Finland Health Profile 2012

According to various indicators, the health of the Finns has considerably improved over the last few decades. Average life expectancy among the Finnish population has improved throughout the 20th century, and especially during the last three decades, reaching 76 years for men and 83 years for women in 2005. The most significant public health problems are currently circulatory diseases, malignant tumours, musculoskeletal diseases and mental health problems. Emerging problems are obesity, chronic lung diseases and diabetes,
particularly type 2 diabetes.
Total expenditure on health as a percentage of gross domestic product (GDP) in Finland was 7.5% in 2005. Health care expenditure expressed in US$ purchasing power parity (PPP) per capita was 2331, which was one of the lowest among the Organisation for Economic Co-operation and Development (OECD) countries. The Finnish health system is primarily funded through taxation (61%) and National Health Insurance (NHI). Total public sector funding as a percentage of total expenditure on health is 78%.  In practice in Finland there are three different health care systems which receive public funding: municipal health care, private health care and
occupational health care. There are significant differences between the systems, for example in the scope of the services provided, user-fees and waiting times.  There are also different public financing mechanisms for health care services in Finland: municipal financing based on taxes and NHI financing based on compulsory insurance fees. Municipalities fund municipal health care services (except outpatient drugs and transport costs) and NHI funds for example private health care, occupational health care, outpatient drugs, transport costs, sickness allowances and maternity leave allowances. This dual public financing creates challenges for the overall efficiency of service production, particularly in pharmaceutical care where dual financing incurs cost-shifting problems. The largest share of publicly financed health care is provided by the municipal health care system (71% of outpatient physician visits, 59% of outpatient dentists visits and 95% of inpatient care periods). According to legislation, more than 400 municipalities are responsible for providing all necessary health services for their residents. Municipalities have a significant degree of freedom to plan and steer the services as they see best, and state level steering is rather weak. Currently there are many ongoing local development projects and experiments concerning municipal services (for example increasing cooperation between municipalities, between primary and secondary care services and between municipalities and the private sector). However, they are not well coordinated from the national level, probably leading to increasing regional variance in structures. Public responsibility for health care has arguably been decentralized in Finland more than in any other European country, and in recent years, concerns have increasingly been raised that the problems of extreme decentralization outweigh the advantages. However, there are signs that the decentralization trend has slightly reversed and national level steering will increase. For example, the governmental programme for the restructuring of municipalities and services has a goal to decrease the number of municipalities and increase cooperation between municipalities.

According to legislation, every municipality must have a health centre which provides primary health services. Additionally, legislation divides the country into 20 hospital districts (excluding Åland islands) which are responsible for the provision of municipal secondary care services. Each municipality must be a member of one hospital district. Hospital districts are financed and managed by the member municipalities. Often municipalities experience a lack of influence on the volume and costs of the hospital districts, despite the fact that they directly own them, and find that primary health care is in too weak a position relative to secondary health care. Legislation sets maximum user-fees and an annual ceiling for health care charges for municipal services. These user-fees cover on average 7% of municipal health care expenditure. Outpatient drugs are not covered by the municipal health care system, but by NHI instead. On average, 67% of outpatient drug costs are reimbursed to the patient. There is a (separate) ceiling for out-of-pocket payments for outpatient drugs. Both the municipal health care  and outpatient drugs ceilings are high compared with other Nordic countries.
In extreme situations social assistance is available (when an individual’s or a family’s income is not enough to cover the user-fees of municipal health care services or outpatient drugs).
The statutory NHI scheme finances 17% of the total costs of health care. The scheme is run by the Social Insurance Institution (SII), with about 260 local offices all over the country. SII falls under the authority of the Parliament and covers all Finnish residents. NHI is funded by the insured (38%), employers (33%) and the state (28%). The insured pay income-based insurance fees which are collected alongside taxation. The use of private health care is partly reimbursed by NHI. It mainly comprises ambulatory care available in the larger cities. The private sector provides about 16% of outpatient visits to physicians, 41% of outpatient visits to dentists and 5% of inpatient care periods. NHI covers about one third of the actual costs of the private health services. Additional voluntary health insurance has a very marginal role in the Finnish health care system and is mainly used to supplement the reimbursement rate of NHI. Legislation on occupational health care obliges all employers to provide preventive occupational health care services for their employees. As part of compulsory preventive occupational health services, many large- or mediumsized employers also provide curative outpatient services (13% of outpatient physician visits are provided by the occupational health care system). The NHI scheme reimburses about 40% of the occupational health care expenses for the employer. Occupational health care services are free of charge for employees.
The majority of physicians work for municipalities and hospital districts. Physicians in health centres and hospital districts are usually salaried employees of the municipalities. However, during the last 10 years a new trend has emerged to lease the physician workforce to health centres from private firms. Eleven per cent of physicians have a private practice as a full-time job and 30% work full-time in the public sector but hold a private practice outside their regular working hours. Since the late 1990s there has been a significant shortage of physicians in Finland, which has had a significant impact on the developments of the health care system. In order to rectify this situation the yearly intake of medical students has been increased considerably.
The most important state level reforms from the beginning of the 1990s have been:

• the deregulation of state steering of municipal health services and related changes in state administration (1993);
• the National Project to Ensure the Future of Health Care (2002–2007);
• the extension of public dental health care to all age groups (2002);
• introduction of the waiting time guarantee (2005);
• the project to restructure municipalities and services (ongoing since 2005)
• and the development of the national electronic patient record system (ongoing
  since 2006).

In addition, there have been several reforms concerning pharmaceuticals, with one important goal being to further promote cost containment. In terms of the distribution of benefits, there are two major challenges in the Finnish health care system: geographical inequities and inequities between socioeconomic groups. There are significant differences between municipalities in service provision (for example in physician visits, dental care, mental health care, elective surgery) and waiting times. There are also significant differences between municipalities in resources invested in municipal health care leading to differences in the quality and scope of municipal services. However, these inequalities can also partly be explained by other differences between municipalities such as age structure, morbidity rates and use of private and occupational health care services.
There are also significant socioeconomic inequalities in the use of health care services. Among OECD countries pro-rich inequity in physician visits was found to be one of the highest in Finland (along with the United States and Portugal) in 2000. Significant pro-rich differences are also evident in screening, dental care, coronary revascularizations and in some elective specialized care operations (hysterectomy, prostatectomy and lumbar disc operations). Although overall mortality has fallen, the socioeconomic inequality in mortality seems to be increasing. The Finnish health care system offers relatively good quality health services for reasonable cost with quite high public satisfaction. The most visible problems are long waiting times and personnel shortage in some municipalities. An ageing population, new medical technology, drug innovations and increasing population expectations will create challenges for the Finnish health care system in the near future. There are also some structures in the Finnish health care system which are perceived as problematic: the level of decentralization, poor steering capacity in the system, relatively weak position of primary care, a lack of cooperation between primary and secondary care and dual financing.

The Finnish health care system provides relatively good quality health services for reasonable cost with quite high public satisfaction. The most visible problems are long waiting times and personnel shortages in some municipalities. An ageing population, new medical technology and drug innovations alongside increasing public expectations are creating challenges for the Finnish health care system. There are also some features of the Finnish health care system that are perceived as problematic: high level of decentralization, weak position of primary care compared to secondary care, relative lack of coordination between primary and secondary care, and dual financing.
In addition, there exist significant inequalities in health and access to health care services. These problems are summarised here. Following the reforms of 1993, the Finnish health care system (municipal services) was decentralized. More than 75% of municipalities have fewer than 10 000 inhabitants and 20% have fewer than 2000. It has been stated that public responsibility for health care has been decentralized in Finland more than in any other country (Häkkinen and Lehto 2005). State level regulations and steering on municipal health care service provision are not very detailed. Municipalities can rather freely set their own municipal income tax rates, decide how much they invest in health care and how they organize services. The advantages of decentralization are strong local democracy, local ownership of public services and better responsiveness to local needs (OECD
2005). However, in recent years growing concerns have been raised that the problems of decentralization outweigh the advantages. Problems created by decentralization are diseconomies of scale, lack of expertise, geographical inequalities in access to services, increase in problems relating to random shifts in expenditure (e.g. the possibility that a few expensive treatments can seriously hamper the annual budget of a municipality), difficulties in securing a sufficient workforce and lack of regional and national cooperation. The limited coordination across municialities has led to increasing regional variations in care. In addition, population movement from rural municipalities to cities and ageing of the population especially in rural areas have made small rural municipalities more and more vulnerable while being solely responsible for the organization of the health services. Indeed, there are signs in recent years that decentralization is reversing slightly. The MSAH has tightened the regulative steering of municipalities (for example, defining maximum waiting times for municipal health services) and national level supervision has been reinforced by expanding the functions of the NAMLA from supervising individual professionals to supervision of health care organizations, health centres, hospitals and other institutions providing health services. Additionally, the Government started a project to restructure municipalities and services in 2005 which will lead to a decreasing number of municipalities and increasing cooperation between municipalities.
In January 2007, Parliament accepted an act defining how to continue the process which stated that primary health care and social services closely related to health services should be organized by organizations covering at least 20 000 inhabitants. In response to this municipalities have made plans to increase cooperation in many regions and in February 2008 decisions on municipal mergers were made so that the number of municipalities will be reduced by 62 by January 2009. It is, however, difficult to estimate what the final outcome of this process will be. The principle of municipal autonomy has a strong tradition in Finland and municipalities value highly their independence in arranging basic services, so the reform will not be easy. Mergers of municipalities can be an especially difficult process for local politicians, municipal employees and residents. However, the general view is that this is the right direction in which to develop the organization of health services in Finland.
The municipal health care system has different structures in place for primary and secondary services. There are also separate acts governing the provision of these services. Having separate organizational structures has clearly hindered the cooperation between these levels, both from clinical and economic perspectives. For example, transmitting patient records and other information on patients between primary and secondary care can be difficult. During the last 10 years several local reforms have been conducted to enhance cooperation between primary and secondary health care and social welfare services by integrating organizations. The new Government appointed in April 2007 will promote this process further as it announced that the Primary Health Care Act and the Act on Specialized Medical Care will be combined into a comprehensive Health Care Act. The central aim is to reinforce the role of primary health care. It will be necessary in the future to carefully assess whether municipal primary and secondary services should be structured and financed by the same organizations. In any case it is evident that primary health care services need to be strengthened relative to secondary care services.
There is a dual system of public financing for health care services in Finland:
municipal financing based on taxes and NHI financing based on compulsory insurance fees. Municipalities fund municipal health care services (except outpatient drugs and transport costs) and NHI (partly) funds private health care, occupational health care, outpatient drugs, transport costs and sickness allowances. This dual public financing creates challenges for the overall efficiency of service provision, for example as evidenced by cost-shifting in pharmaceutical care.
Public funding for private services and curative occupational services is problematic from many perspectives: part of the insured population (lowincome people, unemployed people and people living in rural areas) has fewer possibilities to use these services; the SII does not regulate the quality or efficiency of the services provided; and private services provide the possibility to bypass municipal primary care gate-keeping for municipal specialist level services.It is not the most efficient use of resources for these three somewhat overlapping  systems to be publicly funded. One possible danger is that in the future the Finnish health care system will provide different levels of publicly financed services for different population groups which goes against current general health policy objectives.
There are significant socioeconomic differences in the use of health care services, including physicians, screening, dental care and some elective surgeries. Although overall mortality has fallen, socioeconomic inequality seems to be increasing. Indeed, even though the Nordic welfare state model served as an important guide when the health care system was being developed, socioeconomic inequalities are still one of the major challenges facing the Finnish health care system.

However, despite these challenges, the Finnish health care system has made considerable strides in improving public health, both through preventive and curative measures. Infant and maternal mortality in Finland is one of the lowest in the world and there have been significant improvements in life expectancy, amenable mortality, eradication of communicable diseases, cancer survival andthe functional capacity of the population.