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Norway Healthcare System

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Background Norway is a Nordic country in northern Europe with a population of 4.6 million (similar to South Carolina, Alabama, or the city of Philadelphia), a landmass of 324,220 km2 (about the size of New Mexico), and a population density of 13 people/km2 (ranks 213 out of 244 countries). Norway’s Gross National Product (GNP) per capita is $51,810 (rank #2, US with $41,440 ranks #4) and a GNP per capita based on global purchasing power parity (PPP) is $38,680 which ranks it third behind Luxembourg and the US (at $61,610 and $39,820 respectively)1. Using any number of measures Norway ranks as one of the richest countries in the world. Another factor is the amount of income that the oil industry generates for the government, which is not directly reflected in the above numbers. Norway is the world’s third largest exporter of oil (behind Saudi Arabia and Russia), the bulk of which is funneled back into the government. Norway’s unemployment rate is 2.8% which ranks it 5th lowest in the world (behind Qatar, Thailand, Singapore, and Vietnam)2, while the US unemployment rate is 9.1% (near the top of the major economic countries of the world. In 2001, the proportion of the population with a university education, among
30 to 39-year-olds, was 29% for men and 36% for women. In all, 57% of the population over the age of 16 had completed secondary education. In total, therefore, the enrolment level in secondary and tertiary education amounts to more than two-thirds of Norwegians over 16 years, which makes Norway one of the most highly educated countries in the world
Norway is a monarchy with a parliamentary form of government. There are three independent government levels; the national government, county councils and municipalities. Norway is a member of the United Nations, WTO, NATO, Council of Europe and Council of the British Isles. Norway has signed among others the following international treaties and documents: GATS, Convention on the Rights of the Child, European Convention on Human Rights, International Bill of Rights, and the Barents Health Programme. Buthas (Norwegian congress) turned down being a component of the European Union a number of times.

Norwegian Healthcare The Norwegian healthcare system is organized into three levels; national, regional, and local, although the overall responsibility rests at the national level with the Ministry of Health and Care Services. The regional level is organized into 5 regions for specialist care and the 434 local municipalities at the local level providing the primary healthcare. The social insurance system, managed by the National Insurance Scheme (NIS), provides financial security in the case of sickness and disability. There is no exact definition of the “coverage package” in the Norwegian healthcare system. The Norwegian health care expenditure was 10,3% of GDP. Healthcare expenditure expressed in US$ PPP per capita was $3,572 in 2003, which was much higher than the EU average of $2,326 and the US average of $7,5383. This healthcare is funded by taxes, which is high in Norway. There is a national tax and individual municipalities can add a tax to cover healthcare expenditures. The regional healthcare facilities operate under a grant from the federal government. Norway has a high income tax rate and a moderate corporate tax rate. The top income tax rate is 47.8 percent (when federal and municipal taxes, a top surtax, and an employee contribution to social security are considered). The flat corporate tax rate is 28 percent. Other taxes include a value-added tax (VAT), a tax on net wealth, a national insurance contribution, and a number of environmental taxes. Petroleum companies’ profits are subject to a different tax scheme. In the most recent year, overall tax revenue as a percentage of GDP was 42.1 percent.4 Other taxes are high in Norway with a 25% sales tax, 50% tax on cars, and very high taxes on certain imports (meat products are taxed at 500%). There is no specific tax for healthcare, rather it is a line item under the general fund for the national government. Medical education is paid for by the state in Norway where 500 new physicians graduate yearly. Hospitals are organized into regional enterprises run by the central government. The key strengths of the Norwegian health care system include provision of healthcare services for all based on need (regardless of personal income).5 There are 5 regional and some 80 municipal hospitals scattered throughout the country. Specialists are in the regional centers with general practitioners (GP) in the municipal areas. These GPs work as the gatekeepers to the specialists. Most, greater than 70 %, are employed by the national government with the rest are in private practice and are reimbursed by the state. Payments to the physicians are on a fee-for-service in the private sector and salaried in the government sector. Patients pay a fee (roughly $29) no matter what the visit. The government reimburses the rest. Most private practices are located in the three urban areas of the country. Patients are free to choose whichever GP they want.

The health status of the Norwegian population is one of the best in the world.
With local and regional accountability, public commitment and political interest in improving the healthcare system. There is a high life expectancy (77.5 years for males and 82.3 years for females) and low neonatal and perinatal mortality. The number one mortality factor is cardiac disease followed by cancers. The incidence of HIV in Norway is low with less than 100 cases reported nationwide yearly. While acknowledging the excellent quality of services delivered by the Norwegian health care system we can identify a number of problem areas; in particular: the long waiting lists for hospital admission and lack of medical staff, the marked regional variation in per capita health care expenditure (which cannot be fully explained by demographic factors), and the lack of pharmaceutical retailers. The minority Sami people (similar to North American Eskimos) have much less resources than do the rest of the country.6 While most, >85%, of Norwegians are ‘very satisfied’ with their healthcare the waiting times for specialists and surgery can be long. The main problem concerning the distribution of pharmaceuticals in Norway is the inadequacy of the retail network, the virtual absence of competition on service and opening hours and the associated high retail margins. This situation is a reflection of the strict regulation of the retail market.7 Direct advertising to patients and the public is prohibited. Medical liability is an administrative step. The physicians are not required to carry medical malpractice insurance, as the government pays out any settlements to patients in a no-fault type system. No courts are involved, only administrative avenues are open for payments based upon the facts of the case, no blame is placed on physicians or hospitals. In essence there is no ‘pain and suffering’ cost involved, rather there is a reimbursement for direct damages.8

Norwegian summary In summary the Norwegian form of healthcare works for this very small, very rich, homogeneous, relatively healthy people. The people of Norway have bought into the system of using very few prescriptions (Doctors in Norway prescribe the fewest drugs of any country)9, seeking medical care less than the average, and not minding waiting for medical care (up to 4 months for hip replacement of tonsillectomy). The government pays the bill, albeit by the way of some of the largest taxes in the world. This system works well for a healthy country but would it work for the US? As a total policy it would be impossible to replicate the Norwegian health system in the US without changing the Constitution and the basis of a free economy. There are important lessons that can be learned from the Norwegians however.

Lessons Learned Some of the items that would translate well into the US to decrease the cost and improve the quality of healthcare would be; No fault liability, reduced prescriptions, and a single payer system. Instead of having the medical malpractice ‘lottery’ that is current in the US, a no fault insurance could be set up to pay patients that are either harmed, or not taken care of in the proper way. The reduced risk of litigation would greatly reduce costs of malpractice insurance and the reduction in cost associated with practicing defensive medicine. Taking away the punitive nature of lawsuits and replacing with a process for quality improvement would indeed improve quality and decrease costs. Many prescriptions, especially for antibiotics are unwarranted, but demanded by patients and all too easily prescribed for patients by physicians. Not only to these prescriptions not work well; they actually reduce health by the way of increasing antibiotic resistance. The cost of prescriptions has skyrocketed in the US over the past decade. The lack of advertising directly to patients would further decrease the demand for unnecessary drugs. Reigning in the multiple insurance companies would greatly reduce the cost of healthcare. Some critics state competition is needed to decrease costs. The issue is that most insurance companies practice in certain geographical areas of the US, each one a virtual monopoly in their small service area. There is very little competition to reduce premiums or increase services. A government run insurance system is not the way to save money (look at Medicare). But there should be a single set of rules that are applied nationwide, not regionally, or even locally. Norwegian healthcare is not perfect, it works well for this small Nordic country, and applying some changes from this country could drastically improve quality and decrease cost in the US. Tis along with lessons learned from many other countries could make the US’s healthcare the envy of the world.

1. http://daniel-workman.suite101.com/world-s-richest-countries-a7107
2. http://www.tradingeconomics.com/unemployment-rates-list-by-country
3. http://www.kff.org/insurance/snapshot/OECD042111.cfm
4. http://www.heritage.org/index/country/norway
5. http://healthcare-economist.com/2008/04/18/health-care-around-the-world-norway/
6. http://www.euro.who.int/__data/assets/pdf_file/0005/95144/E88821.pdf
7. http://www.oecd.org/dataoecd/34/49/1864965.pdf
8.http://www.patientforsakring.se/resurser/dokument/engelska_artiklar/medicalliability_alternative_ways_to_court_procedures.pdf
9. http://psychoanalystsopposewar.org/blog/2010/01/03/norway-prevents-resistant-infections-by-reducing-antibiotic-use/

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