The four interconnected areas
The reform revolves around four key areas that complement and reinforce one another:
Customer- and patient-level costing
Activity-based budgeting
Financial forecasting
Advanced analytics and artificial intelligence
While each area has its own value, the greatest benefits come when they are linked into a continuous cycle of data-driven management.
KPP brings accuracy and impact to decision-making
Customer- and patient-level costing (KPP) provides detailed insights into how much an individual customer’s service package costs, which phases consume the most resources, and how costs compare with similar cases.
Modern costing is based on detailed data from care and customer information systems. This information is no longer just an estimate but accurate facts.
Such precision enables the identification of deviations in care pathways and a deeper understanding of why they occur, facilitating dialogue with clinical leadership.
ABB links operations, resources, and finances for more proactive planning
Activity-based budgeting (ABB) differs from traditional budgeting in that it starts with forecasting service production, not past spending patterns. This creates realistic and transparent financial planning where staffing and resource needs follow directly from planned operations.
This approach adds a strategic dimension: it allows early assessment of whether current resources will suffice or whether changing service demands require new investments or staffing adjustments. ABB also enables scenario simulations, such as the effect of a 10% increase in surgeries on resource needs and total costs.
Financial forecasting supports adaptation and planning
Reliable forecasting requires accurate data. Based on detailed costing and realistic budgets, dynamic financial forecasting models can be built.
Unlike traditional linear trends, forecasts can be built on actual drivers of activity. For example, if demand for a certain treatment suddenly rises, the system can detect it quickly and enable action before resources become insufficient.
Over the long term, forecasting supports strategic planning, such as developing service networks or scheduling investments.
Advanced analytics adds depth to decisions
Advanced analytics – including machine learning and AI – brings a new dimension to financial leadership. It reveals patterns and phenomena that traditional methods cannot capture.
It can, for instance, identify patient groups with unforeseen costs or predict bottlenecks in care pathways, enabling more cost-effective resource allocation.
A shared data foundation strengthens understanding and collaboration
One of the greatest benefits of data-driven management is improved interaction across organizational levels. When management, clinical staff, and financial experts all work from the same data foundation, solutions can be developed together.
Financial information becomes more than just an administrative tool – it supports the entire organization when presented clearly and linked to service delivery.
Results already visible
Many LOGEX clients, from wellbeing services counties in Finland to hospitals across Europe, have already adopted tools like KPP and ABB. The results are encouraging:
- Faster responses to change
- More informed decision-making
- Better budget accuracy
- More predictable resource needs and cost development
- Clearer understanding of what produces effective care
Financial data no longer stays in reports – it actively guides everyday decisions. Collaboration between leadership and frontline staff also improves, as decisions are based on evidence rather than assumptions.
Step by step towards more effective leadership
Not everything has to be implemented at once. A phased approach is encouraged. Customer- and patient-level costing is a good starting point, as it lays the foundation for other areas. From there, organizations can progress to ABB, forecasting, and advanced analytics.
The key is to ensure that data is used for real decisions that benefit both customers and finances.
Better decisions through better data
The annual cycle of financial management in social and healthcare can be summarized as follows:
- Carry out a high-quality KPP calculation annually, giving an accurate picture of the true structure of production, resources, and costs.
- Use this data for continuous comparison and analysis.
- Create a realistic operational, resource, and budget plan with ABB.
- Perform continuous forecasting and adaptation based on realized activities.
Together, these form a continuous, interconnected cycle of data-driven management that supports decision-making at every organizational level, building a foundation for more effective, transparent, and sustainable financial governance in wellbeing services counties.
