Distributional Effects of Social Welfare and Healthcare in Finland: A Simulation Study
In addition to morbidity, availability of services, and wealth, a household’s social welfare and healthcare costs depend on current legislation defining the prices for services and medicines. The objective of this study is to produce a more comprehensive evaluation of the effects of social welfare and healthcare costs on the livelihood of households. Furthermore, we analyse the distributional effects of public healthcare expenditures. The research questions are:
- How has the legislation, and changes thereto, on client charges in healthcare and social welfare affected population poverty and the calculated need for social assistance?
- How have the changes in legislation affected the use of social welfare and health services and medicine consumption?
- How do social welfare and healthcare costs affect livelihood and poverty, especially among the elderly?
- What is the distributional effect of public social welfare and healthcare costs?
The SISU model by Statistics Finland is used for the microsimulation of social security and taxation. In this study, the SISU model is complemented with register data on households’ healthcare costs. The data comprises data in the SISU model on selected individuals, Hilmo register data from the National Institute for Health and Welfare (THL), and Kela’s payment data on health insurance reimbursements (medicines, doctor’s fees, dental care, private examinations and treatment, travel costs) from 2016 to 2018. Kela’s data are forwarded to Statistics Finland as total data, from which the sampling is done on individuals in the SISU sample. The data are combined in Statistics Finland and used in their remote access system. Only researchers participating in the study have access to the system. Research permits are applied from Kela, THL, and Statistics Finland. A privacy statement and impact evaluations are drawn when applying for the permits, and we will notify the Data Protection Ombudsman about the study together with THL.
Researchers
- Katri Aaltonen, Leading Researcher
- Pekka Heino
Project Implementation Period
1.1.2019–31.12.2023. The project has ended.
Project Results
During this project led by the Finnish Institute for Health and Welfare, an extensive simulation model was built that enabled the study of the overall effects that legislative amendments regarding health expenditure may have on households’ social welfare and healthcare costs and subsistence for the first time in history. The model covers customer fees charged by public healthcare providers, copayments for medicines, copayments for private healthcare services and copayments for healthcare-related travel costs. The model was built in conjunction with the simulation model for social security and taxation (SISU). The model was used to examine the impact of healthcare costs on the subsistence of different population groups in a cross-sectional situation and the effects of legislative amendments made in 2011–2019 on poverty. The model has also been used in assessing the impact of legislative amendments.
Publications
- Aaltonen K, Tervola J, Heino P. Analysing the effects of healthcare payment policies on poverty: a microsimulation study with real-world healthcare data. Int J Microsimulation 2023; 16(1): 89-107. doi: 10.34196/ijm.00276.
- Tervola J, Heino P, Aaltonen K. A code repository for statistical analyses: INVEST-flagship/Tervola-Heino-Aaltonen-2021-Analysing-the-effects-of-healthcare-payment-policies-in-conjunction-with-tax-benefit-policies-A-microsimulation-study-with-real-world-healthcare-data.(Opens in a new tab) Zenodo. http://doi.org/10.5281/zenodo.5938920.
- Tervola J, Aaltonen K, Heino P. Terveysmenojen korotukset vaikuttivat erityisesti pienituloisiin. Kelan tutkimusblogi 14.8.2023
- Tervola J, Aaltonen K, Heino P, Kajantie M, Kari H, Ollonqvist J. Kotitalouksien terveysmenojen vaikutukset köyhyyteen Suomessa. University of Turku: INVEST Working Papers 1, 2020. http://urn.fi/URN:ISBN:978-951-29-7977-6
- Tervola J, Aaltonen K, Heino P, Kajantie M, Kari H, Ollonqvist J. Kotitalouksien terveysmenot lisäävät erityisesti ikääntyneiden ja työkyvyttömien köyhyyttä(Opens in a new tab). INVEST Policy Brief 5.2.2020
