A revolution in health and care: Global Government Finance Summit, part 3

By on 03/10/2018
Martti Hetemäki, permanent secretary of Finland's Ministry of Finance: "One fifth of Finland's people, consume four fifths of health and care spending."

With 295 municipalities and 20 hospital districts serving its 5.5m people, Finland’s health and care system looks cumbersome. It is time, the country’s finance department chief told delegates at the Global Government Summit, for radical reform. Matt Ross reports

As developed countries struggle to meet fast-rising demand for health and social care provision in an era of tight budgets, governments are looking for ways to deliver these crucial services more cost-effectively. Many of their solutions involve data analysis, market mechanisms and personal choice – and at the 2018 Global Government Finance Summit, an audience of senior civil service finance professionals heard that Finland is using all three techniques in a wholesale reorganisation of its approach to health and care.

One fifth of Finland’s people, said Martti Hetemäki, Permanent Secretary of Finland’s Ministry of Finance, consume four fifths of health and care spending – so “if we can improve their situations and reduce their need for care, we can achieve quite large expenditure savings.”

But there are structural problems. Most Finnish health and care services are currently organised by its 295 local municipalities, Hetemäki explained, but 20 hospital districts – owned by the municipalities – provide specialised services. As a result “the system is really fragmented, and one of the consequences is that data use is complicated.”

Speaking to delegates from 11 countries gathered at the Summit – which was hosted this year in Berlin by the German government, and supported by EY and Microsoft – Hetemäki explained that the government needs to achieve greater economies of scale, more straightforward management of patients’ pathways through care, and better use of data. And this goal, he added, is not easily achieved when services are delivered through a highly localised patchwork of nearly 300 municipalities.

The new model

So the country is undertaking a major reform of provision – passing responsibility for both health and care to 18 counties, whilst streamlining the hospital districts system to create 18 organisations with the same footprints. Existing today as “non-executive organisations with very small numbers of personnel”, these counties will take over about half the municipalities’ staff – delivering some services, and commissioning others from private sector providers. The goals, said Hetemäki, are to cut the annual rise in health and social care expenditure from 2.4% to 0.9% of GDP; and to improve access to, and the quality of, health and care services.

The counties will receive their budgets directly from central government, Hetemäki explained – and much of this funding will be drawn from the municipalities’ current incomes: there is, unsurprisingly, “some resistance from the municipalities” to the plan.

The new model should, though, provide delivery structures with the scale and reach to explore new service models: “There will be lots of experiments, lots of variations between the counties, and we can learn from that what works and what doesn’t,” he said. In particular, an expansion of user choice and the ‘personal budgets’ model will allow patients to choose from a range of health and social care providers – with pilots starting in all 18 counties after Finland’s Parliament has passed the relevant legislation.

Finland’s major reform of provision.

A drive on data

Built into the new system, said Hetemäki, are channels to gather and use detailed data on service delivery and patient treatments: “Pioneering legislation on the secondary use of health data” is currently passing through the Finnish Parliament, with the goal of supporting preventive work and improving services. On top of this, data on local access to services, delivery costs and providers’ performance against quality benchmarks will be gathered and published online.

How have Finland’s leaders won public support for this use of individuals’ health data, asked one delegate. Given the “declining trust in public bodies”, he added, he had his doubts that “a discussion led by the government about the need to share data will necessarily sway citizens. I think we need some serious thought about how to solve this data access issue.”

The Finns have adopted an Estonian model, replied Hetemäki, under which citizens can see exactly how their data is being used – and public bodies are barred from asking citizens for information if the data is already held by another public sector body.

The Once Only Principle

This is the ‘Once Only Principle’, explained Dmitri Jegorov, Deputy Secretary General for Tax and Customs Policy in Estonia’s Ministry of Finance. “By law, you cannot ask the citizen for information if it has already been submitted to a public institution,” he explained: instead, officials must source the data from their colleagues in other parts of the public sector.

To ease data-sharing, all Estonian public bodies are connected via the ‘X-road’ network: a “specific infrastructure to exchange data between public institutions”, governed by a set of standards specifying data formats, languages and transmission protocols. The system avoids the need for a central “super database, because that would create the risk of a huge data breach,” noted Jegorov, and it’s built around open source software – making it easy for the Finns to develop their own version.

Dmitri Jegorov, the deputy secretary general for Tax and Customs Policy in Estonia’s Ministry of Finance.

Driving up quality

With all this data, said Mark McDonald – EY Global’s Public Finance Management Leader – it should be easy for system leaders to compare the performance of counties on crucial issues such as productivity and patient outcomes: “As you go through these reforms, are you finding an opportunity to use information on the top performers to incentivise, to move, to cajole the underperformers to a higher level of outcome?”

Central government certainly does have levers here, replied Hetemäki: in the past, the government has taken direct control of poorly-managed municipalities, “so there’s a great incentive for the counties to keep their finances in order.”

The main incentives within Finland’s emerging new system of health and social care, however, emerge from two dynamics: the alignment of public sector professionals’ goals and management structures around the 18 counties – which provides coherent, unitary management of patients’ treatment throughout the health and care systems – and the introduction of more outsourced service delivery, patient choice and personal budgets, which should push funding towards the most effective and efficient providers.

“It’s extremely hard to get the incentives right in healthcare, and there are many examples of failure,” concluded Hetemäki. “So one has to be extremely careful in introducing market mechanisms, and to learn from the wealth of information available on other countries’ reforms. But the government always gets the most difficult tasks; and it is an illusion to think that the status quo would continue to be financially viable. We must be able to adapt.”

This is part three of our report on the 2018 Global Government Finance Summit. Part one examined the Compact for Africa, whilst part two explored the use of blockchain in public finance management. Part four explores how digital technology can give governments the power to provide convenient user-focused services. Part five will be published soon.

About Matt Ross

Matt is a journalist and editor specialising in public services, policymaking, government and management. He was the editor of trade title Civil Service World from 2008 to 2014, serving an audience of senior UK officials; and the features editor of weekly news magazine Regeneration & Renewal between 2002 and 2008, covering urban regeneration, economic growth and community development. He has also been a motoring and travel journalist, and now combines his role as editorial director of Global Government Forum with writing for other publications including The Guardian and Planning magazine.

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