VALOR Partners’ recent industry reviews on the social and healthcare sector and wellbeing services counties show that many counties have implemented successful reforms, with results emerging over time. Simultaneously, short-sighted cost-saving measures have been taken by reducing outsourced services.
Management consulting company VALOR Partners has published a comprehensive annual review of the social and healthcare market and sector landscape for the past ten years. Each year, the reports also include current thematic topics accompanied by in-depth analyses. With the establishment of the wellbeing services counties, the report suite was expanded to include region-specific reviews comparing local solutions and operating models.
The key message of the May 2025 reports is that wellbeing services counties should proactively and open-mindedly pursue collaborative models that create added value for clients, as well as for the public, private, and third sectors.
This requires deep expertise in service organisation and procurement, to ensure that production methods and contractual models are economically and qualitatively sustainable, for both purchasers and service providers. At the same time, the private sector must demonstrate its ability to act as a long-term and responsible partner, not driven by short-term profit.
Elderly care service coverage is declining
Specialised healthcare and elderly enhanced residential care dominate the cost structures of wellbeing services counties. While demand for elderly 24/7 residential care is increasing, service coverage is declining.
“This issue is present in every wellbeing services county: despite an ageing population, coverage for elderly 24/7 residential care is being reduced,” says Tuomas Nenonen from VALOR Partners, who has extensive experience in social and healthcare consulting. “The private sector has significant capacity, but due to cost restraints, there has been a push to limit outsourced services.”
According to VALOR’s experience, outsourced elderly enhanced residential care services – when properly procured – are often more cost-effective and higher in quality than publicly provided services. However, in recent years, inflation and changes such as staffing requirements have created exceptional pressure to increase prices, prompting difficult negotiations between providers and purchasers. As a result, the use of outsourced services has been restricted in pursuit of cost savings.
Total costs may ultimately be higher
“In practice, a client may wait for a spot in a primary healthcare ward or end up using multiple other social and healthcare services, which can become far more expensive than 24/7 residential care,” Nenonen highlights. “When making decisions about service structures, total costs must be considered. Denying a placement does not necessarily result in zero cost for the county.”
Jussi Ailisto, head of social and healthcare clients at VALOR, suggests that a bold and innovative solution could involve outsourcing all elderly residential care services based on population responsibility, using long-term and well-structured contracts that create value for all involved.
“This kind of solution is neither easy nor straightforward to implement, but piloting such new approaches would certainly be valuable,” Ailisto says. “Moving beyond the traditional unit-based transaction model enables the private sector’s service development capabilities to be harnessed for the benefit of all stakeholders.”
Boosting efficiency in digital services
Primary healthcare has sought greater productivity through digital services such as symptom assessments, chat tools, and remote consultations. The goal has been to shift visits from physical premises to digital platforms and achieve cost savings.
“While several important initial steps have been taken in leveraging digitalisation, the full efficiency potential has yet to be realised,” Nenonen notes. “This calls for significant operational changes in care pathways, affecting the daily routines of both clients and professionals.”
Initially, the aim was to implement a nationwide Omaolo-platform, but in practice, wellbeing services counties have made independent decisions. According to VALOR’s research, several counties have implemented platforms developed by private providers such as Mehiläinen, Terveystalo, or others, while a few counties have yet to select a platform.
“Sharing best practices between counties and private operators would clearly create added value,” Nenonen says. “There is no need to reinvent the wheel.”
Ailisto adds, that private operators have spent years developing and investing in digital solutions and have built functional pathways around them. They are well positioned to support more efficient service delivery and cost savings.
Optimising total costs requires a comprehensive view
Wellbeing services counties form a fragmented landscape, with 21 regions facing different financial and structural challenges. A common denominator is weak financial performance. Solutions are being explored through larger operational units, which are expected to generate savings in the long-term.
According to VALOR’s experts, cutting outsourced services is a short-sighted tactic that may increase total costs unless broader impacts are considered. In their view, counties must significantly strengthen their strategic organising capabilities to fully leverage the strengths of the private sector within the publicly funded service system.
“The private sector makes a good servant but a poor master, as we have seen excesses, especially in pricing,” Ailisto says. “The counties procurement and service organising expertise is therefore absolutely critical. Long-term, goal-oriented contracts are needed. I don’t believe Finland’s social and healthcare system will make real progress as long as over 90% of outsourced services are performance-based.”
He emphasises that, in the difficult financial situation, counties should actively seek innovative, future-oriented, win-win-win solutions in collaboration with the private and third sectors, always keeping the overall regional budget in mind. At the same time, the private sector must commit to long-term cooperation and genuine partnership.
“VALOR Partners can support counties in understanding total costs, identifying value-creating solutions, developing organising strategies, and negotiating procurement and service contracts – this is our core expertise,” Ailisto concludes
VALOR Partners’ annual industry reviews on the social and healthcare sector and wellbeing services counties were published in May 2025. These highly regarded reviews are widely used by companies and organisations to support strategy work, onboarding, understanding the overall sector landscape, and as a source of development ideas at the regional level.
For more information, please contact: Jussi Ailisto, p 040 687 0743 or Tuomas Nenonen, 050 367 8308
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Text: Catarina Stewen