HCE2018 03 Finland
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eMapsKnowledge Hub for Industry and Clinical Innovators Healthcare Europe 2018 The finance and reimbursement systems of 11 European countries Finland Author: Dr. Y.W. van Kemenade Enabled by: EIT Health Supported by: Achmea, Eurapco Editor: Oxford Academic Health Science Network Correspondence: [email protected] February 2018 Copyright 2018 Oxford Academic Health Science Network. All rights reserved. 3. Finland 3.1. Introduction Finland’s healthcare system is founded on government-subsidised municipal social welfare and healthcare services. The healthcare system is heavily regulated by legislation. Local municipal authorities are responsible for organizing the healthcare services. They can organize the provision of services independently or form joint municipal authorities with each other. In addition, local authorities can outsource the provision of services to other local authorities, a non-governmental organization or a private service provider. Operations and services are mostly funded by municipal tax revenue. The State supports municipal service provision by means of central government transfers to local government. Municipalities form hospital districts that are responsible for the provision of specialized medical care. The Ministry of Social Affairs and Health has the highest decisionmaking authority with the 431 municipalities (local governments) responsible for providing healthcare to their residents17. According to the Constitution of Finland, public authorities must guarantee for everyone adequate social, medical and health services and promote the health of the population18. The supervision of healthcare providers is currently a responsibility of the six provincial state offices. The offices have social and health departments that are responsible for, among other things, guiding and supervising both public, specialized and primary and private healthcare in their respective provinces. The government decides on general national strategies and priorities and proposes bills to be discussed by the parliament. Healthcare policy is primarily the field of Ministry of Social Affairs and Health. The Ministry also directs and guides the development and policies of social protection, social welfare and healthcare19. The government presents its annual budget proposal to the parliament, which makes the final decision on how much will be allocated to the healthcare sector as state subsidies. The Health Committee of each municipality prepares the municipality’s budget for healthcare. The Municipal Council approves the total municipality budget and, within the budget, the resources allocated to healthcare. The Council of each hospital district determines the budget for hospital care (within the district area). Finland has five provinces plus the autonomous Province of Åland Islands. The State Provincial Offices are regional government authorities of the state. They guide and supervise social welfare and healthcare in the provinces, while the country's 431 municipalities are responsible for the actual provision of services. At the local level, the municipalities are in charge of the tax-based funding of social welfare and health services for their inhabitants. The municipalities may arrange for services themselves or organise them in cooperation with neighbouring municipal authorities. A municipality may also contract services from another municipality or from a private service provider. Some municipalities purchase nearly all their health centre services from private providers. The basic social welfare, public health and specialised medical care services that must be available in every municipality are defined by law. Local authorities can decide the scale, scope and model of municipal service provision within the limits of legislation. The composition of services is not defined in precise detail by law, which means that services may differ from one municipality to another20. 17 Wikipedia 18 Kiuri 2017 19 Wikipedia 20 Ministry of Social Affairs and Health 2013 26 Health promotion, including prevention of diseases has been the main focus of Finnish healthcare policies for decades. This has resulted in the eradication of certain communicable diseases and improvement in the health of population21. The reform of 1993 reduced central government control and increased the freedom of the municipalities in the provision of health services. This made it possible for municipalities to adopt a more active role as a purchaser instead of acting in the provider role as previously. Particularly in the field of specialist hospital care, the reform has meant that the system changed somewhat from a public integrated model to a public contract model. The reform gave the municipalities and hospital districts enormous freedom to organize, regulate and administer service provision. Under current legislation the power of the ministry is weak, and does not have effective means to affect decisions made at local level. The reform of 2006, aimed to increase national level supervision of provision of health services. Currently provision and quality of healthcare services vary considerably between municipalities. This can lead to conflict with the Constitution which provides equal access to health services according to need for all Finnish residents. However, it has been found that when service production is becoming increasingly complex, it is more difficult to pinpoint failures to individual healthcare professionals from the national level. National level supervision is to be reinforced by expanding the functions of the National Authority for Medicolegal Affairs. Now, its main purpose is to supervise healthcare professionals. It is anticipated that the reform increases patient safety and decreases differences between municipalities in service production. Other authorities The National Institute for Welfare and Health (THL) is a specialist and research institution tasked with research and development on health services and other specialist tasks in the field. The National Supervisory Authority for Welfare and Health (Valvira) guides, supervises and runs the licensing administration of social and healthcare. Regional State Administrative Agencies are responsible for supervising healthcare on a regional level. These, together with Valvira, also supervise healthcare professionals. The Finnish Medicines Agency (Fimea) is responsible for licensing and supervisory tasks, research and development and producing and disseminating pharmaceutical information22. 3.2. Finance system Finland has a compulsory, mainly tax-based healthcare system, which provides comprehensive coverage for the entire population. Both the state and the municipalities have the right to levy taxes. Central government's contribution to municipal healthcare is determined by population numbers, age structures and morbidity statistics. If this tax levy is not adequate for providing the public services required, the municipals receive state subsidies. Statutory health insurance, which covers the entire population, is divided into medical care insurance and earned income insurance. The Social Insurance Institution of Finland (known as KELA) coordinates health insurance, which is part of social security . Medical care insurance reimburses clients for tests and treatments ordered by private doctors and dentists as well as for client charges according to statutory reimbursement rates. Clients pay anything in excess of the statutory reimbursement rate themselves. Medical care insurance is financed almost solely by the state and policy-holders, each paying half of the costs. Medical care insurance contributions are deducted from the income, pension and benefits of all policy-holders23. Earned income insurance covers sickness allowance, rehabilitation allowance, special care allowance as well as maternity, paternity, parental and special maternity allowance. Earned income insurance also covers some of the costs of occupational healthcare services provided by employers and entrepreneurs as well as holiday pay accrued during parental leave. Occupational healthcare services are free of charge for employees. 21 Wikipedia 22 www.stm.fi 23 www.stm.fi 27 There is no official budget for financing the NHI scheme. The level of employers’ and insured persons contributions are decided annually by central government. The allocation of NHI resources to different types of care, as well as their regional distribution, is based on demand for services and on the reimbursement system, which is the same across the country. The NHI is mainly funded by employers and employees from whom income based insurance premiums are collected with taxes. The NHI is run by the Social Insurance Institution (SII) with about 400 local offices all over the country. The SII falls under the authority of the Parliament24. The government social insurance agency called Kansanelakelaitos or more popularly known as KELA, is responsible for coordinating the state contribution system. KELA will reimburse all registered citizens for treatment by doctors, dental care, hospital examination and treatment. Reimbursement is calculated based on a set of fixed fees, which means that citizens may be eligible to pay some of the costs themselves25. The responsibilities of this institute include coverage of some family benefits, National Health Insurance, rehabilitation, basic unemployment security, housing benefits, financial aid for students and state-guaranteed pensions. The NHI system offers varying levels of reimbursement for outpatient drugs, care from