Privatization projects of welfare systems are often justified with demands for “freedom of choice”. With this noble ideal on their lips, neoliberal governments attempt to legitimize privatization of social and healthcare services, schools, etc. The Finnish government is applying the exact same argument to undertake the widest privatization process Finland has ever seen: the social and healthcare reform (sote-uudistus), which is essentially the privatization of the whole network of basic social and healthcare services.
Social and healthcare services: prey for big business
The reform aims to implement a system very much like that of Sweden after 2010. Social and healthcare services are to be centralized at the regional level (basic services are currently under municipal jurisdiction). There would be separation between management and production of the services, according to the “purchaser-producer” model. This means that management would be centralized under the regional authorities (the maakunnat), which would take care of specialized services, while outsourcing basic services to companies functioning locally. The consumer would be able to choose from a range of service providers; public, private or from the third sector. Public units would have to be corporatized and compete in the market with private companies. Prices would be the same in all registered social and healthcare centres. The regulation of prices implies that the state would have to subsidize private businesses in order to guarantee capital’s profitability.
This is nothing but a very expensive gift from the Finnish government to healthcare corporations like Mehiläinen, Terveystalo or Attendo. The “freedom-of-choice bill” (p. 89) acknowledges that big companies would benefit the most from the reform. It’s not clear yet whether public companies would work towards profit-making, but of course the private ones will do so. This means that average working people would have to fund, through their taxes and direct payments, not only the socially necessary services, but also the profits of those who make money out of basic human needs. With brutal cuts imposed upon the public sector, it’s no wonder that big business will be a step ahead of public enterprises when competing in the market. If the state will from here on subsidize private companies, even fewer resources will be directed to public healthcare units. The latter will be in a disadvantaged position in the market and won’t be able to provide high-quality care.
The reform is the cash cow of private healthcare business and the demise of public social and healthcare services. Healthcare merchants will have the perfect conditions for all kinds of fraud and speculation over the public subsidies allocated to the sector. It is certainly not a coincidence that key figures of one of the governmental parties (the bourgeois National Coalition) hastily abandoned politics to take up positions in private healthcare companies as soon as the reform was on track.
The reform meets none of its proclaimed aims
The declared aims of the reform are to enhance users’ influence on the development of social and healthcare services; speed up access to treatment; improve the services’ quality and equal availability; as well as reducing costs. It’s hard to imagine how users would influence the provision of the services when the providers are private businesses protected by corporate law. Democratic public control is non-existent under this model. Where the market rules, there’s no democracy. Neither is there transparency. The Finnish public already has a notion of the ethics of healthcare business when it comes to transparency. In 2014, Helsingin Sanomat reported how most big companies in healthcare used aggressive “fiscal planning” (a nice euphemism for tax evasion) to pay only 4,6% of taxes on their profits, when the corporate tax in Finland is fixed at 20%.
In Sweden, this model proved to be extremely expensive, with growth of public expenditures in the sector sometimes reaching several hundred percent. Quality levels and promptness of access to the services are completely dependent on the market’s condition and profitability strategies. Companies would most likely compete by increasing productivity; lowering the individual value of the commodity. This entails reduction of salaries and overburdening the staff, among other means of reducing production costs. The quality of the service would decline, as was also noted in Sweden. Another issue relates to the fragmentation of the service chain. Instead of a connected network of public service providers, we have the shattering of the service chain into countless different private companies protected by corporate secrecy rights. Each company has its own particular aims and interests, as well as its own information databases. This renders functional integration of the services virtually impossible. Public monitoring would be, if not outright impractical, at least extremely bureaucratic and expensive (see p. 63 of the “freedom-of-choice bill”). EDIT 03.03.17: This is how the Finnish government illustrates the monitoring procedure according to the reform. As you can see, the whole monitoring system is a tangled mess bound to fail on any practical level.
Under this model, provision of social and healthcare services is determined by market demand not by social needs. Therefore, service providers tend to locate their business in areas with higher demand. These are usually middle and upper-class neighbourhoods; areas with higher economic and cultural capital, inhabited by generally better-informed and healthier people. Companies would increase profit rates by boosting the sheer amount of sales or, in case the company prefers to rely on public subsidies, by securing as many (preferably healthy) registered clients as possible. This can be achieved by settling in upper-class urban areas with good levels of public health, where treatments tend to be cheaper. Thus, the ideal habitat for healthcare merchants is a bourgeois neighbourhood full of hypochondriacs.
This model aggravates social segregation in accessing social services and healthcare. This was precisely the case in Sweden. In reality, only the upper layers of Finnish society would benefit from the much-vaunted “freedom of choice”. Commercial exploitation of basic needs such as healthcare not only leads to social inequality, but it also creates regional inequality. It’s quite obvious that investors will be more prone to establish their business in densely populated regions. Therefore, people living in the Finnish Arctic won’t benefit from the constitutional right of healthcare in the same way as their countrymen in Helsinki. So much for the government’s alleged intention of reducing inequality in accessing social and healthcare services.
Neoliberal “freedom of choice” or socialist freedom of choice?
One must view this project within capitalism’s search for new markets to counter the decline of the rate of profit after the late 1970s. This expansion of the market into areas it didn’t previously dominate – commodifying more and more human needs, such as education, healthcare, etc., – has been accentuated since the 1980s and has come to be known as neoliberalism. The ideological expression of this phenomenon is the fanatical belief in the supernatural powers of the market in fulfilling human needs. Even in sectors where needs are not commodified, it is believed that management according to market logics is more efficient. In Finland, this tendency has become the rule in higher education or municipal institutions, for instance. Everyday reality has proved this model to be absolutely irrational. Expenditures aren’t reduced; the quality of services decreases and the workers are overburdened with no positive effect in productivity. Finnish higher education, once the pride and joy of the country, is being systematically destroyed due to budget cuts and the absurd deification of market logics in university management.
From a liberal viewpoint, freedom of choice is the ability to buy a commodity from more than one producer. From a democratic and socialist perspective, freedom of choice implies popular participation in the production and provision of services, thus determining their quality and contents. This can be accomplished through the socialization and democratization of the management of public services. As an example, why not implement new management systems where the decision-power lies in the hands of organisms comprised of employees, users and technical administration? The democratization of educational institutions is a long-standing principle (currently under attack by the neoliberal establishment); why not apply it to social services and healthcare institutions? This way we would have genuine freedom of choice, not the farcical liberal notion. The market reinforces and reproduces social hierarchies and relations of power, an effect that is especially harmful in essential sectors such as healthcare. The Finnish government reform perpetuates inequality. Instead of the market’s short-sightedness, we need rational, public and democratic planning of the production and provision of social and healthcare services according to social needs.
Working-class resistance is necessary
The reform is often discussed as if it already were a fait accompli. This is clearly an attempt to condition public opinion. Nothing is decided yet. The legal documents required for the implementation of the reform are still draft bills, which are now being analysed by civil society institutions. The legality and constitutionality of the bills weren’t even examined, while there is substantiated suspicion regarding their conformity to constitutional rights.
Of all the Nordic countries, liberalization of basic needs has advanced the least in Norway. This is due to resolute working-class opposition to projects of this sort. Sadly, in Finland, the trade-union movement has long been domesticated by neoliberalism. However, the recent radicalization of the Confederation of Finnish Industries (EK), the capitalists’ representative organization, may trigger an analogous effect on trade-union bureaucracies. In any case, wide working-class resistance to this project is necessary. The fall of the social and healthcare reform shouldn’t be the final objective of this movement, for the struggle must be permanent until the overthrow of Juha Sipilä’s government and the call for general elections. This is a quite realistic aim, considering the ongoing governmental crisis, which is likely to deepen in the following months.