Use of public health and social care services among the elderly in Finland: An under-examined mechanism of redistribution

Abstract

The opportunity to use public services supports older people’s livelihoods, although out-of-pocket fees can be a burden, especially for low-income pensioners. In this article, we analyse the use of health and social care services among the elderly in Finland. The objectives are two-fold: first, to study the distribution of public spending on services across income groups, and second, to investigate the related costs to the service-user. The article contributes to the debate on the welfare states’ redistributive function. The study is based on register data covering the total Finnish population in 2015. In our descriptive analysis, we focus on the distribution of the cost of production (based on detailed unit costs), user fees (calculated based on legislation) as well as reimbursements by social insurance and out-of-pocket payments for medicine, private services and travel costs. The results show that the amount of in-kind benefits is the largest in the two bottom income quintiles both in absolute and relative terms. We also see that the related costs to the client are small in relation to the monetary value of the service, although they amount to 9% of the disposable income in the lowest income quintile. It is noteworthy that benefits are highly concentrated on a small group of individuals. Public services create an important context for the evaluation of adequacy of cash income. Likewise, when we want to understand economic conditions of elderly people in a more comprehensive way, studying the share of disposable income going to health and social care is one important dimension. However, we also argue that we need to be cautious when making claims about redistribution through public services.