Policy responses for Finland - HSRM


Policy responses for Finland

4. Paying for services

Adequate funding for health is important to manage the excess demands on the health system. This section considers how countries are PAYING FOR COVID-19 SERVICES. Health financing describes how much is spent on health and the distribution of health spending across different service areas. The section also describes who is covered for COVID-19 testing and treatment, whether there are any notable gaps (in population coverage and service coverage), and how much people pay (if at all) for those services out-of-pocket.

4.1 Health financing

The financing and organising of publicly-financed health services is the responsibility of the municipalities and municipal organisations. For health care as well as for other public services the municipalities levy taxes and receive state subsidies from the central government. The pandemic and the declaration of the state of emergency (see Section 5) have not changed this funding mechanism. This means that any exceptional measures taken in the public health services due to the pandemic is funded by municipalities in the first instance. However, while the overall financial situation of the municipal sector is difficult and in recent years a growing number of municipalities have had difficulties in managing their regular duties, the government has promised to support municipal finances at a later stage.

The regular state budget for the year 2020 included some funding for preparing for large infectious disease outbreaks. However, the funding was planned to be used for purposes, such as participation in influenza vaccine development and for the update of the pandemic preparedness plan. Due to the COVID-19 pandemic, the Government submitted a supplementary budget proposal of €398 million on March 20th. The supplementary budget focuses on covering expenses incurring from COVID19 and on easing the financial situation of companies. In the administrative branch of MSAH, €26 million were proposed for the hospital districts for the procurement of diagnostic test tools and other medical devices.  An appropriation of €12.8 million was proposed for THL operating expenses, such as costs arising from disseminating information and raising awareness among citizens, for safeguarding the functioning of information systems and for maintaining laboratory capacity. From that, €6 million are planned to be allocated to COVID-19 research, such as developing rapid diagnostic methods and research into the emergence of immunity and for creating a national monitoring system. Of the additional funding, €4 million is planned to be used to monitor the effectiveness of the measures to curb the spread of the coronavirus. In addition, €5 million are proposed for participation in the international R&D of COVID-19 vaccine.(1)

On April 8 2020 the Government reached an agreement on second supplementary budget proposal for 2020 (2). They also agreed on the General Government Fiscal Plan for 2021–2024. The second supplementary budget proposal included several measures. These measures included a compensation of €547 million to the municipalities for the loss of tax revenues. However, a corresponding reduction will be made in state transfers for municipalities in 2021. In addition, the Government decided to cover in full the cost incurred in the health services and by public authorities due the COVID-19 epidemic.  €600 million is allocated for the purchase of protective and other equipment and medicines through NESA. The Government will also propose additional funding for the Digital and Population Data Services Agency to cover the increased costs of the public helpline service, (€ 2.2 million appropriation increase), for the RSAA, to cover expenditure arising from additional duties under the Communicable Diseases Act and the Emergency Powers Act (€2.9 million), for the increased costs of high capacity provision within the remote services provided by the Government ICT Centre Valtori (€2.5 million appropriation increase), and for the operating costs of Fimea in order to secure the pharmaceutical services required by the epidemic and to ensure the capacity of ICT services (€ 1.9 million).

The Government also stated that the support to the municipalities will be continued in the third supplementary budget to be decided in May 2020. The measures will include direct compensation to hospital districts with a discretionary government transfer for additional costs related to the COVID-19 epidemic, an increase of the municipalities’ share of corporation tax revenue in 2020, an increase in the central government transfers to municipalities for providing public services in 2020, and additional discretionary increases in government transfers to municipalities. Altogether these planned measures directed at municipalities are expected to total at least €1 billion.

On April 15th 2020 The Government decided to restore its funding for the World Health Organization to the 2015 level, which was EUR 5.5 million. (3)

According to a newspaper report on April 23, the Municipal Guarantee Board, which is a public law body safeguarding the joint financing of the Finnish municipalities, has raised the issue of securing funding of outsourced health and social services in the case that the pandemic situation will be prolonged. The financing risks apply to public-private joint venture companies in which municipalities are minority owners. According to the legislation, it is not possible to fund companies which are not controlled by municipalities, through the joint municipal funding mechanism. In addition, according to the Municipal Act, the municipalities are not allowed to grant loans, guarantee or other collateral to companies in which the municipality is a minority owner. According to an expert opinion commissioned by the Municipal Guarantee Board, the funding risk would request that these outsourcing agreements should be dissolved voluntarily or the companies should set under the municipal control through legislation. (4)

On 28th April Kela has made a decision on reimbursement of coronavirus-related examinations and tests in the private sector after from 1st May as part of its reimbursement of private care (5). In addition, Kela extended the reimbursement of remote services provided by private health care also to physician services provided via phone calls, a recognized chat connection or video connection. (17) Kela has reimbursed private health care remote services provided by physicians, physiotherapists, psychologists and nurses already since 2016. (18) Kela reported that reimbursements for the remote services provided by private physicians increased in 2020, yet they account for a marginal share of all the imbursements, comprising only approximately 1.5 % of the total reimbursements. (19) On the other hand, in occupational health care remote services (including services provided via chat connection and email) have been reimbursed for medical treatment and other occupational health care since 2016 and for preventative care since 2017. During the state of emergency, the service provider and employer have been able to agree on remote services only by email with official documentation done after the state of emergency has ended. Costs due to administrating the COVID-19 vaccines in occupational health are reimbursed as well as conducting COVID-19 tests if laboratory services have been included to the occupational health care contract. (20)

On 28 May 2020 MSAH decided on additional discretionary government transfers to be allocated towards psychosocial support. Funding will also be granted for the development of digital services. Funding will be allocated to 106 organisations and foundations for 109 different purposes and the decisions were based on applications sent in by 382 organisations. A total of EUR 5 million will be distributed from the gambling proceeds of the state-owned company Veikkaus Oy. (6)

The Government’s fourth supplementary budget proposal for 2020 contains a substantial support package for the local governments. The aim is to ensure that basic public services can continue to be provided and to alleviate the financial challenges faced by municipalities as a result of the coronavirus (COVID-19) crisis. The supplementary budget proposal includes various items affecting municipalities, consisting of proposals for mitigating the impact of the virus crisis and for supporting economic growth. (7)

On 16th September, the Government released its plans for the 2021 budget. The Government proposed to channel around EUR 2 billion to costs directly related to the COVID-19 epidemic for the years 2020 and 2021. In addition, the financial situation of the municipalities was to be supported with EUR 1.45 billion through the supplementary budget in Autumn 2020 and in the 2021 budget and in 2021-2023 EUR 450 million were suggested to be directed to additional costs of treatments delayed due to the epidemic. (8)

On 17 September, the Ministerial Committee on Economic Policy decided in favour of reimbursing the Hospital District of Helsinki and Uusimaa (HUS) for the costs of the increased testing and analysis capacity needed for COVID-19 testing at the border. The costs approved by the State aid authority will be reimbursed up to a maximum of EUR 200 million. (9)

On 24th September, the Government released its proposal on the 6th supplementary budget in 2020. The proposal allocates an additional state subsidy of EUR 200 million to the Helsinki and Uusimaa Hospital Districts (HUS) for costs incurred by COVID-19 testing and the increase of the testing capacity for the border control. (10)  HUS commissioned a private laboratory Synlab for COVID-19 tests worth of EUR 100 million. According to HUS the commissioning was decided without competitive bidding due to time constraints. However, the commission has prompted a complaint to the Market Court from another private laboratory Vita Laboratoriot. (11) 

On 16th September, the Government released its plans for the 2021 budget. The Government proposed to channel around EUR 2 billion to costs directly related to the COVID-19 epidemic for the years 2020 and 2021. In addition, the financial situation of the municipalities was to be supported with EUR 1.45 billion through the supplementary budget in Autumn 2020 and in the 2021 budget and in 2021-2023 EUR 450 million were suggested to be directed to additional costs of treatments delayed due to the epidemic. (8)

On 5th Oct 2020, in the 2021 budget proposal the Government suggested to allocate EUR 1.6 billion for covering the costs incurred by the COVID-19 epidemic. The major part, EUR 1.4 billion, is proposed to be allocated to testing and tracing activities. Municipalities and hospital districts are to receive EUR 200 million for other direct costs due to COVID-19. In addition, the Government has decided to appropriate EUR 450 million to be used in 2021-2023 for treatments and services delayed due to the COVID-19 epidemic. (12)

Along with the 2021 budget proposal, the Government released a proposal on a temporary change to the Act on the state transfer for municipal basic services. According to the proposal motivated by the economic consequences of the COVID-19 epidemic these transfers are to be increased by around 8% (EUR 600 million) for the 2021 budget compared to the regular 2020 state budget. (13)

On 29 October, the Government released its proposal on the 7th supplementary budget in 2020. The proposal increases the budget appropriations by €13.7 million of which €10 million is allocated to the Social Insurance Institution for improving data protection and emergency security of IT infrastructure, and €1 million to the County of Åland for costs incurred by COVID-19 testing and tracing. (14)

On 5 November, the Government proposed a temporary change in the law on state transfers to municipalities for basic services. According to the proposal the transfers are increased for the year 2020 by additional €400 million due to additional costs incurred by the COVID-19 epidemic. In addition, another €350 million is allocated for cost incurred by COVID-19 testing and tracing. (15)

Health care and social services are included in the draft of Sustainable Growth Programme for Finland which relates to the national recovery and rehabilitation plan financed through the EU recovery instrument. Health care and social services form one of four pillars in the program and specific aim would be to enhance availability of services and to support effectiveness of services. The investment plan is currently under preparation and will be submitted to the Europen Commission in summer. (16)

The Ministry of Health and Social Care has provided the Finnish Student Health Service (FSHS) with a state grant to extend the mental health services provided. The purpose is to better address the needs of assistance and support for college students during the coronavirus epidemic. (21)

The Government made decisions in its mid-term policy review to promote wellbeing and support COVID-19 recovery efforts. Firstly, funds are planned to be allocated for the purchasing of the COVID-19 vaccinations for the coming years, EUR 50 million for 2022 and EUR 35 million for 2023. In addition, funds will be allocated to carry out a comprehensive package of measures to mitigate the negative effect the COVID-19 crisis has had on children and young people. Lastly funds will be allocated to improve the access to care in primary health and dental care to address the backlog in rehabilitation and treatment. This allocation will be linked to amending of care-guarantee legislation bringing in shorter maximum waiting times for public health centres. (22)