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The Norwegian Health Care System

by Anne Karin Lindahl, Norwegian Knowledge Center for Health Services

What is the role of government?

Government is responsible for providing health care to the population. Norway’s 428 municipalities are responsible for providing primary health and social care, with the Ministry of Health playing an indirect role, mainly through legislation and funding mechanisms. The ministry plays a direct role, however, in specialist care, through its ownership of hospitals and provision of directives to the boards of regional health care authorities (RHAs), as well as through legislation and funding.

Who is covered and how is insurance financed?

Publicly financed health care: Total health expenditure represented 9.2 percent of GDP in 2014, which is about the average for countries in the Organisation for Economic Co-operation and Development (OECD). But Norway ranks among the highest in the OECD in terms of absolute expenditure per capita (NOK56,400, or USD5,965) in 2014) (Statistics Norway 2015).

(Please note that, throughout this profile, all figures in NOK were converted to USD at a rate of about NOK9.45 per USD, the 2014 purchasing power parity for GDP published for Norway by OECD, 2015.)

The nationally managed and financed health system, providing more than 95 percent of all health care, is built on universal coverage and on the principle of equal access for all regardless of socioeconomic status, ethnicity, and area of residence. It is financed through national and municipal taxes. Social security contributions finance public retirement funds, sick leave payment, and reimbursement of extra health care costs for some patient groups.

For acute hospitalization, there is no private alternative.

Through common agreements, European Union residents and other legal residents have the same access to health services as Norwegians. Other visitors are charged in full. Undocumented adult immigrants have access only to emergency acute care, while undocumented children receive the same care as citizens.

Private health insurance: Private health insurance is provided by for-profit insurers and purchased for quicker access to examinations and care but also for choice among private providers. Private health insurance accounts for less than 5 percent of planned services. About 8 percent of the population (or nearly 15 % of the workforce) have some kind of private insurance. About 92 percent of policies are paid for by an employer (Finans Norge 2014).

What is covered?

Services: Parliament determines what is covered, although there is no defined benefits package except for new and costly treatments and technologies (see below). In practice, national health care covers planned and acute primary, hospital, and ambulatory care, rehabilitation, and outpatient prescription drugs on the formulary (the “blue list”). It also covers dental care services for children up to 18 years of age and other prioritized groups, such as people with rare diseases or chronic diseases that increase the risk of dental problems, patients with chronic mental disabilities, and patients in permanent nursing homes. Dental care for 19–20-year-olds and dental orthopedics (braces) for children are partially covered. Nonmedical eye care, aesthetic surgery, and complementary medicine are not covered.

Primary, preventive, and nursing care are organized at the local level by municipalities. The municipality, often in cooperation with the county, decides on public health initiatives or campaigns to promote a healthy lifestyle and reduce social health disparities. Preventive services for mental health are directed toward children and adolescents through the school system. Psychological care for children under the age of 18 is fully covered. Primary care for mental health is provided by general practitioners (GPs) and municipal psychologists. Long-term care, including palliative end-of-life care, is provided on the basis of need, either at home or in nursing homes. There are few designated hospice facilities. The substantial government funding for municipalities is generally not earmarked, and budgets are set locally, but provision of some services is statutory, particularly those related to pediatric and long-term care.

Cost-sharing: GP and specialist visits, including outpatient hospital care and same-day surgery, require copayments (NOK141 [USD15] and NOK320 [USD34] per visit in 2015, respectively), as do physiotherapy visits (in varying amounts), covered prescription drugs (up to NOK520 [USD55] per prescription), and radiology and laboratory tests (NOK227 [USD24] and NOK50 [USD5]). Public providers cannot charge patients more than these amounts, except for bandages and other supplies. Consultations for antenatal and postnatal follow-up, for prevention and treatment of transmittable diseases for particularly vulnerable individuals, and treatment of sexually transmitted diseases are also exempt from copayments. Hospital admissions and inpatient treatment are free. Out-of-pocket payments finance about 14 percent of total expenditure.

Home-based and institutional care for older or disabled people require high cost-sharing (up to 85% of personal income), but are means-tested.

Safety net: The major safety net mechanisms are annual caps for out-of-pocket expenditure set by Parliament, above which fees are waived. For 2015, the cost-sharing ceiling for most services is NOK2,105 (USD223). A second ceiling is set at NOK2,675 (USD283) for services such as physiotherapy and certain dental services. Long-term care and prescription drugs outside the “blue list” do not apply toward these ceilings.

Children under the age of 16 receive free treatment and access to essential drugs on the blue list. Pregnant women receive free medical examinations during and after pregnancy. Residents eligible for minimum retirement pension or disability pensions, which amount to about NOK162,000 (USD17,134) per year, receive free essential drugs and nursing care. Individuals with specified communicable diseases, including HIV/AIDS, and patients with work-related injuries receive free medical treatment and medication. Taxpayers with high expenses (above NOK5,880, or USD622) as a result of permanent illness receive a tax deduction. “Basic benefits” (NOK653–NOK2,264, or USD69–USD239 per month) may be provided, upon application, to patients who regularly incur additional expenses due to permanent illness, injury, or disability.

How is the delivery system organized and financed?

Primary care: Municipalities provide primary care in accordance with current legislation, government directives, and quality requirements set by the Directorate for Health.

The “regular GP scheme,” whereby people register with one general practitioner (GP), covers 99.4 percent of the population. There were an average of 1,132 patients per GP in 2014. Patients may change their GP twice a year. GPs function as gatekeepers, as referral to specialist treatment by a GP is required for coverage.

There are 2.4 specialists in hospitals or ambulatory care for every practicing primary care physician (Den norske legeforening, 2015). Financial incentives encourage physicians to certify as a specialized GP and to see many patients per day.

Municipalities contract with individual GPs, who receive a combination of capitation from the municipalities (35% of income), fee-for-service from the Norwegian Health Economics Administration (Helfo) (35%), and out-of-pocket payments from patients (30%). GP financing is determined nationally by negotiation between the Ministry of Health and the Norwegian Medical Association. In the fee-for-service scheme, there are fees provided for taking part in coordination of care and individual planning, but they are relatively low. There is also a financial incentive for medication reconciliation. Most GPs are self-employed, and 10 percent are salaried municipal employees (Helsedirektoratet 2014). The average salary is estimated to be NOK750,000 (USD79,325), but may be substantially higher for full-time practitioners. GP practices typically comprise two to six physicians and employ nurses, lab technicians, and secretaries. Many municipalities have multidisciplinary outreach teams for mental health, staffed by health care workers employed by the municipalities.

Specialist care: The four RHAs, which are state-owned corporations that report to the Ministry of Health, are responsible for supervising specialist inpatient somatic and psychiatric care, as well as treatment for alcohol and substance abuse. The ministry provides RHAs’ budgets, and issues an annual document instructing the RHAs as to aims and priorities.

Outpatient specialist care is provided both by hospitals and by self-employed specialists. Hospital-based specialists are salaried. Privately practicing specialists contracted by an RHA are paid a combination of annual lump sums, based on the type of practice and number of patients on the list (about 35%); fee-for-service payments (about 35%); and patients’ copayments (about 30%). The annual lump sum and the out-of-pocket fees are set by government, and the fee-for-service payment scheme is negotiated between government and the Norwegian Medical Association. In principle, patients have a choice of specialist, although in practice specialist availability varies by geographic location. In the more densely populated areas, clinics with multidisciplinary specialists have emerged during the last few years and seem to be increasing in number. Hospital-employed specialists cannot see private patients at the hospital, but may practice privately after hours, on their own time. Specialists with an RHA contract can charge patients only the specified out-of-pocket fee. Those who do not receive public financing are neither regulated nor subject to the out-of-pocket expenditure caps.

Patient out-of-pocket payments: Patients pay their out-of-pocket fee directly to the provider. If they reach the first safety net ceiling, it is automatically registered and copayments are made directly to the provider by Helfo. For the second ceiling, patients need to submit an application with proof of payment of the out-of-pocket costs. Once it is approved, patients receive a certificate and are not charged further copayments.

After-hours care: After-hours emergency primary care services are the responsibility of the municipalities, whose contracts with GPs include after-hours emergency services on rotation. The municipalities provide offices, equipment, and assistance, and pay the GPs a small fee. Other payments are provided by the national fee-for-service system and out-of-pocket payments from patients. The organization of after-hours services varies according to the size of the municipality. The more densely populated municipalities have walk-in centers where nurses triage patients and answer calls, and several doctors see patients all through the day and night. In smaller municipalities, patients call an after-hours phone number and speak with a nurse, who calls the GP if the patient needs to be seen. As of September 2015, a common national phone number (116117) was launched for all of these public primary care after-hours services (legevakt). In larger cities, as a supplement to the public services, there are a few privately owned and run after-hours clinics where patients pay in full.

There is variation as to whether information from emergency visits is shared with patients’ regular GPs. There is an emergency phone number patients can call for urgent ambulance services, but no national medical advice line. Patient cost-sharing and provider fees are slightly higher for after-hours emergency services.

Acute-care hospital services are the responsibility of RHAs. Patients need an acute-care referral to these services by a primary care physician or may, in particular cases (accidents, suspected heart attack, stroke, etc.) have access directly via ambulance.

Hospitals: Public hospital trusts are state-owned, formally registered as legal entities with an executive board (approved and partly appointed by the Ministry of Health), and governed as publicly owned corporations. A few are privately owned, mostly by nonprofit humanitarian organizations, and mostly provide publicly funded services as part of RHA plans for providing acute care. The for-profit hospital sector is small, providing less than 1 percent of specialist services in 2013 (Samdata 2013). For-profit hospitals do not provide the full range of services, and do not offer acute services. A part of their services may be publicly funded, but the proportion varies, from almost none to 85 percent in 2013. Patients are free to choose a hospital for elective services but not for emergency care. Public hospitals are financed through RHAs—for somatic services with a block grant (50%), and with an activity-based portion (50%, based on diagnosis-related group, or DRG). The RHAs are free to decide how the hospitals are paid, but all four have chosen the same funding mechanism for somatic services; 50 percent as block grant and 50 percent based on DRG. All health personnel are salaried, including doctors, and all payments, public and private, include all services.

Mental health: Mental health care is provided by GPs and by other providers (psychologists, psychiatric nurses, social care workers) in municipalities. For specialized care, GPs refer patients to private psychologists or psychiatrists, or to a low-threshold hospital (district psychiatric center). These hospitals are dispersed throughout the country. They often include psychiatric outreach teams. More advanced specialized services are organized in the inpatient psychiatric wards of general hospitals or in mental health hospitals. Hospital treatment is provided free of charge, and outpatient services are subject to the same cost-sharing as described above. Hospitals and district psychiatric centers are funded by government block grants through RHAs. The role of private mental hospital care is very small, and includes services for eating disorders, nursing home care for older psychiatric patients, and some psychiatrist and psychologist outpatient practices, mostly contracted by RHAs. The role of private treatment centers for addiction (mainly drugs and alcohol) is more prominent, and funded mostly through contracts with RHAs.

Long-term care: The municipalities are responsible for providing long-term care, and contract also to some extent with private providers. Cost-sharing for institutionalized care is income-based, and is set at 75–85 percent of patients’ income, depending on means tests. Home nursing is also provided, if needed. The levels of care at home or in a nursing home are determined by the municipality. Only about 3 percent of nursing homes are private, and for home nursing care, the proportion is even lower. There are a few private providers of home nursing care and other services, which are purchased by patients most often as a supplement to services by public home care. In some densely populated areas, patients can have a choice of home care provider or nursing home, but rarely arrange for services themselves. Very few patients pay individually for full-time private nursing home care. End-of-life care for terminal patients is often provided in particular wards within dedicated nursing homes. There is a system in place for informal carers to apply for financial support from the municipalities.

What are the key entities for health system governance?

The Ministry of Health and Care Services is politically led by the Minister of Health, who ensures that political decisions are translated into practice. This is done through legislation, economic measures, and documents instructing the RHAs and the Directorate for Health and other underlying agencies regarding activities and priorities. The political values conveyed by the annual national budget and the instructions in the annual letter of allocation from the ministry are determinative, and specify provider fees, out-of-pocket payments, and ceilings.

The Directorate for Health is an executive agency and authority subordinate to the ministry. It issues clinical guidelines, maintains the National System for the Introduction of New Health Technologies, coordinates 18 patient ombudsmen, and provides public information on health and health care through the website www.helsenorge.no. The Directorate for Health is not responsible for producing systematic reviews or health technology assessments (HTAs) but rather applies them to decision-making pertaining to the system for new technologies, to guidelines, and to policymaking. From 2014 to 2018, the directorate is also in charge of the secretariat for the National Patient Safety Program. It is responsible overall for setting standards and leading the development and application of health information technology in health care. The Directorate for Health is responsible for fee-setting in the DRG system, and also for the five-year project on quality-based financing. There is no single authority overseeing fee-setting for providers other than hospitals.

The Medicines Agency determines which medications to reimburse. For new drugs, the agency determines whether a prescription drug should be covered (on the blue list) by evaluating its cost-effectiveness in comparison with that of existing treatments; a “green” scheme encourages providers to prescribe lifestyle and nutrition programs as a first alternative to more expensive preventive medicine. The agency also decides on the maximum price of specific drugs. The Norwegian Knowledge Center for Health Services, financed by government, produces comparative effectiveness studies (systematic reviews and HTAs) and works with quality and patient safety, quality indicators, and national patient experience surveys. Its HTAs are used by the Norwegian Council for Priority Setting in Health Care and the National System for the Introduction of New Health Technologies. The center also runs the national Reporting and Learning System for adverse events in hospitals.

The Board of Health Supervision is a national public institution organized under the Ministry of Health. The board audits the different areas of the health care system, either systematically on a national basis or individually. An alert system ensures that hospitals alert the board to serious adverse events, and the board may then decide to investigate particular incidents. The board can issue fines to institutions and warnings to health personnel, and can revoke authorization for health care personnel who engage in misconduct.

The Norwegian Institute of Public Health is a center for research on and surveillance of the health status of the population. It provides the Ministry of Health with advice on public health. It is the main authority regarding infection control and infectious disease surveillance. It provides community health profiles regarding prevalence of disease and holds several of the large health registers, including the prescription registry. The institute also assists the prosecuting authorities and the judiciary regarding forensic medicine.

What are the major strategies to ensure quality of care?

The national strategy for quality improvement (2005–15) focuses on efficacy, safety, efficiency, patient-centered care, care coordination, and continuity and equality in access to health care (Directorate for Health 2005). National evidence-based guidelines are being developed for a number of diseases. For cancer, there is a disease management program, introducing defined “packages” to be delivered to patients. To improve patient safety, there is a five-year national program (2014–18), as well as a national reporting and learning system for adverse events. There are 47 national clinical registries for specific diseases, as well as 15 national health registries. There is no registry for technical devices, but a statutory duty for hospitals to report adverse events, including those involving technical equipment.

The Directorate for Health is in charge of the national program for health care quality indicators. The program includes results from national patient experience surveys. No information is gathered or disseminated regarding results or quality of individual health care professionals’ performance. The Registration Authority for Health Personnel licenses and authorizes all health care professionals and can grant full and permanent approval to those meeting educational and professional criteria. There is no system for reevaluation or reauthorization. The authority issues certificates of specialization to medical doctors, in accordance with specific and transparent requirements. Only the specialization for GPs requires recertification. The Norwegian Board of Health carries out audits of all levels of the health system, including the health care workforce.

RHAs, hospitals, municipal providers and private practitioners are responsible for ensuring the quality of their services. There is no requirement for accreditation or re-accreditation, although some hospitals or hospital departments are accredited.

A five-year developmental period (2013–17) is under way for quality-based financing of RHAs, based on performance and improvement on a set of indicators—29 indicators in 2014, increased to 33 indicators in 2015—of which patient experiences constitute about 30 percent of the reporting. Quality-based financing constitutes only about 0.5 percent of the total of the RHAs’ budgets.

The Norwegian Institute of Public Health uses the Norwegian Prescription Database to produce annual reports on prescribing trends, giving national health authorities a statistical base for planning and monitoring the prescribing and use of drugs. Personal information held by the registry is anonymized.

What is being done to reduce disparities?

Eliminating socioeconomic inequalities in health is a priority of the Directorate for Health. A national strategy for addressing inequalities in health and health care includes various ways of increasing knowledge and awareness (Ministry of Health and Care Services 2007). There have been some initiatives for children, including vaccination programs, kindergarten and education; initiatives for people with disabilities to be included in the workplace; price and tax policies; initiatives for care integration; general information campaigns regarding smoking cessation, alcohol and diets; and specific initiatives for populations at risk.

There is increasing focus on immigrants’ health and underutilization of health care. Research on pregnancy has been informative, as there are significantly more complications for newborns and mothers among immigrants than among Norwegians (Ahlberg and Vangen 2005). The need for adequate information to be provided in immigrants’ native languages has been emphasized.

Health outcomes vary geographically, not only because of differences in the prevalence of diseases but also as a result of variations in the availability and quality of health care. Recruitment of health personnel, notably doctors and specialized nurses, is more difficult in rural areas.

What is being done to promote delivery system integration and care coordination?

Care coordination has been pointed out as a weakness in the health care system. The coordination reform of 2012 put more emphasis on municipalities’ responsibility for 24-hour and post-discharge care, including individual treatment plans for patients with chronic diseases, but not for hospital treatment. Hospitals and municipalities must establish formal agreements on the care of patients with complex needs (Ministry of Health and Care Services 2009 and 2011). The number of integrated primary care practices is experiencing moderate growth, with GPs establishing common practices with physiotherapists and specialists in orthopedics, gynecology, ophthalmology, dentistry, and pediatrics.

For hospitals, incentives for care coordination are provided by mandatory agreements with municipalities. Financing is still fragmented between the hospitals (state-funded) and primary care (municipality-funded), but the municipalities pay substantial fines per day to hospitals if they are not able to accommodate patients ready for discharge.

What is the status of electronic health records?

A national strategy for health information technology (HIT) is the responsibility of the Directorate for Health, with implementation by a departmental steering committee. Every resident is allotted a unique personal identification number, which is used in primary care and for hospitals’ medical records. Secure messaging is not a part of that system, but several GPs use such messaging systems, for instance to request prescriptions. Some GP and specialist outpatient offices have electronic booking, while most hospitals do not. All patients have the right to see or get a copy of their complete record, including doctors’ notes, but there is not yet an electronic solution for doing so. An ongoing project on patient access currently gives 2.3 million inhabitants access to their core medical record, also allowing for correction of personal information.

The National Health Network is charged with providing efficient and secure electronic exchange of patient information between all relevant parties within the health and social services sector. It provides secure telecommunication for GPs, hospitals, nursing homes, pharmacists, dentists, and others.

HIT in primary care is fragmented, and some areas of service lack resources and equipment for its implementation. Still, virtually all GPs use electronic patient records and transmit prescriptions electronically to pharmacies. HIT is also used for referrals, communication with laboratories and radiology services, and sick leave. Most GPs receive electronic discharge letters from hospitals. Where after-hours emergency care is organized within the same patient record network, patient histories remain available and primary care providers are able to access information regarding emergency visits. All hospitals use electronic records.

The lack of structured electronic records in primary and secondary care precludes automatic data extraction; hence, there is still insufficient data for quality improvement at local and national levels.

How are costs contained?

Central government sets an overall health budget annually, and municipalities and RHAs are responsible for maintaining their budgets. The drug pricing scheme aims to encourage use of generic drugs. Cost-effectiveness is a criterion to get on the “blue list” of drugs eligible for reimbursement, and there is a defined maximum price for drugs, linked to reference prices set at the average of the three lowest market prices for the drug in a defined group of Scandinavian and Western European countries. The Drug Procurement Cooperation (LIS) has been effective in negotiating drug purchases and delivery jointly for the four RHAs.

Costs are contained through GP gatekeeping for specialized services. There is very little competition regarding pricing within the health services. A minute proportion of specialized care is offered to the private sector by RHAs and contracted through tenders, for which price is one of several criteria.

The National System for the Introduction of New Health Technologies, established in 2014, bases its decisions on whether to approve new, costly drugs or treatment mainly on Health Technology Assessments, which address cost-effectiveness.

Norway has a low number of hospital beds (four per 1,000 inhabitants in 2012) compared with the OECD-Europe mean of five (OECD 2014). The low number is part of a policy to drive services toward outpatient and daycare settings, and to make municipalities accountable for patients not needing specialized hospital care. There is an ongoing debate about overdiagnosing and use of procedures that are not evidence-based. Clinical guidelines and a published atlas of variation in frequency of some daytime surgical procedures (www.helseatlas.no) are the only measures taken to date to reduce “low value” care. Although the Council on Priorities in Health Care has debated, for instance, levels of end-of-life care and use of intensive care beds, no focused initiatives have resulted from the debates.

What major innovations and reforms have been introduced?

Municipality cofinancing of hospital care was abolished in 2015, as it was concluded that it did not have the intended effect of keeping patients out of the hospital.

Availability of single occupancy for patients in nursing homes for those preferring it has been a goal for many years. The realization that the goal had not been met led the government to introduce reduced payments by patients for occupancy in double rooms as a financial incentive (or penalty) for the municipalities effective from January 2015. No plan is in place for evaluation of the effect.

A new Agency for Hospital Construction (Sykehusbygg HF) was established in November 2014. Owned by the RHAs, the agency will serve as a national center of competence for hospital planning and construction for all hospital trusts. There is no plan for evaluation.

Acknowledgements

The author would like to acknowledge David Squires and Ă…nen Ringard as contributing authors to earlier versions of this profile.

References

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