Background. The Finnish psychiatric treatment system has undergone a rapid transformation from operating in institutional settings to a adopting a community-based approach, through implementation of national plans; this process was carried out quickly, due to a severe economic recession in the early 1990s.

Methods. This paper is a narrative review, based on relevant documents by national authorities, academic dissertations and published scientific literature, between 1984 and 2018, as well as the interviews of key experts in 2019.

Results. The municipality is currently the primary organization, responsible for all health services. Municipalities may also work together in organizing the services, either through “unions of municipalities” or hospital districts. Services are to a great extent outpatient-oriented. The number of beds is one fifth of the previous number, around four decades ago, despite the increase in population. In 2017, 191,895 patients in total (<4% of Finns) had used outpatient psychiatric services, and the number of visits totalled 2.25 million. Psychotherapy is mainly carried out in the private sector by licensed psychotherapists. Homelessness in relation to discharged psychiatric patients has not been in evidence in Finland and deinstitutionalization has not caused an increase in the mortality rate among individuals with severe mental disorders.

Conclusion. Psychiatric patients have, in general, benefitted greatly from the shift from institutions to the community. This does not preclude the fact that there are also shortcomings. The development of community care has, to date, focused too heavily on resource allocation, at the expense of strategic planning, and too little on methods of treatment.