Project to restructure municipalities and services

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

Abstract

The purpose of the planned public sector reform is to create a firm structural and financial basis within municipal services so that the organisation and provision of services will be secured in the future. At the same time quality, effectiveness, availability, efficiency and technological change of services are taken into consideration. The project concerns all services organised by municipalities, not only health care. The expected outcome is a restructuring of municipalities and services.

Purpose of health policy or idea

The main purpose of the planned public sector reform is to create a firm structural and financial basis within municipal services. The more detailed objectives in the ongoing reform planning are among others:

• to make a proposal for those services for which municipalities should be responsible for
• to make a proposal for the population basis (size) of municipalities and for the cooperation between municipalities
• to promote best practices in the organisation and production of services
• to make a proposal for the steering and development system of services
• to make a proposal for the division of tasks and their costs between the state and the municipalities
• to prepare the necessary changes in law

The planned reform is expected to lead to major legislative changes which in succession are expected to affect the bulk of public sector in Finland. The precise effect on health care remains to be seen.

Main points

Main objectives

To create a firm structural and financial basis within municipal services so that the organisation and provision of services will be secured in the future.

Type of incentives

Non-financial: legislative changes are being planned

Groups affected

Municipalities, providers, central government

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 aim of the project and the expectations regarding the outcome of the project are innovative and radical and there is wide consensus about the need for reform. However, at present, there is no consensus about the concrete actions to be taken. Thus, the degree of innovation and structural impact remain open.

Many municipalities have expressed their willingness to reform, but at the same time, they seem to want to preserve the current structure of municipalities. Consequently, the current judgement about the possible outcome of the project is that it might merely lead to a merger of the smallest municipalities while leaving the basic municipal structure largely unchanged.

Political and economic background

The project was originally not included in the Government's programme. It first came up in discussions between Ministers in February 2005 on the possible solutions to secure services organised by municipalities. The background for these discussions were concerns about the increasing financial difficulties faced by municipalities and the growing need for health and social services because of the ageing of the population. The latter would reduce the availability of workforce as a remarkable number of personnel within social and health services would retire in the next decade or so, and at the same time, it would increase the need for workforce.

A policy paper regarding state economy in March 2005 contained a commission to reform municipalities and services. The Government subsequently launched a project to planning a reform on restructuring municipalities and municipal services in May 2005.   

Complies with

Need to comply with the aging of the population, anticipated shortage of health and social care personnel in the future, and economical prospects of municipalities

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 policy idea is not new. It has been discussed and proposed in differing forms with differing emphasis for over a decade. Prior policy documents and initiatives have been among others "The Project to Change the Balance of Care", "The Guidelines on Health Care in Finland", "Health Care into year 2000", and "The National Project on Safeguarding the Future of Health Care Services". Prior initiatives have not led to major concrete changes.

Initiators of idea/main actors

• Government: Idea initiated by the Government

Approach of idea

The approach of the idea is described as:
renewed: First voiced in the Project to Change the Balance of Care at the beginning of the 1990s. The current policy idea has been influenced by the public sector reforms in Denmark.

Innovation or pilot project

Local level - Various experiments have taken place at the local level (see Survey (2)2003, Finland: County level management of welfare services). Experiences with mergers of municipalities have been mixed.

Stakeholder positions

The idea of the project came up in discussions between ministers in February 2005 on the possible solutions to secure services organised by municipalities. A policy paper regarding state economy in March 2005 contained a commission to reform municipalities and services. The Government subsequently launched the project to restructure municipalities and services in May 2005.   

Within the Government, the project is supervised by the Ministerial Working Group. It will make the political conclusions and review proposals made by the Group on Restructuring Municipalities and Services. The Group on Restructuring Municipalities and Services is responsible for the preparation and supervision of the practical implementation of the project and is chaired by the Minister of Regional and Municipal Affairs. In addition, the project is prepared by four Preparatory Working Groups involving representatives from various ministries, municipalities and labour market organisations.

Actors and positions

Government
The Government	very supportive		strongly opposed
The Ministry of the Interior	very supportive		strongly opposed
The Association of Finnish Local and Regional Authorities	very supportive		strongly opposed

Influences in policy making and legislation

The health policy idea is likely to lead to legislative changes. The expected minimun change is a new framework legislation.

Legislative outcome

pending

Actors and influence

Government
The Government	very strong		none
The Ministry of the Interior	very strong		none
The Association of Finnish Local and Regional Authorities	very strong		none

Positions and Influences at a glance

Adoption and implementation

The project has made three different proposals for organising basic services: model of basic municipalities, regional model, and district model. The first one would merge the smallest municipalities into larger ones with a minimum population size of 20 000 inhabitants. The regional model would introduce 20 municipalities with a relatively large population size and responsibilities similar to those of the current municipalities. The third model would integrate primary and secondary health care as well as certain social welfare services into one and the same organisation with a population size of 100 000 - 200 000 inhabitants while leaving the responsibility for the remaining basic services to current municipalities.

The three models have been presented to the public and have been widely discussed and commented by the municipalities.

In April 2006, it was not yet clear which of the three models or whether a fourth model, not yet presented, would be adopted. Whatever the final proposal is, it is expected to involve major legislative changes, major changes in the administration of municipalities, mergers of municipalities, and possibly some other changes. Moreover, the adoption process is going to involve a wide variety of actors within the public sector.

Monitoring and evaluation

No monitoring and evaluation are planned so far.

Expected outcome

The expected outcome is improvement in the access to services and better control of total health care costs.

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

The expectations regarding the improvement of cost-efficiency and quality are high. In practice, the reform might only lead to some marginal changes in quality, equity and cost-efficiency.

References

Sources of Information

www.intermin.fi/intermin/hankkeet/paras/home.nsf/pages/indexing Project to restructure municipalities and services; including documents

• Decision to instigate the project
• Background memorandum
• Future challenges facing the municipalities

Author/s and/or contributors to this survey

Jutta Järvelin and Markku Pekurinen

Suggested citation for this online article

Jutta Järvelin and Markku Pekurinen. "Project to restructure municipalities and services". Health Policy Monitor, 11 May 2005 to 31 May 2006. Available at http://www.hpm.org/survey/fi/a7/1