Norwegian General Hospitals, 1970–2002: County Ownership—An Interlude between Welfare Localism and State Direction

Over the last three decades, Norway has experienced two fundamental reforms in hospital organization and direction. In 1970 the nineteen county authorities took over ownership and budget responsibilities for hospitals within their areas, replacing a highly varied and complex structure of ownership, typically generated locally. In 2002 hospitals were transferred to the state and amalgamated into five regional government enterprises. These, in turn, have organized all hospitals in their region under local health enterprises. Both regional and local enterprises are separate legal entities, with their own executive boards and managing directors. The Minister of Health appoints the boards of the regional enterprises, while their directors and the boards of the local enterprises are appointed by the regional boards. Both regional and local enterprises are supposed to have full autonomy for day-to-day operations, while being subject to strategic and political decisions by the Minister of Health as the ultimate authority of the enterprise assembly ( foretaksmøte). The ‘‘enterprise’’ concept is, of course, borrowed from private business, modelled on companies of limited liability. The choice of this organizational model must be understood at least partly within the context of a general politico-administrative reform, inspired by the worldwide New Public Management movement. Each enterprise is a separate economic entity with a clear responsibility for balancing its budgets. Privatization (or part-privatization) and bankruptcy, however, are out of the question, as the state in the end retains full economic responsibility. The objective of this article is to contribute towards an understanding of this pattern of reform. I will suggest three explanations. First, ownership and organization in the hospital sector falls nicely into a long line of development in the creation of the Norwegian welfare state—with the emphasis on ‘‘state’’. This can be described as the development from ‘‘welfare localism’’ to central direction with the aim of equalizing welfare provisions