Current situation: social welfare and healthcare services in mainland Finland, Social welfare and health care reform in the new Government Programme

1. 1.10.2015
Social welfare
and healthcare
reform
The Ministry of Social Affairs
and Health - Finland
1st October 2015

2. 1.10.2015
Present social welfare and
healthcare system in Finland
• Universal services
• Public, tax-based funding
• Local authorities (municipalities)
responsible for organising
– primary healthcare,
– specialised medical care and
– primary social welfare
for their residents.

3. 1.10.2015
Objectives of Finnish health policy
• to reduce premature deaths
• more healthy years of life without loss of
functional capacity
• to ensure an optimal quality of life for all
• to reduce health inequalities between
population groups

4. 1.10.2015
Current situation: social welfare and
healthcare services in mainland Finland
Healthcare services
• Municipalities (301 in
total) are responsible for
arranging health care
services
• Hospital districts (20 in
total) are responsible for
specialised medical care. A
municipality has to be part
of a hospital district to
arrange specialised medical
care.
• 5 specific catchment
areas are responsible for
arranging highly-
specialised medical care
Social welfare services
• Municipalities are
responsible for arranging
social welfare services
• Municipalities are members
in joint municipal
authorities of special
welfare districts (15+2
in total) that arrange
services for people with
developmental disabilities.

5. 1.10.2015
Hospital districts and special catchment
areas

6. 1.10.2015
Population 1970 Population 2007
Inhabitant per square kilometer Inhabitants per square kilometer
Uninhabited area
Uninhabited area

7. Demographic forecast of the elderly
by age group, Finland
Source: Statistics Finland
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
1980 1990 2000 2010 2020 2030 2040 2050 2060
65-74-year-olds
75-84-year-olds
85 and older
Number of inhabitants

8. Demographic dependency ratio forecast,
Finland
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
1980
1985
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
2055
2060
Pensioners
Children
Statistics Finland, September 2012
The ratio of children (0-14) and pensioners (65+) to working age population

9. 1.10.2015
Challenges
• Ageing population
• Increased need for services due to multi-
morbidity
• Urbanisation
– accumulation of social and health problems:
poverty, unemployment, poor health, poor mental
health
– 10% of the population is using 80% of social and
healthcare resources
• Increasing inequalities
• Increased demand for services because
people have access to information via new
technologies

10. 1.10.2015
Earlier preparation of the reform
• Earlier version of the reform: five social
welfare and health service regions (joint
municipalities) would be responsible for
planning services
• Bill for a new Social Welfare and Health Care
Arrangements Act, submitted to Parliament
on 4 December 2014
• Statement of the Constitutional Law
Committee: the Bill was against
constitutional local autonomy principles
→the Bill was dismissed

11. 1.10.2015
The Constitutional Law Committee’s
opinion
There is an acute need, from the
perspective of fundamental social rights,
to
–increase the efficiency of the social and
health services
–improve their integration
–strengthen the carrying capacity of the
organisers.

12. 1.10.2015
Social welfare and health care reform in
the new Government Programme
• Prime Minister Juha Sipilä’s Government
Programme, published in May 27th 2015
• A strategic programme
• Social welfare and healthcare reform one
part of the structural reforms needed

13. 1.10.2015
Main objectives of the social welfare
and health care reform
• reduction of health inequality and
• cost-efficiency.

14. 1.10.2015
Government’s objectives for cost
reduction
• Government wants to reduce public costs
by EUR 4 billion in the long term
– Social welfare and healthcare reform´s share
EUR 3 billion
• Measures before reform include
– Reduction of cost differences in specialised
health care
– Improving efficiency in the organisations of
regional specialised health care (hospital
districts)

15. 1.10.2015
Ways to achieve the targets of reform
The reform will be executed through
• extensive horisontal and vertical integration
• strengthening the economical carrying
capacity of the areas.

16. 1.10.2015
Solution for arranging the services
• Social welfare and healthcare (SOTE) areas,
autonomous areas larger than a municipality
– Areas will be managed by elected councils
– Maximum 19 areas
• SOTE area responsible for arranging the social
welfare and healthcare services in it’s area
– division of work between hospitals will be reviewed
– part of the specialiced care will be centralised to
special catchment areas

17. 1.10.2015
Financing
1. Options for financing services via
municipalities or state will be investigated
• Constitution must be respected
2. Proceeding into monochannel funding
• Budgetary framework for social welfare and
healthcare services to ensure effective
governance

18. 1.10.2015
Production of services
• SOTE areas
– produce their services
– can buy services from companies or
organisations
– or increase the use of service vouchers
• Indicators for efficiency and quality of
services will be created

19. 1.10.2015
Timetable
• 10/2015 Government’s decision on the number of
areas and the main structure of funding
• 12/2015 Decisions on steering of digital solutions,
coordination of investments and the principles of
election
• 4/2016 Circulation of the new bill for comments
• 10/2016 The bill will be presented to the
Parliament
• 7/2017 Enactment of the new legislation
• 2017 - 2018 Elections
• 1/2019 New SOTE areas start

20. 1.10.2015
Multichannel funding of social and
health services

21. 1.10.2015
Multichannel funding system
• Funding collected from several sources and
targeted through many channels
• Funders: state, municipalities, households,
the Social Insurance Institution,
employers, private insurance companies
– tax revenue, statutory and voluntary insurance
payments, customer payments
• The funding can be directed to public or
private production of services

22. 1.10.2015
Challenges for multichannel funding
• Incentives inappropriate from the perspective of the
funding system
– Incentives transfer costs from one funder to
another → partial optimisation creates a damaging
effect
• Independent decision-making in different funding
channels
• Overlap
• Differences between regions and population groups in
respect of availability of services
• Effects on the availability of personnel

23. 1.10.2015
Possible means for the discontinuation
of multichannel funding
• Multichannel targeting of funding a bigger
problem than multiple channels in the
collection of funding
• The goal is to reduce the harm by
– reducing the number of various channels
involved in decision making
– reducing the number of parties responsible for
funding and decision making
– reducing the overlap between the various
channels

24. 1.10.2015
Thank You!
Further information:
http://stm.fi/en/service-structures