Developing the formula for state subsidies for health care in Finland

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Abstract
Aim: The aim was to generate a research-based proposal for a new subsidy formula for municipal healthcare services in Finland. Methods: Small-area data on potential need variables, supply of and access to services, and age-, sex- and case-mix-standardised service utilisation per capita were used. Utilisation was regressed in order to identify need variables and the cost weights for the selected need variables were subsequently derived using various multilevel models and structural equation methods. Results: The variables selected for the subsidy formula were as follows: age- and sex-standardised mortality (age under 65 years) and income for outpatient primary health services; age- and sex-standardised mortality (all ages) and index of overcrowded housing for elderly care and long-term inpatient care; index of disability pensions for those aged 15 - 55 years and migration for specialised non-psychiatric care; and index of living alone and income for psychiatric care. Conclusion: Decisions on the amount of state subsidies can be divided into three stages, of which the first two are mainly political and the third is based on the results of this study.