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Autonomy, Transparency and Management

Reform dynamics in health care: a comparative project



Project summary

The responsibility for the Norwegian public hospitals has been transferred from the counties to central government. Five regional health enterprises have been established, and there has been a reform in the rights of patients, and in the way hospital departments are to be managed. The aim of this project is to study such processes of reform and change within the Norwegian health care sector, make comparisons with Sweden, Denmark and other countries, and estimate the consequences for quality, cost efficiency and legitimacy. Three research modules are introduced:

  1. AUTONOMY. The ambition to establish autonomous organizational units, with a focus on the health enterprise.
  2. TRANSPARENCY. The dynamics involved in the strive for transparency, exemplified by the introduction of still more detailed instruments for monitoring of performance and quality, as well as patient’s rights to be informed.
  3. MANAGEMENT. To establish a more professional and distinct managerial role at all levels is a major ambition for most of the recent reform programs.

A comparative research design is employed - regional, cross-national and global - in order to analyze the relationship between reform activities, organizational changes and service provision. The aims are to:

  • Generate research on the preconditions for change in health care by the means of comparative research
  • General competence development in organization and management of health care
  • assist the health institutions in their efforts to improve service delivery and create more innovative structures for organization and management.
  • Develop a forum for research on organization and management of health enterprises, in cooperation with Health Bergen, as well as a Nordic and International research group and network



The aim of this project is to study processes of reform and change within the Norwegian health care sector, make comparisons with Sweden and Denmark and other countries with similar reforms and estimate the consequences for quality, cost efficiency and legitimacy of health services. How are reform initiatives translated into practice, in health enterprises and other institutions for specialized health care? Under what circumstances do reform programs lead to organizational changes with effects for service quality, legitimacy or cost efficiency?

The first research area relates to the ambition to establish autonomous organizational units. This idea is central in the recent ownership reform in Norway, which have introduced the health enterprise as a major unit at a local and regional level and transferred ownership from the counties to the state. The second research area is to study the dynamics involved in the strive for transparency, exemplified by the introduction of still more detailed instruments for monitoring of performance and quality, as well as patient’s rights to be informed and make choices. The third research area is management and leadership. To establish a more professional and distinct managerial role at all levels is a major ambition for most of the recent reform programs. This may be exemplified by the recent law enacted by the Norwegian parliament requiring from all clinics and hospital departments that they implement a system of unitary management. Similar reforms are undertaken in other sectors of public administration and in other Scandinavian countries.

The focus within each research area will be on 1) content of the various reforms programs and the discourses provoked by them 2) how such programs and debates differ among the Scandinavian countries, and also among countries with different health systems 3) in what way practices in the hospital system are affected by the various reform programs, and 4) what are the likely consequences for quality, efficiency and legitimacy. A comparative research design is employed - regional, cross-national, global - in order to analyze the relationship between reform activities, organizational changes and service provision. The aim of the project is to both develop knowledge, durable partnerships and modules for education and research that may assist the health institutions in their efforts to improve service delivery and create more innovative structures for organization and management. Similar challenges face other public institutions, and the project clearly has relevance for a whole range of sectors and policy areas. The project is also a contribution to the development of theories and perspectives in the field of management and organization studies.



The research group and the institution serving as host

The Stein Rokkan Center for Social Studies at the University of Bergen is responsible for the project. A broad range of researchers, research institutions and health organization are brought together in a concentrated effort. We have created a research team with different kind of competences, research experiences and networks, led by researcher, dr.polit Haldor Byrkjeflot. Other participants are: professor Ivar Bleiklie and professor Per Lægreid, the Rokkan Center and Department of Administration at University of Bergen, Ph.d. Katarina Østergren at PWC and the Rokkan Center , Associate professor Hallgeir Gammelsæter at State College of Molde , Ph.d. - candidate and research associate Kristijane Cook Bulukin, at Norwegian School of Business and Management, Bergen (NHH) and Ph.d.-candidate and associate professor adjunct Dag O. Torjesen, Agder State College.

Our main institutional partner is Health Care Bergen, represented by Vice President Tore Nepstad and director of unit for organizational development Cand Polit. Trond Søreide. Other active partners are Finn Borum, Professor in organization theory at the Department of Organization and Industrial Sociology, the Copenhagen Business School, and professor Kerstin Sahlin-Andersson at Department of Business Administration at University of Uppsala.

The research group will have close contacts with the program for Health Economics in Bergen (HEB), a program located at the Rokkan Center and based on a co-operation between the University of Bergen and the Norwegian School of Economics and Business Administration (NHH). Important links also include the research on health history and health services at the Rokkan Center, and the strong research tradition on public administration and professions at the Department of Administration and Organization theory. We also cooperate with the Institute for Research in Economics and Business Administration (SNF) in Bergen.


Research needs and perspectives

It is a commonly held view that the hospital sector is facing great challenges with respect to management, organization and governance, but not much research is undertaken on this issue. There is a great deal of activity within research on health economics, and in the more development-oriented fields of consulting and education. Previous studies of Norwegian health care provide aggregated data (e.g. Kjekshus et al 2001) and analysis of structural preconditions for efficient service provision (e.g. Askildsen and Haug 2001). These studies are important, but there is also a need for studies that focus more explicitly on organization and management.

Several reforms have been introduced, the ambition is to change the way managerial and professional actors operate and behave. The reform makers put large hope in the logic of economics and try to implement economic incentives to increase productivity. Politicians rely on advice from shrewd experts in formal modeling. The assumptions about what goes on inside the organization may be wrong, and frequently not at all spelled out. Sometimes models that are believed to have been successful in other contexts are copied without concern for how action frames differ. Studies are needed that focus on what goes on inside the “black box” of management and organization. What are the preconditions that need to be fulfilled in order to activate the capacities of the critical actors and their motivation to participate in reform work? Under what circumstances do actors learn from their own and each other’s experiences?

Although important if one wants to understand many of the crucial issues in modern health care provision, these internal matters have not been systematically studied in a Norwegian context. Previous studies show that there are problems with implementing new reforms. Firstly, reforms may be rejected, either by veto-groups or by the professional system as a whole (Søreide 1999). The second problem with implementing reforms has been that reform ideas are adopted, but then in a passive, superficial way, as part of a windows-dressing strategy (Brunsson 1989). Many attempted reforms may just have been a waste of time and resources, and others may even have decreased the actor’s capacities to act in a concerted and innovative way, as seen in the example of “organizational blockage”, a situation with collapse in communication (Crozier 1964). A third possible response to implementing reforms is that a translation occurs. Translation happens when reform ideas are transformed as they meet the organizational members and their local patterns of thought and action (Czarniawska and Sevon 1996, Røvik 1998). A precondition for translation may be actors that have developed knowledge and have a work-situation and position that allow them to take an active and creative approach to reform ideas. As shown there are different ways of dealing with new reforms in organizations and in this project we want to know how professionals and managers in Norwegian health care respond to the the new reforms.

Introducing reforms, one also has to take into consideration that most changes happen for other reasons or in despite of political reform efforts or deliberate organizational strategies. New knowledge and technologies, professional strategies, the expansion of patient organizations, all these dynamic elements affect the way health services are delivered. Boundaries between organizational units and between the health system and other relevant systems get blurred, e.g. as a consequence of intervention by the pharmaceutical industry and insurance companies (Scott et al. 2000). A whole range of intervening factors and actors may undermine the existing power balance. Therefore, we will emphasize studies with different perspectives, with a focus on institutions (Røvik 1998), actor-networks (Latour 1986, Blomgren et al 1999), organizational politics (March 1994), the politics of audits, transparency and categorization (Power 1997, Bowker and Star 1999). Such perspectives may stimulate conversations among researchers as well as among researchers and practitioners, and contribute to a capacity to act, based on a deeper understanding for why and how change occurs in health care organizations.

There is also a lack of comparative studies. A means to assess the impact of various variables and actors in such a complex system is to make comparisons across settings; regional, cross-national and global. Transnational networks are influential in the development of knowledge-based groups and technologies in health-care, as well as management. Individualism, human rights, patient-as-customer, the right to choose doctor and hospital, these are “world models” with great implications for hospital management (Meyer et al. 1997, Boli et al. 2000, Meyer 2002). Therefore, we will have a focus on comparative studies.



Recent reform initiatives and important research questions

Since 1 January 2002 the responsibility for the Norwegian public hospitals has been transferred from the counties to central government. Five regional health enterprises have been established, which in turn have organized the hospitals under 47 health enterprises with 250 institutions under their jurisdiction. These enterprises are of various size and geographical span; some are encompassing just one hospital, while others organize hospitals as divisions under larger health enterprises(1). At the same time there has also been a reform in the rights of patients, and in the way hospital departments are to be managed, towards unified management. These three reforms can be seen as representative of three kinds of programs, 1) an ambition to establish organizational autonomy 2) a strive for transparency 3) a strive for professional leadership. Altogether these programs represent an ambitious effort to move away from the traditional public-administrative system for funding and organization towards a more decentralized, transparent and managed system.

From a place-bound, planned system of resource allocation to decentralized autonomy? 
The public-administrative system was based on fixed government grants and a strong belief in the possibility to establish “ objective criteria” for health needs and equality in service provision, and operationalize them into regional and national health plans. An important precondition for this relatively stable, hospital-based and place-bound system was a centralized employment policy, encompassing professional groups, and a medical profession that took a key role in health planning as well as in the allocation of positions and resources (Erichsen 1995).

The new enterprises are believed to be autonomous, which means that they have to find the best way to allocate resources in a cost-efficient way. It is no longer an option to return to the government for more resources, the enterprises have to make the priorities themselves and make structural changes if necessary. Therefore they have to take another perspective than the hospitals. Such local and regional hospitals may not be easy to control, however. They have became rooted in their respective communities, due to their importance as employers, their role in local politics, as a source for journalists, and as symbols of belonging and security for the population at large. It has been easy to mobilize communities in defense of them, and it is an open question whether the new enterprise model will be able to keep local hospitals from repeating their successes in mobilizing against plans to rationalize and reorganize health services.

From a system with unlimited expansion towards a transparent system with cost control.
The constitution of health enterprises has accentuated the need for transparency and new identities, a governance regime that has been classified as new public management (NPM), corporate governance or even “managed care”. New public management refers to the introduction of quasi market mechanisms (purchaser-provider models, contracting), along with an increased emphasis on the role of management (unitary management) and the customer (freedom to choose), as well as the expansion of expert-based agencies for quality control and evaluation (Lægreid and Christensen 2001, Pettersen 2001). We therefore want to know whether a new set of business-oriented and expert-based players will intervene into the health terrain, and whether the new rules will make it possible for such actors to initiate a change towards transparent and autonomous units. Alternatively, one may suggest that the same actor-networks and professions that have been the powerful players in the traditional system will be able to reject reforms or adapt to them just in a symbolic way, in order to maintain the status quo.

From professionals to managers. 
It has been observed that professionals-as-managers gain in power, whereas collegial professional formations loose power (Fitzgerald and Ferlie 2000: 722) in those countries where NPM-reforms have been advanced the furthest. In health services it has commonly been the professional that has had the upper hand over the manager, but they are now changing places, with the consequence that the professions become less unified, a managerial strata is developed within each profession (Leicht and Fennell 2001). Norwegian health professions are still more unified than those in many other countries (Erichsen 1996). This means that they carry with them a complex and contradictory set of values and priorities that may lead them in many directions (Bleiklie 1997).

Many see the new role of managers and reformers, not as a contrast to medical professional values, but rather as a reconstruction of the existing actor-networks, and values (Kjekshus 2002, Llewellyn 2001). Managers, politicians and professional actors make different interpretations of the reforms and the forces they seek to influence. We are here interested in how the medical professions respond to the demand to take a more managerial role.


Research design

In order to control for many and complex intervening variables we will use a comparative design. The reforms seek to establish a clearer division of labor between institutions and organizational units. It may thus be useful to compare with other settings where other kinds of division of labor has been institutionalized, e.g. Sweden where there has been an effort to have treatment at right level, that is a stronger emphasis on primary care than in Norway, and putting more emphasis on treatment in hospitals. The project will be organized in three research modules (below) and we will employ three kinds of comparative research designs (frames):

Frame 1. Regional implementation of health reforms. 
The focus will be on national variations in the implementation of the various reforms by comparing processes in various hospitals, local enterprises and regional health enterprises, and also the introduction of unitary management in other sectors than health. The major research effort will be done in cooperation with Healthcare Bergen, a health enterprise established under the jurisdiction of Health West in January 2002, as 11 former independent institutions were merged into one organizational unit. Healthcare Bergen is among the largest health enterprises in Norway with 7500 employees. We will also cooperate with researchers at Agder State College and the State College of Molde. They will use empirical data from another two regional enterprises: Health Mid-Norway and Health South.

Frame 2: Health reforms in Scandinavia 
This frame will be used to focus on the role of management and organization in the health services in Scandinavia. There is a common trend towards unitary management and away from dualistic and troika models of management in medical units and hospitals, and similar reforms towards the use of new public management instruments, in order to establish autonomous, transparent and accountable organizational units.

Although the principles of governance of specialized health services in the Nordic countries are rather similar, there are also relevant differences. Funding is provided by taxpayers in all countries, but a difference is that in Sweden and Denmark the counties have more leverage in collecting tax money for health purposes. Furthermore, there is also a difference in public ownership, whereas such services are still owned by the counties and not the state in Sweden and Denmark. How far are patient reforms and benchmarking activities relating to quality, customer satisfaction and cost effectiveness advanced in the various countries? We will cooperate closely with researchers at Uppsala University, Sweden and at the Business School of Copenhagen, as well as the FLOS project, in Denmark.

Frame 3: European variations and the role of international circulation of management concepts.
This frame will focus on the internationalization trend within health services, and on the more systematic variations in the effect of management and organization in various contexts. We plan to develop an application for the EU and other international and national agencies, with partners from France and Britain, as well as organizations with a multinational or international orientation. We will focus more on international variations in division of labor, management and organization. What are the consequences of the trend towards internationalization in regulation of professions, as well as the development of new agencies and instruments for quality control in health services, as exemplified by the growth of international medical associations and transnational agencies (Evetts 1999) We plan to organize the project in such a way that scholars with different kind of research focus meet each other continually and have to consider each others perspectives in their daily work.



More specific research areas


1. The ambition to create organizational autonomy.

The first project module will study the impact of the movement away from hospitals and toward health enterprises, a dynamic encouraged by the recent health reform, and establish hypotheses about possible implications for the governance of the field of specialized health care services and cost efficiency/quality of health services. There are variations among the regions as to how they organize the health enterprises, and also what kind of expertise is predominant among board members and directors. Some enterprises are based on local and regional hospitals, whereas others seek to merge hospitals or integrate them into the new enterprises as divisions or as part of larger organizational units. How do such choices affect the legitimacy of the health services in general and hospitals in local communities in specific? Two aspects of the transition from public hospitals to health enterprises will be given specific attention:

The constitution of boards and enterprise direction.
It is now the central state and the boards of the health corporations, and not the counties and local politicians that have the last word when setting priorities. The patients’ associations have gained a more important role through the new user councils that have been established in some regions, apparently as a substitute for politically appointed advisory boards. There is currently a struggle to define the appropriate role of boards and the relationships between regional and local health enterprises. How do board members and directors balance their role as representatives of the state, their role as experts/professionals and how do they adjudicate between patient interests and local political priorities? Where do they search for role models, in private or public firms?

Purchaser-provider models. 
Several of the regional health care companies have decided to implement purchase-provider models, in order to take benefit of market mechanisms. One of the benefits associated with such models is that they are time-limited and based on an agreement between two or more partners. Secondly, it is believed that competition gives lower costs and more satisfied customers. Thirdly, it may enable concentration in the sense that purchasers and providers have different roles. The purchaser role is to decide on what-questions, while the provider’s focus on why-questions. The purchaser should thus concentrate on managing structural tasks, while provider responsibility relates to technical, mundane and daily matters.

The purchaser-provider models that are implemented will be studied from a contract theory perspective, an institutional perspective and a political perspective. The contract theory perspective helps us to understand whether agents behave according to the principals' needs. The institutional perspective helps us to understand what implementation of purchaser-provider models means for actors who belongs to different norm systems in the health care sector. Finally, the political perspective helps us to understand how purchaser-provider models affect the political system, the interests of the actors involved and how democratic values are changed as a consequence of an increased focus on the rights of citizens and patients. Sources will be documents, newspaper reports, interviews and participant observation of board meetings. Parallel to these two studies we will have smaller studies connected to the above by master students.


2. The strive for transparency: how the movements for patients’ rights and political control over health services play together and contradict each other

Stakeholders without insight and knowledge?
The hospital sector has been difficult to understand for many groups that may have an interest in it as taxpayers, patients, politicians or journalists. The freedom to choose hospital-act and, the new procedures for accounting and financing, as well as new procedures for evaluation and control seek to make new aspects of organizational life visible and problematic. March (1994) refers to the measurements that feed such reform movements as “magic numbers”, numbers that the organizations and its stakeholders are competing and negotiating to define. Such kinds of processes need to be better understood in order to arrive at credible hypotheses about the relationship between quality reforms, budgeting reforms, patient reforms and performance in the health sector. It is not our main aim to collect more data on quality, cost effectiveness etc., or to evaluate whether they measure what they claim to do, but rather to study those who collect, negotiate and use such numbers in their daily activities and estimate the effects of the dynamics involved. New kinds of actor-networks emerge and get empowered. They seek to make their own interpretations, negotiate and influence the “numbers-game”. Politicians and public administrators are also interested in manipulating or influencing the objects that have been constructed (waiting lists, treatment costs, the average hospital etc).

Stakeholders in demand for transparency
This process will be studied from three perspectives: a) a patient or consumer perspective where transparency is related to access to and quality of the services, b) a citizen or political participant perspective where transparency is considered a question of availability of the information needed by politicians in order to assure accountability and exercise political control, and c) an accounting perspective where transparency is related to possibility to control. In management accounting the idea is to make the enterprise transparent by introducing measurement systems. The accounting system shows “a picture” of the enterprise that is supposedly clear, objective and easy to categorize. This will work as decision support. Legal regulations will make the new enterprises more focused on economic information than the former hospitals.

Patients and those who claim to represent them have gained in strength due to a new law that gives the patient “the right to choose hospital”. It is assumed that hospitals may be encouraged to take the role of a competitor, and provide more information about themselves to the public in order to attract patients. This means that they will be more appreciative of the movement towards transparency and allow for media and patients to look into waiting lists and availability and quality of treatment. Patients must be informed and have more alternatives in order to act as customers. The professions, however, may have an interest in bringing the focus away from performance in each hospital and towards other levels of governance, in health enterprises (Norway) or function-bearing units (Denmark, Borum 2000,2002). Previous studies of professions and power assume that it is important for professions to control and often conceal information concerning the decisions they make within their field of expertise (Johnson 1972). Blomgren (1999), on the other hand, found that quality assurance programs were welcomed among Swedish nurses, because they made the nurses’ work more visible, and also more abstract. It is thus necessary to study how such reforms are received and transformed in various professional settings.

Political perspective: from political representation to user representation.
The citizen’s right to have a say in the priorities of healthcare is not a focused issue any more, instead there is an increasing interest in the issue of patient’s rights and a discourse centered on the patient as customer. The news media seek to increase their circulation by reporting on matters relating to priority conflicts, maltreatment and organizational problems. They increasingly take the role as advocate of patients, consumers and citizens. The expansion of the Internet and the access opened to alternative sources and kinds of expertise may also empower the patients and their advocates, as it now gets increasingly difficult for the experts and managers to control the information flow. The view that the patient as well-informed customer may take over the role of local politicians may be questioned, however. It is not only that actual and potential patients may be too poorly informed, due to the problems associated with access and filtering of information, but also whether the new role assigned to the patients' organizations is beneficial from a democratic point of view. Will only the large patient organizations and their advocates be heard, or is it also possible for the less well organized and less well represented to gain influence and argue for their opinion?

From an accounting point of view there may be a limit to how much information the patients should be able to get on their own, and what kind of alternatives should be available to them. Some kinds of information is of bad quality, it is maintained, and other kinds of information will open the avenue for patients to make choices that are not beneficial from a public health point of view. There is thus only a partly overlap among those who want to increase transparency in order to control costs and create legitimacy, and those who argue that the patients should be enabled to act as customers. In some cases politicians with an ambition to control cost, and professions, with an ambition to conceal their knowledge, may create coalitions in order to slow down the dynamics of the movement towards transparency. In other cases there may be a dynamic where all stakeholders feel compelled to jump on the transparency bandwagon, with the consequence that the whole system is overloaded with audits and transparency games (Llevelyn 2002).

This project will link up with a similar Swedish project, undertaken by Kerstin Sahlin-Andersson and her research team that will 1) map how widespread the use of audits of various kinds is in the Swedish hospital sector. 2) How audits are initiated and undertaken. 3) How audits are used in political governance and in management 4) Consequences for organizational and professional practices (enclosure 6). Although it will be our aim to collect comparable data where possible, we will concentrate on how audits are used and what consequences they have for organizational and professional practices. One question is how new systems for quality control and management lead to changes in organizational routines and what are the learning effects of struggles over whether such systems should be rejected, “adopted” or translated.


3: From tandem and troika management to unitary management

The Norwegian parliament has enacted a law requiring from all hospital departments that they implement unitary management structures from 2002. There has been a trend away from dual, collegial and representative management structures within other sectors as well. This represents a break with development patterns since the 1970s, since when there was a trend towards democratization and more collegial management structures (Sommervold 1997). More specifically, in the health sector there was a strong tendency towards the establishment of dual (Norway and Sweden) and troika management (Denmark). By the end of the nineties this trend had come to an end in all these countries (Østergren and Sahlin-Andersson 1998, NOU 1997:2, Bentsen 2001)

The intention of those who seek to establish autonomous health enterprises is to gain a stronger grip on management in relation to the structure of the health service, e.g. by means of the distribution of functions. The individual enterprises will be given greater responsibility and freedom, and great hopes are put in the hospital department managers. They are supposed to be able to create a better health care organization with higher cost-efficiency. When such a leadership role is established, then this is supposed to be an engine in itself that will create change inside the organizations. Not only is a productivity increase expected, but the management reform will also give rise to higher quality and a more innovative organization.

What are the preconditions that need to be in place for the department managers to act like the role assigned to them in policy documents? We want to contribute to a discussion about what is possible, what is reasonable, and what the department manager can do under present circumstances. This has to be based on an investigation into their experiences, and comparisons with similar managerial roles in other contexts, e.g. hospitals in other Scandinavian countries and other sectors. It is on this basis possible to paint a more realistic picture of what the clinic and departmental managers can do and how they may handle the many different and contradicting claims relating to their role as managers and decision-makers. How do they handle, balance, and coordinate between professional, administrative/economic and political principals (Østergren and Sahlin-Andersson 1998, Blomgren 1999)?

One level of comparison is the Scandinavian, since the implementation of such reforms are likely to be influenced by nation-specific contexts; professional configurations, ownership roles, level of political influence etc. There may also be a lot of local experimentation involved among those institutions that are now on the way to implement management reforms. One project will make a comparison between management reforms in the Norwegian social insurance offices and the specialized health services. A comparison with similar management roles and concepts in the US hospital sector may be useful. US management ideas, and professional recipes developed as responses to them, are continuously imported to European contexts (Byrkjeflot 1997, 1999). We will thus encourage studies with a focus on the international circulation of ideas relating to management (Sahlin-Andersson and Engwall forthc.) and more specifically how these are translated into various professions, expert groups in hospitals.

In our studies we will interview department managers and have them describe their own experiences. Secondly, we will observe managers in their daily work contexts, also in meetings, in order to get a better grasp of interprofessional dynamics, and problems with drawing boundaries between professional and managerial roles.



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[1] Even though this reform is often called a hospital reform, it also includes most county municipal specialist health services and we will thus refer to it as the enterprise reform, highlighting the importance of the introduction of the enterprise model into public health services.
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