Finland's healthcare funding model contains a fundamental error that could cost welfare regions tens of millions of euros. Experts reveal the system incorrectly calculates financial allocations to regional health authorities.
The problem centers on long-term diagnoses, which form the basis for 80% of welfare region funding. Only 13% depends on population numbers.
Healthcare leaders Tero Järvinen and Jari Kankaanpää identified the issue. They estimate the correction needed ranges from tens to over one hundred million euros.
How does the system work? Regions submit diagnosis data to the Finnish Institute for Health and Welfare. That agency then forwards calculated coefficients to the Ministry of Finance.
The more long-term diagnoses a region reports, the more funding it receives. This directly affects how state money gets distributed.
Now the core problem emerges. Some welfare regions fail to transmit enough long-term diagnosis data. Their funding consequently drops below proper levels.
When a patient visits a doctor for flu, the system should also send all existing chronic conditions like hypertension. But not all regional IT systems automatically transfer this data.
Some require manual entry by staff. When systems work properly, a single patient's complete records can bring over €10,000. Incomplete data might yield only a few thousand.
Multiply this across years, and the financial impact reaches tens of millions per region.
Southwest Finland welfare region received €76 million extra in 2024 after fixing its diagnosis reporting. Other regions continue struggling with deficits.
Järvinen calls this a serious national problem. Kankaanpää notes incomplete reporting poses bigger issues than incorrect ghost diagnoses previously discussed.
We cannot even estimate the full scope of this error, Kankaanpää said. It likely involves tens of millions, possibly over one hundred million euros.
Questionable classifications compound the problem. Should wearing glasses count as a long-term diagnosis?
If we register all glasses wearers in our region, that means €20-30 million for us if others don't, Kankaanpää explained.
Currently, welfare regions face massive deficits requiring staff cuts. The law mandates eliminating deficits by 2026, with extension to 2028 only possible if 2025 shows surplus.
Many regions have already begun termination talks affecting hundreds of positions. Without funding corrections, some areas might need to dismiss thousands.
Is miscalculated funding causing these deficits and staff negotiations?
The state economy requires adjustments, Järvinen acknowledged. But are these cuts distributed fairly across regions given the funding discrepancies?
Funding allocation fundamentally determines which regions achieve surplus, he noted.
Most welfare regions accumulated deficits reaching hundreds of millions by 2023. Some have balanced their 2025 budgets.
The funding problem only became clear in summer 2023, though regions began operations at year start. Some tried retroactive corrections.
South Ostrobothnia requested adjustment from the finance ministry but got rejected. The case now moves to administrative court.
Järvinen suggests extending the deficit deadline to 2030 for all regions. He argues since deficits stem from system flaws, past years should be reassessed.
The solution requires fixing patient data systems for uniform THL reporting nationwide. Funding should not reward questionable long-term diagnoses, and diagnosis categories need reduction.
We have irrelevant diagnosis codes that must go, Kankaanpää emphasized. Glasses provide an extreme example. We cannot distribute millions in state money based on eyeglasses.
This funding flaw reveals how technical reporting errors can trigger real-world consequences including healthcare staff reductions across Finland.