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Social protection and ageing of the
Finnish population
Head of Functional Capacity Unit, Research Manager, Minna- Liisa Luoma
&
Senior researcher, Eero Siljander, CHESS/THL.
9.6.2014 Esityksen nimi / Tekijä 1

Content of the presentation
• Nordic model of welfare
• Social protection
– Strategies : Pension reform (2005), & New Health care act
(2011)
• Income security ES
• Long term care ES
• Financing the services ES
– Strategies : National Framework for high quality services for
older people, New draft Act on care Services for the elderly
(MLL)
• Preventive services (MLL)
• Housing services (MLL)
• Home services & nursing care (MLL)
• Memory rehabilitation (MLL)

Social protection and ageing of the population
Social protection promotion in society aims to strengthen
people's participation and to prevent poverty and social
exclusion.
Social protection for older people consists of services and income
security, arranged as a part of social care and health care.
The aim of the ageing policy is to further older people's
– Functional capacity
– Independent living
– Active involvement in society

Mira Koivusilta | Nordic Congress on Gerontology | Reykjavik | 2 June 2010 4
• TÄHÄN KUVA

The population context – rapid ageing scenario.
• Tackling the “ageing of society” issue is important:
• - Expansion of long-term care services and pension finance to be
expected because of population structure change and longevity.
• - Cost-effectiveness and quality of services need to be addressed.
• - Informal care and home care of older people rising on the political
agenda.
• Facts:
• Population of 5,4 million people: 2 748 733 women and 2 652 534
men in 2011 .
• 65 % 15-64 years old and It is forecasted that the number over 65+
population will double from current 900 000 to 1,8 million by 2060.
• It is forecasted that the demographic dependency ratio will change
from 50,3 in 2008 to:
• - 70,5 (+ 40 percent) by year 2026.
• - 79,1 (+ 60 percent) by 2060.
• (this is the ratio of under 15 and 65+ to 15-64 working ages)

Welfare-mix in Finland/Older People
SOCIAL SUPPORT NETWORK OF AN OLDER
PERSON
•Complementary provider
•Spouse, children, relatives
•Friends, neighbours
•70 % of the need of social care
PUBLIC SERVICES
•Primary provider
•Provided by the local authorities (municipalities)
•Purchased from private or public providers (the
purchasing-provider model
•30 % of the need of social care
COMMERCIAL, FOR-
PROFIT SERVICES,
FIRMS
• Supplementary provider
•Private professionals
•Private enterprises
•Increasing especially in
home care, service
housing and leisure
activities
•“silver markets”
NON-GOVERNMENTAL
ORGANISATIONS – NGO’S
•Supplementary provider
•Organisations and
foundations
•Voluntary work

Nordic model – the welfare state
• Finland is a Beveridge -orientated welfare state, belonging to
the so called Nordic welfare model, together with
Scandinavian countries
• state and public sector major provider, tax-financed, state having a
guiding role in form of legislation, recommendations, national
development programs and information guidance
• The government subsidises social and health care services
provided by the municipalities through state grants.
– Every municipality is in principle (n=336) is a service organizing unit.
Median and mean inhabitant size is low = 5000 - 6000.
– However, in practise co-organizing is also applicable and for many
municipalities the only reasonable option.
– Finland is unique in the EU in health and social care service finance and
production with widespread responsibility.
– Reforms of municipal structure is top priority of the current Katainen
administration. The target is to ensure financially strong enough local
government units for the future.

Social and elderly care services in a
municipality

Non-
institutional
care
Mix-type
services
Mix-type
services
Mostly long-
term care
Non-
institutional
care
Inpatient
specialised health care
- somatic
- psychiatric
Day hospitals/day centres
Day and night care etc.
Residential home
HEALTH CARE
SOCIAL SERVICES
LONG-TERM CARE AND
SOCIAL SERVICES FOR
OLDER PEOPLE
Home help
Support services
- meals-on-wheels, transport
service etc.
Support for informal care
Home nursing
Outpatient primary health
care
Outpatient specialised health
care
- somatic
- psychiatric
Service housing (ordinary/ with 24-hour
assistance)
Inpatient care in
primary health care
Emergency
inpatient care
Emergency/
long-term
inpatient care
Gerontological
Social Work

CURRENT HEALTH CARE SYSTEM
AND ITS CHALLENGES

Finland - New Health and social care legislation.
New Health care act (enacted in 2011)
• - freedom of provider choice in primary and
specialized care (at this stage regional but will
be expanded to cover whole country later),
• - enforced access timetables (tighter time limits
to waiting lists),
• - vouchers and new providers (enabling
vouchers for social and health care services,
more public-private partnership & private
producers).
• - nurse prescription rights (limited to a list of
basic drugs and some antibiotics).
• - New social care and old people care acts
expected to be in force under current
administration. Under construction.

Financing of health and LTC care - Finland (A)
• health care is financed by state, municipalities,
employers, employees and patients/clients.
• Households finance 62,7 % and companies 37,3 %.
• Multi-channel funding, cost-shifting, sub-optimizing
strategies (proposal by THL to make one-channel
funded, 2011).
• Use of private health care is partially compensated by
the public insurance. Dental care is 50 percent private.
• Municipalities get state subsidies/grants, and they collect
local taxes to finance the public costs.
• One of highest client fee -systems among the OECD-
countries. 85 of net disposable income in LTC for
example.

LONG-TERM CARE IN FINLAND

INCOME SECURITY
• employee pension
• national pension
• housing allowance
• care allowance

Pension system (1) – Finland.
• two main schemes, both are statutory public schemes
– (1) National pension scheme for 65+, co-ordinated
with other pensions and incomes
– (2) Employment Pension Schemes to secure the level
of consumption attained, flexible retirement age from
63 to 68.
– (2+)extra bonus if staying in work 63+, increase to 4.5
% in accrue rate (compared to under 2).
– Future pensions will decrease as compared to wages
by a so-called life-time multiplier. This is due to
population longevity. The current replacement rate is
60 of gross income.
– Private (voluntary) Pension Schemes are becoming
more popular. Private (voluntary) LTC care insurance
is on the planning table as well.

Pension types, supplements and allowances (2)
• Types:
• A) old-age pension, B) disability pension, C)
unemployment pension, D) part-time pension, E)
rehabilitation benefits, F) survivors’ pension, farmers’ G)
early retirement aid.
• Details:
– Housing allowance for pensioners, pensioner's care allowance,
war veteran's supplements.
– family care allowance and services to support informal care at
home.
– tax deductions for purchasing help for cleaning and other home
works, garden works, renovations, care etc. (apply for all
population groups, not just the old).
– At the end of 2011, there were 1,483,000 pension recipients, the
majority of whom drew an old-age pension (77 %) second largest
group was surviving spouse’s pensions (18%) and third largest
disability pensions (18 %).

Key figures – pensions (3)
• The average total pension calculated for all pension recipients
is the average figure for the most extensive group of pension
recipients possible. In 2011, this figure was EUR 1,328/
month. The figure includes pensions paid abroad as well as
survivors' pensions. There is no ceiling on pension levels.
• If the group of pension recipients is limited to persons residing
in Finland who receive only a pension based on their own
working career (pension in their own right), the average total
pension at the end of 2011 amounted to EUR 1,415/month.
Part-time pensions are not included in these calculations.
• According to the results, the median of the replacement ratio
of retired employees in the early 2000s was approximately 60
percent of the wage-earner’s earnings from a few years ago.
• By 2030 the life-time multiplier is expected to reduce the
replacement ratio to below 50 percent maybe even 40.

Longevity, services and social expenditure as %
of Gross domestic product (GDP) – Scenarios.
- If service and care needs
are postponed by 100 or 50
percent with longevity then
major savings in social
expenditure are expected.
(Myhrman, Alila, Siljander,
2009)
- The scenario presented
earlier indicates the same
result with 3 years
postponement in LTC care.
(Häkkinen, 2008).
 The Key in curbing
expenditure is reduction in
morbidity in common
population diseases and
postponement of LTC care.

References – more information
• See THL, Ministry and Finnish Centre for Pensions web-
pages:
•  www.thl.fi
•  www.etk.fi
• www.stm.fi
• Literature:
• Myhrman R. & Alila A. & Siljander E. (2009): Scenarios on
Finnish health and social expenditures in the long-run –
SOME-model (in finnish language), Ministry of Social Affairs
and health – publication, 7:2009.
• Häkkinen U., Martikainen P., Noro A., Nihtilä E., Peltola M.
(2008). Aging, health expenditure, proximity to death and
income in Finland. Health Economics, Policy and Law, 3: 165-
195.

Social protection: care services
National Framework for high
quality services for older
people, New draft Act on
care Services for the
elderly (Mll)
• Preventive services (MLL)
• Housing services (MLL)
• Home services & nursing
care (MLL)
• Memory rehabilitation
(MLL)

National Framework for High-Quality
Services for Older People
09/06/2014 31
The framework aims at promoting old-age health
and welfare and improving the quality and
effectiveness of services.
http://www.stm.fi/julkaisut/julkaisuja-
sarja/nayta/_julkaisu/1063089#en

National Framework for High-Quality Services
for Older People 2001, 2008, (2013)
• the aim is to promote the health and welfare of older people
and to boost the quality and effectiveness of services
• is designed to help municipalities and cooperation districts to
develop their services for older people on a basis of local
needs and resources, jointly with the third sector, private-
sector service providers, and clients, their relations and other
local residents.
• It sets national quantitative targets for services for older
people that municipalities and cooperation districts can use
as a basis for fixing their own targets.
09/06/2014 32

Framework stresses importance of….
• the structure of a joint advice and service centre network of
social and health care
– Low threshold
– Able assess and monitor the functional capacity and health
• increasing the number of home visits promoting wellbeing
and establishing them as an integral part of the service
provision for older people
– Risk groups
• Rehabilitation and rehabilitative care that begin
immediately after acute treatment bring results
09/06/2014 33

Preventive services

• Prevention services
– Older people's functional capacity is supported using preventive
services and rehabilitation. These services include Senior Info,
home visits, day centres, and vaccinations.
• Service needs assessment
– All over 75 years of age and those receiving a special care
allowance should have an assessment of their non-emergency
service needs by the seventh working day from the day of
contact.
– If an older person requires home services, informal care,
institutional care, services for older people, social assistance or
other social care services, for these to be granted a municipal
official assesses the client's service needs.
– In urgent situations, the need for all services must be assessed at
once, regardless of age.

Increasing the number of home visits
promoting wellbeing
• ‘The target group is selected on the basis of either (1) age or
(2) the age and if the person belongs to a risk group.
• to be targeted primarily to persons aged 70–85 years who do
not receive regular services or to a certain age class within
this group.
• During a home visit an overall assessment will be made of
the person’s functional capacity, the risk factors in the
housing environment will be considered, and guidance given
for self-motivated promotion of wellbeing.
• The clients are also told about the services available in the
municipality
09/06/2014 36

Housing services
• Older people's independent
housing is supported by
housing services by
granting reimbursements
for housing renovation
work
• by providing service
accommodation.
•

Home services and home nursing care
• Home service and home
nursing care assist when
an older person requires
help at home due to
diminished functional
capacity or illness.
• Support services are used
to supplement home
services, for instance to
provide meals, home
cleaning, bathing clients
and transport.
•

Home Care
• the percentage of people in
need of continuous 24-hour
care varied between 4.3 to
and 22.9 %
• Just under a quarter
(22.8%) of clients receiving
home-care services had
had more than 60 visits a
month.
• It was estimated by the staff
that a great majority
(84.2%) of clients had
received the treatment best
suited to their needs, that
is, home care.

Informal care allowance
Municipalities may grant informal care support for a relative or friend
of a person being cared for.

Support for informal care
• In 2010, municipal support for informal care was granted to
some 37 000 care givers for older, this support involving
approximately the same number of care receivers.
• In 2012 Minimum amount 364,35 €/ month and If the carer is
unable to be gainfully employed during a transitional stage with
the nature of care being heavy support is 728,69 €/month
• The person receiving support for informal care is entitled to
have at least two days off in any month during which the nature
of the care is extremely restraining. The municipality provides
for the care during the statutory time off.
09/06/2014 41

Memory rehabilitation
• Social and health care
professionals offer
guidance and advice for
people with memory
disorders in need of special
services.
• Many municipalities have
nurses, advisers or
coordinators for memory
disorders. Also, the regional
specialists and support
centres of the associations
for memory disorders and
dementia provide advice
and guidance.

The new draft Act on Care Services for the
Elderly
• Access to social services for the elderly to be made
easier and faster
• The basis for access to services will be the capabilities of the
elderly person, rather than age in itself.
• Right to apply for services orally as well as in writing
• In urgent cases, make decision on, and arrange, services
without delay.
• non-urgent services have been approved, right to receive the
service within three months of the approval decision
• Granting services required by the elderly would be facilitated
by the service need's clarification from a number of
perspectives.
09/06/2014 44

Act on Care Services for the Elderly (II)
• Municipalities must provide systematic support for the
elderly
• Municipality must draw up a plan on measures for promoting
the wellbeing, health, capabilities and independent living of,
as well as arranging and developing services
• Municipalities must have a sufficient level of expertise on the
following areas: the promotion of wellbeing and health,
geriatric care and social work, geriatrics, safe medication,
nutrition, rehabilitation and oral healthcare.
• Service units providing services for the aged must have
sufficient staff, whose qualifications and duty structures match
the number of elderly clients and the service need set by their
capabilities.

Vielä muistiohjlemasta

09/06/2014 48
Thank you for your attention!
9.6.2014 48

Esityksen nimi / Tekijä
Sustainable Strategies:
Socio-economic Security
• Pension reform 2005
- longer working life: 63-68 years
- rise in employment rate of 63+
higher min. pension for lowest 10% (2011)
• Strategy for Social Protection 2015 (2010)
(health, work, poverty, services)
• Health promotion HIAP 2006
Universal Social Health Insurance
- including home care services
- Act on Support for Informal Care 2006
• National Framework for High-Quality Services for Older People 2001,
2008
KASTE framework 2008-11
• The new draft Act on Care Services for the Elderly 2013

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