1. The Danish Structural Reform Morten Rand Jensen Executive Vice President in the Capital Region

2. Denmark before the structural reform in 2006 14 counties with a broad portfolio of tasks operation of the health care system and especially the hospitals was the biggest task but also tasks such as physical planning, environmental protection, public transport and operation of specialized social institutions and colleges 271 municipalities also with a broad task portfolio schools, kindergartens, elderly care, physical planning and roads Metropolitan municipalities Copenhagen and Frederiksberg have both the municipal and county tasks Hospitals in the metropolitan area, however, are operated by the public company Copenhagen Hospital Corporation

3. Denmark before the structural reform in 2006 Both counties and municipalities were led by democratically elected councils Both counties and municipalities could levy taxes

4. Background to the desire for structural reform The Commission of Administrative Structure (2004): “A major part of the current administrative units are too small considering the performance required by the legislature today In a number of areas it is difficult to ensure a consistent and coordinated effort. The problem is mainly based on the fact that responsibility for some tasks has been divided between several decentralised administrative units. The result is a risk of "grey zones“ In some areas there are problems due to parallel tasks in several administrative units. This makes it more difficult for the administrative units to coordinate and prioritise task performance and to improve efficiency and quality The Commission recommends a total reform of the public sector, including a change in boundaries and transfer of tasks between the state, counties and municipalities.”

5. Denmark after the structural reform The 14 counties become 5 regions with a smaller portfolio of tasks health, especially the operation of hospitals and contracts with private practitioners (90% of the budget) regional development, including public transport and soil pollution operation of specialized social institutions as a supplier. Responsibility for the social area in the municipalities Each region is headed by an elected regional council with 41 members Regions can, in contrast to the former counties not collect taxes

6. Allocation of budgets in Danish regions in 2015 There are three distinct economies. The Regional Council must not move money between these separate economies: Health: 14.5 billion euros 80% block grants from the state 2% activity-based funding from the state 18% activity-based funding from the municipalities regional development: 0.4 billion euros block grant of 76% from the state block grant 14% from municipalities specialized social institutions: 0.3 billion euros payment from the municipalities for their clients covers all expenses

7. Municipalities From 271 to 98 municipalities after the reform Capital Municipalities equated with other municipalities Many tasks from the old counties transferred to the new municipalities (other transferred to the State) Municipalities can continue to collect taxes

8. Responsibilities of the Municipalities since 2007 Social services: Total responsibility for financing, supply and authority Child care Primary school, including any special education and special pedagogical assistance for small children Special education for adults Care for the elderly Health care: Preventive treatment, care and rehabilitation that do not take place during hospitalisation, treatment of alcohol and drug abuse, home care, local dental care, special dental care and social psychiatry Activation and employment projects for the unemployed without insurance in job centres run jointly with the state Integration and language education for immigrants

9. Responsibilities of the Municipalities since 2007 Citizen service regarding taxation and collection in cooperation with state tax centres Supplies and emergency preparedness Nature, environment and planning: E.g. specific authority and citizen related tasks, preparation of local plans and plans regarding waste water, waste and water supply Local business service and promotion of tourism Participation in regional transport companies. The local road network Libraries, schools of music, local sports facilities and cultural activities

10. Responsibilities of the Regions since 2007 Health service, including hospitals, psychiatry and health insurance as well as general practitioners and specialists Regional development, i.e. nature, environment, business, tourism, employment, education and culture as well as development in the fringe areas of the regions and in the rural districts secretarial service for the regional growth fora establishment of transport companies throughout Denmark soil pollution raw material mapping and planning Operation of a number of institutions for exposed groups and with special needs for social services and special education

11. Responsibilities of the State since 2007 Police, defence, legal system Foreign services General planning within the healthcare sector Education and research except primary school and special education Activation of the unemployed with insurance in joint job centres with the municipalities, unemployment insurance, working environment and overall employment policy Taxation and collection of debt to the public authorities The general road network and the state railway

12. The five Regions RegionPopulation (millions) Nordjylland (North Jutland)0,6 Midtjylland (Central Jutland)1,3 Syddanmark (Southern Denmark)1,2 Sjælland (Zealand)0,8 Hovedstaden (Capital)1,7. Political and administrative headquarters decided by Parliament

13. Political and administrative leadership of the fusion project June 2004: Agreement between the government (the Liberal Party and the Conservative Party) and the Danish People's Party about the structural reform Submission of the 50 bills of the reform to parliament and final vote during the spring of 2005 Selection of the 41 future members of each regional council in November 2005. The counties will continue in 2006, but the newly elected regional members will be in 2006 a Preparatory Committee to plan the merger to the new region The upcoming regional councils elect the President and elect from among its members an Executive Committee of 11-19 members The CEO and executives are hired in the spring of 2006. A small administration with managers and staff from the old units will be transferred to serve the preparation committees Political and administrative cooperation between the new and the old units on the transfer of tasks, personnel, property, etc.

14. The process of transfer of staff from the previous units The political agreement said that employees follow the task The purpose is not dismissals but new distribution of tasks National agreement between public employers and employees’ organisations for the period 2005-6 establishes the conditions in more detail Employees transferred without loss of pay, even if they get a job below their former level Leaders below the level of CEO and executives are appointed among those transferred through a transparent process with application and selection on the recommendation of an appointments committee

15. Central administrative staff transferred to the Capital Region Transferred from:Number of FTEs Copenhagen County227 Frederiksborg County126 Copenhagen Hospital Corporation110 Municipality of Copenhagen34 Municipality of Frederiksberg11 The Metropolitan Regional Council12 Municipality and Region of Bornholm17 Total537 Merger gains-105 New central administration in the Capital Region432 Hiring freeze in the previous units from the beginning of 2006 Less than 10 FTEs too much by the region's start in 2007 Found room for them in hospitals, etc..,so no one was laid off Some leaders were placed in lower positions such Senior Consultant Wages were not immediately harmonized, but at the annual individual salary negotiations the following years the wage structure influenced the results

16. Costs and benefits of the merger There can be no single answer to what the benefits and costs have been Of course there have been costs of relocation, new signs, dual administration in the transition year 2006, etc. Conversely, there has been a significant administrative rationalization as a result of the reform. Alone in the Capital Region, we reduced the central administration with over 100 employees on the merger, and since there is further rationalized We have also rationalized by centralizing procurement, IT etc. The biggest gains have been achieved in the hospitals where we know collection of treatments at fewer hospitals and other rationalization has achieved a productivity growth of 2.6% annually

17. Organisation and employees in the Capital Region UnitNumber of employees Management and Secretariat40 Center for Economy203 Center for HR506 Center for IT, Medico and Telephony794 Center for Communications55 Center for Regional Development181 Centre for Health416 Hospitals and Other Institutions32.865 Total35.060 Centers have administrative and cross-cutting service functions

18. Most administrative staff gathered in the political and administrative headquarters in Hilleroed Centers having specific cross-cutting service functions such as HR and IT are at other addresses Organisation and employees in the Capital Region

19. Cooperation between the State and the regions There is a long tradition of close cooperation between the state, counties (and now the regions) and municipalities The collaboration is particularly true of regional and local economy, where every year are made agreements on how much money the regions and municipalities may use In recent years it has also emphasized how much service regions and municipalities must deliver for the money A new budget law adopted a few years ago has introduced financial penalty if regions and municipalities spend more money than agreed

20. Future of the Danish regions Denmark is a small country Therefore, there has long been debate about whether the regions should exist or be disbanded We had hardly regions in Denmark today if it was not because the operation of hospitals is a regional task that is difficult to place elsewhere. The two organizations representing the decentral political level, Local Government Denmark and Danish Regions, has been in close dialogue to merge to be stronger against the State But opposition from the smaller municipalities has meant that the merger plans are abandoned.

21. The current center-left government will preserve the regions Danish People's Party and the Conservative Party will discontinue regions The Liberal Party, which is the main opposition party, has not announced a clear position The issue may be relevant for the upcoming election this year Future of the Danish regions

22. Other ways to organize hospitals The state operates hospitals as part of the Ministry of Health The state operates hospitals, but through professional boards Hospitals operated as local communities Hospitals operated as private institutions with state or local authorities as "buyer" of healthcare