First step of the privatisation of the Finnish health system

doctor-1149149__340According to the online newspaper Finland Times, the government  announced plans to convert public health care units into publicly-owned companies.This is the next step towards a global privatization, which is the objective of the National Coalition Party.

Going towards a privately managed health system offers an interesting market for international health operators

Officially, such a change would make it possible to compare cost and efficiency of publicly-owned and private operators. In reality, transforming public services into publicly-owned company is always leading towards a situation where the state sells first a percentage of its shares, and finally the totality of them. If it was not the case, there would be no need to create (publicly own) private companies, as other solutions exist. And we have seen that it did not go so well in the sector of energy, where privatization has meant a steep increase of the costs for the users.

According to Finland Times, from 2019, regional health authorities would license the public, private and third sector operators including civic organizations to offer primary care services. Patients could then choose the service provider they want, but would have to stay with their choice for some time at least and would pay the same fees irrespective of whether the doctor is employed by a commercial or public company, as long as they are approved by the authorities to get public health money.

It is also mentioned that “the Confederation of Finnish Industries, EK, profiled as the leading lobbyist for Finnish business interests, praised the governmental plans“. International health care providers are already preparing their offers.

Why change the Finnish system for something less efficient

When the government wanted to change the health system, one could have expected that its experts would look at the systems which have been implemented in other countries, and in particular compare the impact of different solutions on the costs and on the quality of care, in order to achieve the best efficiency balance.

When you look for the best systems in the world, you can use the rankings provided by different operators: among the most recognized, one is the  Euro Health Consumer Index, which measures the quality of the services provides, and the other one is the most Efficient Health Care ranking, provided by Bloomberg.

The 2014 Euro Health Consumer Index (ECHI) ranked 37 countries according to several factors. These were patient rights and information disclosure; accessibility and waiting times for treatment; outcomes; the range of services offered; illness prevention and access to pharmaceuticals. In this ranking, which is according to experts is the best available on the market, Finland is in  4th position behind Netherlands, Switzerland and Norway. One can consider that it is quite a good result.

Then, one can think that the Finnish government wanted to make it more efficient and spare some money. In order to get an opinion on this topic, it is useful to consult the Bloomberg study, which is less quality oriented, but gives good data concerning the health systems’ costs. In terms of costs per capita in 2014, Finland spent $4,232, Norway $9,055, Switzerland $8,980  and Netherlands $5,737. Even in percentage of GDP, Finland fares quite well, with 9,1 % of the GDP spent on health care, against  12,5 % for Netherlands, 11,4 % for Netherlands, and 9,1 % for Norway. Compared to the other Nordic and Western  European countries, Finland does really good, and a serious analysis would show that it is today the most efficient health system,  providing the best quality for a relatively modest price.

Why change an brilliant health system instead of improving it

The government could have worked on the weaknesses of the present system, instead of deciding on a reform which is going to cost a lot in terms of money, unrest and political struggle, and not necessarily a winning one.

On the side of the national Coalition Party, the reform is pushed because the party is more and more changing from a conservative party to a supporter of big financial players. It is not so interested anymore in small businesses or conservative ideas, which explains the increased success of the Center party which can attract those abandoned by the NCP.

The Center party had an interest in the reform consisting in creating a large number of new regions, offering interesting political and administrative appointments for its members. M. Sipilä probably imagine that he will be able to control the private operators, but it may prove quite difficult, in particular when the resources of the  administration of the health system will continue to be cut , providing less people to implement the control.

The Finns Party was against, but as usual has difficulties to oppose such a reform: it would mean the end of the coalition, and they would lose their positions in the government. Being a Minister of Foreign Affairs seems important for Timo Soini.

And there is also for a inexperienced leader like M. Sipilä the temptation to appear like a strong reformer: it would have been easy to go the Swedish way and to limit the waiting lists in the public service, by providing incentives and improving the top management of the primary health care system, but is is not so attractive when you want to look bold and efficient. It would have also obliged the government to put an end to the present system where the people working have direct access to private health care with a funding provided by their employer, which would not have been good for M. Sipilä’s popularity (but it would have been good for Finland’s competitiveness) .

As matter of conclusion, I would strongly recommend that, before  deciding on new measures in the next weeks, M. Sipilä’s teams have a look at the health care in countries which are really more efficient: for example Singapore, the most efficient health care in the world, with low costs and excellent results, organized in a similar way as today’s Finland, but with very strong incentives to limit the costs for all actors. And if Finland wants really to go to a public-private mix, France or Germany could be used as references, but their costs are definitely higher. And they might visit the US, which, with a private health system in principle controlled by the state, have the most inefficient system in the world, with the highest costs and health indicators comparable to east Africa.


Categories: Government, Health

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