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The Impact of Financial Incentives on the Composition of Long-term Care in Norway

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  • Henning Øien
  • Martin Karlsson
  • Tor Iversen

Abstract

In Norway, municipalities have economic incentives for choosing residential care in nursing homes for high-income clients and home-based care for low-income clients. Using a three-year panel, 2007-2009, on 427 municipalities we provide an analysis of the effect of the Norwegian long-term care (LTC) financing system on the composition of LTC services at the municipality level. Our main result is that the composition of service is determined by local government revenue and local need for LTC services. We cannot identify an effect of average income among older people in a municipality regarding the balance between home-based care and nursing home care. Hence, the results do not provide evidence of a service distortion.

Suggested Citation

  • Henning Øien & Martin Karlsson & Tor Iversen, 2012. "The Impact of Financial Incentives on the Composition of Long-term Care in Norway," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 34(2), pages 258-274.
    • Handle: RePEc:oup:apecpp:v:34:y:2012:i:2:p:258-274.
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    File URL: http://hdl.handle.net/10.1093/aepp/pps021
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    Cited by:

    1. Norman Bannenberg & Oddvar Førland & Tor Iversen & Martin Karlsson & Henning Øien, 2021. "Preventive Home Visits," American Journal of Health Economics, University of Chicago Press, vol. 7(4), pages 457-496.
    2. Øystein Hernæs & Snorre Kverndokk & Simen Markussen & Henning Øien, 2023. "When Health Trumps Money: Economic Incentives and Health Equity in the Provision of Nursing Homes," CESifo Working Paper Series 10359, CESifo.
    3. Øien Henning, 2013. "Do Local Governments Respond to (Perverse) Financial Incentives in Long-Term Care Funding Schemes?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 14(2), pages 525-549, August.
    4. Jakobsson, Niklas & Kotsadam, Andreas & Syse, Astri & Øien, Henning, 2016. "Gender bias in public long-term care? A survey experiment among care managers," Journal of Economic Behavior & Organization, Elsevier, vol. 131(PB), pages 126-138.

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