Finland announces act enabling patients to choose healthcare providers

The Finnish government on Tuesday published its landmark freedom of choice act, which would put public and private health and social care providers onto an equal footing.

In the future, a patient would pay the same fee irrespective whether the service provider is public, private or third sector. Patient fees only cover a fraction of the costs and the rest is reimbursed from tax payer money. The reform is to take effect gradually in 2019 and requires parliamentary approval this spring.

Patients cannot shop around on a daily basis, but have to register with a service provider for a fixed period.

The public financing of the service providers will be based on the quality of patients: the older and sicker the patient, the better the compensation to the service provider.

Under the new system, public health centers may face fierce competition from private providers and may even go bankrupt if their patients rather choose a private provider.

The reform also features a plan that public services must be converted into provincially owned businesses. The newly established provinces will be in charge of health care instead of the municipalities, authorizing private and public service providers, operating on public money.

Even though the reform of the health care system had been prepared for years, the latest plan dates back to a deal between the conservative National Coalition Party and the Center Party in late 2015.

In the deal, the establishment of provinces favored by the Center was approved, while the Conservatives got in return "freedom of choice" in health care.

Juha Rehula, Minister of Family Affairs and Social Services and a MP from the Center Party, defended the legislation on Tuesday and said that many changes were made on account of feedback. However, political opposition parties and some social affairs experts criticized the plans.

Critics say distant areas may not attract private operators at all, while competition will be hard in urban centers. Most of high level specialized care will remain outside the business conversion requirement.

Health care specialist Tiina Merikanto said on national broadcaster Yle that the reform was prepared at great speed.

"The conservatives are in a rush as there is no certainty that the next parliament, elected in 2019, would back these principles," she said.

During the last ten years, ownership of Finnish private health care has been consolidated. Some leading companies are owned by foreign capital investors.

Internationally owned health companies in Finland have often used legal tax planning and been able to pay only a minute tax in Finland. In the newly announced act, a demand was that service providers must divulge their taxes and where they have been paid. Endit