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Background: Global budgeting was partially replaced by activity-based funding in 1999 in order to improve productivity and reduce waiting lists. The aim of this study is to estimate otolaryngologic surgery rates after the introduction of Diagnosis Related Groups funding., Material and Method: National data on outpatient and inpatient otolaryngologic surgical procedures over the period 1999 to 2002 were provided by the Norwegian Patient Register; an estimate was made of the proportion undergoing uvuloplasty for sleep apnea or snoring., Results: From 1999 to 2002, there was an overall increase in otolaryngologic procedures of 12%. Inter-procedural variation ranged from a 110% increase in uvuloplasties to a 12 % decrease in tonsillectomies. There was a particular increase in procedures requiring neither general anaesthesia nor a highly specialised surgeon. In spite of the increased rates of uvuloplasty, the proportion of patients selected for surgery remained unchanged., Interpretation: The substantial increase in certain procedures may give rise to several interpretations: better medical technology, reallocation of surgical resources to disorders that had been inadequately covered, or a shift towards procedures for which marginal costs do not exceed treatment costs.