Reform of multi-channel financing aims to put funds and responsibility in same hands

Although the reform of the social and health care services has been postponed for the time being, the need for it has not diminished. "In terms of society's overall interests, the present service structure and financing system does not yield positive solutions in society's general interest. Prudent management and control hardly succeed when operators can shift costs from one to the other," says MSAH Permanent Secretary Päivi Sillanaukee.

The conversation about public social and health care services has traditionally been more ideological than based on economic arguments. Sillanaukee stresses that the on-going economic challenges and population ageing are forcing everyone to think about what we can afford and how we can use resources as effectively as possible.

In Finland, social and health services have long been financed from a variety of sources, principally municipalities, the state, service users, the Social Insurance Institution, employers and private insurance companies. In March last year the MSAH set up a working group to examine the options for rationalising the system of multi-channel financing and eliminating its defects, as well as reducing the system's tendency toward partial optimisation and creating incentives for overall cost reduction.

Partial optimisation is one of the current system's intrinsic problems. We find it, for instance, in the practice of hospital waiting lists. A municipality makes the decision on surgical operations and pays for them, but the state and employers are left to pick up the tab for sickness leave expenses. Municipalities are therefore under no pressure to reduce waiting times. The cost of operations themselves does not increase during waiting periods, but long periods of sick leave can multiply costs.

Alternative optionsThe working group examined the multisource financing issue on principle and in its entirety.

The options range from, at one end, placing the responsibility for arranging services in the hands of larger and less numerous entities, and encompassing regional elections and taxation jurisdiction. At the other extreme, the system would be completely insurance-based. Other options concerning financing and control fall between these two poles.

It drew on ideas and proposals from the level of operators and clients, and written proposals from the National Institution for Health and Welfare, the Social Insurance Institution and the Finnish Innovation Fund (Sitra), which were appended to the working group's report.

In the future financial reform will be prepared in conjunction with the structural reform of the social and health care services. Information will be explicated for constitutionally feasible solutions in which there remain three alternative responsible authorities: joint municipal authorities, intermediate agencies or the state.

"It may be that talks with different parties on the new model will be able to start already in late autumn. But the three organisational models must be prepared and evaluated/ assessed carefully beforehand."

Management challengesSillanaukee points out that no matter what financing and control method is finally chosen, the running of the service system will not improve on its own accord.

"Even if management and financing are in the same hands, it is no guarantee of change. To improve the situation requires robust guidance to strengthen the position of service users and motivate the various actors to develop their own areas of work. We have seen instances where the concentration of responsibilities has been more to the detriment of local services. On the other hand, the example of the South Karelia Social and Health Care District indicates how much can be achieved by developing ICT or mobile services."

Boosting efficiency also requires that there is information that is more comprehensive available. When there are many players involved and all have their own ways and systems to document work, it is hard to get an overall picture of the situation. Work to develop social and health care data systems is gradually making headway, but so far data has been obtained from a number of pilot projects.

"A study carried out in Oulu, for example, showed that 75 per cent of service resources are targeted at 10 per cent of service users. These people usually have to deal with many agencies, which underscores the importance of the integrative purpose of the Sote reform."

One example of social and health care service productivity variations concerns the disparity in the length of sickness absenteeism between areas such as Kainuu and Jyväskylä. Sillanaukee does not think the explanation is a matter of morbidity but rather differences in practices.

Reform boundary conditionsApart from effectiveness, another major challenge posed by multisource financing concerns health service inequalities and disparities. The current system benefits people in work, university students and those who can afford to use private services.

"These are influential groups and would unlikely to approve of the weakening of the present system," says Sillanaukee. New financing options must therefore probably retain the possibility for such things as the quicker access to treatment for employees occupational health care provides.

The Permanent Secretary thinks, however, that it would be unrealistic to expect health centres to reach the same level as occupational health care while occupational health care staff resources cannot also be deployed more widely. "For instance, at present many general practitioners work in occupational health care and we need to consider how to direct personnel resources more appropriately. Ultimately, the solution to the level of service for various groups lies with policy makers."

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Social and health care expenditure are about €26 billion a year. Of this, municipalities pay for 38% and the state 32%. Service user fees amount to a further 14%, the Social Insurance Institution pays 10 %, employers and insurance institutions about 2% each, and other funding sources less than one per cent.


Text: Mark Waller & Paula Mannonen