6.1. Analysis of recent reforms

Since 2017, recent changes in the Estonian health care system have focused on improving the efficiency and the sustainability of its financing. Over the past decade, the mandate of the EHIF has been expanded in terms of functions and responsibilities. Its revenue base has also been diversified through increasing transfers from the state budget on behalf of non-working pensioners.

Steps have also been taken to improve financial protection, such as extending protection from user charges for medicines and increasing dental care benefits for low-income individuals. Efforts are being made to strengthen PHC and care integration, including improvements in information systems, development of patient pathways and the expansion of e-health services.

Table6.1 provides an overview of recent health reforms from 2017 to 2022, which are described in greater detail below. For more information on past measures, see Habicht et al. (2018).

Table6.1

6.1.1. Streamlining the roles and responsibilities of health sector agencies

The broadening of the health insurance revenue base triggered changes in the EHIF’s responsibilities by consolidating both financing and organization of several health care services. Since 2018, the administration of the outpatient prescription drug pricing and reimbursement has been transferred from the MoSA to the EHIF (see section 2.2.1 The role of the state and its agencies). The rationale behind this was to reduce the MoSA’s executive role and instead shift the focus more onto policy development and implementation. In 2019, the EHIF also started contracting ambulance services, similar to the other health care services. However, the Health Board remains responsible for the organization and monitoring of ambulance services in Estonia (see section 5.5 Urgent and emergency care). The aim of the change was to increase the efficiency in health care provision by improving the integration of services provided by ambulances, family physicians and hospitals, coordinated by one authority. Starting in 2020, the EHIF pays the salaries of all medical students in residency training, a cost previously covered by the MoSA. However, the ministry continues to fund the costs of teachers and provides grants for service providers who offer residency training for medical students (see section 4.2.4 Training of health personnel).

In September 2018, the EHIF’s Supervisory Board was reduced from 15 members to six, with the aim of improving its decision-making efficiency. Despite this change, the overall design of the Board, which includes tripartite representation of the state, employers and beneficiaries, remained unchanged, with each party holding two seats. However, the discussions on this change did not include a review of the overall governance and accountability framework of the EHIF to ensure effective checks and balances, despite its increasing role in the financing and organization of health services (see section 2.2.1 The role of the state and its agencies).

In 2016 and 2022, the MoSA commissioned external evaluations of the institutional set-up in the health sector with the goal of identifying potential for efficiency gains and merging some functions. The 2016 evaluation found overlapping activities, and opportunities for efficiency gains through improved regulatory clarification and ministerial leadership. However, in 2022, the reorganization efforts to reshuffle the functions between health agencies were put on hold due to strong opposition (see section 7.1.2 Accountability).

6.1.2. Steps to accelerate efforts in integrated public health

Since 2008, Estonia has been transforming its public health sector through strategic planning and integrated efforts. The approval of the next-generation NHP 2020–2030 marked a significant step, emphasizing evidence-based intersectoral health policies and key implementation principles. Although plans for an updated Public Health Act have encountered delays, key stakeholders, including the MoSA, the Health Board, the NIHD and the EHIF, collaborate to shape the public health landscape. In April 2021, an agreement on the principles of universal multisectoral prevention was signed by several ministers in Estonia. These ministers included the Minister of Education and Research, the Minister of Justice, the Minister of Culture, the Minister of Finance, the Minister of Social Protection, the Minister of Interior and the Minister of Health and Labour. The main objective of this agreement was to coordinate the prevention activities and improve their quality across sectors. To implement this agreement, an action plan was developed and the Prevention Council was established to devise and monitor the plan. The newly established cross-sectoral Prevention Council underlines Estonia’s innovative strategy to foster collaboration and shared goals in prevention, criminal justice and child protection. The Prevention Research Council, which was established simultaneously, works to improve the quality of prevention and evaluates the effectiveness of prevention programmes and interventions.

Significant efforts are focused on the prevention of noncommunicable diseases. Since 2014, Estonia has introduced comprehensive, evidence-based Green Papers on alcohol and tobacco control, which have been systematically implemented over the years. In 2021, a government commission approved the Estonian Drug Policy 2030, which formulates goals in the area of substance use. However, challenges remain, such as the increasing alcohol consumption, use of alternative/new nicotine products (especially among minors) and illicit drug use. Estonia’s proactive measures include the adoption and implementation of comprehensive intersectoral policies, the development and introduction of support, counselling and treatment services, and the expansion of the role of nurses in addiction management. To address obesity and physical inactivity, Estonia is set to renew its Green Paper on Nutrition and Physical Activity to promote health-conscious choices. In addition, a food reformulation plan has been drafted and discussions with the food industry are planned for autumn 2023. A National Action Plan for Cancer Control was adopted in 2021 to accelerate efforts in addressing the relatively poor cancer-related health outcomes.

6.1.3. Measures to ensure sustainability of health system financing

Since 2018, the Estonian Parliament has diversified EHIF’s revenue base, moving away from its exclusive reliance on earmarked social payroll taxes. This was achieved by gradually increasing the state budget transfers on behalf of non-working pensioners. The formula-based state budget transfers rose from 7% of the average state pension in 2018 to 13% in 2022, harmonizing the contribution rates of employees and pensioners. As a result, the share of general budget transfers on behalf of non-working pensioners now accounts for about 11% of the EHIF’s planned budget for 2023 (see sections 3.2 Sources of revenue and financial flows and 7.6 Health system efficiency).

During the COVID-19 pandemic, additional general budget transfers were made to the EHIF’s budget, initially as an emergency response to cover direct pandemic-related costs, but later as non-targeted budget support. In 2022, transfers were also made to cover additional expenses related to the provision of care to Ukrainian refugees. In total, state budget transfers were 18% of the EHIF’s revenues in 2023. The continuously increasing gap between revenues and expenditures is a growing concern.

Furthermore, the revenue and expenditure of the EHIF have been reduced in another parallel reform. Additional transfers to the EHIF budget on behalf of certain population groups (for example, parents raising a child under the age of three) have been abolished, while the obligation to pay maternity benefits has been transferred to the Social Insurance Board, merging it with the national parental benefit system in 2022 (see section 2.2.1 The role of the state and its agencies). Based on calculations using 2018 data, this reform was expected to reduce EHIF revenue and expenditure by about 4% in a zero-sum calculation.

6.1.4. Sequential actions to improve coverage, access and financial protection

High OOP spending on prescription medicines and dental care has been a persistent issue. In response, Estonia redesigned its user-charges policy in 2018 to tackle the problem of high OOP payments for outpatient prescription medicines. The reform aimed to expand access to protection from user charges and remove administrative barriers that hindered people from receiving such protection. The protection is now applied automatically at the point of purchase in the pharmacy. As a result, the number of people spending over €250 on outpatient prescribed medicines annually plummeted by 95% from 24 000 in 2017 to only 1000 in 2018 (see sections 3.4.1 Cost sharing (user charges) and 5.6.3 Cost-containment measures applied to pharmaceuticals).

Additionally, the in-kind dental benefit was reintroduced for all adults in mid-2017. The shift from a cash benefit to an in-kind benefit is expected to give the EHIF greater control over prices. Furthermore, from 1 January 2022, those who have received a subsistence allowance (toimetulekutoetus) in the two months before receiving dental care, or who are registered as unemployed, are eligible for an increased dental care benefit. Although indirectly, this is the first EHIF benefit to be linked to household income, as the subsistence allowance is a means-tested benefit (see section 3.4.1 Cost sharing (user charges)).

Incremental steps have been taken to improve population coverage. Since 2021, the uninsured individuals have been invited to all EHIF-funded cancer screenings (breast, cervical and colorectal), and health insurance covers the expenses for diagnostics and necessary treatments for detected cancer. This decision was made after more than 10 years of discussion (see section 3.3.1 Coverage). However, the range of services and conditions covered for the uninsured population remains very limited.

Ukrainian refugees who have received temporary protection, a residence permit and an Estonian personal identification number are eligible for insurance coverage, just like other residents. However, less than half of the refugees from Ukraine actually have insurance coverage. Uninsured Ukrainian refugees have access to a wider range of health services than other uninsured people. Overall, the limited access to health care for the uninsured has become increasingly apparent, leading to greater political attention to the issue. Despite this, there are currently no implementable solutions or explicit political commitments to address the problem.

6.1.5. Ongoing efforts to advance the role of primary health care

The recent PHC reforms have emphasized the importance of multidisciplinary care and prioritized PHC centres over solo practices. To overcome a key barrier to broadening the scope of PHC and fostering group practices with multidisciplinary teams, the EU Structural Funds have been used to invest in PHC providers’ infrastructure. The preparations for using the EU Structural Funds for PHC investments began in 2014, followed by the implementation phase from 2018 to 2023 (see sections 3.7.1 Paying for health services and 5.3 Primary care).

In addition to infrastructure investments, the EHIF has developed special contract terms and payment incentives for multidisciplinary PHC group practice centres providing midwifery, physiotherapy (from 2017) and home nursing services (from 2018). In 2019, the EHIF introduced financing requirements for providers affiliated with a larger PHC practice centre, but operating in separate premises and in different regions. This means that individual PHC providers, known as affiliated practices, can cooperate with PHC group practice centres if they work there at least four hours per week. The primary goal is to incentivize the creation of PHC networks to ensure access, especially in rural settings (see sections 3.7.1 Paying for health services and 5.3 Primary care).

From 2021, the EHIF has offered PHC group practice centres that hire additional staff a compensation based on the volume of their work. The aim of this change is to tailor service provision to patient lists, allowing providers to choose the most needed expertise. In addition, since 2019, PHC providers with additional training in radiography and sonography have been permitted to offer radiological services, granting them more freedom to broaden the scope of their services (see section 3.7.1 Paying for health services).

6.1.6. Efforts to improve care coordination and person-centredness

The MoSA, in collaboration with the EHIF, has taken steps to clarify and improve patient pathways to overcome fragmentation and poor coordination. The EHIF has initiated several programmes, including new patient pathways for stroke, endoprostheses, emergency care, depression and psoriasis. The implementation of the renewed stroke and endoprostheses pathways is supported by the implementation of the new bundled payment mechanism (see sections 3.7.1 Paying for health services).

In addition, in 2022, the MoSA launched the nationwide project “Person-Centred Social and Health Care Services”, which aims to create a model for integrated health and social care service delivery and financing. The project builds on the experience gained from the Viljandi PAIK project (PAIK, 2023), which tested the compatibility of health care and social services based on patients’ needs (see sections 2.8 Person-centred care and 7.2 Accessibility).

Furthermore, family physicians and specialists are increasingly using e-consultations to help patients access specialist care more quickly, and specialists can support family physicians in providing treatment recommendations. Statistics show that the proportion of e-consultations is still relatively low. In 2021, e-consultations accounted for only 8% of all referrals to specialists, and about 35% of patients did not need to visit a specialist in person because the specialist was able to provide treatment recommendations through electronic channels. However, efforts are complicated by the lack of supportive e-health solutions to facilitate the standardization and integration of patient care across different health and social care providers (see sections 3.7.1 Paying for health services and 5.4 Specialized care).

6.1.7. Elevating the importance of mental health in the political agenda

The government’s approval of the Green Paper on Mental Health in April 2021 demonstrates a shift towards prioritizing mental health and recognizing its importance at individual, community and state levels. Estonia was one of the few European countries without a national mental health policy framework, which hindered cross-disciplinary development. The Green Paper was prepared in collaboration with numerous experts and professionals, and is based on the main goal of extending healthy lives by reducing premature mortality and morbidity as set out in the NHP 2020–2030. It outlines the existing organization of mental health care, highlights problem areas and proposes solutions for future development. The paper emphasizes the importance of prevention, early detection of mental health issues and timely access to high-quality care throughout Estonia. The Green Paper served as a foundation for the mental health action plan for 2023–2026 (published in 2022) and the creation of a separate suicide prevention action plan by 2024. Additionally, a mental health department was established within the MoSA starting from the beginning of 2022 (see section 5.11 Mental health care).

6.1.8. Pharmacy reform to strengthen the role of pharmacists

The pharmacy reform was implemented on 1 April 2020 after a five-year transition period. The main change brought about by the reform is that a pharmacist must now control the majority of the capital of a general pharmacy. Previously, it was possible for businesses, including pharmaceutical wholesalers, to own the majority of shares. The reform also allows one pharmacist to own up to four pharmacies, of which at least one must be managed by the pharmacist. Furthermore, a general pharmacy can operate a branch pharmacy in towns with fewer than 4000 inhabitants. The objective of the reform is to prioritize professional development in the pharmacy market over business interests and strengthen the role of the pharmacist in the health system (see sections 2.7.4 Regulation and governance of pharmaceuticals and 5.6 Pharmaceutical care).

However, the reform faced opposition from wholesalers in late 2019, with opponents arguing that pharmacists were not ready to become pharmacy owners, which would lead to closures and access issues, particularly in rural areas. Protests against the reform culminated in the closure of chain pharmacies for half a day to highlight the potential impact. Since the reform’s implementation, no notable closures of pharmacies have occurred. However, a significant number of pharmacies have entered into franchise agreements with wholesalers, leaving the system largely unchanged, and new independent pharmacies have been established. The longer-term impact of the reform has yet to be assessed.

6.1.9. Building health sector capacity in emergency preparedness and response

In 2020, in response to the COVID-19 pandemic, the roles of health service providers in emergencies and the levels of national defence and preparedness were redefined. It became evident that the existing regulations were too focused on trauma-related crises, lacked flexibility and failed to provide a comprehensive health system perspective. The new regulations task the Health Board with developing a crisis management structure for PHC, which was a challenge in the decentralized nature of the COVID-19 pandemic response. A central crisis management structure is necessary to enable quick reorganization of PHC services during such emergencies (see sections 2.2.1 The role of the state and its agencies and 5.1.1 Public health governance). The new crisis plans for both civilian and military scenarios still focus on massive trauma cases, but are more flexible and universal for all types of health-related threats.