Can a Public Health Care System Achieve Equity? The Norwegian Experience

Equity in health care provision is an important policy goal in Norway. This article addresses equality in the services provided by primary care physicians. These services are the responsibility of local government financed mainly through public funding. Patient fees are low. The local government system results in geographical variation in the number of physicians relative to local health demands. The authors present the hypothesis that this generates inequalities in health care utilization. The system of government finance is based on the assumption that utilization of health services is independent of patient income. Therefore, variation in income is expected to have only a small impact on utilization. The authors estimate a demand model by combining extensive micro data with aggregate data on municipal supply. There is very little relationship between indicators of access and health care utilization. The estimated income elasticities approximate zero, supporting the argument that equality in utilization has been achieved. However, the authors results also raise the question of whether equality has been achieved at the cost of limiting supply of services for people who could afford to consume more, or to pay for services of higher quality.