Overview of Estonian Health Care System

Estonia is the northernmost of the Baltic states, which lie on the east coast of the Baltic Sea, with Latvia to the south and Russia to the east. Estonia is a democratic parliamentary republic and has belonged to the North Atlantic Treaty Organizaton (NATO) and the European Union (EU) since 2004. Since regaining independence, the political environment has been stable enough to implement various economic and social sector reforms which aim to further ensure stability in Estonia. Estonia has enjoyed a level of continuous annual economic growth in recent years that is above the EU average. Several positive trends can be observed in the economic environment, such as the unemployment rate decreasing to 4.7% in 2007; the employment rate increasing for women and people over 65; as well as wage increases. This is supported by a conservative fiscal policy and balanced public budget policy, along with a simple taxation system. However, vulnerability is high because Estonia has a small and open economy, with a large, persistent current account deficit and a rapidly expanding gross external debt. Estonia has a population of 1 340 000 in 2008. Since the late 1990s, an increasing birth rate has been observed, yet this is lower than current death rates. The life expectancy (LE) in 2005 for women was 78.1 years and for men 67.3 years, which is lower than the relative EU averages, but has been steadily increasing since 1999. The main challenge in terms of disease burden is premature mortality caused by external causes and lifestyle-related risk factors. The working-age population bears more than half the current burden of disease. The main risk factors leading to ill health are related to tobacco use, low levels of physical activity, alcohol consumption and obesity. Although positive trends are visible regarding decreasing tobacco use among adults, the rising alcohol consumption among adolescents is a worrying trend. Other positive trends include high vaccination rates and decreasing incidence rates of communicable diseases. However, the most serious health challenge facing the Estonian health system is the high HIV incidence (which peaked in 2001) and prevalence.

Organization and regulation

The steward of the health system in Estonia is the Ministry of Social Affairs. The organizational structure in the health system is advanced and comprises numerous actors, including various agencies under the Ministry of Social Affairs (e.g. State Agency of Medicines (SAM), Health Care Board (HCB), National Institute for Health Development (NIHD), Health Protection Inspectorate (HPI)); public independent bodies (the EHIF); (mainly publicly owned) hospitals under private regulation and private primary care units; and various nongovernmental organizations (NGOs) and professional associations. In recent years, other sectors (e.g. agriculture, justice, economy, environment and transport) have started to be more actively involved in health system activities due to the development and implementation of intersectoral public health strategies. In this environment, with many stakeholders and diverging responsibilities, a correct balance between the stewardship role, direct control mechanisms, good governance and proper accountability is continuously aimed for within the Ministry of Social Affairs and within the health system. Fundamental reforms aiming to develop a modern health system took place in the early 1990s. These were followed by a second legislative review during 2000–2003 that addressed various areas including health financing, service provision and regulation of relations between different actors (e.g. purchaser, provider and patient). In recent years, further adjustment to regulation has been implemented to harmonize the framework with EU legislation and to respond to emerging needs. However, these adjustments have been marginal compared to the reforms of the previous periods. The period since 2004 can be characterized by preparing, launching and implementing various intersectoral public health strategies (e.g. those dealing with cardiovascular disease and HIV/ AIDS). Important differences compared to the previous (smaller scale) public health policies have included the clear mandate, improved accountability, firm commitment, the allocated resources and the large-scale preparation process involving all stakeholders. Consultation on the preparation of a long-term overall National Health Strategy covering the whole health system is an ongoing process as of 2008.


The Estonian health care system is mainly publicly funded through solidarity based mandatory health insurance contributions in the form of earmarked social payroll tax, which mounts to almost two thirds of total health care expenditure.
The Ministry of Social Affairs is responsible for financing emergency care for uninsured people, as well as for ambulance services and public health programmes. The role of the local municipalities in health financing is relatively small, and yet diverse. Private expenditure comprises approximately a quarter of all health expenditure, mostly in the form of co-payments for pharmaceuticals and dental care. This growing out-of-pocket (OOP) expenditure may hinder access to health care for low-income population groups. As a consequence, health financing has become more regressive over recent years.
The core purchaser of health care services for insured people is the Estonian Health Insurance Fund (EHIF). The health insurance system is mandatory, covering about 95% of the population. Contributions are related to employment, but the share of non-contributing individuals (such as children and pensioners) represents almost half of the insured. In the longer term this is a threat to the financial sustainability of the health system, as the narrow revenue base is mostly related to wages and the population is ageing. This is complicated by a potential downturn in economic activity. Over recent years, steps have been taken to increase population coverage as well as the revenue base, but the impact of these steps is still marginal. More resources have been allocated to health care and public health programmes which increased the activities, but further fragmentation of financing sources needs to be closely monitored and avoided. Health services purchasing builds on a contractual relationship with providers as well as financial incentives. Contracts and procedures to involve providers in negotiations have continuously been developed and, similarly, new payment mechanisms have been introduced. For hospitals a diagnosis-related group(s) (DRG) system has been implemented since 2004, complementing the fee-for-service payments and those related to bed-days. With regard to primary care, age-adjusted capitation, fee-for-service payments for selected areas and basic allowances have been complemented by a quality bonus system, implemented in 2006, which aims to foster disease prevention and management of selected chronic conditions.

Physical and human resources

Estonia inherited from the Soviet era a large, ineffective hospital network with poor facilities. Various structural and managerial reforms in the 1990s reduced the number of hospitals (and beds) and restructured the providers’network. The reforms aim to modernize the network and enable the provision of high-quality services while also ensuring sufficient health services access. This process to modernize the current facilities is ongoing and is supported by various resources, including those from the EU structural funds. Estonia has developed a well-equipped infrastructure for primary care that builds on family physicians and nurses. Medical training for doctors is provided by one university and for other professionals (including nurses) this has been centralized to some medical schools to ensure higher quality of training. The curricula for health specialists and workers were reviewed in the 1990s and were brought in line with EU law in anticipation of the 2004 accession. Since a general lack of human resources exists in the health care sector, strong emphasis has been laid on long-term planning and increasing training for nurses and doctors. EU accession in 2004 led to a temporary migration spike of doctors and nurses migrating to neighbouring EU countries. In recent years, however, migration has decreased and the main challenges are to retain qualified professionals in the health care sector, along with the ageing of the current workforce. The period since the mid-1990s can also be characterized by high investments in information and communication technologies. This has led to e-health solutions which aim to achieve better coordination, improved access and transparency. This development builds on information technology (IT) solutions which have been implemented since the 1990s. Since 2005, a countrywide e-health approach encompasses four innovative pillars: Electronic Health Records (EHR), Digital Registrations, Digital Imaging and Digital Prescriptions.

Provision of services

Reforms which started in the early 1990s introduced the principles of a purchaser and provider split; strengthening primary care; free choice of provider; and a high level of provider autonomy in the Estonian health care system. As a result, the current Estonian health care system is built around countrywide primary care which is centred around family medicine, with specially trained doctors and nurses. Primary care is supported by ambulance services available all over Estonia. Specialized care has increasingly been provided in outpatient settings and care involving high technology has been centralized to fewer institutions. Furthermore, over the years, availability of and access to pharmaceuticals has increased significantly. Increasing importance of public health services has led to development of services and standards, raised awareness of the population, as well as an increased public health approach to health care services. Increasing concerns of the population are waiting times to access outpatient services and overall access to health care services. Various initiatives have been implemented, including opening a 24-hour primary care call centre in late 2005; widening the scope of services; and introducing financial incentives as quality bonus. In addition, more emphasis is put on quality of care, which is visible in initiatives such as voluntary accreditation of professionals by their associations, introduction of quality handbooks in hospitals and developing clinical guidelines. In relation to both access and quality, the coordination of and approach to tackling chronic conditions are a continuous concern. In this respect several additional topics need further attention, most noticeably patient empowerment, self-care, development of further home care as well as long-term care services.


Estonia has vigorously and quite successfully reformed its health system over recent decades. Whereas incremental changes can be observed during the period 2003–2008, larger scale legislative reforms had been implemented since the early 1990s and at the beginning of this century. The current system is built on solidarity-based health financing; a modern provider network based on family medicine-centred PHC; modern hospital services; and more concentration on public health. This has resulted in a steadily increasing LE and continuously high rates of population satisfaction with access and quality. However, as in any health system, a number of challenges remain. In Estonia they include reducing inequities in health status and health behaviour; improving control of and responding to the consequences of the high rates of HIV and related conditions; improving regulation of providers to ensure better public accountability; and sustaining health expenditure and human resources at levels that ensure timely access to and high quality of care. This last challenge is particularly important in the face of rising patient expectations, as well as increased costs and volume of health care services. If solidarity and equity are to be maintained and guaranteed for the future, additional resources need to be found from public sources of revenue.

Koppel A, Kahur K, Habicht T, Saar P, Habicht J and van Ginneken E. Estonia:
Health system review. Health Systems in Transition. 2008; 10(1): 1-230.

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