Finland operates a predominantly tax-funded public healthcare system, overseen by 22 newly established wellbeing services counties, which assumed responsibility in 2023 following a major administrative reform. This reform aimed to enhance the quality and efficiency of healthcare and social services by consolidating management from 195 municipalities.
The public healthcare system accounts for 75% of funding and is complemented by occupational and private healthcare. Occupational healthcare is typically provided by employers and allows for same-day appointments and access to diagnostics. In contrast, public primary care often involves long waiting times, sometimes up to three months for general practitioner appointments. Private healthcare serves those who either have the financial means to pay out of pocket or hold private health insurance policies.
Challenges and trends impacting the system
A range of socioeconomic and demographic trends are placing growing strain on Finland’s public healthcare infrastructure. These include:
- Ageing population: Finland is among the world’s fastest ageing nations. The number of people aged 85 and over is set to double by 2040, increasing demand for chronic care and specialist services.
- Healthcare workforce shortages: A significant proportion of healthcare professionals are nearing retirement, with 26% expected to exit the workforce by 2033.
- Increasing chronic and mental health conditions: The prevalence of long-term illnesses, particularly mental health disorders among younger populations, continues to grow.
- Rising expectations: There is an increasing emphasis on health awareness and self-monitoring, coupled with a demand for timely and efficient care.
- Health inequalities: Disparities are widening across regions and socioeconomic groups, with access to care increasingly linked to employment status and income.
Public trust in the healthcare system has declined, particularly due to delays in primary care. These factors are driving more individuals toward private health insurance as a means to secure quicker access to care and financial protection.
The role and response of LocalTapiola
LocalTapiola operates within a highly centralised private healthcare market in Finland, with over 95% of its customers using services from one of just four main providers. While demand for private health insurance has surged, so too have claims costs. Since the COVID-19 pandemic, the use of health insurance has grown significantly, claims for minor health issues have increased, and the combined claims ratio in 2023 reached an unsustainable 112%.
This paradox, of growing need but declining profitability, has prompted LocalTapiola to take a strategic approach centred on five core initiatives:
- Procurement and pricing: Leveraging its market power, LocalTapiola engages in active procurement negotiations to secure favourable contract prices with private healthcare providers and reduce overall service costs.
- Customer steering and digital triage: The company is developing systems to direct customers toward appropriate service providers and medical professionals. This includes digital triage tools that match patients with the correct level of care, whether that be physiotherapists, GPs, or specialists, based on clinical need.
- Integrated care pathways: LocalTapiola collaborates with healthcare providers to design value-based care pathways that prioritise patient outcomes while containing costs.
- Product and pricing development: The company is introducing more sophisticated pricing models and higher deductibles, encouraging customers to manage minor health issues independently and reserving insurance use for more serious conditions.
- Technological innovation: Embracing AI and digital tools, LocalTapiola aims to streamline administrative tasks, improve diagnostics, and optimise health data use, ultimately enhancing service delivery and cost-efficiency.
The Finnish healthcare landscape is being reshaped by profound demographic and economic trends. As the public system faces mounting challenges, the role of private health insurance is becoming more significant than ever. LocalTapiola’s strategy illustrates how insurers can adapt by aligning product design, technology, and service partnerships to meet changing customer needs and maintain long-term sustainability.
While the road ahead is complex, especially in balancing accessibility with profitability, LocalTapiola’s proactive approach offers a potential blueprint for how private insurers can contribute to a more resilient and equitable healthcare system in Finland.
