Efficiency in the Provision of Municipal Nursing- and Home-Care Services: The Norwegian Experience

Abstract

Municipalities of Norway are, by law, responsible for provision of care of persons in need, due to old age or physical and psychological handicaps, etc. The care can take place either in institutions or in peoples’ homes. This is public sector production, with a few private not-for-profit institutions, and is the most important municipal spending sector consuming about 25 per cent of the total budget. The services of the sector are not traded in a market. There is therefore neither an automatic check on the efficiency in the use of resources, nor on the match between services demanded and type of services provided. The purpose of the paper is to explore the potential for improvement as to the former aspect by using observed best practice as a norm for efficient operation (but see Newhouse (1994) for a critique of a frontier approach in the health sector). A nationwide cross-section study is undertaken for the first time in Norway, with municipalities, and organisational independent townships within the three largest cities, as the units. Earlier studies for Norway have been focussed on institutions within a limited region, e.g. for the largest cities. Home-based care has not been included in any efficiency studies before in Norway. And also internationally the focus has been only on institutions, like nursing homes (see e.g. Chattopadhyay and Ray (1996), Dusansky and Wilson (1994), Kooreman (1994), Nyman and Bricker (1989), Rosko et al., 1995).

The paper is part of the project “Cheaper and better?” financed by the Norwegian Research Council, and is a continuation of the project “Efficiency and quality variations in the provision of municipal nursing-and home care services” financed by the Municipalities’ Association (see Erlandsen et al., 1997).