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Case Study: Norway

Norwegian health care illuminates questions of single-payer vs. market-based systems and highlights the complex balance among factors of cost, quality, and access.

A Costly System

• According to the latest OECD data on health expenditures as a percentage of GDP, Norway spends less than most of its European neighbors at 8.7 percent, but more than the UK (8.4).
• With outlays of $4,520 per capita for health purposes, Norway’s expenses surpassed other European countries.
• Funding for health services comes from both central government tax revenues and additional taxes charged by the municipalities. ¹

The Cost of “Free” Healthcare

Anyone who is a legal resident or works in Norway can participate in the government health care system. Citizens are entitled to all “necessary health care,” and neither doctors nor health care officials can deny treatments that fall under this for any reason, even if doing so places financial strain on the system. ²

• Government care includes a multitude of health services, from “outpatient care, diagnostic services, specialist care, maternity services, preventive medicine, palliative care and prescription drugs” to visits to the spa for some patients. Hospital costs are also included.
• Those patients out of work due to injury or illness are compensated for lost income. ³

But Norwegian health care is not totally free at the point of service.

• For services not fully covered, patients are charged copays, about 125 to 235 kronor for a visit to a general practitioner, depending on the condition and time of day. These costs amount to an annual individual total of about 1615 kronor in 2006. Once a person (or one parent plus children under 16) has reached this threshold, they get a special card and their care is then gratis for the rest of the year. Over 1 million Norwegians reached this point in 2005.
• Children are not charged copays for many medical services, depending on their age. Those who are retired or disabled also are exempt. ⁴
• For care in areas outside the health system, such as dental and rehabilitation, there is a separate threshold of 2500 kronor.
• Other costs to patients come from copays for medications. A patient must pay the difference if he or she needs a pricier drug than the system will reimburse.
• For a majority of Norwegians, around 15 percent of health care spending is out of pocket. ⁵

Decentralization

The state does not facilitate the day-to-day operation of the health care system. Norway has significant decentralization in providing care.

• Much of the responsibility is devolved to regional and local governments, although, as of 2002, public hospitals are all federally run. ⁶
• Five regional health authorities oversee access to specialists, while primary care falls under local authorities. General policies and annual budgets are set on the federal level. ⁷
• Many doctors and health care workers are paid salaries by the state. In cases where fee-for-service exists, reimbursement amounts are set by the state. ⁸

Waiting for Care

Norwegian residents must contend with extensive waits for health care services and rationing of care.

• A 2000 report estimated that 280,000 people in Norway, or about one in every 16, were awaiting treatment.
• Patients also experience wait times for surgeries, including four months for hip replacements and three months for prostectomies in 2003.
• Long lines and care rationing prompts some Norwegians to seek care in neighboring countries where treatments are more readily available and can be obtained promptly. ⁹
• The government has been unsuccessful in solving this problem and has relied more on rhetoric than substantive action. ¹⁰
• Norway has also fallen prey to the lure of cost-effectiveness, which often comes into conflict with the right to “necessary health care.” ¹¹

Lack of choice

• People in Norway also have a limited ability to decide which doctor they want to see since only those listed with the government are considered acceptable. Specialists require a referral from a general practitioner.
• There are also limits on how often patients can switch general practitioners.
• Norwegians can choose their hospital, but cannot demand procedures that are not authorized by their doctor. ¹²

Private Care

Despite the government system, Norwegian can select to pay for private care. ¹³ However, private facilities are relatively few and generally located in urban areas.

• Most Norwegians obtain private care only for “substance abuse treatment, rehabilitation and dental care,” as well as laboratory tests and scans.
• Pharmacies are primarily private. ¹⁴
• Care outside the government system is significantly more expensive. Generally, private policies are purchased to supplement public coverage, not to replace it. ¹⁵

Though people are generally content with health care as it exists in Norway, dissatisfaction has been on the rise for a number of years, centering on questions of choice and long wait times. However, there is not yet impetus for substantive change to the health care apparatus and little restructuring can be expected in the near future. ¹⁶

1. ¹ Jan Roth Johnsen, Health Systems in Transition: Norway,” European Observatory on Health Systems and Policies, vol. 8, no. 1, (2006); Michael D. Tanner, “The Grass Is Not Always Greener: A Look at National Health Care Systems Around the World,” Policy Analysis, no. 613, 18 March 2008, available at http://www.cato.org/pub_display.php.
2. ² Johnsen.
3. ³ Tanner.
4. ⁴ Johnsen.
5. ⁵ Ibid.
6. ⁶ Tanner.
7. ⁷ Johnsen.
8. ⁸ Tanner.
9. ⁹ Ibid.
10. ¹⁰ Johnsen.
11. ¹¹ Ibid.
12. ¹² Ibid.
13. ¹³ Tanner.
14. ¹⁴ Johnsen.
15. ¹⁵ Ibid.
16. ¹⁶ Tanner.