Hospital financing in Norway

The Norwegian block grant reform of 1980 replaced state reimbursements to hospitals by block grants allocated to counties according to objective criteria. The reform was accompanied by a general decentralization of budget authority to local level. The reform aimed to promote primary care, equalize the supply of health care across regions and give counties incentives to improve hospital efficiency. A decade later, the reform was reversed. The government has imposed restrictions which reduce the budget discretion of the counties and part of the block grant has been made dependent on the performance of the hospitals in the counties. The government has also issued a 'waiting-list guarantee' which states that patients who suffer from a serious disease are entitled to medical treatment within six months. This paper provides an overview of hospital financing in Norway during the last two decades and discusses why the block grant system did not fulfil the expectations of its architects.