Background and goal of the investigation

The buildings owned by Norway’s health trusts and regional health authorities were valued at a total of NOK 60 billion as of 31 December 2009. The health trusts and regional health authorities have invested more than NOK 40 billion in their buildings during the period 2003 to 2009. Twenty per cent of the buildings were built after the year 2000.

The health trusts and regional health authorities are responsible for systematic periodic maintenance of existing buildings, for the renovation of buildings and for building new ones. In order to ensure rational, cost-efficient and expedient property management, it is important that the health trusts and regional health authorities have relevant information about their buildings and plans for the maintenance and development of the buildings, and that the quality of their decision-making process in connection with investment projects is adequate.

The purpose of this investigation was to assess whether the properties of the specialist health service are managed and developed in an efficient manner and in accordance with the overriding guidelines.

Method

The investigation is based on a questionnaire survey of the health trusts and regional health authorities, document analysis of governing, planning and decision documents, and interviews.

Results

The book value of the buildings has increased by ten per cent during the period 2003 to 2009. The main reason for this increase is the new buildings that have been built during this period. About half of the buildings show signs of being in a poor condition, and three of four health regions believe that there has been a negative development during the period 2003 to 2010. Maintenance that preserves the value of the buildings has been given low priority. Only half of the health trusts and regional health authorities have long-term plans for the management of their buildings.

Alternative development solutions are not examined to any great extent in early-phase planning of investments in hospital buildings.

In several of the projects, there are serious weaknesses in the business economics analyses on which the preferred investment alternatives are based. In seven of the nine projects examined, considerable savings on personnel have been included in the calculations. It is often assumed that most of the savings on operating expenses will be realised once the building is completed, and that savings will increase during the first years of operation. The health trusts and regional health authorities have failed to substantiate such assumption to any great extent. Several of the concept reports state that the savings on operating expenses will involve organisational challenges and restructuring for employees. No increased costs resulting from this are included in the calculations, for example relating to the development of lines of treatment and competence-raising. In their respective concept reports, none of the health trusts and regional health authorities has included increased ICT costs resulting from the new building compared with the current level. The two largest projects have been planned without including bed capacity for patients who are ready to be discharged. In their calculations, the same projects have also included increased income resulting from an increase in patient treatment, and after a few years of operations, this increased income is expected to cover about half the improvement in financial performance that is to pay for the building's additional annual costs.

Investments in hospital buildings are often based on an assumption of rationalisation and savings on operating expenses. On the basis of completed investment projects that have failed to realise planned gains, the Office of the Auditor General questions the realism of the health trusts and regional health authorities’ planning. It also questions whether sufficient consideration is given to challenges relating to restructuring and the changes on which the realisation of gains is based.