Controversial health sector reform proposed

On 18 January 2000, the Norwegian Minister of Health presented a government proposal for a wide-scale reform of the public health sector. The proposed reform is controversial in industrial relations terms because it includes a decentralisation of employer's responsibilities to individual hospitals.

On 18 January 2000, the Minister of Health, Tore Tønne, presented a government proposal for a public health sector reform. The reform involves a transfer of the ownership of all public hospitals from the county authorities to the state, and a complete financial and organisational restructuring of the national public hospital structure. This is being undertaken in order to create a more uniform ownership structure and a better demarcation of areas of responsibility within the health sector. The reform is seen as a necessary precondition for achieving the health policy objectives set by the government in order to improve the health service, in relation to both accessibility and quality of service for the whole population. The reform also involves a decentralisation of employer's responsibilities.

Industrial relations consequences

The reform proposal stresses that the transfer of ownership will not in itself lead to significantly altered employment and working conditions for the employees concerned, because the rights and duties of the previous employer vis-à-vis the employees will be transferred to the new employer. At present, a large majority of hospital employees are covered by municipal sector collective agreements, and only a small minority by state sector agreements. However, although the state will take over as owner, employer's responsibilities will be vested in main "regional enterprises", and with the individual hospitals and health institutions. As such, the employees presently working in the state-owned hospitals will no longer be covered by the Act relating to civil servants and the Act relating to public service disputes.

The new Act relating to health enterprises proposed by the government will include provisions that require the various enterprises to be organised by the same employers' organisation, and stipulates that their articles of association will determine which organisation this will be. The Act will also explicitly state that such an affiliation will be outside the state sector bargaining area. As such. the employee side will not be subject to the Basic Agreement and collective agreements in the state sector. The Act will also provide for employee representation both on the boards of the regional main enterprises as well as on the boards of their sub-enterprises (hospitals).

Finally, the proposal states that the reform raises a number of issues with regard to employment and working conditions, which need to be subjected to further deliberation and as such must be settled at a later date in cooperation with the social partners.

The views of the social partners

The is a general consensus among the Norwegian social partners about the need for a more uniform ownership structure with demarcated areas of responsibility in the national health sector, and as such they welcome a state takeover of public hospitals.

However, on the issue of transferring financial decision-making powers and employer's responsibilities to judicially independent enterprises there is little consensus among the social partners. The Norwegian Confederation of Business and Industry (Næringslivets Hovedorganisasjon, NHO) has, in an earlier document, expressed a wish to see individual hospitals made into independent public limited companies. Furthermore, the administrative director of the Confederation of Norwegian Commercial and Service Enterprises (Handels- og Servicenæringens Hovedorganisasjon, HSH), Anne-Grete Ellingsen, argued in a recent interview in the Aftenposten newspaper that the issue of employers' organisation affiliation for hospitals should be subject to competitive tendering among employers' associations. HSH organises several private hospitals and health institutions.

In its response to the government's, proposal the Norwegian Union of Registered Nurses (Norsk Sykepleierforbund, NSF) rejects the idea of making individual hospitals into judicially and financially independent entities. NSF envisages a model very much based on the present system, in which hospitals remain part of public administration, but with ownership responsibility vested only in the state. An important prerequisite for accepting a state takeover among trade unions in general is that the state maintains employer's responsibility, and that state sector collective agreements and Basic Agreement are thus made applicable to all employees in the new hospital enterprises. There are also concerns about pay and working conditions for the minority of employees currently working in the state-owned hospitals. Employees in hospitals owned by the state will lose their rights and prerogatives according to the Act relating to civil servants as well as the Basic Agreement, such as advantageous wage compensation in the event of dismissal, or priority for new posts within the state sector.

Furthermore, many organisations, especially on the employee side, are worried about the proposed speed with which the process is the be implemented, and argue that such a large-scale reform requires caution and time in the deliberation process as well as during its implementation. Finally, a concern for the unions is the fact that the wage level in the state sector is slightly higher than in the counties.

Commentary

The proposed reform raises a number of issues, not least with regards to the relationship between the state, the counties and the municipalities. No doubt such a transfer of ownership will have a bearing on the future role of the counties, since a large proportion of county finances are poured into public hospitals.

The reform also raises a number of questions and concerns relevant to industrial relations. The most controversial issue is the status of hospitals in the future national health system, and the issue of employers' organisation affiliation. Most union organisations are reluctant to see any decentralisation of responsibility, which will allow individual hospitals and health institutions more responsibility and decision-making powers, especially in relation to their employer's responsibilities. In the event of a transfer of employer's responsibilities, the employees in the state sector will not accept losing the rights and prerogatives that they enjoy according to the Act relating to civil servants as well as in collective agreements. Furthermore, wage level reductions will not be accepted, and the application of state sector wage levels to all employees affected by the reform will be immensely costly. Thus, it will not be easy for the government to find a solution that will satisfy most of the employees concerned, as well as keeping its promise that the reform will not mean any extra costs to the taxpayers of Norway.

Finally, there will also be significant competition between the various employers' organisations over recruiting the hospitals. The two most relevant organisations in this regard are HSH and the Employer Association for Semi-autonomous Enterprises (NAVO). However, NHO also organises health institutions, although on a lesser scale. An alternative may be to create a new employers' association for the hospitals and health institutions concerned. (Håvard Lismoen, FAFO Institute for Applied Social Science)

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