War|Welfare areas could save 280 million euros annually, says the chief economist of Hali, which represents employers.
Private companies provide care for the elderly much more efficiently than the public sector, claims the Hyvinvointila Hali organization, which represents private social security companies.
According to Hali’s calculation, in 2023, privately produced hova was even more than 20 percent cheaper than welfare regions’ own production. Hali has made similar calculations in previous years as well.
Hali’s calculations present information from different welfare areas. Costs vary by region. For example, in Vantaa-Kerava, producing an average day of care cost the welfare area’s own production an average of 182 euros in 2023. A private person, on the other hand, produced one day for an average of 169 euros, i.e. about 7 percent cheaper.
In Eastern Uusimaa, on the other hand, one day produced by the welfare area itself cost 215 euros, and 160 euros as a purchase service from a private person. The private one was therefore 26 percent cheaper. On average, in the regions of Uusimaa, private individuals provide care 21 percent cheaper.
The calculations include a 5 percent VAT refund, which the welfare district receives when purchasing a service from a private company.
Halin chief economist Joel Kuuvan According to
According to Kuuva, this amount could finance, for example, more than 4,400 new care homes, which would be about a 10 percent increase compared to the current number of residents in round-the-clock care.
“Alternatively, those savings could, for example, eliminate treatment queues in specialized medical care that have become illegal,” says Kuuva.
According to Kuuva, the difference in costs is explained by a “fundamental” issue.
“Private companies have to be efficient, otherwise the end result is bankruptcy,” says Kuuva.
According to Kuuva, inefficiencies in public care homes can be, for example, in the use of personnel and rented premises. According to him, private companies operate in such properties with such large rents that they can be fully covered by the rents paid by the residents. Residents pay the same rent in a public care home and in a private care home purchased as a purchase service.
In addition, according to Kuuva, private companies try to avoid staff overtime and concentrate as much work as possible on weekdays.
Round-the-clock care for the elderly is strictly governed by law. According to it, there must be a certain number of caregivers per elderly person. Currently the number is 0.65, but it will be reduced to 0.6.
The elderly director responsible for services Kirsi Oksanen Eastern Uusimaa admits that the difference in costs is big.
The welfare district has also made its own comparison of costs, and it does not differ significantly from Hali’s calculations: according to it, own production cost 214 euros per day last year, purchasing services 168 euros. Buying from private individuals was therefore 21 percent cheaper than own production.
According to Oksanen, the difference is due at least to the fact that it is easier for private companies to recruit personnel more precisely according to how many residents there are in nursing homes at any given time. The rent level also affects. The law forces the regions to rent the old social security properties until the end of 2025 at a set price.
Salaries in the welfare area are also somewhat higher.
In addition, the welfare area offers some free supplies, such as diapers, to its residents. Private individuals do not contribute to these costs, but are paid from the welfare area’s pocket.
Expenses must be monitored more closely than at present, says Oksanen.
“After all, private monitoring is probably somewhat stricter. If the purchase service is cheaper, we have to think about whether it is more profitable to buy the services or implement them as our own production.”
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