Looming social welfare and healthcare reforms in Finland

15 March 2017
Social care working in Finland
The health and social care sector in Finland is on the pathway to major reforms. Provision of services by the 313 Finnish municipalities are to be transferred to 18 autonomous regions (Social and Healthcare (SOTE) areas) to be created by 2019.

The reforms will also include expansion of private for-profit interests in health and social care services delivery, with adverse consequences for the population.

The reform agenda was unveiled by Prime Minister Juha Sipilä last June, in a 600-page legislation package. It reflects the aim of privatisation of public services and comprehensive participation of private service providers in public healthcare. Supporting services like food service and cleaning will be handed over to companies owned by the SOTEs, and greater reliance on private providers will be promoted.

Publicly-funded universal health and social care has been a major pillar of the Finnish welfare state. Finns attest to the high quality of health care delivery, with an average of 88% of the population expressing satisfaction with the country’s health system compared with the EU average of 41.3%.

This is not surprising, taking into consideration the country’s health status.  Life expectancy has improved remarkably over the past decades, rising to 84 years for women and 78 years for men. Infant mortality and maternal mortality are also amongst the lowest in the world. The vaccination programme is equally excellent with 99% of children under 2 years being vaccinated against whooping cough and measles.

Despite these resounding successes of universal public health, arguments have been raised for reforms since the 1990s. Far-reaching steps to effect these were envisaged in in 2008, but could not be successfully implemented.

Advocates of reform appear committed to addressing social inequalities. There are long waiting lists for some specific medical procedures in public healthcare facilities, which high-income groups avoid by utilising private providers and with fast-lanes for occupational healthcare which benefits professionals.

Increasing healthcare expenses, partly due to population aging has also been an excuse presented for the reforms. This has resulted in an increase in healthcare spending in relation to the GDP from 6.9% (€14bn in fixed 2014 prices) in 2000 to 9.6% (€21bn) in 2015. But this is just slightly higher than the OECD average of 9.1%. The state’s argument, however, has been that the reform is expected to save €3bn annually by 2030.

These are lofty aims; the reform has some useful elements. For example, the SOTEs, which build on the existing secondary health structures of regions would help consolidate the pooling of resources together for services delivery. KELA-reimbursements (Social Insurance Institution),  by the state to private providers for residents’ medical expenses would be abolished, ending the subsidy of private care from public budgets.

But, there is cause for concern with the envisaged role of private providers under the new regime of the health system. They are likely to be in the driving seat, supposedly with increased “choice” between accessing care from private or public providers. Meanwhile, many of the private companies in social and health services are owned by international capital funds and some are also known for their preference for tax avoidance and tax havens.

What the new administrative structure for healthcare delivery would become also remains uncertain, as does the impact of the changing face of administration on the terms and conditions of employment of workers. Trade unions like the JHL and Tehy believe that this could “result in salary and benefit cuts.”

What is certain is that health services delivery would now be based on the logic of competition, rather than the rights-based approach informing the entrenchment of universal public healthcare since 1929. The companies to be established by the SOTEs must compete with private healthcare providers, opening the room for commodification of healthcare.

This would be a step backwards. It is essential that the Finnish state consolidates coordination and funding of public social welfare and healthcare services. Liberalisation of the health system, just like the liberalisation of the economy in the 1980s, is likely to lead to adverse consequences for most Finns.

The wave of re-municipalisation with over 100 municipalities having to cancel outsourcing contracts with private providers due to issues of quality and price, provides insight on the dangers that loom ahead if necessary safeguards for public health are not established.
It is also instructive that just five big multinational companies control 72% of the health and social services outsourcing market that currently amounts to €5bn. It is obvious that what would emerge in these circumstances is an oligopoly of big business in health, driven by the for-profit motive.

Action must be taken now to ensure that the right to health for the immense majority is not sacrificed in Finland on the altar of reforms that benefit private interests. Now is the time to have a critical engagement with the reform agenda, and reject its components that bear this looming danger.

With reports from Eveliina Petälä & Heikki Jokinen (JHL) and Sari Koivuniemi (Tehy).

Also see