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Public sector reform and hospital management I

Country: 
Dänemark
Partner Institute: 
University of Southern Denmark, Odense
Survey no: 
(4)2004
Author(s): 
Michael O. Appel
Health Policy Issues: 
Public Health, Rolle Privatwirtschaft, Pflege, Organisation/Integration des Systems, Politischer Kontext, Vergütung
Reform formerly reported in: 
Public sector reform and hospital management
Current Process Stages
Idee Pilotprojekt Strategiepapier Gesetzgebung Umsetzung Evaluation Veränderung/Richtungswechsel
Implemented in this survey? nein nein nein ja nein nein nein
Featured in half-yearly report: G-politik in Industrieländern 4

Abstract

The agreement outlines a reform of the administrative structure of the public sector, including the health care sector. The suggested reform measures are to strengthen the fulfilment of the existing goals of the public health sector. The main change is a reorganisation of the counties. A new financing system implies that health care services will be financed through a block grant based on objective criteria for expenditure need, a smaller state activity pool, and local co-financing instrument.

Purpose of health policy or idea

Following the report by the Commission on Administrative Structure (se report on Public sector reform and hospital management in report 03/2004) and a public discussion the government has conducted negotiations with the political parties in parliament. The result has been an agreement between the centre/right-of-centre government and a populist rightwing party. The agreement out-lines a reform of the administrative structure of the public sector, including the health care sector. Together the aforementioned political parties represent a majority in parliament. The parties have agreed to prepare a plan for a more detailed legislative implementation of the agreement by the end of September 2004.

The objectives of the agreement on a reform are stated in very broad terms. They reiterate existing objectives (such as unrestricted, equal and free access to prevention, examination, treatment and care at a high professional level). Basically the suggested reform measures do not introduce new goals; rather the measures are thought to strengthen the fulfilment of the existing goals of the public health sector. The main changes are a reorganisation of the counties and a new system of financing the regions:

  • The counties are to be reduced in numbers and termed "regions" and in addition there is to be a new financing system of the regions. The new regions are planned to be in operation on 1 January 2007.
  • The new financing system implies that health care services will primarily be financed through a block grant based on objective criteria for expenditure need, a smaller state activity pool, and local co-financing instrument.

One much noticed and discussed feature of the model is that the regions are to be headed by a council of politicians popularly elected and that, as a consequence of the new finance system, the councils will not be able to raise taxes.

Central health care authorities are assumed to be made responsible for ensuring systematic follow-up on quality, efficiency and IT application in the health care service based on common standards. The municipalities are assumed to be made responsible for prevention, care and rehabilitation that do not take place during hospitalisation and to be able to find new solutions especially within prevention and rehabilitation, e.g. in the form of health care centres. Finally, the agreement addresses the question of the coordination of the activities of the municipalities and the counties/regions. The municipalities and regions are supposed to be obliged by statute to cooperate about treatment, training, prevention and care. Obligatory health care agreements should include agreements on the discharge procedure for weak, elderly patients and for prevention and rehabilitation. The municipalities will pay a contribution for financing of the health care service, which gives them further incentives to make an extra effort within prevention, training and care. The local co-financing consists of a basic contribution per inhabitant and an activity-related contribution.

Main points

Main objectives

The main objective is to ensure "optimal planning" sizes in the hospital sector by increasing (decreasing) the population size (the number) of counties.

Type of incentives

The expectation is that a combination of statutory commands and a new finance structure will solve some of the perceived performance problems of the sector.

Groups affected

Counties/hospitals, Patients

 Suchhilfe

Characteristics of this policy

Innovationsgrad traditionell traditionell innovativ
Kontroversität unumstritten neutral kontrovers
Strukturelle Wirkung marginal marginal fundamental
Medienpräsenz sehr gering sehr hoch sehr hoch
Übertragbarkeit sehr systemabhängig recht systemabhängig systemneutral

Denmark stands out as a country, which has pretty consistently avoided market-oriented experiments in its health care sector. The present reform confirms that picture. The reform, however, is not likely to change the underlying incentive-structure so problems with performance, whether real or perceived, are likely to remain unchanged. The implication being that the suggested administrative structure is not likely to be stable.

Political and economic background

The recent development - a political agreement being reached - follows the report of the Commission on Administrative Structure and the public discussion of it. It was part of the original plan that a political discussion and then a political agreement would follow the report.

Change based on an overall national health policy statement

It was part of the original plan that a political discussion and then an agreement would follow the report.

Purpose and process analysis

Current Process Stages

Idee Pilotprojekt Strategiepapier Gesetzgebung Umsetzung Evaluation Veränderung/Richtungswechsel
Implemented in this survey? nein nein nein ja nein nein nein

Origins of health policy idea

The discussion of the structure was brought to the top of the political agenda by the government.

The political agreement is consistent with parts of the report by the Commission on Administrative Structure. The reduction in the number of counties/regions was part of the main recommendation of the Commission. The Commission, however, was split on several issues, which opened the way of a selective use of its considerations.  

The new way of financing the regions has, however, been controversial. It has been opposed by the minority parties in parliament and by the majority of researchers. The concern most mentioned by researchers is that without a responsibility to finance their activities (through taxes) there is a risk that the regional political bodies will have only a weak incentive to constrain costs.

The counties have also opposed the change whereas the municipalities generally have welcomed the change.

Approach of idea

The approach of the idea is described as:
renewed: The idea to reduce the number of counties has been on the Danish political agenda for several years

Stakeholder positions

The new way of financing the regions has been opposed by the minority parties in parliament and by the majority of researchers. The concern most mentioned by researchers is that without a responsibility to finance their activities (through taxes) there is a risk that the regional political bodies will have only a weak incentive to constrain costs.

The main opposition parties have announced a change to the proposed new structure if they form a new government. It is not clear how profound a change they will seek to initiate. Probably it will be limited to a marginal change of the new finance system: they have particularly argued for the regions possibility to raise taxes to finance some part (apparently they will be satisfied with app. 10 percent of total funding being raised by regional taxes) of the total funding. 

The counties have also opposed the change whereas the municipalities generally have welcomed the change.

The health care sector employees have not expressed strong views on the matter.

Influences in policy making and legislation

The parties taking part in the agreement intend to prepare a plan for a more detailed legislative implementation of the agreement by the end of September 2004.

Legislative outcome

n/a

Adoption and implementation

The counties and the municipalities will be heavily involved in the actual implementation.

Monitoring and evaluation

The legislative process is still underway and no evaluation mechanism has been proposed. It is likely to be considered a major reform and a number of governmental, semi-governmental and research based evaluations are probably going to be carried out if the reform is carried through.

There is, however, as part of the agreement a proposal to establish an evaluation institute. It will be established to "systematically follow up on decentralised, public task performance and to publish comparisons of the results." That is, the purpose is to evaluate the performance of public sector activities and not to evaluate the reform as such.

Expected outcome

It is not likely that a reduction in the number of counties will change the basic incentives in the system. Consequently it's unlikely that there will be significant change in performance.

There has been some concern that the establishment of regional political bodies with no responsibility/possibility to raise taxes will drive the aggregate health care expenditure level up. The presence of budget-games between a regional and a central government level is not going to be en entirely new thing, however, and it remains an empirical question whether there will actually be change in bargaining power and behaviour.

References

Sources of Information

 

  • The organization of the existing counties - Danish Regions - presents its viewpoint (in Danish) on its homepage www.arf.dk.

Reform formerly reported in

Public sector reform and hospital management
Process Stages: Strategiepapier

Author/s and/or contributors to this survey

Michael O. Appel

Empfohlene Zitierweise für diesen Online-Artikel:

Michael O. Appel. "Public sector reform and hospital management I". Health Policy Monitor, 09/10/2004. Available at http://www.hpm.org/survey/dk/a4/2