|Public sector reform and hospital management I|
|Implemented in this survey?|
This piece of reform has now entered a parliamentary legislative phase as the government has proposed a bill to parliament on 24th February 2005. The bill out-lines a reform of the administrative structure of the public sector, including the health care sector.
|Medienpräsenz||sehr gering||sehr hoch|
There is general consensus on the great importance of the proposed new structure of the public sector. And in terms of administrative inconveniences and challenges the merging of several
counties is, without a doubt, going to have an impact on those employed at the counties. Looking at the main actors and their incentives it is less obvious that the reform involves any relevant
change. The model is still to be classified as a public, integrated model.
Compared to the previous report on the proposal it is rated as less traditional: the particular financing scheme is a novelty in a Danish context.
The political divide on the issue between government and opposition parties has turned out to persist and not, as expected, just to be part of the tactics surrounding the negotiations. Consequently, the degree of controversy has been rated as more severe.
|Implemented in this survey?|
Following the report by the Commission on Administrative Structure (se report on Public sector reform and hospital management in report 03/2004) the government announced a reform-plan and
subsequently conducted negotiations with the political parties in parliament. The negotiations revealed a fairly rigid divide between the centre-right government and the opposition parties on the
issue. This process of negotiations was then interrupted when the government called for general elections to be held in February 2005. The announced goal was to get a popular mandate to carry on with
its intended transformation of the municipalities and the counties (reducing the number and changing how they are financed). The government-parties won enough votes to retain power and has
subsequently proposed a public sector reform-bill to parliament. At present the bill has been through the first (of three) parliamentary debates. The bill out-lines a reform of the administrative
structure of the public sector, including the health care sector. The bill does not imply changes to the overall purpose of the public health care sector (as a by-product of the new structure the
government also introduces a new bill for the health care sector - to be treated separately here).
The main changes are a reorganisation of the counties and a new system of financing the regions:
i) a state (central government) block grant based on objective criteria for expenditure need (in 2003 it would have been equivalent to app. 77 percent),
ii) a smaller state activity pool (to be at a maximum of 5 percent),
iii) a per capita contribution by the municipalities (in 2003 it would have been equivalent to app. 8 percent).
iv) an activity based contribution from the municipalities (in 2003 it would have been equivalent to app. 11 percent) for services rendered to citizens of the particular municipality. The fee varies with the particular service. For hospital somatic treatment the fee is set to 30 percent of a DRG-tariff, however with €530 as a maximum charge.
In addition, regarding the overall financing an earmarked tax is introduced.
There has been a general consensus regarding the appropriateness in reducing the number of municipalities and counties (or equivalently: increasing their size). The disagreements have been about how to allocate the portfolio of public sector assignments among the municipalities and regions and, in particular, how to finance the regions. The two parts of the proposed bill, which have attracted most of the criticism are:
a) The involvement of the municipalities in the financing of the region.
b) The fact that the regions will not be able to (or rather: not be obliged to) raise revenue through taxes.
Regarding a): The municipalities contribution to the financing of health care treatment has been stressed in the bill as an instrument to improve the municipalities incentive to i) strengthen public health through preventive measures in the expectation of long-run savings, and/or ii) to offer more cost-effective alternatives perhaps even in the short run. This part of the bill has been heavily criticised by both university experts and opposition parties in parliament. Experts have stressed that municipalities do not have alternatives to hospital treatment in the short run, and that it would be an expensive option should they try to establish such alternatives. The policy implication is that the planned municipal co-financing should be abandoned. Opposition politicians have directed their criticism at the possibility that the potential saving for the municipality is too small for it to have any relevant effect. In that case the policy implication is to strengthen the incentive, possibly by way of increasing the municipal co-financing.
The government has not explicitly answered the expert line of criticism except by way of reference to some existing municipalities, which have lower hospital admission rate than average. According to the Minister of Health the lower rate is achieved through the use of policy instruments (care for the elderly and home care) available to the municipalities.
As to the criticism from opposition parties the answer from the government has been an invitation to proposals that strengthen the municipalities incentive to promote preventive care.
Regarding b): The fact that the regions will not be able to (or rather: not be obliged to) raise revenue through taxes has caused some experts and the Association of Counties to predict that the regions will raise the level of health care expenditures. Norway (and her recently introduced model with a regional structure somewhat similar to the one proposed for Denmark) has been used as an example to support this contention. The Association of Counties (who has been in fundamental opposition to the reform) has probably promoted this line of reasoning in the hope that it would appeal to the usually very potent Ministry of Finance. However, the MoF has only played a minor role in this process (due to particular and temporary circumstances: the Minister of Health enjoys a prominent position in the hierarchy and the present government got elected not least because of its promise to reduce waiting times for treatment), and opposition parties have had no incentive to appear as opposed to an increase in funding. Moreover: opinion polls appear to suggest that the public has an appreciative understanding of an increase in funding to health care.
In sum: stakeholder positions and alliances have remained fairly stable during the process.
|Minister||sehr unterstützend||stark dagegen|
|MoH Bureaucracy||sehr unterstützend||stark dagegen|
|MoF||sehr unterstützend||stark dagegen|
|Main supporting party||sehr unterstützend||stark dagegen|
|Socialdemocrats||sehr unterstützend||stark dagegen|
|Parties left of Socialdemocrats||sehr unterstützend||stark dagegen|
|Association of Counties||sehr unterstützend||stark dagegen|
|Hospitals||sehr unterstützend||stark dagegen|
|Researchers (health economists, political scientists)||sehr unterstützend||stark dagegen|
|Local Government Denmark (LGDK) (Local Authority Interest Association)||sehr unterstützend||stark dagegen|
The government initiated a Commission on Administrative Structure to come up with proposals but the government has subsequently been very selective in its use of the recommendations by the
Commission. Potentially this could have become a polical liabilty but the broader public focus has on the change in the number of municipalities and counties, and that particular aspect has support
in the Comission's work.
Following the original policy-proposal by the government and its main partner few concessions have been made to opposition parties or others.
One new aspect to the actual bill is that it puts heavy emphasis on preventive care. It clearly seeks to substantiate the proposed changes by that particular reference.
The specific financing scheme is also new.
|MoH Bureaucracy||sehr groß||kein|
|Main supporting party||sehr groß||kein|
|Parties left of Socialdemocrats||sehr groß||kein|
|Association of Counties||sehr groß||kein|
|Researchers (health economists, political scientists)||sehr groß||kein|
|Local Government Denmark (LGDK) (Local Authority Interest Association)||sehr groß||kein|
The bill is expected to be passed by parliament before summer. Implementation then follows.
|Qualität||kaum Einfluss||starker Einfluss|
|Gerechtigkeit||System weniger gerecht||System gerechter|
|Kosteneffizienz||sehr gering||sehr hoch|
The basic incentives of the existing public, integrated model are retained. Therefore litlle effect is expected.
Unfortunately all sources available on the proposed bill are in Danish only.
MoH: Forslag til lov om regioner og om nedlæggelse af amtskommunerne, Hovedstadens Udviklingsråd og Hovedstadens Sygehusfællesskab (Lovforslag nr. L 65). [Proposed Bill on the establishment of regions etc.]
MoH: Forslag til lov om regionernes finansiering (Lovforslag nr. L 71). [Proposed Bill on the funding of the regions]
K. M. Pedersen: "Kommunal medfinansiering af Sundhedsvæsenet" [Municipal Co-financing of the Health care Sector], 2005, University of Southern Denmark Press.
Two sources in English on the period leading up to the proposed reform are:
K. Vrangbæk and T. Christiansen: "Health Policy in Denmark: Leaving the Decentralized Welfare Path?", Journal of Health Politics, Policy and Law, Vol. 30, Nos. 1-2, February-April 2005.
K.M. Pedersen: "The public-private mix in Scandinavia", ch. 9, p. 161-189, in A. Maynard (ed.): "The Public-Private Mix for Health", 2005, Cornwall, Radcliffe Publishing Ltd.
|Public sector reform and hospital management I|
Process Stages: Gesetzgebung
Michael O. Appel