At Last… Healthcare Reform Takes One Big Step!

Finland is small but well developed country with an excellent and high standard of living… and being small means that it can be used as a test bed for seeing what happens when the government makes changes to the public services.

One of the biggest policy changes that has been driven by the last 3 governments over the past 12 years has been attempts to reform public health- and social care. Now the present government is making a final attempt to implement a reform of public health- and social care when they presented a new proposal to Parliament yesterday.

The new proposal is similar to past proposals with the formation 23 Healthcare Regions (one is slightly different for the Helsinki region) all under central government control and funding. Each region will be responsible for provide healthcare, social services and emergency services. They will be fully responsible for all three sectors and will have to request funding with a 4 year rolling investment plan from the government. The idea is to reduce excess capacity that has evolved because, up until now, there have been 195 municipal healthcare bodies each building for their own needs with very little coordination resulting in plenty of costly excess capacity. Now with fewer entities and better controls cost savings will be achieved with the roll out of new digital applications for healthcare, better facility management and more cost-efficient procurement.

But let’s not get carried away – cost efficiencies are being put in place but costs are rising because of our ageing population and because of the virus. On the other hand we are starting in a good place because Finland’s healthcare costs per head of the population in US Dollars is one of the best and lowest for richer nations in the western nations. This OECD graph shows the costs of public healthcare, the costs of private healthcare and their total – Denmark and Sweden are some 40% higher, Norway 60% and the USA over 200% higher:

The total costs of healthcare have increased rather rapidly these last decade as more and more has been privatised by past governments. This has been pushed by a very aggressive healthcare lobby representing doctors and by the banking and insurance lobby. Here is a history of Finland’s healthcare costs from 2000 to 2018 in billions of Euros split up between the main sectors from bottom (Green) to top (Blue) – Hospitals, Healthcare centres, Elderly, Drugs & Equipment, Other Costs:

If one examines those countries with a major part of healthcare controlled by this private sector one can see that their costs are clearly higher both in absolute and relative terms, no matter what base is used. The present Finnish government has taken a very pragmatic view and has determined that the public sector needs to be in the driving seat of healthcare and social services in order to exploit benefits in an optimal and cost efficient manner. The government is proposing with this reform that private healthcare contracts with the private sector that have effectively reduced public control over regional healthcare services shall be revoked.

When you read about Finland and Sweden, Norway and Denmark, you will often see comments that we are taxed rather heavily, and that we embrace socialism, whatever that means! Nothing could be further from the truth when you actually look at what we pay and for what:

  1. First, all working people are covered by compulsory basic healthcare through their employers. That is laid down by law and means that employees have easy and free access to basic healthcare with mainly private healthcare companies. Specialist and demanding care at hospitals is normally covered by the public system for very low fees. The same taxes also give the whole population free primary education and low cost secondary and tertiary education and training, plus excellent public transport and a very secure society. 
  2. Second, as seen above, the actual cost of healthcare per head of the population is low and the quality of care is very high. 

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