Finland's entire government has resigned after it failed to reform the country's healthcare system, one of its key policies.

The announcement came on Friday from the Finnish president's office.

Prime Minister Juha Sipila's resignation was approved but the president has asked his cabinet to stay on as a caretaker government until a new one is appointed.

The collapse comes just one month before parliamentary elections are to be held after Sipila failed to push through the reforms.

The changes were crucial for the three-party ruling coalition's plans to balance public finances.

Finland has an aging population that is pushing up healthcare costs, but cutting that budget is politically sensitive in a Nordic region that has historically provided extensive social welfare.

The head of the prime minister's Centre Party parliamentary group, Antti Kaikkonen, tweeted that Sipila resigned because "the healthcare reform cannot be accomplished during this government term."

He added that several governments have tried to push through reforms over the past 12 years.

The government claimed that their reforms could have curbed the annual growth of Finland's public social and healthcare expenses to 0.9% from the current estimate of 2.4% between now and 2019.

The prime minister had previously warned that he would dissolve the centre-right government if he could not get the reforms through parliament.