The Estonian health system has come to be based on regulation and contractual relationships rather than subordinate relationships. Starting in 1991, the health system began a complete transformation. This year, the Health Insurance Act was passed and was shortly thereafter followed by the Health Services Organization Act in 1994. These two acts set out the legal framework for all subsequent reforms. First, the health financing system was transformed from a centralized, state-run system to a decentralized, social health insurance model. Under this scheme, 22 non-competing funds were established across the country and were coordinated through the Association of Sickness Funds. A health insurance tax of 13% of wages was established to fund the system. The next step in the reform process was to convert family medicine into a specialty with postgraduate training in order to train enough family physicians to cover the entire population. The aim was to establish family medicine as the gateway into the health system. The status of family doctors changed through time, so that by 1998, they had become independent contractors for the state. Thus, the strategic direction of the Estonian health system began to change.
The Estonian health system has come to be based on regulation and contractual relationships rather than subordinate relationships. Starting in 1991, the health system began a complete transformation. This year, the Health Insurance Act was passed and was shortly thereafter followed by the Health Services Organization Act in 1994. These two acts set out the legal framework for all subsequent reforms. First, the health financing system was transformed from a centralized, state-run system to a decentralized, social health insurance model. Under this scheme, 22 non-competing funds were established across the country and were coordinated through the Association of Sickness Funds. A health insurance tax of 13% of wages was established to fund the system. The next step in the reform process was to convert family medicine into a specialty with postgraduate training in order to train enough family physicians to cover the entire population. The aim was to establish family medicine as the gateway into the health system. The status of family doctors changed through time, so that by 1998, they had become independent contractors for the state. Thus, the strategic direction of the Estonian health system began to change.
During the mid-1990s, hospitals were given the right to hire and fire personnel and all medical staff stopped being civil servants and instead became employees under private labor regulation. Also during this time, it became apparent that a decentralized system of sickness funds was inefficient, especially in regards to risk pooling. Therefore, a Central Sickness Fund was established, and all of the regional funds were consolidated. In this way, revenue would be collected centrally and reallocated to the regions on a per capita basis. The State Health Insurance Council (SHIC) was also established in order to approve the state health insurance budget and to create a price list for health care services. The SHIC existed until 2001, when it was replaced by the Estonian Health Insurance Fund (EHIF).
The establishment of the EHIF as a public, independent body with regional departments clarified the manner in which all aspects of the health insurance system were regulated. This included benefits, reimbursement lists, and maximum levels of cost sharing, among others. Finally, in 2004, a gradual implementation of a diagnosis-related grouping system was started. Its use has expanded gradually over the last few years.
Estonian Health Insurance Fund
Program Summary
The Estonian health system has come to be based on regulation and contractual relationships rather than subordinate relationships. Starting in 1991, the health system began a complete transformation. This year, the Health Insurance Act was passed and was shortly thereafter followed by the Health Services Organization Act in 1994. These two acts set out the legal framework for all subsequent reforms. First, the health financing system was transformed from a centralized, state-run system to a decentralized, social health insurance model. Under this scheme, 22 non-competing funds were established across the country and were coordinated through the Association of Sickness Funds. A health insurance tax of 13% of wages was established to fund the system. The next step in the reform process was to convert family medicine into a specialty with postgraduate training in order to train enough family physicians to cover the entire population. The aim was to establish family medicine as the gateway into the health system. The status of family doctors changed through time, so that by 1998, they had become independent contractors for the state. Thus, the strategic direction of the Estonian health system began to change.
During the mid-1990s, hospitals were given the right to hire and fire personnel and all medical staff stopped being civil servants and instead became employees under private labor regulation. Also during this time, it became apparent that a decentralized system of sickness funds was inefficient, especially in regards to risk pooling. Therefore, a Central Sickness Fund was established, and all of the regional funds were consolidated. In this way, revenue would be collected centrally and reallocated to the regions on a per capita basis. The State Health Insurance Council (SHIC) was also established in order to approve the state health insurance budget and to create a price list for health care services. The SHIC existed until 2001, when it was replaced by the Estonian Health Insurance Fund (EHIF).
The establishment of the EHIF as a public, independent body with regional departments clarified the manner in which all aspects of the health insurance system were regulated. This included benefits, reimbursement lists, and maximum levels of cost sharing, among others. Finally, in 2004, a gradual implementation of a diagnosis-related grouping system was started. Its use has expanded gradually over the last few years.
Estonian health care is funded through a Social Health Insurance regime where contributions are paid by salaried and self-employed workers, who contribute 13% of their wages to the system. The earmarked payroll tax is collected by the Estonian Tax and Customs Board. The tax board then transfers the health contribution to the EHIF. This system has a strong element of solidarity, as 46% of enrollees are non-contributing members and are subsidized by those who contribute. All enrollees are entitled to the same benefits package.
Estonian health care is funded through a Social Health Insurance regime where contributions are paid by salaried and self-employed workers, who contribute 13% of their wages to the system. The earmarked payroll tax is collected by the Estonian Tax and Customs Board. The tax board then transfers the health contribution to the EHIF. This system has a strong element of solidarity, as 46% of enrollees are non-contributing members and are subsidized by those who contribute. All enrollees are entitled to the same benefits package.
The Estonian Health Insurance Fund is the primary financing entity. It is responsible for pooling funds, contracting with service providers, reimbursing health services and pharmaceuticals, and reimbursing sick leave and maternity benefits. In 2006, approximately 20% of EHIF expenditures went toward cash benefits such as health related work incapacity compensation, as well as dental care and prescription reimbursements. In the same year, approximately 70% of expenditures went toward payment of services such as preventative and curative health and pharmaceuticals and medical devices. EHIF also funds disease prevention and health promotion programs.
Funds are disbursed to the four regional EHIF offices on a per capita basis based on the number of insured in the region. The per capita payments for primary care are adjusted based on the age structure of the region, but payments for all other health services are not adjusted. Once the regional EHIF offices receive their funds, they have some flexibility in their allocation. This is especially useful, as the planning of health service provider contracts is conducted by the regional offices.
The EHIF is liable for all of its obligations, so it cannot declare bankruptcy. However, if social health insurance revenues are lower than budgeted, the state becomes responsible for the shortfall. Also, if the government establishes prices such that the EHIF cannot meet its contractual obligations, then the state becomes responsible. In order to ensure solvency, the EHIF has a cash reserve to manage daily cash flows, a legal reserve to decrease the risk of macroeconomic changes, equivalent to 6% of the budget, and a risk reserve to ensure that health insurance obligations are met, equivalent to 2% of the budget. EHIF revenues have exceeded expenditures every year since the reforms except 1999, when an economic crisis significantly reduced revenues.
Out-of-Pocket payments have been the most rapidly increasing sources of financing, increasing from 7.5% of total health financing in 1995 to 24% in 2006. OOP payments flow mainly toward cost sharing for EHIF benefits, payments for services outside of the EHIF benefits package, payments to non-EHIF providers, and to informal payments. However, the primary reason for the increase in OOP has been the dual increase in pharmaceutical use and dental care expenditures that are not a part of the benefits package.
Table 1: Share of Primary Sources of Health Care Financing (1995-2006)
| Source of financing | 1995 | 2000 | 2005 | 2006 | 2007 |
|---|---|---|---|---|---|
| Public | 89.8 | 76.4 | 76.7 | 73.7 | 75.6 |
| Taxes (state and municipal) | 12.4 | 10.4 | 10.5 | 11.2 | 11.4 |
| Social health insurance | 77.4 | 66.0 | 66.2 | 62.5 | 64.2 |
| Private | 7.5 | 23.3 | 23.0 | 25.6 | 23.3 |
| OOP Payments | 7.5 | 19.7 | 20.4 | 23.8 | 21.9 |
| Private health insurance | 0.0 | 1.0 | 0.3 | 1.1 | 0.3 |
| Other | 0.0 | 2.6 | 2.3 | 0.7 | 1.1 |
| External sources | 2.7 | 0.3 | 0.3 | 0.6 | 1.1 |
Source: Ministry of Social Affairs, 1999-2006
There are no copayments for family doctor visits, but other services have small copayments. Prescription drugs normally have a deductible as well as a coinsurance of percentage. Flat small copayments are charged on family doctor home visits, outpatient care visits, and hospital bed days. There has been a gradual move toward an elimination of patient cost sharing for primary care. Outpatient specialist care has a maximum consultation fee, but providers can choose to charge any amount up to the maximum. Inpatient care providers can charge a per diem rate (maximum is set by EHIF) for up to ten days. However, inpatient child care, pregnancies, and emergency care are exempt from this per diem rate.
Estonian Health Insurance Fund
Funding
Estonian health care is funded through a Social Health Insurance regime where contributions are paid by salaried and self-employed workers, who contribute 13% of their wages to the system. The earmarked payroll tax is collected by the Estonian Tax and Customs Board. The tax board then transfers the health contribution to the EHIF. This system has a strong element of solidarity, as 46% of enrollees are non-contributing members and are subsidized by those who contribute. All enrollees are entitled to the same benefits package.
The Estonian Health Insurance Fund is the primary financing entity. It is responsible for pooling funds, contracting with service providers, reimbursing health services and pharmaceuticals, and reimbursing sick leave and maternity benefits. In 2006, approximately 20% of EHIF expenditures went toward cash benefits such as health related work incapacity compensation, as well as dental care and prescription reimbursements. In the same year, approximately 70% of expenditures went toward payment of services such as preventative and curative health and pharmaceuticals and medical devices. EHIF also funds disease prevention and health promotion programs.
Funds are disbursed to the four regional EHIF offices on a per capita basis based on the number of insured in the region. The per capita payments for primary care are adjusted based on the age structure of the region, but payments for all other health services are not adjusted. Once the regional EHIF offices receive their funds, they have some flexibility in their allocation. This is especially useful, as the planning of health service provider contracts is conducted by the regional offices.
The EHIF is liable for all of its obligations, so it cannot declare bankruptcy. However, if social health insurance revenues are lower than budgeted, the state becomes responsible for the shortfall. Also, if the government establishes prices such that the EHIF cannot meet its contractual obligations, then the state becomes responsible. In order to ensure solvency, the EHIF has a cash reserve to manage daily cash flows, a legal reserve to decrease the risk of macroeconomic changes, equivalent to 6% of the budget, and a risk reserve to ensure that health insurance obligations are met, equivalent to 2% of the budget. EHIF revenues have exceeded expenditures every year since the reforms except 1999, when an economic crisis significantly reduced revenues.
Out-of-Pocket payments have been the most rapidly increasing sources of financing, increasing from 7.5% of total health financing in 1995 to 24% in 2006. OOP payments flow mainly toward cost sharing for EHIF benefits, payments for services outside of the EHIF benefits package, payments to non-EHIF providers, and to informal payments. However, the primary reason for the increase in OOP has been the dual increase in pharmaceutical use and dental care expenditures that are not a part of the benefits package.
Table 1: Share of Primary Sources of Health Care Financing (1995-2006)
| Source of financing | 1995 | 2000 | 2005 | 2006 | 2007 |
|---|---|---|---|---|---|
| Public | 89.8 | 76.4 | 76.7 | 73.7 | 75.6 |
| Taxes (state and municipal) | 12.4 | 10.4 | 10.5 | 11.2 | 11.4 |
| Social health insurance | 77.4 | 66.0 | 66.2 | 62.5 | 64.2 |
| Private | 7.5 | 23.3 | 23.0 | 25.6 | 23.3 |
| OOP Payments | 7.5 | 19.7 | 20.4 | 23.8 | 21.9 |
| Private health insurance | 0.0 | 1.0 | 0.3 | 1.1 | 0.3 |
| Other | 0.0 | 2.6 | 2.3 | 0.7 | 1.1 |
| External sources | 2.7 | 0.3 | 0.3 | 0.6 | 1.1 |
Source: Ministry of Social Affairs, 1999-2006
There are no copayments for family doctor visits, but other services have small copayments. Prescription drugs normally have a deductible as well as a coinsurance of percentage. Flat small copayments are charged on family doctor home visits, outpatient care visits, and hospital bed days. There has been a gradual move toward an elimination of patient cost sharing for primary care. Outpatient specialist care has a maximum consultation fee, but providers can choose to charge any amount up to the maximum. Inpatient care providers can charge a per diem rate (maximum is set by EHIF) for up to ten days. However, inpatient child care, pregnancies, and emergency care are exempt from this per diem rate.
Health insurance through EHIF is mandatory. There are three main categories of enrollees:
- Those who make their own contributions: These enrollees contribute 13% of their wages. They primarily include employees and the self-employed. This group makes up 51% of the systems’ enrollees.
- Those whose contributions are covered by the state: these enrollees are composed of individuals on parental leave, the unemployed, the disabled, military personnel, and dependent spouses of diplomats. This group makes up 2.5% of the systems’ enrollees.
- Those who are eligible for coverage without contributing: these enrollees include children up to 19 years of age, pensioners, disabled people with special pensions, students, non-working spouses of insured individuals, and non-working pregnant women. This group makes up 46.5% of the systems’ enrollees.
Health insurance through EHIF is mandatory. There are three main categories of enrollees:
- Those who make their own contributions: These enrollees contribute 13% of their wages. They primarily include employees and the self-employed. This group makes up 51% of the systems’ enrollees.
- Those whose contributions are covered by the state: these enrollees are composed of individuals on parental leave, the unemployed, the disabled, military personnel, and dependent spouses of diplomats. This group makes up 2.5% of the systems’ enrollees.
- Those who are eligible for coverage without contributing: these enrollees include children up to 19 years of age, pensioners, disabled people with special pensions, students, non-working spouses of insured individuals, and non-working pregnant women. This group makes up 46.5% of the systems’ enrollees.
In order to receive services, patients must show their national identification card to providers. An online information system is used to verify that the card is valid and to provide details of insurance status and family doctor.
Estonian Health Insurance Fund
Population covered
Health insurance through EHIF is mandatory. There are three main categories of enrollees:
- Those who make their own contributions: These enrollees contribute 13% of their wages. They primarily include employees and the self-employed. This group makes up 51% of the systems’ enrollees.
- Those whose contributions are covered by the state: these enrollees are composed of individuals on parental leave, the unemployed, the disabled, military personnel, and dependent spouses of diplomats. This group makes up 2.5% of the systems’ enrollees.
- Those who are eligible for coverage without contributing: these enrollees include children up to 19 years of age, pensioners, disabled people with special pensions, students, non-working spouses of insured individuals, and non-working pregnant women. This group makes up 46.5% of the systems’ enrollees.
In order to receive services, patients must show their national identification card to providers. An online information system is used to verify that the card is valid and to provide details of insurance status and family doctor.
The EHIF covers a broad range of services, including family physicians services, in- and out-patient care, long-term care, rehabilitation, and prescription drugs. Children through 19 years of age are also eligible for free dental care, including preventive and curative services. Meanwhile, adults receive partial reimbursement for dental care.
The EHIF covers a broad range of services, including family physicians services, in- and out-patient care, long-term care, rehabilitation, and prescription drugs. Children through 19 years of age are also eligible for free dental care, including preventive and curative services. Meanwhile, adults receive partial reimbursement for dental care.
Patients are free to choose the doctors and hospitals they prefer, since the EHIF contracts with most providers. The primary constraint in the system is the waiting list that a highly preferred doctor or facility may have.
All Estonians register on a family doctor’s practice list. Doctors can refuse to add a patient if the patient lives outside the practice region or when the practice list is full. In 2005 only 13% of patients changed doctors and these cases were primarily due to a change in residence. Family doctors are required to hold a minimum of 20 visiting hours per week and the practice must remain open at least eight hours per day. Patients must get access to their doctor within one day for acute problems and within three days for chronic conditions.
If certain services are not available in Estonia, patients can seek care abroad. In non-urgent situations, patients must seek approval from the EHIF. The service must be medically justifiable and must be proven efficacious with a probability of success of at least 50%.
In order to add new benefits to be covered under EHIF, the managerial board conducts an evaluation process and recommends services to the supervisory board, which then proposes them to the Ministry of Social Affairs where they are reviewed and sent to the government for approval once per year. There are four criteria for including or excluding services from the benefits package:
- Medical efficacy
- Cost effectiveness
- Appropriateness and compliance with national health policy
- Availability of financial resources
Estonian Health Insurance Fund
Benefits package
The EHIF covers a broad range of services, including family physicians services, in- and out-patient care, long-term care, rehabilitation, and prescription drugs. Children through 19 years of age are also eligible for free dental care, including preventive and curative services. Meanwhile, adults receive partial reimbursement for dental care.
Patients are free to choose the doctors and hospitals they prefer, since the EHIF contracts with most providers. The primary constraint in the system is the waiting list that a highly preferred doctor or facility may have.
All Estonians register on a family doctor’s practice list. Doctors can refuse to add a patient if the patient lives outside the practice region or when the practice list is full. In 2005 only 13% of patients changed doctors and these cases were primarily due to a change in residence. Family doctors are required to hold a minimum of 20 visiting hours per week and the practice must remain open at least eight hours per day. Patients must get access to their doctor within one day for acute problems and within three days for chronic conditions.
If certain services are not available in Estonia, patients can seek care abroad. In non-urgent situations, patients must seek approval from the EHIF. The service must be medically justifiable and must be proven efficacious with a probability of success of at least 50%.
In order to add new benefits to be covered under EHIF, the managerial board conducts an evaluation process and recommends services to the supervisory board, which then proposes them to the Ministry of Social Affairs where they are reviewed and sent to the government for approval once per year. There are four criteria for including or excluding services from the benefits package:
- Medical efficacy
- Cost effectiveness
- Appropriateness and compliance with national health policy
- Availability of financial resources
Health care provision in Estonia is completely decentralized. Care within the Estonian system is characterized by four tiers:
- Primary care offered by family doctors who are either private entities or salaried employees of private firms owned by family doctors. Family doctors contract with the EHIF for the care of their patient list. The average number of patients on a practice list equaled 1,800 in 2008. Family doctors are responsible for referring patients to specialist care.
- Emergency care
- Specialized medical care, most of which is in the hands of private entities within the different specialties. Patients can freely access certain specialties such as ophthalmology, gynecology, psychiatry, dentistry, and pulmonology in the case of TB. If a patient seeks the care of a specialist outside of those previously mentioned they must pay out of pocket for services.
- Nursing care
Health care provision in Estonia is completely decentralized. Care within the Estonian system is characterized by four tiers:
- Primary care offered by family doctors who are either private entities or salaried employees of private firms owned by family doctors. Family doctors contract with the EHIF for the care of their patient list. The average number of patients on a practice list equaled 1,800 in 2008. Family doctors are responsible for referring patients to specialist care.
- Emergency care
- Specialized medical care, most of which is in the hands of private entities within the different specialties. Patients can freely access certain specialties such as ophthalmology, gynecology, psychiatry, dentistry, and pulmonology in the case of TB. If a patient seeks the care of a specialist outside of those previously mentioned they must pay out of pocket for services.
- Nursing care
All health care providers operate as private, independent, legal entities. These entities can be private individuals, limited liability companies, or foundations.
Most hospitals belong to local governments. They are managed as either limited companies or as non-profit foundations. Hospitals function as true business entities, with managers able to strive for better clinical practice and empowered to achieve improved financial performance. Management structures are explicit with a supervisory board and a management board governing the process.
Maximum waiting times for specialized services vary by type. Ambulatory care is capped at four weeks, inpatient care and day surgeries are capped at eight months, and other interventions such as joint replacements have maximum waiting times of up to two and a half years. This initially led some patients to jump the queue by seeking care privately. However, queue jumping rules have recently been established to prevent private patients from getting quicker access to treatment. Cutting in the queue is only permitted in cases where the waiting list is caused by a provider having reached the EHIF contract volume.
Service delivery must take place within agreed time limits. Emergency care must be provided immediately, outpatient specialist care must be provided within four weeks, and inpatient care must be provided within six months.
Estonian Health Insurance Fund
Service delivery system
Health care provision in Estonia is completely decentralized. Care within the Estonian system is characterized by four tiers:
- Primary care offered by family doctors who are either private entities or salaried employees of private firms owned by family doctors. Family doctors contract with the EHIF for the care of their patient list. The average number of patients on a practice list equaled 1,800 in 2008. Family doctors are responsible for referring patients to specialist care.
- Emergency care
- Specialized medical care, most of which is in the hands of private entities within the different specialties. Patients can freely access certain specialties such as ophthalmology, gynecology, psychiatry, dentistry, and pulmonology in the case of TB. If a patient seeks the care of a specialist outside of those previously mentioned they must pay out of pocket for services.
- Nursing care
All health care providers operate as private, independent, legal entities. These entities can be private individuals, limited liability companies, or foundations.
Most hospitals belong to local governments. They are managed as either limited companies or as non-profit foundations. Hospitals function as true business entities, with managers able to strive for better clinical practice and empowered to achieve improved financial performance. Management structures are explicit with a supervisory board and a management board governing the process.
Maximum waiting times for specialized services vary by type. Ambulatory care is capped at four weeks, inpatient care and day surgeries are capped at eight months, and other interventions such as joint replacements have maximum waiting times of up to two and a half years. This initially led some patients to jump the queue by seeking care privately. However, queue jumping rules have recently been established to prevent private patients from getting quicker access to treatment. Cutting in the queue is only permitted in cases where the waiting list is caused by a provider having reached the EHIF contract volume.
Service delivery must take place within agreed time limits. Emergency care must be provided immediately, outpatient specialist care must be provided within four weeks, and inpatient care must be provided within six months.
The Estonian Health System is centralized at the national level. Funds collection is managed by the Estonian Tax and Customs Board. The tax board then transfers the health contribution to the Estonian Health Insurance Fund (EHIF). The EHIF is also responsible for the operations of the financing system, as it is the only purchaser for health care services within the country. Health system oversight is carried out by both the EHIF supervisory board as well as the health division of the Ministry of Social Affairs.
The Estonian Health System is centralized at the national level. Funds collection is managed by the Estonian Tax and Customs Board. The tax board then transfers the health contribution to the Estonian Health Insurance Fund (EHIF). The EHIF is also responsible for the operations of the financing system, as it is the only purchaser for health care services within the country. Health system oversight is carried out by both the EHIF supervisory board as well as the health division of the Ministry of Social Affairs.
The Estonian Health Insurance Fund (EHIF) is responsible for the financing of the health system. Its responsibilities include:
- Purchasing health care services by contracting with service providers
- Paying for services rendered
- Reimbursing enrollees for pharmaceuticals, sick leave, and maternity leave.
A 15 member supervisory board is responsible for EHIF results. This board is composed of representatives from employer organizations, insured individuals’ organizations, and the state. This board approves the four year development plan and the annual budget. The supervisory board also composes necessary reports and selects providers for contracting. It also has the authority to examine and audit all documents. The management board is responsible for daily EHIF operations. Under the management board, the central and four regional departments conduct needs assessments, contract with providers, and process claims.
The government plays a role in planning and regulating the health system by:
- Approving acts regulating public health issues
- Approving development plans for the hospital network
- Nominating members to the EHIF Supervisory Board
The health division of the Ministry of Social Affairs is responsible for:
- Developing and implementing health policy
- Supervising health service quality and access
Table 2: Influence on decisions made by the EHIF
| Decision-making | Appointment of supervisory board | Appointment of management board | Financing | Services | Prices | Payment methods | Contracting | Reserves | Fund management |
|---|---|---|---|---|---|---|---|---|---|
| President | -- | -- | -- | -- | -- | -- | -- | -- | -- |
| Parliament | -- | -- | ++ | + | + | + | -- | + | -- |
| Government | ++ | + | + | ++ | ++ | ++ | + | ++ | -- |
| Ministry of Social Affairs | + | + | + | ++ | ++ | ++ | + | + | -- |
| Ministry of Finance | -- | -- | ++ | -- | -- | -- | -- | + | -- |
| Supervisory board | -- | ++ | + | ++ | ++ | ++ | + | + | + |
| Management board | -- | + | -- | + | + | + | ++ | + | ++ |
| Providers | -- | -- | -- | + | + | + | ++ | -- | -- |
(++ Strong Influence; + Moderate Influence; -- No Influence)
Source: Habicht T
County governments are responsible for:
- Announcing family doctor vacancies
- Approving family doctor post appointments
- Assigning family doctor service areas
- Organizing the supervision of practices at the county level
All health care providers within Estonia function as private parties operating under the purview of private law. Family practices are organized as private businesses or joint-stock companies, while hospitals are organized as for-profit joint stock companies or non-profit foundations.
Estonian Health Insurance Fund
Institutional structures
The Estonian Health System is centralized at the national level. Funds collection is managed by the Estonian Tax and Customs Board. The tax board then transfers the health contribution to the Estonian Health Insurance Fund (EHIF). The EHIF is also responsible for the operations of the financing system, as it is the only purchaser for health care services within the country. Health system oversight is carried out by both the EHIF supervisory board as well as the health division of the Ministry of Social Affairs.
The Estonian Health Insurance Fund (EHIF) is responsible for the financing of the health system. Its responsibilities include:
- Purchasing health care services by contracting with service providers
- Paying for services rendered
- Reimbursing enrollees for pharmaceuticals, sick leave, and maternity leave.
A 15 member supervisory board is responsible for EHIF results. This board is composed of representatives from employer organizations, insured individuals’ organizations, and the state. This board approves the four year development plan and the annual budget. The supervisory board also composes necessary reports and selects providers for contracting. It also has the authority to examine and audit all documents. The management board is responsible for daily EHIF operations. Under the management board, the central and four regional departments conduct needs assessments, contract with providers, and process claims.
The government plays a role in planning and regulating the health system by:
- Approving acts regulating public health issues
- Approving development plans for the hospital network
- Nominating members to the EHIF Supervisory Board
The health division of the Ministry of Social Affairs is responsible for:
- Developing and implementing health policy
- Supervising health service quality and access
Table 2: Influence on decisions made by the EHIF
| Decision-making | Appointment of supervisory board | Appointment of management board | Financing | Services | Prices | Payment methods | Contracting | Reserves | Fund management |
|---|---|---|---|---|---|---|---|---|---|
| President | -- | -- | -- | -- | -- | -- | -- | -- | -- |
| Parliament | -- | -- | ++ | + | + | + | -- | + | -- |
| Government | ++ | + | + | ++ | ++ | ++ | + | ++ | -- |
| Ministry of Social Affairs | + | + | + | ++ | ++ | ++ | + | + | -- |
| Ministry of Finance | -- | -- | ++ | -- | -- | -- | -- | + | -- |
| Supervisory board | -- | ++ | + | ++ | ++ | ++ | + | + | + |
| Management board | -- | + | -- | + | + | + | ++ | + | ++ |
| Providers | -- | -- | -- | + | + | + | ++ | -- | -- |
(++ Strong Influence; + Moderate Influence; -- No Influence)
Source: Habicht T
County governments are responsible for:
- Announcing family doctor vacancies
- Approving family doctor post appointments
- Assigning family doctor service areas
- Organizing the supervision of practices at the county level
All health care providers within Estonia function as private parties operating under the purview of private law. Family practices are organized as private businesses or joint-stock companies, while hospitals are organized as for-profit joint stock companies or non-profit foundations.
The EHIF negotiates capped cost and volume contracts with hospitals at the start of each year. These contracts contain provisions on service quality and access, as well as an extended cost and volume section. The contracting process begins with a needs assessment based on historical data regarding health service utilization along with existing waiting times. The EHIF does not have to contract with all providers. Still most of the services are purchased from hospital master plan hospitals with which EHIF has contracts. A small amount of funds go to selective contracting which provides private providers the opportunity to get some health insurance funding. These private providers, however, tend to be primarily funded through OOP payments. A large part of the standard contract conditions are negotiated with the Hospital Association, but there are also financial appendices that are negotiated with each provider individually. Contracts are monitored quarterly using the Management Information System.
The EHIF negotiates capped cost and volume contracts with hospitals at the start of each year. These contracts contain provisions on service quality and access, as well as an extended cost and volume section. The contracting process begins with a needs assessment based on historical data regarding health service utilization along with existing waiting times. The EHIF does not have to contract with all providers. Still most of the services are purchased from hospital master plan hospitals with which EHIF has contracts. A small amount of funds go to selective contracting which provides private providers the opportunity to get some health insurance funding. These private providers, however, tend to be primarily funded through OOP payments. A large part of the standard contract conditions are negotiated with the Hospital Association, but there are also financial appendices that are negotiated with each provider individually. Contracts are monitored quarterly using the Management Information System.
Actual payment methods and prices are regulated in a single government health service list that lies outside of the contract negotiation process and which is updated at least once per year. All providers are paid the same prices. The list includes over 2,000 different items and a range of different payment methods. Outpatient care is normally paid on a fee-for-service basis and inpatient care is paid with a mix of fee-for-service, per diem, and diagnosis-related group (DRG) methods.
Primary care family physicians are paid through per capita payments that are adjusted based on the age of the patients. If a family physician has fewer than 1,200 patients, he will still receive a capitation payment for 1,200 patients in order to cover fixed costs. Family physicians can also receive additional fee-for-service payments up to 32% of the capitation amount received. Contracts for family medicine are agreed to between the EHIF and the Estonian Association of Family Doctors. The financial stipulations of the contracts with particular family doctors are reviewed every quarter in order to align with changes in the number of patients on the practice list. Specialist care is also compensated using different types of payment methods depending on the services provided. These methods include fee-for-service, visit fees, per diem, diagnosis-related group, and case-based complex pricing. Since the 1990s, there has been a gradual move away from fee-for service toward case-based payments.
Estonian Health Insurance Fund
Provider payment mechanisms
The EHIF negotiates capped cost and volume contracts with hospitals at the start of each year. These contracts contain provisions on service quality and access, as well as an extended cost and volume section. The contracting process begins with a needs assessment based on historical data regarding health service utilization along with existing waiting times. The EHIF does not have to contract with all providers. Still most of the services are purchased from hospital master plan hospitals with which EHIF has contracts. A small amount of funds go to selective contracting which provides private providers the opportunity to get some health insurance funding. These private providers, however, tend to be primarily funded through OOP payments. A large part of the standard contract conditions are negotiated with the Hospital Association, but there are also financial appendices that are negotiated with each provider individually. Contracts are monitored quarterly using the Management Information System.
Actual payment methods and prices are regulated in a single government health service list that lies outside of the contract negotiation process and which is updated at least once per year. All providers are paid the same prices. The list includes over 2,000 different items and a range of different payment methods. Outpatient care is normally paid on a fee-for-service basis and inpatient care is paid with a mix of fee-for-service, per diem, and diagnosis-related group (DRG) methods.
Primary care family physicians are paid through per capita payments that are adjusted based on the age of the patients. If a family physician has fewer than 1,200 patients, he will still receive a capitation payment for 1,200 patients in order to cover fixed costs. Family physicians can also receive additional fee-for-service payments up to 32% of the capitation amount received. Contracts for family medicine are agreed to between the EHIF and the Estonian Association of Family Doctors. The financial stipulations of the contracts with particular family doctors are reviewed every quarter in order to align with changes in the number of patients on the practice list. Specialist care is also compensated using different types of payment methods depending on the services provided. These methods include fee-for-service, visit fees, per diem, diagnosis-related group, and case-based complex pricing. Since the 1990s, there has been a gradual move away from fee-for service toward case-based payments.
Estonia has recently increased its focus on monitoring the performance of the health system. The European Observatory on Health Systems and Policies supplies quantitative data drawn from the European Health for All database, which contains over 600 indicators that track and monitor health system performance and is updated twice yearly. In recent years, there has also been a rise in target setting and reporting of the health system designed to increase accountability within the sector. This trend includes the EHIF, which releases detailed reports annually. Finally, national and international organizations have assessed the performance of the many components within the health sector.
Estonia has recently increased its focus on monitoring the performance of the health system. The European Observatory on Health Systems and Policies supplies quantitative data drawn from the European Health for All database, which contains over 600 indicators that track and monitor health system performance and is updated twice yearly. In recent years, there has also been a rise in target setting and reporting of the health system designed to increase accountability within the sector. This trend includes the EHIF, which releases detailed reports annually. Finally, national and international organizations have assessed the performance of the many components within the health sector.
The EHIF finances clinical audits (approximately 5 per year) to assess the quality of care and to perform medical records check-ups. The EHIF also cooperates with medical specialties to develop clinical quality and other performance indicators. The Ministry of Social Affairs monitors health system performance at a more general level by publishing studies like the Health System Performance Assessment though the World Health Organization.
Estonian Health Insurance Fund
Monitoring and evaluation
Estonia has recently increased its focus on monitoring the performance of the health system. The European Observatory on Health Systems and Policies supplies quantitative data drawn from the European Health for All database, which contains over 600 indicators that track and monitor health system performance and is updated twice yearly. In recent years, there has also been a rise in target setting and reporting of the health system designed to increase accountability within the sector. This trend includes the EHIF, which releases detailed reports annually. Finally, national and international organizations have assessed the performance of the many components within the health sector.
The EHIF finances clinical audits (approximately 5 per year) to assess the quality of care and to perform medical records check-ups. The EHIF also cooperates with medical specialties to develop clinical quality and other performance indicators. The Ministry of Social Affairs monitors health system performance at a more general level by publishing studies like the Health System Performance Assessment though the World Health Organization.
In 2007, 99% of patients with acute conditions were able to get an appointment with a family physician on the same day. While in the case of chronic conditions, 99% of patients were able to get an appointment with the limit of three working days.
In 2007, 99% of patients with acute conditions were able to get an appointment with a family physician on the same day. While in the case of chronic conditions, 99% of patients were able to get an appointment with the limit of three working days.
The payroll tax has ensured that health care resources are redistributed from high to low income groups and from the healthy to the sick. There is also a redistribution of resources within the health insurance system, with the contributing population covering health expenditures for children, pensioners, and other non-contributors.
The payroll tax system has contributed to privatization, labor market development, and lowered unemployment by creating incentives for workers to join the formal sector. It has also established a stable resource base for health insurance and permitted the EHIF to provide a broad benefits package.
Estonian Health Insurance Fund
Results of the reform
In 2007, 99% of patients with acute conditions were able to get an appointment with a family physician on the same day. While in the case of chronic conditions, 99% of patients were able to get an appointment with the limit of three working days.
The payroll tax has ensured that health care resources are redistributed from high to low income groups and from the healthy to the sick. There is also a redistribution of resources within the health insurance system, with the contributing population covering health expenditures for children, pensioners, and other non-contributors.
The payroll tax system has contributed to privatization, labor market development, and lowered unemployment by creating incentives for workers to join the formal sector. It has also established a stable resource base for health insurance and permitted the EHIF to provide a broad benefits package.