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Financing of healthcare and social services

The existing multisource financing of healthcare and social services and will be simplified as part of the healthcare and social welfare reform package. The objective is to devise a financing system that encourages healthcare and social services actors to be more cost-effective.

Current problems

Currently, the financial resources for healthcare and social welfare are assembled from various sources. These are then channelled to the services via different financial resource providers. The main resource providers for healthcare services include central and local government, the Social Insurance Institution of Finland, households, employers, wage-earners and private insurance companies. Social welfare services are mainly financed by central government, local government and the clients themselves.

Money for the services is collected through taxation, obligatory insurance contributions, voluntary insurance premiums, employer’s contributions and client fees from service users.

The current system of financing healthcare and social welfare fails to treat people equally and hampers equitable access to services. Decision-making can be disjointed and service provision is not always efficient and effective. This applies, in particular, to situations where a financial resource provider may transfer liability for costs to another actor even though this results in higher overall expenditure.

Assessment of financing models

As part of the healthcare and social welfare reform package, a working group appointed by the Ministry of Social Affairs and Health is currently assessing how to improve freedom of choice for customers and how to simplify the multisource financing system. 

 

Earlier preparation

A report on the multisource financing system was prepared during the previous government term. The report focused on the financing sources between central government, local government and the Social Insurance Institution and on employers' financial contributions. At the time, the working group presented six different models for financing.

To support the preparation, the National Institute for Health and Welfare (THL) published a description of the current financing system in healthcare.

Inquiries:

Tuomas Pöysti, Under-Secretary of State, Ministry of Social Affairs and Health and Ministry of Finance, tel. 0295 163 012
Outi Antila, Director General, Ministry of Social Affairs and Health, tel. +358 295 163 164