Health accounts, 1997-2005

Total health spending accounted for NOK 176 billion in 2005. In terms of expenditure per capita this corresponds to NOK 38 000, which is almost NOK 17 000 more than in 1997. Measured in constant 2000-prices the annual growth rate was 3.5 per cent per year on average. Expenditures on day care, long term-nursing home care and pharmaceuticals showed the highest growth in real terms.

Total health spending accounted for about 9 per cent of GDP in 2005. During the years 1997 to 2005 the health expenditure to GDP ratio varied between 8.5 and 10.1 per cent. The relatively large variation over time reflects that the GDP growth rate shows a larger variation than the expenditures on health. This is mainly due to the fluctuations in the prices of oil. Taking this into account and comparing the GDP ratio for mainland Norway, the ratio devoted to health rose from 10.4 in 1997 to 12.4 per cent in 2005. The slight decrease between 2004 and 2005 is caused by a decrease in the grow rate of health expenditure. This is partly due to a more moderate growth in gross capital formation, especially the part financed by the local government, together with a somewhat reduced growth in the current expenditure on health.

Health expenditure by function

In-patient curative care, service of long-term nursing care and pharmaceuticals compose the largest share of health expenditure. The distribution of health expenditure by functions shows minor variations during the period 1997 to 2005

The public sector is the main source of health funding in Norway, composed by general government, the social security fund and the local governments. About 83.6 per cent of health spending was funded by public sources in 2005.The share of public spending in Norway has increased from 81.3 per cent in 1997, and stabilized around 83.5 during the past five years. In contrast the public expenditure on health as a share of total public expenditure has increased from 15.8 i 1997 to 19.1 in 2005. This is caused by a higher public share of funding combined with a rise in health expenditure compared to other public spending.

Health funding

More than 40 per cent of health spending is funded by the central government. In-patient curative and day cases of curative care compose the highest share, accounting for two third of the central government’s expenditures on health. In-patient curative care made up a decreasing share during the period 1997-2005, whereas day cases of curative care increased. During the given period, the expenditures on day cases doubled in real terms. Of the remaining functions clinical laboratory, diagnostic imaging and out-patient curative care are the main expenses of the central government. These services are provided mainly by the hospitals, while the provision by the medical and diagnostic laboratories is increasing.

From January 1 2002 the general government assumed responsibility for the Specialist Health Service from the local government. Since then the main component of the local government health expenditure is related to long term nursing care. These services composed almost two thirds of the local government spending on health. Between 1997 and 2005 the expenses on long term nursing home care increased far above the average, with a real annual growth rate of 8.5 per cent. In contrast the in-patient long-term nursing care increased by 5.2 per cent.

The spending on pharmaceuticals to out-patients has increased above average of the total health spending since 1997. The average annual growth rate reached 7 per cent in real terms. The share of public spending by the social security funds was around 60 per cent in 2005, a bit higher than in 1997.

The private health funding is mainly out of pocket expenditure, on out-patient curative care, especially dental care, pharmaceuticals and long-term nursing care

Providers of the services

The distribution of health expenditures by providers in 2003 is quite similar to the 1997 distribution. During 1997-2005 almost 30 per cent of the health spending is provided by general hospitals, while around 17 per cent covers nursing care facilities. Offices of dentists compose s lower share in 2005 than in 1997, meaning a growth rate below average.

Mental health and substance abuse hospitals, nursing care facilities and providers of home health care services showed a higher growth rate than the other health care providers.

Norge vs other countries

Total health spending in Norway accounted for 9 per cent of GDP in 2005. This is above the latest available OECD average of health expenditure of 8.6 per cent of GDP in 2002. Norway also ranked above average in terms of total health spending per capita and is, together with other Nordic countries and Japan, one of the countries with the highest share of public funding among the OECD countries.

New updated health figures for 2003 will be released at OECDs website mid june 2006, please see: http://www.oecd.org/home/0,2987,en_2649_201185_1_1_1_1_1,00.html

Tables:

• Table 1 Health expenditure, key figures. 1997-2005
• Table 2 Current expenditure on health, by function of care. 1997-2005. NOK million
• Table 3 Total current expenditure on health by function, distributed by source of funding. 2003. Per cent
• Table 4 Total current expenditure on health by function, distributed by source of funding. 2000. Per cent
• Table 5 Total current expenditure on health by function, distributed by source of funding. 1997. Per cent
• Table 6 Total current expenditure by provider distributed by source of funding. 2003. Per cent
• Table 7 Total current expenditure by provider distributed by source of funding. 1997. Per cent
• Table 8 Total current expenditure by function distributed by provider. 2003. Per cent