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.

Multisource financing will be simplified 

The goal is that the counties will be responsible for the organisation and financing of health and social services as of 1 January 2021. The counties will receive their funding from the state. A government proposal on a more simple financing system will be drawn up in 2018. 
The ministerial working group on reforms decided on the relevant means and timetables in their meet-ing on 13 April. The working group argues that several health insurance related tasks that are currently carried out by the Social Insurance Institution of Finland (Kela) could be transferred to the counties’ responsibility in terms of organising or financing or both.  The tasks would be transferred to the coun-ties gradually:
  • The responsibility for organising ambulance services and emergency medical services will be transferred to the counties already in 2021 when the counties start operations.
  • Transportation services under the Social Welfare Act will be transferred from the municipalities to the counties in 2020 when the counties start operations. The responsibility for organising and fi-nancing the reimbursement system for healthcare-related travel expenses will be transferred from Kela to the counties in 2022.
  • As of 2022 Kela will no longer reimburse clients for the costs of visiting private health service pro-viders. County residents will be able to choose their health and social services centre in 2021 and dental clinic in 2022 (earlier in pilot areas). There will be both public and private service providers operating the centres and clinics.
  • The responsibility for organising rehabilitative psychotherapy and intensive medical rehabilitation will be transferred from Kela to the counties gradually after careful consideration. Piloting can start during 2020. The responsibilities will be transferred in 2022 or later if experiences from the pilot-ing projects demand it.
  • Medicines-related policies will be prepared once several surveys have been completed (including rational pharmacotherapy and improving the medicine reimbursement 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.


Outi Antila, Director General, Ministry of Social Affairs and Health, tel. +358 295 163 164