Centralized or decentralized? A case study of Norwegian hospital reform

In recent years, decentralization of financial and political power has been perceived as a useful means to improve outcomes of the health care sector. Such reforms are often a result of fashion, rather than being based on knowledge of “what works”. If decentralization is the favored strategy in health care, studies of countries that go against the current trend will be of interest and importance as they provide information about the potential drawbacks of decentralization. In Norway, specialized health care has recently been recentralized. In this paper, we review some of the evidence now available on its economic effects. The most striking observation is that recentralization did not affect the variables related to cost containment and soft budgeting.