County level management of welfare services

• Abstract
• Purpose of health policy or idea
• Characteristics of this policy
• Political and economic background
• Purpose and process analysis
• Expected outcome
• References

Featured in half-yearly report: Health Policy Developments Issue 3

Abstract

The Kainuu County self-government pilot will create a new regional administration which will provide primary and specialist healthcare, a large part of social services, and upper secondary school and vocational education. The county will be responsible for part of health protection, economic policy, and local development funding. The experiment is expected to boost productivity in welfare services and pioneer models for sustainable public services in sparsely populated, disadvantaged areas.

Purpose of health policy or idea

The administrative experiment in the Kainuu region aims to gain experiences on county level self-government and its influence on the county's development, management of welfare services, citizens' participation, relations of the county and central government, and the operation of municipal and state regional administration. By the integration of the decision making at the county level, the experiment is expected to boost productivity in welfare services and achieve savings. 

In the experiment, the county level municipal federation will take responsibility for several welfare services which are currently run by the municipalities. These are upper secondary schools and vocational education, primary health services and part of health protection /environmental health care, and a large part of social services. In addition, the county will be responsible for general economic policy, development and planning in its region and manage regional development funding from the European Social Fund and from the central government. Part of these activities are presently managed by the various central government agencies. The county will continue to run specialist health care and care for the handicapped.

The experiment started Jun 1, 2003. Currently, the required administrative and other changes are prepared at the local level. The new county administration should take over on Jan 1, 2005. The experiment is scheduled to end Dec 31, 2012. The experiment will cover nine municipalities in North-East Finland with an area nearly equalling Belgium but with only 85000 inhabitants. Most of the participating municipalities are rural, sparsely populated and without resources or expertise to develop their services and economic policies.

The experiment creates a new regional self-regulating mid-level administrative body with its own regional council elected for a four-year term at the same time with the general municipal councillors' election. The council appoints the County Board and the County Executive Manager. The county has no right to levy taxes but it receives part of central government funding formerly mainly paid to the municipalities, such as subsidies for school expenditure. The municipalities are also obliged to fund health and social services managed by the county.

Main points

Main objectives

1. to gain experiences on the integration of regional level decision making and
2. to ensure sustainable regional development

Type of incentives

1. increased self-regulation for the county-level local authorities;
2. funnelling funds to be managed by the county authorities formerly allocated by the central government agencies;
3. expected savings in service production

Groups affected

municipalities in the Kainuu region, municipal employees specially in health and social services and schools, inhabitants of the experiment area, various government agencies and their employees managing regional development funds

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

The independence of the municipalities has a long tradition in Finland and only ten years ago the decision making power of the municipalities was strengthened by reforming the municipal subsidy system of the central government. In this sense, the Kainuu administrative experiment is a new approach. On the other hand, the independent counties have been an established model for local administration in other Nordic countries.

At the local level, the Kainuu experiment establishing a self-governing county will markedly change the administration and provision of welfare services. It will form a new ground for local municipal co-operation and, in parallel, limit the independence of the municipalities. Considering the strong impact, the reform has been debated scantly and its media coverage has been poor.

The transferability of the Kainuu experiment to other countries is poor because in most countries the responsibility for the provision of welfare services is not as decentralised as in Finland. In other countries, services are usually managed by larger administrative units than Finnish municipalities.

Political and economic background

The Finnish local administration is based on 450 independent municipalities which are mostly quite small with the median size of about 5000 inhabitants. In rural areas particularly in the remote North-east part of Finland suffering from unemployment, and declining and ageing population, the municipalities have difficulties to support the adequate provision of municipal services. The experiment boosting the extensive co-operation between municipalities is seen as an approach to ensure a sustainable service structure in these areas.

Complies with

The innovation can be considered as a way to comply with disparate regional economic development resulted from large changes in the Finnish economic structure .

Purpose and process analysis

Current Process Stages

	Idea	Pilot	Policy Paper	Legislation	Implementation	Evaluation	Change
Implemented in this survey?

Origins of health policy idea

• The idea of regional administrative experiment was at least officially proposed by the former Prime Minister, Mr. Paavo Lipponen at a seminar on North Finland development strategy in 2001. The local municipal and central government authorities in the Kainuu Region agreed early next year to start the experiment. Soon after this the Ministry of the Interior appointed an expert to prepare the content of the experiment and later drafted the Government's bill on the experiment.
• In the Finnish context, the approach in the experiment is novel. In the experiment a self-governing county takes over a part of the mandate of the municipalities which are presently largely independent and run almost all welfare services in the overall Finnish local government system. Corresponding ideas have been presented for health services but the present experiment is more extensive covering also other fields of public administration.
• The idea of the experiment partly draws on the experiences in other Nordic countries where the role of the counties in public administration and services is more substantial than in Finland. For instance the counties in Sweden levy taxes and manage public health services.

Approach of idea

The approach of the idea is described as:
renewed: In other Nordic countries the role of the counties is more prominent as a self-regulating independent administrative body

Stakeholder positions

• The Government's bill on the experiment drafted at the Ministry of the Interior in co-operation with various other Ministries and representatives of the Association of the Local and Regional Authorities followed mainly the expert's propositions. The Ministry of Trade and Industry working group supported the preparation by providing guidance for regional economic policy. 
• Most relevant actors were positively disposed to the idea of the experiment and the Government's bill. The critical opinions mainly concerned the county's role in the allocation of central government development funds and administrative issues, such as the process to appoint the County Manager. The integration of health and social services at the county level were not markedly criticised. Two municipalities of the region criticised the proposed experiment and one of these decided not to participate in it.
• From the employees point of view, the experiment is mostly neutral in terms of their contracts. In primary health care and social services the employer will change from the municipality to the county but the terms of employment will remain the same.

Influences in policy making and legislation

The experiment required a law in order to be started. The law passed in March 2003 and taking force in 2005 will waive nearly twenty laws on the administration and obligations of the municipalities in the Kainuu region. The legislative process brought only minor changes for the original proposals of the expert's draft on objectives and content of the experiment.

Legislative outcome

success

Adoption and implementation

For this innovation, the implementation issues are partly premature because the initiative is a regional experiment itself. The law on the experiment passed in the Parliament established by and large the content of the experiment. In the participating municipalities, a consensus on the benefits of the administrative reform seems to prevail. Currently, the actual start of the experiment is prepared by the working group consisting of municipal and regional chief executives. Their work is overseen by a control group representing municipal and regional authorities and social partners.

Monitoring and evaluation

The innovation is an administrative experiment to gather experience on the county level administration of welfare services and regional economic policy. The expert who drafted the plan for the experiment recommended continuous evaluation to be carried out on the experiment. At present, there are no definite plans published how to carry out the evaluation. The government's bill, as usual, did not contain any regulations on the evaluation.

Expected outcome

• The law on the administrative experiment in the Kainuu regions defines very carefully the administrative structure and political procedures of the new self-government county, such the electoral system, but the actual content of the experiment, such as changes in service production, are just been planned in the working group of the executives of the participating municipalities. The impact of the innovation is thus difficult to anticipate. Currently, the remote rural municipalities in the area tend to experience difficulties in staffing their welfare services. The new administration may improve access to services in the rural municipalities by easing the situation and forming more versatile job descriptions and more attractive working conditions in larger service units for trained staff in welfare services.
• The experiment will not probably give any general example for reforming local administration in Finland but it may give a future model to organise welfare services in sparsely populated areas in North and East Finland.
• The experiment also covers the administration of economic policy and planning which may bring along a positive impact on regional co-operation and economic development.

Impact of this policy

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

In the remote, sparsely populated area, health service provision managed by the county and based on a larger unit than in the present situation may improve possibilities to introduce quality assurance measures, to provide adequate services in small municipalities which are currently poorly served, and to effectivate service production. 

References

Author/s and/or contributors to this survey

Ilmo Keskimäki

Suggested citation for this online article

Ilmo Keskimäki. "County level management of welfare services". Health Policy Monitor, Oktober 2003. Available at http://www.hpm.org/survey/fi/a2/3