocation. The term New Public Management includes different cost‐improvement programmes like Prospective Payment Systems, which were introduced as a new basis of funding in four Norwegian hospitals during a three year experimental period. The studies presented here support the findings from similar reforms in other countries, stating that there are very few, if any, documented efficiency gains by these reforms. The explanation may be that the reforms have disregarded the importance of internal organisational processes, like high quality management, communication and participation as parts of the implementation phases.

An international comparison of hospital efficiency: does institutional environment matter?

The consensus among many health economists is that no meaningful performance differences exist among for-profit and non-profit hospitals in the US, but this topic has continued to be a matter of academic, judicial, and public policy interest. A similar debate has ensued internationally, regarding the potential efficiency gains from privatization of public enterprises. In this paper, we examine empirical evidence from the public, highly regulated Norwegian hospital sector and the private, highly competitive and unregulated California hospital sector to ascertain whether institutional environment and level of market competition significantly affect the degree of productive efficiency in hospitals. We compare and discuss the productive efficiency of four similar sets of hospitals operating in different institutional and competitive environments. The four samples are carefully matched in the dimensions of sample size, hospital size, and average lengths of stay. Heterogeneity in output definition is used to control for other dimensions (casemix, age distribution of patients). We use Data Envelopment Analysis (DEA) to estimate and compare average long-run as well as short-run efficiency measures across groups. We find that scale and scope regulation of Norwegian hospitals improves long-run efficiency, primarily due to better utilization of capital.