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Brief analytical summaries or syntheses #18

Decentralization in health care

Summary

The Spring issue of Euro Observer looks at decentralization as a governance tool in health care. Case studies on Norway, Spain and the United Kingdom (U.K.) highlight how decentralized arrangements work in practice in these countries.

Background

A common challenge across most countries in Europe is finding the appropriate level for the making and implementation of policy and administration, particularly in health care. Many countries have decentralized, recentralized and then decentralized again in an ongoing cycle, searching the right balance of efficiency and responsiveness in their health care system. Looking at the arguments for and against, in many cases the same reasons are used to justify movement in opposite directions. This issue of Euro Observer looks at whether decentralization is purely a politically driven phenomenon or the wrong instrument used for the right objective.

The debate about decentralization is underway in a number of European countries where decentralization refers to the transfer of powers and responsibilities from the national to the local level. Arguments supporting this position are that services can be more easily tailored to the requirements of local people, which can vary greatly from one place to another. Arguments supporting centralization have at their heart the belief that greater efficiency and cost effectiveness is possible in more centralized systems.

Analysis and results

The evidence to support arguments for or against decentralization in health care is ambiguous. Given the complex multidimensional nature of decentralization, this is not surprising. In reviewing the evidence, Saltman et al (2007) report some positive outcomes of decentralization, including increased capacity to innovate, greater cost consciousness and greater local accountability.

Whatever the nature of the decentralization, it is highly context-specific. This is particularly true for health care, where funding, purchasing and provision may be provided at different levels of the system by a broad range of public and private bodies. Adding to this complexity, the authors highlight the need to take into account the legislative frameworks in each national context.

Three case studies

U.K.: Health policy in the United Kingdom is a paradox of simultaneous centralization and decentralization. Since the 1998 creation of devolved governments for Northern Ireland, Scotland, Wales and England, there has been little interest or coordination across borders. However, within each jurisdiction, and particularly England, every minister has made greater and greater claims to control the system, at the expense of intermediate organizations such as the medical profession or NHS boards. This study demonstrates that decentralization can, in fact, mean greater centralization on the ground.

Spain: The decentralized health system in Spain was put in place at the end of the 1970s. The delivery of health services falls under the Communidades Autonomas, which are regional authorities, while the central government provides a common political framework to assure equity and system performance. There is consensus that the decentralized health system in Spain has stimulated investment in health care, encouraged flexibility and innovation in the delivery of health services and fostered approaches that are attuned to local preferences. However, this system faces important challenges as regions have tended to over-spend their allocated budgets, and as the Ministry of Health has encountered serious obstacles to effectively coordinating the health system due to partisan struggles between national and regional political parties.

Norway: In 2002, responsibility for hospital services in Norway was transferred from 19 counties to the state. This highly controversial hospital reform was taken on in the name of responsibility and leadership reform and currently draws support from only one of the three parties in the coalition government. This reform was motivated by the need for greater geographic equity between regions and by economic challenges related to payment for hospital services and the financial responsibility of different actors. This reform is expected to undergo changes in the not-too-distant future.

Conclusion

Comparison across Europe is difficult given the complex nature of the arrangements, the importance of the underlying historical context and the lack of strong evidence. However, some common challenges appear in the different debates about decentralization. Moving power up or down geographical or organizational levels may be one way of addressing these challenges, but every country can point to areas where this is done well, suggesting that while some of the answers might lie in the system structure, many of them lie in broader issues of culture and management.

Implications and recommendations

Ironically, it seems that the key arguments of enhancing efficiency and bolstering democracy are used by both sides in the debate. Achieving allocative efficiency is cited as a reason to centralize. However, it is also often argued that decentralization, which would bring the planning and prioritization of services to a lower level, allows for a more sensitive local mechanism to target populations in greatest need.

What is probably more interesting than the arguments for and against decentralization is developing an understanding of the problems that it is trying to solve. In many countries this is about how a range of services can be appropriate and accessible to local populations. The challenge implies a closer look at decentralization but also at the management of our health and social service systems.

Source

Decentralization in health care