Government's joint opinion
The regional government, health and social services reform is for all of Finland

Ministry of FinanceMinistry of Social Affairs and Health 11.5.2018 10.01
Press release

The aim of the regional government, health and social services reform is to guarantee equal services and reduce inequality throughout the country, reminds the ministerial working group on reforms in its joint opinion.

The existing system will not safeguard the future

Finland’s population is ageing, and, in the future, increasingly fewer people will fund the services of the welfare state. Finland is facing the fact that the increase in the cost of public services has to be mitigated. It is irresponsible to present public opinions on health and social services needing to continue with the current municipality-based organisation model that has not been able to resolve these challenges.

Mitigating the costs of social and health service expenditure is part of the Government’s aim of reducing the sustainability gap by EUR 10 billion. Without reforming health and social services, the income of the public economy will not be sufficient for statutory services in the future. Mitigating expenditure is not about impairing services but deploying the best and most efficient operating methods throughout the country. 

According to the National Institute for Health and Welfare, there are significant differences in the availability and range of health and social services in different municipalities. The services provided by health centres vary both between and within municipalities. The chronically ill, pensioners and families with children queue at health centres. The growth in private health insurance policies is an indication of people’s reduced faith in the system. (Appendix 1)

Many counties have gone a long way in reforming health and social services. The reform allows municipalities and cities to focus on the tasks which cities typically focus on in other countries. Municipalities are responsible for health services in few OECD countries. 

The funding for counties would be provided by the state. This means the state would have more responsibility for the availability of necessary basic services. The counties would receive funding based on their special characteristics and the needs of the region’s residents. The state would limit the increase in expenses in order to be able to reach the economic objectives of the reform. However, funding would not be limited at the cost of basic rights.

The reform is advancing in phases and partly through experiments. All 18 counties have applied for freedom of choice pilots. The pilots will commence from 1 July 2018, i.e. once Parliament has passed the Freedom of Choice Act.

International assessments consider the reform unavoidable

Finland has been provided with several international recommendations on the health and social services reform. The EU, IMF and OECD recommendations consider the health and social services reform to be a significant factor in safeguarding the long-term sustainability of the public sector economy. The EU Council’s country-specific recommendation includes a direct recommendation for accepting and implementing the health, social services and regional government reform. According to the IMF, the health and social services reform is crucial in resolving the pressure on expenditure caused by the ageing population. In its reports, the OECD has prompted Finland to prepare for the national economy’s expenditure caused by the ageing population, inequality in the availability of services and to centralise urgent and emergency specialised healthcare. (Appendices 2–4)

The advance assessment by the WHO’s expert group in AUTUMN 2016 paid attention to the many favourable aspects of the health and social services reform, in particular the centralising of the responsibility for organising and funding services with counties. It was recommended to advance in phases and through pilot experiments in implementing the freedom of choice. (Appendix 5)

Several governance models have been rejected

The previous term of the government included drawing up a government proposal to Parliament, according to which health and social services would have been organised on the basis of five joint municipal authorities and 19 joint provider municipal authorities. At that time in 2014, the Constitutional Law Committee stated that the proposed joint municipal authority model involved significant problems from the point of view of democracy. Moreover, the joint municipal authority model would have, due to other impacts on municipal economy during the same parliamentary term, caused unreasonably high economic risks to many municipalities. (Appendix 7)

Freedom of choice for all demographic groups

In the freedom of choice model proposed by the Government, the residents of the counties could more extensively choose their provider of health or social services. This would provide the residents with faster access to the health and social services centre and other services, reducing queues.

The services would be compiled around the client, regardless of the organisation

The reform would significantly increase the freedom of choice in social services. Elderly and disabled people would have considerably more autonomy over their services.

As a result of freedom of choice, the share of private social services is estimated to increase from the current level of 32 per cent to 39 per cent (an increase of EUR 500 million). The share of private health services is estimated to increase from the current level of 6 per cent to 13 per cent by by 2024 (an increase of EUR 800 million). (Appendix 8)

The freedom of choice model proposed by the Government is based on international and domestic expert surveys, assessments and statements. The recommendations of the working group led by Professor Brommels in 2016 have played a significant role: freedom of choice should be realised so that the client would sign up with the public or private health and social services centre of their choice. In addition, the client could choose from other services included within the scope of freedom of choice. The state funding to counties should primarily be based on a fixed reimbursement based on the size and needs of the population. (Appendix 9)

Extensive use of digital services is required

The reform facilitates better digital services to clients, making the use of services more flexible and day-to-day life smoother. The client’s information has to move in timely and secure fashion between different experts and locations. Information systems are thus built to be functional and user-friendly. In the initial phase, the digitalisation of operations requires investments, but it will generate savings over the longer term.

Surveys and recommendations:

  1. NIHW: Valinnanvapaus sosiaali- ja terveydenhuollossa - kriittiset askeleet toteuttamisessa (Freedom of choice in health and social services – critical steps in implementation)
  2. Council Recommendation of 11 July 2017 on the 2017 National Reform Programme of Finland and delivering a Council opinion on the 2017 Stability Programme of Finland 
  3. Conclusions of the IMF’s annual Article IV consultation 
  4. OECD’s reviews of Finland: The OECD’s 2012 review of Finland included an extensive assessment of Finland’s health care system and a recommendation to reform the structure of health services to achieve benefits of scale and a better balance between primary and specialised healthcare. 2012 review of Finland. In its subsequent reviews, the OECD has monitored the implementation of the recommendation. The 2016 survey additionally emphasises the fact that the success of the health and social services reform is important from the point of view of the sustainability of the public sector economy and long-term development of well-being. 2016 review of Finland 
  5. International expert panel pre-review of health and social care reform in Finland (WHO)
  6. NIHW: Sote viidelle alueelle - vaikutusten ennakkoarviointi (2014) (Health and social services to be organised in five regions – preliminary assessment of impacts) 
  7. The Constitutional Law Committee’s opinion of different organisation models 75/2014
  8. Summary of the impact assessment of the Freedom of Choice Act, 8 March 2018 
  9. Valinnanvapaus ja monikanavarahoituksen yksinkertaistaminen sosiaali- ja terveydenhuollossa : Selvityshenkilöryhmän loppuraportti (Freedom of choice and simplification of multi-channel funding in health and social services: final report of the expert group), Brommels, Mats; Aronkytö, Timo; Kananoja, Aulikki; Lillrank, Paul; Reijula, Kari (2016-05-31) 
  10. Other surveys and impact assessments

Inquiries:

Päivi Nerg, project manager for the regional government, health and social services reform, tel. +358 295 530 149, paivi.nerg(at)vm.fi