Finnish health regions’ funding report confirms what regions already knew

Finnish regions say a new report on health-region financing confirms long-standing problems with diagnostic data that have cost them tens of millions of euros.

A study commissioned by the Ministry of Finance and carried out by professors Ulla-Mari Kinnunen and Tomi Voutilainen of the University of Eastern Finland found serious flaws in how diagnostic data used to calculate regional health funding have been collected and recorded.

Several regions, including South Ostrobothnia and Central Finland, have repeatedly highlighted errors in diagnostic coding that they say have distorted their funding allocations. They estimate the mistakes have deprived them of tens of millions of euros, forcing service cuts and contributing to deficits.

South Ostrobothnia’s health-region director Tero Järvinen said the findings matched the region’s own investigations and were not surprising.

“The observations are fully consistent with what South Ostrobothnia and Central Finland have found,” Järvinen said.

Finland’s health regions are funded mainly on the basis of morbidity, which in turn is calculated from diagnostic data. However, coding practices and the information systems used vary across regions, leading to inconsistent data.

The report is one step in efforts to fix the funding system, but it does not address past shortfalls. A broader reform of the funding law is currently under review.

Regions that have run deficits because of inadequate funding are now seeking retroactive corrections through administrative courts. South Ostrobothnia, Central Finland, West Uusimaa and Päijät-Häme have already filed appeals against last year’s funding decisions. The Ministry of Finance rejected their claims, prompting the legal challenges.

Järvinen said a ruling is expected in May. He noted that while the report shows funding has been skewed, the court will decide on legal grounds.

The next funding calculation is due in April. Järvinen said regions have improved their diagnostic coding in recent months and are waiting to see how this affects their allocations.

At least five regions—South Ostrobothnia, Ostrobothnia, South Karelia, South Savo and Kanta-Häme—have again requested corrections to this year’s funding decisions.

South Ostrobothnia also learned this week that its application for an additional €110.8 million in emergency funding for 2026 was denied.