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Government amends its draft proposal on health and social services reform in response to comments received

Ministry of FinanceMinistry of Social Affairs and HealthMinistry of the Interior 13.10.2020 13.31 | Published in English on 13.10.2020 at 18.02
Press release
Sote-uudistus etenee. Isä ja tytär tulevat terveysasemalle.

The Ministerial Working Group on Health and Social Services has reviewed the opinions submitted in the round of comments held from 15 June to 25 September 2020 on its draft government proposal. As a result, the Government has made a number of policy adjustments and amendments to the draft. A total of 804 comments were received. The draft proposal will be submitted to the Finnish Council of Regulatory Impact Analysis on 14 October 2020 and presented to Parliament in early December 2020. The new self-governing areas foreseen in the health and social services reform will be renamed wellbeing services counties (earlier health and social services counties).

Government amends its draft proposal on health and social services reform 
in response to comments received

The Ministerial Working Group on Health and Social Services has reviewed the opinions submitted in the round of comments held during 15 June–25 September 2020 on its draft legislative proposal. As a result, the Government has made a number of policy adjustments and amendments to the draft. A total of 817 opinions were received in the round of comments. The draft proposal will be submitted to the Council of Regulatory Impact Analysis on 14 October 2020 and presented to Parliament in early December 2020. The areas based on the division used in the health and social services reform are to be renamed ‘wellbeing services regions’ (previously health and social services counties). 

Most of the feedback in the round of comments was related to the financing of municipalities, wellbeing services counties and rescue services; the right to tax, self-government and oversight of wellbeing services counties; responsibility for organising the services; provision of services by the counties themselves and the purchase of third-party services; the nullification of agreements; the responsibilities for promoting health and welfare; and the timetable for execution and the implementation of the reform.

Names and regional division

For the purposes of the round of comments, the proposed new self-government level was referred to as ‘health and social services counties’. All the new self-governing areas would now be knows as wellbeing services counties. Later, when regional development duties, for instance, are included in the entities’ duties, the name will be replaced by the term ‘county’.

The Hospital District of Helsinki and Uusimaa (HUS) would be renamed Joint County Authority for the Hospital District of Helsinki and Uusimaa (HUS-yhtymä). The term ‘county’ would also be used to form other compound words. For example, the elections would be called county elections.

The municipalities of Eastern Savo would be part of the Eastern Savo wellbeing services county.  

Amendments to the responsibility for organising the services, purchased services and extension of existing agreements

Key issues raised in the course of the discussions held during the round of comments and the feedback received focused on the organisation and provision of services in the counties and the exercise of public authority. Other matters calling for closer scrutiny included policy guidelines on the range of services to be provided by the counties themselves; the multi-provider model; purchased third-party services; as well as the use of temping agency staff and personnel leased from service providers. The government proposal was clarified as a result of the round of comments.

The point of departure is that health and social services are to be planned and implemented – in terms of content, extent and quality – so as to truly respond to the needs of the residents in the individual counties. Services should be provided on an equal basis close to the clients in the form of coordinated services with due regard to the needs of the local population in the county.

The counties would be required to possess adequate skills and competence, capacity and resources to assume responsibility for organising health and social services and to ensure access to these services under all circumstances as determined by local needs. While the counties themselves should be able to provide a sufficient range of services in primary and specialised healthcare, no requirement to maintain any over-capacity would be imposed. Under emergency conditions, access to the necessary services should be ensured through in-county service provision, contingency planning and cooperation with other wellbeing services counties and service providers. Unless otherwise provided by law, the counties would not be permitted to procure services from private service providers when such services include duties related to the responsibility for organising the services or involve the exercise of public authority or include social work, 24-hour social services, primary and specialised 24-hour health services or organising responsibilities related to emergency medical services. 

A county would be allowed to organise and provide services in the territory of another county only in collaboration and agreement with the other county (procurement of services from another county, a joint agency/body, cooperation within the collaborative catchment area, centralised services, a jointly owned company).

For the purposes of providing services within the county, companies owned by the counties would be equated with private service providers. A public undertaking is not a government agency.

Private service provision and the multi-provider model: 

The provision of services by multiple operators would still be possible within the limits imposed by the Constitutional Law Committee. Services could still be extensively procured from private service providers; in fact, all services could be so procured unless specifically prohibited by law. For example, a wide range of social services pursuant to the Social Welfare Act that are currently provided as purchased services could be procured from private service providers, such as home help services, home care, family care, housing services and institutional services. 

The requirements concerning private service providers would be clarified with due regard to the content and scope of the totality of services procured by the county. Duties involving the exercise of administrative and public authority will be clarified in the preamble to the act. The exercise of public authority is always based on law. Public authority may be exercised as part of the services provided by a private service provider if so stipulated by law, as in the case of the application of restrictive measures permitted under the Child Welfare Act and the Disability Act.

Service vouchers would continue to be used. The Service Vouchers Act will remain in force and be amended in due course. Due consideration in legislative drafting will also be given to the personal budget, which will require special legislation.

The provisions on the use of temping agency staff and personnel leased from private service providers for the purpose of performing work will be defined in greater detail. Wellbeing services counties would be allowed to use leased employees and temping agency staff necessary for the purpose of providing health and social services, provided that these health and social services professionals work under the direct supervision of the county. Additionally, leased personnel and temping agency staff could also be used in 24-hour emergency health services to assist the county’s own health and social services professionals. A more extensive use of leased or temping staff in 24-hour on-call services would be permitted on a temporary basis or when short-handed.

However, the assessment of clients’ needs for services and decision-making on the provision of social services could not be entrusted to a private service provider or any personnel leased from such a service provider. Assessments and care-related decisions could be made in the context of purchased primary healthcare services as well as specialised healthcare services, provided that they do not require a hospital or emergency room environment. Moreover, a leased physician or dentist could carry out assessments and make care decisions when on call 24/7 as well as when treating a patient admitted to specialised care. As in the past, referrals to specialised care could be issued by any legalised physician or dentist. As a rule, decisions on the admission of referred patients to specialised care would be made by a government-appointed physician or dentist. However, a physician or dentist leased to perform work or services could make decisions on admitting patients to specialised care if it is a question of urgent care or access to care.

The criteria for subcontracting by private service providers will be clarified by specifying the permitted scope of such subcontracting and identifying the services that may be subcontracted. 

Nullification and termination of outsourcing agreements: A number of outsourcing agreements would be subject to termination instead of being nullified. Consequently, the nullification of outsourcing agreements on health and social services would be limited to exceptionally extensive and substantial agreements as well as to cases in which outsourcing is explicitly forbidden by law (exercise of public authority, 24-hour social services, etc.). 
 
Wellbeing services counties would be authorised to terminate agreements that do not meet the nullification criteria, but specify provisions on matters related to the organising responsibility in such a way that this responsibility is not realised as determined in the overall assessment of the county. Such an overall assessment should ensure that the county is entitled, by invoking its organising responsibility, to determine the extent of the services in its territory on an equitable basis, while ensuring that the county itself is left with adequate resources for the provision of its own services. The term of the nullified and terminated agreements would be extended up to three years, while the agreements subject to termination could qualify for an extension if access to services would otherwise be jeopardised.

Other key points

Guaranteed access to medical care
The primary healthcare guarantee stated in the government programme will be implemented as part of the productivity package and the EU recovery instrument. Counties will be incentivised to guarantee access to care, for which workable models and practices already exist. Provisions on the use of service vouchers will included in the care guarantee legislation.

Promotion of health and wellbeing
Concerns were raised during the round of comments about ambiguities related to the responsibilities for the promotion of health and wellbeing. Wellbeing services counties should promote health and wellbeing in collaboration with the counties’ municipalities and provide expert assistance for this purpose. Additionally, the counties should cooperate with other government agencies, private companies and public-interest NGOs engaged in the efforts to promote health and wellbeing in the territory.

Student care
Access to local student care services will be ensured by law.

Länsi-Pohja Hospital
In the Lapland wellbeing services county, the continuation of joint 24-hour services will be extended up to the end of 2032. However, the operations may not continue to be provided as outsourced purchased services beyond 2025.

The state's strategic guidance focuses on the tasks of organising wellbeing services counties

Wellbeing services counties are self-governing organisations, in which central government guidance and direction would be based on positive interaction and annual negotiations. The provisions on the guidance and direction to be provided by the central government regarding the organising duties of the counties have been clarified so as to focus on key aspects relevant to financing and the organisation of the services. The foreseen guidance and direction would not address the duties of the counties or the provision of services in any great detail, nor impose further obligations in this respect. Ministries would not be able to impose compulsory duties on the self-governing counties except through legislation.

Ministries would engage in annual negotiations with the wellbeing services counties to provide guidance and direction focusing on the organisation of health and social services as well as rescue services. The annual guidance and direction process would provide data for the preparation and monitoring of the General Government Fiscal Plan, while at the same time contributing towards the attainment of the objectives established for general government finances. At the negotiations, ministries would be able to issue recommendations for action for the wellbeing services counties.

If it is determined that the party responsible for organising health and social services lacks the ability to satisfy the fundamental rights of the people, the Ministry of Social Affairs and Health could file a request with the Ministry of Finance to initiate an assessment procedure. The right of initiative has been clarified in response to the feedback.  Any initiative for the commencement of the assessment procedure would be based on the annual guidance and direction process, an ongoing interaction between the counties and ministries, as well as an annual expert appraisal, by the National Institute for Health and Welfare, of the organisation of health and social services. 

Additionally, the matters to be specified in the agreements between collaborative catchment areas and the obligations to make such agreements have been determined in greater detail in response to the comments. The contents of the co-operation agreements on health and social services concluded by wellbeing services counties have been clarified. As a result, a total of five collaborative catchment areas would be created around university hospitals, which would then conclude co-operation agreements with their wellbeing services counties within their region. 

Said agreements would improve the cost-effectiveness, productivity, quality and client and patient safety as well as the adequacy, equal access, language rights and performance of the service chains and services in the health and social services sector. Additionally, the division of duties should ensure that the unit providing the health and social services under the co-operation agreement possesses adequate financial, human and skills resources for the fulfilment of the task. The agreements between collaborative catchment areas should include provisions on the division of duties and cooperation. Should any counties fail to agree, the Government could make the final decision on the agreement and determine its contents. 

In accordance with the special arrangement made for Uusimaa, the Joint County Authority for the Hospital District of Helsinki and Uusimaa would be tasked to coordinate the preparation of the co-operation agreement for the Uusimaa collaborative catchment area. 
Model for directing investments in the wellbeing services counties is based on the capacity to borrow money and investment plans

The purpose of the provisions regulating the investment plans made by counties is to guarantee that investments are planned on a financially sustainable basis. The funding made available to the county must be enough to finance the planned investment. Oversight is designed to ensure that large investment projects for the counties are planned cost-effectively with due regard to equivalent plans being made by other counties for each collaborative catchment area.  While the approval procedure for investment plans and the capacity to borrow money has been retained, it was streamlined in response to the feedback.  

Central government funding for municipalities 

In response to a large number of comments, it is proposed that the maximum amount of the permanent transitional compensation related to the equalisation of municipalities’ funding be EUR +60   per inhabitant instead of the previous EUR +100. Moreover, a new criterion has been added to the central government transfers system: an additional part to compensate for the increased need for services in growth municipalities due to the increase in the number of population. This additional part will be financed within the system on a equal basis in terms of euros per inhabitant, whereas the change in the transitional equalisation will not require special financing.

A new transfer based on the increase in the number of population (approximately EUR 29 million) will be added to meet the increased need for services caused by demographic growth. This transfer will be financed within the central government transfers system on an equal basis in terms of euros per inhabitant.

Rearrangement of assets and compensation

The joint municipal authorities for hospital and special care districts, inclusive of their assets and liabilities, would be taken over by the wellbeing services counties. The movable assets and contracts of the health and social services as well as the rescue services of the municipalities and other joint municipal authorities, including the holiday pay liabilities of the staff, would be transferred to the wellbeing services counties for no consideration. As the transfers would be used to adjust the basic capital, they would not be recognised in profit or loss. In this respect, the draft proposal has not been amended.

As a result of the transfer of assets, municipalities may incur costs that are beyond their control. For this reason, the proposal provides for the compensatory regulation required by the Constitutional Law Committee. In response to the feedback received, the rate to be applied in compensatory regulation was reduced to 0.5 percentage points of the imputed need for an increase in the municipal tax rate.

Financing of the wellbeing services counties

In response to the round of comments, the symmetric permanent transitional compensation for counties of EUR +150 per inhabitant was replaced by an asymmetric compensation of EUR +200 and EUR -100 euros per inhabitant. This change will be financed by the state. As previously proposed, the transitional period will last seven years.

The weighting factor for bilinguality in the allocation criteria for health and social services funding will be increased fro 0.35 to 0.5 per cent. The increase will be deducted from the imputed funding allocated according to the need for services with the result that its relative weight decreases from 81.6 to 81.45 per cent.

As of 2023, the coefficient based on wellbeing and health performance (health & wellbeing coefficient) of 1 per cent would be included in the funding criteria and be initially distributed on a per capita basis. From 2026 onwards, health & wellbeing funding will be determined in accordance with the imputed health & wellbeing coefficients of the counties. The total funding to be distributed according to the number of residents with a mother tongue other than Finnish or Swedish will increase with the increase in the number of such foreign-language speakers.

Nationwide, funding will be increased up to 2029 at a rate determined by the estimated increase in the need for services generated by the social expenditure analysis model, increased by 0.2 percentage points. From 2029 onwards, funding will be increased based on the forecast produced by the analysis model.

Adequacy of funding for rescue services to be assessed

A major concern raised in the comments was the adequacy of funding for rescue services and the criteria for determining the amount of funding. The Ministerial Working Group on Health and Social Services noted that according to the estimate made by the Ministry of the Interior, the 2020 funding base for the rescue operations now being transferred from municipalities will not be enough to guarantee the level of service prescribed by law. Based on data gathered from rescue services across the country, the Ministry of the Interior arrived at a total deficit of EUR 79 million.

For 2021 and 2022, responsibility for the level of performance to be provided by rescue services and related funding will rest with the municipalities. The Ministry of the Interior and the Ministry of Finance will reassess the level of funding to be reallocated from municipalities to the wellbeing services counties relative to the funding necessary to guarantee the statutory level of service.

The financing model will be fine-tuned with regard to the criteria determining the risk factors. The risk factor elements will be determined by the end of the year and a Government decree issued in due course. At the same time, the rescue services risk assessment model used for determining the need-based criteria for funding will be developed further over an extended period of time in consultation with the services.

The Ministry of the Interior will issue its own communication on the Government policies at a later date.

Taxation by counties being prepared

As indicated in its programme, the Government is planning to introduce a new county tax. Accordingly, preparations to this end will be completed by a parliamentary committee by the end of 2020. The tax policy, including the timetable, for the adoption of the right to tax will be announced promptly upon completion of the committee’s work. The Government is committed to completing the tax and financing laws during its term of office and having them enacted by 2026, if not earlier. County taxation will not increase the overall tax rate.

The funding of the counties in relation to their duties will be reviewed by the Government in the 2022 discussions on spending limits. If the legislation on county taxation is not completed within the timeframe given above, the Government undertakes to guarantee the adequacy of the funding base for the counties. 

According to the government programme, the establishment of self-governing counties will permit a gradual transition to counties with a wide range of duties covering several sectors following parliamentary preparations due for completion by the end of 2020. The working parties are to determine the criteria and identify the duties that could be reassigned from municipalities, joint municipal authorities and the state to the wellbeing services counties.

Policy statements on the preparations for county taxation and the extension of the range of duties to be assumed by the new wellbeing services counties will be completed within the same timeframe following completion of the work of the parliamentary working parties. 

The Ministerial Working Group on Health and Social Services has decided to phase out the multisource financing system at a brisk pace by introducing the necessary legislation during the present government term. 

Implementation

A transitional provision in force up to 2033 on the hospitals in the Länsi-Pohja and Eastern Savo hospital districts as well as the joint 24-hour services to be provided by these hospitals has been added to the act implementing the reform of healthcare, social welfare and rescue services.

The operations of the wellbeing services counties would be commenced by an interim preparatory body promptly upon the entry into force of the proposed legislation. The establishment and operations of such interim preparatory bodies would vary from county to county depending on whether any joint regional arrangements for health and social services are in place. In the law-making process, the proposed provision was amended to allow wellbeing services counties to establish political monitoring groups. The cost of such groups would be paid by the state.

The Government will finalise legislative proposal following feedback from the Finnish Council of Regulatory Impact Analysis. The proposal is to be submitted to Parliament in December 2020. The entry into force of the proposed legislation is subject to parliamentary approval.


Inquiries:
Kari Hakari, Director General, Ministry of Social Affairs and Health, tel. 02951 5163642, firstname.lastname(at)stm.fi
Auli Valli-Lintu, Senior Ministerial Adviser, Ministry of Social Affairs and Health, tel.  02951 63463firstname.lastname(at)stm.fi
Jani Pitkäniemi, Director General, Ministry of Finance, tel. 02955 30494, firstname.lastname(at)vm.fi
Janne Koivukoski, Deputy Director General for Rescue Services, Ministry of the Interior, tel. 0295 488420, firstname.lastname(at) intermin.fi 
Ilpo Helismaa, Senior Ministerial Adviser, Ministry of the Interior, tel. 0295 488422, firstname.lastname(at)intermin.fi