Hospital management prioritizes profitability, say physicians

Does money rule Norwegian hospitals, even with universal healthcare? If so, this practice could impact people with chronic or long-term illnesses.

Eighty-four per cent of hospital doctors believe that the hospital management now places greater emphasis on profitability than before."

Pål Erling Martinussen, Professor, Norwegian University of Science and Technology's Department of Sociology and Political Science

Many Norwegian hospital physicians therefore think management prioritizes profitability more than they did before the Norwegian goverment restructured the health sector a few years ago.

So what happened? One factor is that people are different now.

Change in financing

Until 1997, it didn't matter to Norwegian hospitals what kind of patients they treated. Hospital financing in Norway wasn't linked to patient ailments.

But that year brought changes to the financing of the Norwegian health service. Hospitals were paid more on a per-patient basis, and were paid differently depending on the type of illness patients had.

"Patients with chronic conditions and other people who need treatment over time are generally less profitable for hospitals than patients who require less follow-up and can move quickly through the system," Martinussen says.

This approach was reinforced in 2002, when the Norwegian statetook over responsibility for the hospitals and organized them as local enterprises. But does this matter in practice for how patients are prioritized?

The changes were designed to inspire increased staff effort and to reduce health queues. But at the same time it became tempting to prioritize the simple-to-treat patients and the quick money. This is called "cream skimming" - even in professional circles.

"Our research group wanted to find out what consequences these changes had had," says Martinussen.

Hospital doctors surveyed

A survey among hospital doctors in Norwaywas first conducted in 2006 when the latest reorganization was still relatively recent, and then again in 2016 when the scheme had been in place for a few years. The first time the study was sent to 2500 doctors, the second time to 3000, and the research group has now analysed the results.

The hospital doctors were asked three questions:

1. Does the new system encourage prioritizing more profitable patients?
2. Does this lead to hospitals actually prioritizing these patients?
3. Does the top management at the hospital place an emphasis on profitability?

The first two questions were slightly different in 2006 and 2016. This means that the two surveys are not directly comparable, but some results are clear nonetheless.

Hospital doctors still sceptical

In 2006, a majority of doctors in Norway believed that the Norwegian hospital reform in 2002 provided an incentive to focus on profitable patients and in fact led to profitable patients being given priority.

Martinussen says the 2016 picture is less clear in relation to doctors' views on whether profitable patients are actually given priority.

We still know very little about whether profitable patients are actually given priority. But very few of the doctors believe that the reforms have made it less tempting to prioritize the profitable patients, or that this is happening to a much lesser extent than before.

Managers less worried

But the managers themselves are not that worried.

"Doctors who are also managers appear to be less concerned about the current system providing an incentive to prioritize profitable patients," says Magnussen.

It's hard to say who's right.

"A majority of the doctors believe that the management places too much emphasis on financial performance in operating the hospitals," Martinussen says.

The researchers believe one possibility is that the changes may have led to a division of labour, where managers are forced to pay more attention to finances than before, but ethics are still being upheld by most hospital doctors at all levels.