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Restructuring municipal services - follow up

Country: 
Finland
Partner Institute: 
National Institute for Health and Welfare (THL), Helsinki
Survey no: 
(11)2008
Author(s): 
Vuorenkoski, Lauri
Health Policy Issues: 
System Organisation/ Integration, Political Context, Funding / Pooling, Access
Reform formerly reported in: 
Project to restructure municipalities and services
Current Process Stages
Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? no no no no yes no no
Featured in half-yearly report: Health Policy Developments 11

Abstract

In January 2007 the Parliament approved an act defining how to continue the Project to Restructure Municipalities and Services launched by government in 2005. Among other things the act defines that in municipal health services organizational responsibility for primary health care and social services closely related to health services should reside with organizations covering at least 20 000 inhabitants. The project will lead to mergers and increased co-operation of municipalities.

Recent developments

In Finland the 415 municipalities, with a median of about 5000 inhabitants, hold legislative responsibility for organizing and funding the necessary health services for their residents. In May 2005 the government launched the Project to Restructure Municipalities and Services. The goal of the project was to create a stronger structural and financial basis for the services that municipalities are currently responsible for (not solely health services), so that the required standard of quality, effectiveness, availability, efficiency, and technological advancement are secured. 

In January 2007 the Parliament approved an act defining how to continue the process. Before this, the project had made three alternative proposals for reforming municipal services. The first alternative was to merge current municipalities so that each municipality would have a population base of at least 20 000 inhabitants. The second alternative was to integrate organizational responsibility of primary and secondary health care as well as certain social welfare services into new regional organizations with a population size of between 100 000-200 000 inhabitants (current municipalities would still be responsible for funding the services). The third alternative was to introduce a new mid-level administration of 20 regions which would have organizational and funding responsibility to arrange most of the services (somewhat similar to Landsting in Sweden). These regions would have their own representative elected councils and they would have the possibility to levy tax and receive state subsidy.

The new act defined the process to be continued by a somewhat conservative version of the first alternative. The act states that organizational responsibility for primary health care and those social services closely related to health services should reside with organizations covering at least 20 000 inhabitants (currently only 23% of health centres have a population base of 20 000 or more). This would not necessarily require mergers of municipalities smaller than 20 000 inhabitants, but rather the forming of, for example, municipal federations where funding liability resides with individual municipalities. According to the act, the state will financially support mergers of municipalities. Additionally, the responsibility for the organising and funding of forensic psychiatry examinations and examinations related to sexual abuse of children will be transferred to the state no later than 2009.

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Characteristics of this policy

Degree of Innovation traditional rather traditional innovative
Degree of Controversy consensual neutral highly controversial
Structural or Systemic Impact marginal neutral fundamental
Public Visibility very low very high very high
Transferability strongly system-dependent system-dependent system-neutral
current current   previous previous

By this process municipal health services in Finland are undergoing changes, with organizational responsibility for primary health services being transferred to larger organizations. Systemic impact of the reform is not as fundamental as previously assumed as the most conservative option of the proposed alternatives was selected as a basis for the continuation of the process. Public visibility of the project has been very high, which has been the intention of the government during the process.

Purpose and process analysis

Current Process Stages

Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? no no no no yes no no

Initiators of idea/main actors

  • Government
  • Providers

Stakeholder positions

The principle of municipal autonomy has a strong tradition in Finland and municipalities value rather highly their independence on arranging basic services. Municipalities are not always willing to give the organisational responsibility to larger organisations and mergers of municipalities are difficult processes for local politicians, municipal employees, and residents. The reform is opposed by some small municipalities which are obliged to deepen co-operation with neighbouring municipalities but are not willing to do so. However, the common view at the national level is that this is the right direction in which to develop the organization of health services in Finland.

Actors and positions

Description of actors and their positions
Government
Governmentvery supportivesupportive strongly opposed
Providers
Municipalitiesvery supportiveneutral strongly opposed
The Association of Finnish Local and Regional Authoritiesvery supportivesupportive strongly opposed
current current   previous previous

Influences in policy making and legislation

A special act on the project was enacted in January 2007. The act was prepared by an extensive process in which a wide variety of actors were involved. For example 19 regional meetings were arranged to listen to the municipalities' views on the matter. The alternative selected as the basis for the act was the one most favoured by the municipalities of the three alternatives proposed initially (see "Recent developments).

Legislative outcome

Enactment

Actors and influence

Description of actors and their influence

Government
Governmentvery strongstrong none
Providers
Municipalitiesvery strongstrong none
The Association of Finnish Local and Regional Authoritiesvery strongstrong none
current current   previous previous
Government, The Association of Finnish Local and Regional AuthoritiesMunicipalities

Positions and Influences at a glance

Graphical actors vs. influence map representing the above actors vs. influences table.

Adoption and implementation

In autumn 2007 all the municipalities made detailed plans for the state administration on how the stated goals (for example to have a population base of at least 20 000 for organisations having organisational responsibility for primary health services) are to be achieved. However, the state administration was satisfied only with a minority of these plans. The majority of the municipalities are required to further specify their plans or have been summoned for negotiations with the state administration.

Plans reveal that municipalities intend to form about 70 co-operational regions involving about 300 municipalities. About half of these would work as joint municipal federations. In this type of setting neighbouring municipalities would form a municipal federation which has the organisational responsibility for the services whereas funding responsibility would remain in member municipalities (currently there exists about 60 of this type of municipal federations). Another proposed model is that one municipality have the administrative responsibility of organising services and others have a contract with that municipality related to the organization of services for their residents (currently about 20 municipalities have arranged services according to this model). One indentified problem in the plans is that some of them disperse different social and health services to different regional organizations, which could hamper the seamless provision of services.

Decisions on municipal mergers have already been made so that the number of municipalities will be reduced by 67 in January 2009 and by three in January 2011. Additionally, in March 2008 there are another 13 ongoing merger processes involving 33 municipalities.

Monitoring and evaluation

The government will produce a report to the Parliament on the progress of the project during the year 2009. Municipalities are obliged to make final decisions on the implementation of the law before that. The target is for this process to be completed in 2012.

Expected outcome

The project will lead to mergers of municipalities and increased co-operation between municipalities, but probably not in the extent which was anticipated at the start of the project. Currently it is difficult to estimate what the outcome of this process is with regard to quality, access and efficiency of municipal health services.

Impact of this policy

Quality of Health Care Services marginal marginal fundamental
Level of Equity system less equitable four system more equitable
Cost Efficiency very low low very high
current current   previous previous

The impact is not as fundamental as previously assumed as the most conservative option of the proposed alternatives was selected as a basis for the continuation of the process.

References

Sources of Information

The Ministry of Finance. Project to restructure municipalities and services. www.vm.fi/vm/en/05_projects/02_paras/index.jsp

Reform formerly reported in

Project to restructure municipalities and services
Process Stages: Policy Paper

Author/s and/or contributors to this survey

Vuorenkoski, Lauri

Suggested citation for this online article

Vuorenkoski, Lauri. "Restructuring municipal services - follow up". Health Policy Monitor, April 2008. Available at http://www.hpm.org/survey/fi/a11/5