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Government proposal for health and social services reform and related legislation adopted by Parliament

Ministry of FinanceMinistry of Social Affairs and HealthMinistry of the Interior
23.6.2021 14.13 | Published in English on 24.6.2021 at 13.26
Press release 182/2021

The Government proposal for legislation on establishing wellbeing services counties and reforming the organisation of healthcare, social welfare and rescue services was adopted by Parliament on 23 June 2021. The proposed wellbeing services counties will be established as soon as possible after the passing and approval of the relevant acts. The acts will enter into force in stages, the first ones on 1 July 2021 and the last ones on 1 January 2023. The Government submitted its proposal to Parliament on 8 December 2020.

The responsibility for health, social and rescue services duties will rest with 22 organisers. 

Altogether 21 wellbeing services counties will be established in Finland and entrusted with the health, social and rescue services duties that are currently the responsibility of municipalities and joint municipal authorities. Four wellbeing services counties will be established in the Region of Uusimaa, based on the special arrangements made for Uusimaa. The City of Helsinki will still be responsible for organising healthcare, social welfare and rescue services. In addition, the joint county authority for the Hospital District of Helsinki and Uusimaa will be responsible for organising specialised healthcare in Uusimaa. The responsibility for organising healthcare will be divided between the wellbeing services counties in the Region of Uusimaa, the City of Helsinki and the joint county authority for the Hospital District of Helsinki and Uusimaa as separately laid down by law and in an agreement on the organisation of services.

The operation of hospital districts and special care districts will be transferred to the wellbeing services counties. Similarly, the responsibility for organising the services of social workers and psychologists in student welfare will be transferred to the wellbeing services counties. The wellbeing services counties and the municipalities will both be responsible for promoting health and wellbeing. The municipalities will retain the responsibility for the organisation of environmental healthcare. However, subject to certain conditions, municipalities and wellbeing services counties can agree to organise environmental healthcare duties as part of healthcare and social welfare services.

The Act on Organising Healthcare and Social Welfare Services will lay down provisions on the responsibility for organising healthcare and social welfare, the promotion of health and wellbeing, the securing of locally accessible services and linguistic rights, and the guidance, direction and supervision of wellbeing services counties. 

Organisation of rescue services

In the wellbeing services counties, rescue services will be a separate sector working in parallel with the healthcare and social welfare sector. Rescue services will be organised by the wellbeing services counties and the City of Helsinki in addition to their responsibility for organising health and social services in their areas. As a result of the reform, the role of central government guidance and direction in rescue services will be strengthened. The Ministry of the Interior will continue to guide and supervise the rescue services and their availability. The aim of the stronger national guidance and direction is to provide more harmonised and thereby more equal rescue services across the country. The aim is also to develop the operations of rescue services as a national system. Provisions on the responsibility for organising rescue services are laid down in the Act on Organising Rescue Services. Rescue departments can continue to provide prehospital emergency medical services for healthcare. Currently, the rescue departments carry out approximately 500,000 urgent prehospital emergency medical care duties every year. 

The Ministry of the Interior will issue a separate press release on the organisation of rescue services.

Implementation

The implementation of the reform will start once the relevant acts have entered into force. A key aim of the implementation process is to ensure that, from the standpoint of clients and personnel, all key functions and services of the future wellbeing services counties work as smoothly as possible when the reform enters into force on 1 January 2023.

Temporary body

The municipalities, local government co-management areas, hospital districts, special care districts and regional rescue services in each wellbeing services county will together decide the composition of an interim preparatory body and the appointing authority. The work of the interim preparatory bodies will be funded by the central government and their duties will be laid down by an act.

Each interim preparatory body will lead the preparations for launching the activities and administration of its wellbeing services county and exercise the right of action associated with its duties until the start of the county council’s term of office. The interim preparatory bodies will prepare matters for their county councils, and they can enter into agreements and recruit personnel on a temporary basis until 31 December 2023.

Each interim preparatory body must be appointed as agreed as soon as possible, but no later than two months after the entry into force of the act. Each member of the interim preparatory bodies must be in a public-service employment relationship with one of the relevant parties. The Government will appoint the interim preparatory bodies that have not been appointed by the relevant parties by the due date.

County council

A county council, elected by direct popular vote, will be the highest decision-making body of each wellbeing services county. The first county elections will be held on 23 January 2022. The activities of each wellbeing services county will be managed in accordance with the strategy for the wellbeing services county approved by the relevant county council, which will also decide on the organisational structure of the county.

Central government guidance and direction

The Government will confirm the strategic objectives of healthcare, social welfare and rescue services every four years. The wellbeing services counties must take the objectives into account in their own activities and when preparing agreements on the organisation of collaborative areas for healthcare and social welfare.  

An advisory board for healthcare and social welfare will be established under the Ministry of Social Affairs and Health. The Government will appoint the board for a term of four years. Its task will be to monitor and assess the fulfilment of health and social services duties and support the national guidance and direction of healthcare and social welfare. An advisory board for rescue services will be established under the Ministry of the Interior. The Government will appoint the board for a term of four years. Its tasks will be to monitor and assess the fulfilment of rescue services duties and support the national guidance and direction of rescue services. An advisory board on county finances and administration will be established for a four-year term under the Ministry of Finance.

The Ministry of Social Affairs and Health, the Ministry of the Interior and the Ministry of Finance will hold annual negotiations with each wellbeing services county. The aim of these negotiations will be to monitor, assess, guide and direct the organisation of healthcare, social welfare and rescue services in the counties at the strategic level. Each county will draw up an annual investment plan, and the Ministry of Social Affairs and Health and the Ministry of the Interior will decide whether to approve it. An approved investment plan will be a requirement for new investments and asset transfers in the county. 

Funding of wellbeing services counties and municipalities

The activities of the wellbeing services counties will be funded mainly by central government and partly from client fees to be collected from the users of services. Provisions on funding will be laid in the Act on Funding of Wellbeing Services Counties. The funding of wellbeing services counties will be universal. It will be divided among the counties based on imputed factors related to service needs and circumstances, covering healthcare and social welfare and rescue services. Some of the funding will be based on population numbers and some will be determined by the criteria for health and wellbeing performance. The funding of rescue services will also be determined on the basis of a risk coefficient.

The imputed funding for healthcare and social welfare will be based on the service need coefficients that describe the need for healthcare, social welfare and services for older people. In calculating these coefficients, account will be taken of the information on the age and gender structure, morbidity and socio-economic factors of the population and their use of services as well as the costs arising from the use of services. The health and social services need coefficients and the coefficient for services for older people will be determined annually for each wellbeing services county. They will describe the service needs of residents in the county in relation to other counties.

Transferring the responsibility for funding from municipalities to the central government will mean that the central government revenue will need to be increased and, at the same time, the revenue of municipalities will need to be reduced to correspond to the responsibility for funding transferred from them. To ensure the total tax ratio will not grow, all municipalities will be obliged to reduce local income tax. Municipal income tax percentages will be lowered by 12.39 percentage points for all municipalities when the relevant acts enter into force. Moreover, the municipalities’ share of corporation tax revenue will be reduced, while the central government’s share will be raised correspondingly. The changes in taxation will be as neutral as possible from the standpoint of taxpayers. The changes to the tax structure will not result in tax increases when the relevant acts enter into force. 

Personnel transfers

All healthcare and social welfare personnel and their tasks will be transferred from municipalities and joint municipal authorities to the employment of the wellbeing services counties. School social workers and school psychologists working in the education sector in municipalities will also be transferred to the employment of the counties. Personnel will be transferred from joint municipal support services to the employment of the wellbeing services counties if at least half of their present duties were devoted to municipal health, social or rescue services. 

Personnel will be transferred in accordance with the transfer-of-business principle so that at the time of the transfer they will retain their current rights and obligations under the terms of their employment or public service relationships.

The arrangements required by the reform will be made in 2021 and 2022 in cooperation with the wellbeing services counties, the municipalities and the representatives of personnel of the municipalities. The scope of the Act on Cooperation between the Employer and Employees in Municipalities will be expanded to apply to the wellbeing services counties, too. The scope of application of other local government employment legislation will also be expanded to apply to the personnel of the wellbeing services counties. This means that the status of personnel will not change in this respect. 

In 2023, about 172,900 people currently employed by 332 municipalities or joint municipal authorities will be transferred to the employment of the wellbeing services counties in line with the transfer-of-business principle. 

Transfers of assets and liabilities 

The joint municipal authorities for hospital districts and for special care districts and their assets and liabilities will be transferred to the new wellbeing services counties. The wellbeing services counties will acquire the movable assets and contracts of the municipalities and joint municipal authorities relating to healthcare, social welfare and rescue services as well as the holiday pay liabilities of the transferable personnel without compensation.

The counties will lease municipality-owned facilities for healthcare, social welfare and rescue services for a transition period of three years with one year’s option. Debts transferred from hospital districts and special care districts to the wellbeing services counties will be granted a government guarantee to safeguard the status of creditors and keep the loans in the zero-risk category. The transfers will be carried out based on reports drawn up by the municipalities and joint municipal authorities. 

Asset arrangements can generate costs for municipalities which are beyond their control. For this reason, the act will include a compensation rule as required by the Constitutional Law Committee. Municipalities will be entitled to receive compensation for costs incurred in making asset arrangements when the direct costs exceed the entitlement threshold set by law. If the right of municipalities to decide on their own finances is compromised, they will be entitled to receive compensation even when the entitlement threshold is not exceeded.

Timetable — some of the bills to enter into force in summer 2021 

The proposed wellbeing services counties will be established as soon as possible after the entry into force of the Act on the Implementation of the Reform of Health, Social and Rescue Services and on the Entry into Force of Related Legislation. The joint county authority for the Hospital District of Helsinki and Uusimaa would be established through an agreement approved by the wellbeing service counties of the Region of Uusimaa and the City of Helsinki. The first county elections would be held in early 2022. The county elections would not apply to the residents of the City of Helsinki.

At the first stage, the counties’ provisional governance and, after the county elections when the county councils will start their work, the counties will prepare the organisation of their activities and the transfers of personnel and assets jointly with the municipalities and joint municipal authorities. The responsibility for organising healthcare, social welfare and rescue services and other services and duties to be stipulated separately will be transferred to the wellbeing services counties from the beginning of 2023.

The aim is for the bills included in the proposal to enter into force in stages so that some of them would enter into force in early July 2021 while others would enter into force on 1 March 2022 when the new county councils would start operating. The last bills would enter into force on 1 January 2023. The Act on the Implementation of the Reform of Health, Social and Rescue Services and on the Entry into Force of Related Legislation is scheduled to enter into force on 1 July 2021. In addition, parts of the Act on Wellbeing Services Counties will be applied to the operation of counties immediately.

The acts will enter into force once the President of the Republic has approved them. 

Inquiries:

Laura Lindeberg, Special Adviser to Minister Kiuru, tel. +358 2951 63109, firstname.lastname(at)stm.fi

Kari Hakari, Director General, Ministry of Social Affairs and Health, tel. +358 2951 63642, firstname.lastname(at)stm.fi

Auli Valli-Lintu, Senior Ministerial Adviser, Ministry of Social Affairs and Health, tel. +358 2951 63463, firstname.lastname(at)stm.fi 

Ville-Veikko Ahonen, Senior Ministerial Adviser, Ministry of Finance, tel. +358 2955 30066, ville-veikko.ahonen(at)vm.fi (interim preparatory body and implemention of the reform)

Minna-Marja Jokinen, Senior Ministerial Adviser, Ministry of Finance, tel. +358 2955 30018, minna-marja.jokinen(at)vm.fi (administration, assets and personnel) 

Tanja Rantanen, Senior Ministerial Adviser, Ministry of Finance, tel. +358 2955 30338, tanja.rantanen(at)vm.fi (financing) 

Jani Pitkäniemi, Director General, Ministry of Finance, tel. +358 2955 30494, jani.pitkaniemi(at)vm.fi 

Kimmo Kohvakka, Director General for Rescue Services, Ministry of the Interior, tel. +358 2954 88400, [email protected]

Ilpo Helismaa, Senior Ministerial Adviser, Ministry of the Interior, tel. +358 2954 88422, [email protected]

Milja Henttonen, Special Adviser (requests to interview Minister Ohisalo), tel. +358 50 599 3094, [email protected]