Norwegian government boosting hospital finances: waiting times to be slashed

“The population throughout Norway can be confident that they’ll get high-quality healthcare when they need it. Our shared welfare state is the best health insurance we have in Norway. The government’s proposal means that hospitals can continue their good work on reducing waiting times,” says Jan Christian Vestre, Minister of Health and Care Services.

Compared with the balanced budget for 2024, the government is proposing to increase the funding framework for hospitals by approximately NOK 5.8 billion. At the same time, efficiency improvements of NOK 316 million are required. The increase includes NOK 1.7 billion given as a permanent allocation increase in the revised national budget for 2024, as well as increased payments for activity-based schemes.

Compared to the revised national budget for 2024 and new activity estimates for 2024, the increase is approximately NOK 3.4 billion. The budget proposal involves the biggest increase in an ordinary budget for hospitals in many years, discounting one-off allocations and other special conditions. Compared to the balanced budget, the closest comparable increase was back in 2008. It is estimated that costs will increase by NOK 2.8 billion next year as a result of the growing number of us getting older.

Subsidy for co-operation between municipalities and hospitals

The government is proposing a continuation in funding to the tune of NOK 286 million for recruitment and collaboration subsidies, which will stimulate binding co-operation between municipalities and healthcare enterprises companies.

“The subsidy will help to support effective patient pathways and measures that promote recruitment and the effective use of personnel at every level in our joint health services, such as the trialling and creation of combined roles,” says Vestre. Special priority is being given to measures and areas that can reduce waiting times in hospitals.

Healthcare enterprises and relevant municipalities must agree on what the subsidy funds are to be used for.

Changes in financing mechanisms

In line with the National Health and Co-operation Plan (in Norwegian), financing mechanisms will change from 2025, so that the increase in activity can be realised at 100 percent of the average treatment cost. After many years of marginal funding at 80 percent, this is now being increased to 100 percent.

“The government is keen for the actual increase in costs linked to demographic changes to be covered,” says Vestre.

The proportion of initiative-based funding within somatics will be reduced from 40 to 30 percent from 2025. The change will help to raise awareness of the subject and improve quality. Reducing the share of initiative-based funding can help to increase strategic room for manoeuvre among regional healthcare enterprises, especially in relation to joined-up patient pathways and co-operation with municipal health and care services.

The government is also changing the financing mechanism for hospital investments by reducing the equity requirement for investments and improving interest rates on loans.  

Funds for the Northern Norway Regional Health Authority

The Northern Norway Regional Health Authority is continuing to face special challenges and must continue its efforts to ensure that costs are kept within prescribed limits and to ensure financial sustainability going forwards. The government is proposing special subsidies of around NOK 570 million to the Northern Norway Regional Health Authority in 2025.

The funds will be a continuation of the allocations made in 2024 and are distributed as follows:

• NOK 209 million for staff recruitment and retention
• NOK 135.2 million in recruitment and co-operation subsidy
• NOK 150 million in subsidy for maintaining emergency services in the Northern Norway Regional Health Authority. This will ensure that the emergency services at the hospitals in Narvik and Lofoten continue at their current level, while compensating the Northern Norway Regional Health Authority for the fact that proposed savings related to discontinuing these functions are not being pursued.
• NOK 41.7 million for the continued development of specialist health services in Alta
• NOK 36.5 million for preparedness and emergency services in Kirkenes