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Increases in health care efficiency can also improve quality

Billions of euros could be saved in social welfare and health care with key changes.
Teemu Malmi
Professor Teemu Malmi. Photo: Aleksi Poutanen

I am a professor of accounting and in recent years I have focused my research on two large areas: the role of accounting in corporate management systems, and health care and opportunities for boosting health care efficiency.

I have trained a large number of health care professionals, as matters of accounting and finance have not traditionally been part of studies in this field. Now the situation is changing, as we are forced to think about how to obtain the greatest possible health benefits with a limited amount of money.

Social welfare and health care costs have, for a long time, been growing faster than GDP, which is an unsustainable trend. Nor is it any kind of natural law which just needs to be accepted, at least as the population ages. In fact, for the majority of people the need for care increases only during the last one or two years of their life.

After the collapse of the previous Finnish government’s social welfare and health care reform, we set out to calculate different productivity figures to find opportunities for savings. Finland is ranked high on the WHO lists in terms of the numbers of operations carried out. There are, however, massive differences in these figures between different regions, and these differences cannot be explained by sickness rates or other patient- or region-related factors alone. This suggests that the number of operations is being determined, at least partly, by supply rather than demand. Changing this situation requires effective leadership and changes to production structures, and this, once again, is not possible without larger social welfare and health care regions.

In a study funded by the Foundation for Municipal Development and nine hospital districts, we compared the expenses of different hospital districts. We calculated that there is an opportunity to achieve savings in social welfare and health care expenditures of as much as €2.6 billion without significantly affecting the level of service. This could be achieved by following the example of the most efficient hospital districts: reduce the number of operations, increase the operational efficiency of operating rooms, laboratories and imaging services, direct resources to rehabilitation and invest in elderly care. In Finland, for example, dementia patients continue to receive care in hospital bed wards, which is often both expensive and inhumane for the patients.

There was a serious defect in the social welfare and health care reform proposal that recently collapsed in the country: price competition was not included. Instead, the price to be paid to private and public social welfare and health care centres was to be calculated according to the public operator’s cost levels. According to market logic, private companies will be particularly drawn to areas where there are more patients. In this way, the public sector is forced to take care of areas on the margin, which causes their cost level to rise. The companies would have received larger payments, amounting to an income transfer from society to these companies.

After these society-level calculations, we have turned to examine individual organisations and how to improve the efficiency of their operations, as well as seeking methods for getting personnel inspired about productivity development. One central thought is that operational management and planning should be fact-based. In HUS psychiatric care, for instance, they have started to code patient treatments. With these we can know precisely what has been done to patients, and better monitor and compare the effectiveness and costs of treatments.

In many ways, Finland has an excellent health care system, one which fares very well in international comparisons. But, nevertheless, it would be foolish to think that further development and changes are not necessary. As in industry, so also in health care, we can improve both productivity and quality simultaneously—and all the while make progress.

Text: Minna Hölttä

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