Labour demand until 2040 in the Norwegian Specialist Health Care sector

This report projects the labour demand (man years) until 2040 in the Norwegian Specialist Health Care sector required to meet given assumptions regarding demographic changes, health conditions within population groups and service standards. The specialist health sector includes General Hospitals, Rehabilitation, Mental Health Care, and Multidisciplinary Specialist Substance Abuse Treatment. The projections are carried out at both the national level, as well as for each of the 19 intake regions for the local health corporations. They are relevant when deciding the capacity of the future supply of health services, including both investments in hospitals, equipment etc., and relevant education. Both types of capacity expansion are time consuming, hardly reversible, and they are mainly a government responsibility in Norway. Moreover, updated projections of employment in the health sector are relevant in assessments of the fiscal sustainability of the Norwegian welfare state in the future decades.

Section 2 defines concepts and describes data sources that have been used in the projections, and Section 3 explains our methodology, which emphasises the strong age dependency of individual demand for health services. Thus, the key elements of our study are projections of the total population and its age compositions, as well as gender specific age profiles of the present user ratios (population shares of patients) and service standards (man years per patient). Section 4 explains how all available relevant micro data have been used to estimate these age profiles.

Sections 5 presents our base line projection, which combines the most realistic demographic projections with a prolongation of the age profiles of 2013 for patient shares and service standards. Here, the total number of man years in the specialist health care sector rises from about 111 000 in 2013 to 155 000 in 2040 (40,4 percent). The corresponding total population growth equals 25 percent. Accordingly, population ageing accounts for approximately 12 percent of the growth in health employment. This increase takes place smoothly at both the national and the regional level. The base line implies stronger relative growth in General Hospitals than in Mental Health Care. The strongest growth take place in the intake regions Ahus (54,4 percent), Stavanger (51), Oslo (46,7), Bergen (45,4) and Sørlandet (45). Regions facing the relatively slowest growth include Sogn og Fjordane (25,5), Telemark (27,1) Innland (27,6) and the intake regions of Helse Nord (23,7 – 29,1).

Section 7 examines how sensitive the projections are to partial changes in the demographic assumptions. We compare the base line with a scenario in which all assumptions are identical to the base line assumptions except for mortality rates. These are reduced, foremost among the elderly, so that the average expected life time increases by 1,4 years more than in the base line from 2013 until 2040. Compared with the base line in 2040, this implies a 2,6 percent increase in the total population and a 5,8 percent increase in the specialist health sector employment equals 5,8 percent. The deviation between these effects reflects increased survival of the elderly, which have relatively high patient shares.

We also compare the base line with a «High Immigration» scenario in which all assumptions are the same as in the base line, except for immigration which is higher i all years. In 2040, this deviation has generated a population which is 8,7 percent greater than in the base line, whereas the corresponding effect on the health employment is 5,8 percent. This is equal to the above mentioned effect of lower mortality among the elderly, although the population effect is substantially higher. The reason is that higher immigration increases the size of the relatively young cohorts, as long as we do not calculate effects beyond 2040.

We consider the assumption of constant service standards more as a convenient analytical bench mark than realistic. If the standards, in terms of man years per user of specialist health care services, grow by one percent each year from 2014 until 2040, the necessary number of man years will be 30,8 percent higher than in the base line in 2040. In our calculations, this result applies to all sub sectors and regions. Productivity growth affects the required number of man years in the same way as standard reductions.

Probably, parts of the increase in life expectancy assumed in our scenarios, are caused by a gradual change in favour of a more healthy life style on average. Such changes in life style are likely to contribute to lower demand for services provided by General Hospitals and Rehabilitation. However, we do not see good reasons why the same effect should apply to Mental Health Care and Substance Abuse Treatment. We have constructed a “Health Ageing” scenario in which the patient shares of individuals older than 55 years falls in time with the gradual increase in remaining life expectancy. In 2040, this shift implies solely that the necessary number of man years in the Specialist Health Care sector will be 5,3 percent lower than in the base line, but still 39 percent above the 2013-level, even in the case of no standard improvements.