No. 21




Responding to the Challenge of Financial Sustainability in Estonia’s Health System

16 June 2010


RiTo No. 21, 2010

The recently launched report “Responding to the challenge of financial sustainability in Estonia’s health system” (authors Sarah Thomson, Andres Võrk, Triin Habicht, Liis Rooväli, Tamàs Evetovits, Jarno Habicht) assesses the current performance of health system, the health financing policy and its financial sustainability.

The report is the result of a one-year process of stakeholder consultations and expert analysis initiated by the Ministry of Social Affairs in 2009, in partnership with the Estonian Health Insurance Fund and the World Health Organization (WHO) Regional Office for Europe.

The report takes an in-depth look at the strengths and weaknesses of Estonian health financing policy and highlights some as following. The strengths of the health financing policy are internationally recognized, but avoiding further fragmentation and strengthening of purchasing will yield better results. Over the years, the rising levels of out-of-pocket spending have eroded financial protection and equity in financing. Weak government control over capital investment and lack of incentives to balance and coordinate care across levels promote inefficiency.

Further, the projected revenue and expenditure trends from now to 2030 are presented. It is observed that developments in health technology and patterns of health care utilization will have a much larger impact on future health care spending than population ageing. The projections for coming decades show that the current system of raising revenue will not be sufficient to bridge the prospective gap between health sector revenue and expenditure.

There are many options for change, but only some will help the health system to achieve its objectives. The report rejects the option of blanket reductions in coverage breadth, scope and depth. It does not recommend an expanded role for private health insurance in Estonia. The report makes the following recommendations on the grounds that they have significant stakeholder support, reflect the health system’s values, are politically feasible and likely to enhance the system’s ability to meet is objectives. (1) Broaden the public revenue base. (2) Improve financial protection by curbing out-of-pocket payments. (3) Continue to improve health system performance through better resource allocation and purchasing. (4) Maintain strong governance of the health system.
The health system’s financial sustainability rests on political decisions about how, and how much, to invest in health and how resources should be allocated. These decisions need to be made sooner rather than later because the projections and evidence of existing inefficiencies suggest that the costs of inaction will be high.

Full article in Estonian