Elsevier

Health Policy

Volume 59, Issue 2, January 2002, Pages 107-118
Health Policy

Organization and financing of the Danish health care system

https://doi.org/10.1016/S0168-8510(01)00201-9Get rights and content

Abstract

The present paper aims at giving a short overview of the organization and financing of the Danish health care system as of 1997–1998 when the SWOT panel evaluated the system. The overview follows the triangular model of a health care system. The Danish system is characterized by being decentralized and single-funded. The hospital sector is public, and hospitals are financed and run by the counties (with only a very small private hospital sector alongside). General practitioners are private entrepreneurs but work under contract for the counties. Hospitals are financed by global budgets, while general practitioners are paid by a mixed remuneration system of capitation fees and fee-for-service. During the past 20 years, the government has repeatedly imposed budget ceilings on the counties which has limited growth in the health care sector.

Introduction

The Danish health care system is overwhelmingly a public and decentralized system. The present organization dates back to the Local Government reform in 1970 when larger counties and municipalities were established to allow a framework for a comprehensive decentralization of health care and other public services [1]. The responsibility of financing and running hospitals lies with 15 administrative units (14 counties and one hospital authority in the metropolitan area, The Copenhagen Hospital Cooperation), who are also responsible for the planning and financing of medical services outside hospitals through the Health Care Reimbursement Scheme, which replaced the former Sick Funds in 1973.

Health care providers outside hospitals are self-employed, but payment for their services follow a contract between the Association of Counties and the unions of the various professional groups within the medical profession.

The 275 municipalities take care of the elderly through home help and nursing homes, and are responsible for school dental care, home nursing and a number of preventive services such as those provided by health visitors.

There is a relatively clear division of tasks among the three administrative levels. However, optimal performance requires close cooperation between the administrative levels.

Section snippets

The third party

The legal regulation of the Danish health care system is performed through the Danish Parliament. The Ministry of Health is a centralized authority, under which The National Board of Health belongs.

The tasks of the centralized authority among others, are to formulate goals for health care policy, to set general legal frameworks for the provision of health care, to exert influence on the system and services through various means, such as agreements, advice and information, and control and

Citizens and third party

Every resident in Denmark must choose between two health plans, which involve either a Group 1 or 2 membership of the Health Care Reimbursement Scheme. Group 1 members (98% of the population) have, free access to their general practitioner (GP) and—after referral—to specialist care either in a hospital or from private specialists outside hospitals. They may, however, see an ear-nose- and throat (ENT) specialist or an ophthalmologist without referral. Group 2 members are allowed free choice of

Third party and providers

As the counties both own, finance and run the hospitals, the system is vertically integrated. In addition, there exist three private hospitals and a number of smaller ones. A few for-profit hospitals were established during the last decade, some of which were closed again. There are also some not-for-profit institutions, owned by patient organizations. Counties run hospitals through global budgets and employ personnel on a salaried basis. During the nineties, some counties have supplemented the

The providers

As of 1997, Denmark had 86 hospitals; 13 of these were psychiatric hospitals and 14 were highly specialized, tertiary referral centers. Each county has at least one central hospital plus smaller district hospitals. The number of hospitals is not very informative, however, as a hospital as an administrative and organizational unit may include two or more geographically separated units.

With a few exceptions, hospitals are owned by the counties or the aforementioned Copenhagen Hospital

Patients and providers

Persons with a permanent residence in Denmark are automatically covered by the services of the health care system (personal health care, cash benefits). Each citizen who is a Group 1 member of the Health Care Reimbursement Scheme is listed with a primary care doctor who acts as their GP, and most of the Group 2 members also have the same primary care provider. The GP has the primary responsibility for diagnosing and treating the listed patients, and a patient is only referred to a specialist

The citizens/patients

General outcome measures of health care are difficult to obtain and studies of the marginal effect of health care expenditure appear inconclusive, although it is often believed that the marginal effect of health care on health is modest, compared with-education, life style and environment.

The mean length of life in Denmark in 1996 was 72.8 years for men and 78.0 years for women[14]. Compared with 16 other industrialized OECD countries, the figure for Danish women was the lowest, while for men

Statistical description

The Danish population numbered 5.3 million in 1998. Health care costs (including construction costs, but excluding costs of running nursing homes) amounted to 76.2 billion DKK in 19981 (see Table 1). The health share of the Gross Domestic Product (GDP) has been relatively stable over the last two decades, declining from about 6.9% in 1980 to 6.5% in 1998 [18], compiled from

Acknowledgements

The study is financed by the Rockwool Foundation.

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