-03.05.20231 Under-Secretary of State, Dr. Tuomas Pöysti

Freedom of Choice and Competition - How Finland will use it?

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Finnish social and health services reforms• Ambitious social and health services reform together with a reform of

regional administration• concerns 50 % of the public sector employees• establishment of autonomous counties with directly elected councils

• Widening of the freedom of choice• Use of multiple producers => modern service ecosystem based on

platform economics• Use of competition and markets in the production of services =>

enhancement of effectiveness

• http://alueuudistus.fi/frontpage

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Objectives of the Finland’s social and health services reform?

Renewal of services

More expedient administration

Better and more fluid functioning of services

Citizen participation Enhancement of economic growth

Cost-effectiveness

to promote and enhance the activities of citizens and enterprises

Administrationas a service

Openness.Customer-focus.

Inter-action and dialogue

Diminuation of differences in health and social wellbeing

Improved equality in services, efficiency of fundamental rights

Slowing of the expenditure growth (1.5 % to GDP)

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Bridging the Sustainability Gap in the Public Finances

The savings target for the health and social services reform package is EUR 3 billion, approx. 1,5 % of the GDPThe expected annual growth of healthcare and social welfare costs must be cut from 2.4% to 0.9% between 2019 and 2029

Functional and performance gains trough digitalisationCompetition => wise use of resources

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New functions of the counties as of 1 January 2019

GovernmentDecisions on health and social services: nationwide work division, division of duties over county borders, policies for service provision, broad-based investments, other measures needed to safeguard availability of services, steering of information management and ICT

18 counties- Responsibility for

organising services- Responsibility for

financial resources- Determines service level

and contract for arranging services

Municipalities

5 collaborative catchment areas

Counties• Healthcare and social welfare• Rescue services• Duties of the regional councils• Regional development duties and tasks related to the promotion of

business enterprise • Environmental healthcare• Planning and steering of use of regions• Promotion of regional culture and identity• Other statutory services organised on a scale that is larger than a

municipality that require deliberation

Collaborative catchment areas • Centralised duties in most demanding services• Streamlining of service structure, investments and services • Development and centres of excellence• Emergency medical service unit • Collaborative tasks and forum• Cooperation agreement

Service providers

•Public, private and third sector service providers

Municipalities• Promotion of health and wellbeing• Local democracy and dynamism • Statutory duties – local tasks• General mandate

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12 units with extensive service around the clock (incl. 5 university hospitals

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The Finnish model for organising health and social services and county government in the future:

Healthy people, fluent services and strong economy

Health and social services and county government reform legislation creates possibilities

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Promoting health and well-

being in municipalities and counties

Strengthening the self-determination and responsibility of

customer

Information, digitalisation and skillful personnel enablers

CitizenFunctional democracy and

participation

The usa of information - Integration og information

The Act on Financing of the

Counties - Criteria for the service needs

and cost containment

Economic growth

Taxpayercost-

effectiveness, effectiveness

Public, private and third sector providers

Promoting health and well-being in all

policies

Effective organising,

producing and managementMultiple producers

model - Same principles for

public, private and third sector providers

New CountyResponsibility to organise duties

Financing responsibilityResponsibility on integrated services and

functioning service chains

Alignment for preparation of the

legislation for wider freedom of choice

Measurements supporting and required

by renewal - Entrepreneurship

Multisectoral counties with

distinct distripution of work

Municipalities as local vital societies

Democracy in the Counties: county council

User- possibility to choose

- possibility to influence

Workforce transfers employees maintain their current terms of

employmentIncorporation has transition

period

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Issues to be addressed

• Freedom of choice in health care• Competition policy, social and health policy or both?• Will it function?

• Is health care exceptional?• Is freedom of choice alien to the social services?• Under which institutions and rules will competition and freedom of choice

work?

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Freedom of choice: cost-effectiveness trought shared decision-making and customer-centred serviceGovernment’s guidelines on the reform 29.6. 2016

Main rule in the primary and community servicesModified principle in secondary and tertiary care

User may choose between public, private or third sector provider

Finnish freedom of choise model. supports user-centred service integration

4 different tools- right to choose primary service provider- client vouchers- personal budget- right to choose among public producers.

The possibilities for producers of different sizes to operate in the market will be secured

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Theory

• Competition good to allocate scarce resources• Freedom of choice with shared decision-making creates incentives for

customer-cenred approach• Freedom of choice balances asymmetries of information and power• Health and social services are trust commodities

• big information problems• trust to service provider is a key decision-criteria

• A good case for public sector financing for universal health services and social services

• There is a case for multiple producers in the productions and utilisation of market mechanisms

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Practise• Conflicting goals in the market and freedom of choice models• Challenge of persons with multiple service needs• Commissioning - provision -distinction in practise• Trust commodity

• conditions for trust• Few persons actively change producers• Different levels of complexity and different business logics in the social and health services

commodities• Information conditions vital for the market• A natural tendency for big producers and concentration of the markets

• incentive structures in the market• risks to be allocated by the market• producer payment systems decisive

• Listing of clients to producers in the opening of the markets is a decisive act• Dependent on the regulation and institutions of the markets

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Primary services

producer Producer selected

by the used to which the user

lists himsels/hersselg

Public service institutions of

the CountyServices outside the freedom of

choice

Assessment of service

needs (gatekeeper)

Producers of services on the

bases of vouchers and

personal budgets

Finnish freedom of choice model

-03.05.2023 Alivaltiosihteeri Tuomas Pöysti12

Will it work?Updates?

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