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Partial reimbursement of overwork

Partner Institute: 
PRAXIS Center for Policy Studies, Tallinn
Survey no: 
Agris Koppel, Ain Aaviksoo
Health Policy Issues: 
Zugang, Vergütung
Current Process Stages
Idee Pilotprojekt Strategiepapier Gesetzgebung Umsetzung Evaluation Veränderung/Richtungswechsel
Implemented in this survey? nein nein nein nein ja nein nein


In October 2005 the Estonian Health Insurance Fund Board agreed to reimburse 30% of costs of additional health care services for 19 hospital care providers who are listed in the Estonian Hospital Master Plan. The additional reimbursement is meant to cover only non-fixed costs of out-patient, inpatient and day care services which occur with higher volumes of services. In 2005 the EHIF bought 2% over the planned services ? 7612 services amounting to additional costs of 4.5 million Estonian kroons.

Purpose of health policy or idea

In Estonia the Health Insurance Act stipulates that the EHIF and health service providers make a contract where they agree on the minimum number of cases to treat and the budget for these cases. Health care providers have to plan their work according to the agreed number of cases. However, the minimum number of treatment cases has usually been surmounted by providers and therefore not all cases are reimbursed after rebudgeting with EHIF.

The main purpose of the additional reimbursement is to increase access to health care services and to reimburse the costs which accrue to health service providers because of an increased volume of services. The idea started some years ago because some hospitals faced over-production even after decreasing the volume of services provided. Hospitals have increased health service provision efficiency and are interested to be reimbursed for the additional volume of services. 

In 2005 a dispute rose between EHIF and Tartu University Clinicum: Tartu hospital demanded that EHIF should pay for the additional volume of services too. Tartu University argued that the Health Insurance Act states only the minimum and not the maximum number of treatment cases. Thus, the Clinicum claimed that the additional volume should be reimbursed to the hospital as well. As EHIF wanted to avoid litigation the Board of EHIF decided to set up reimbursement of additional volume by the coefficient 0,3 for all hospitals who are listed in the Estonian Hospital Master Plan.

The Estonian Hospital Master Plan is a governmental act that states those regional, central, general and local hospitals around Estonia that are important organisations in the hospital system. The list consists of 19 hospitals and they provide more than 80% of all specialised outpatient, inpatient and day care services to the Estonian population.

Main points

Main objectives

Better access to specialised health care

According to the Health Insurance Act the EHIF and health care providers agree on a minimum number of cases that EHIF will reimburse to care provider and that health care providers will provide to patients. If the health care provider provides more cases than specified in the contract and this additional number of treatments is approved by the EHIF then more patients will have medical treatment at hospitals.

Equitable reimbursement for the additional services provided

With contract the EHIF reimburses all costs for resources that health care providers have to use for providing the agreed number of out-patient visits, inpatient and day-care services. If the provider can increase the volume of services without hiring additional work-force then the only costs to reimburse are costs for additional medical utilities. It is the decision of the health care provider if he or she wants to provide more services than specified or not and the reimbursement level is the same for all providers.

Cost containment in specialised health care

The main incentive for introducing partial reimbursement of overproduced cases by the EHIF was to avoid full reimbursement of all services in the current intense budget situation. The partial reimbursement covers only non-fixed costs which are directly connected to the extra time and materials used for the treatment of patients. Also, the EHIF aim was to avoid further litigation and potential changes in the Health Insurance Act that has ensured balance in the health insurance budget over the years.

Groups affected

Patients, hospitals


Characteristics of this policy

Innovationsgrad traditionell recht innovativ innovativ
Kontroversität unumstritten kaum umstritten kontrovers
Strukturelle Wirkung marginal neutral fundamental
Medienpräsenz sehr gering gering sehr hoch
Übertragbarkeit sehr systemabhängig recht systemabhängig systemneutral

The new partial reimbursement scheme affects only the hospital sector and will not lead to any large structural or financial changes. At the same time though it is rather innovative in Estonia because the partial payment covers only non-fixed costs. Even if the EHIF and hospitals are opposing partial reimbursement to some degree, this mechanism has also satisfied hospitals as at least some of the costs for additional cases were reimbursed and will be reimbursed in the future if hospitals are over-performing. Public visibility of the new reimbursement scheme is not very high as hospitals would not be interested in increasing the volume of services very much and therefore access to services will not increase drastically. The method of partial reimbursement could be best applied in systems were health care financing bodies have a (strong) purchaser role and where the relationship between purchasers and health service providers is regulated through service contracts.

Political and economic background

The implementation of additional partial reimbursement of specialised health services is not directly connected to any of the specific health policy statements of the Ministry of Social Affairs or the Estonian Health Insurance Fund.

Purpose and process analysis

Current Process Stages

Idee Pilotprojekt Strategiepapier Gesetzgebung Umsetzung Evaluation Veränderung/Richtungswechsel
Implemented in this survey? nein nein nein nein ja nein nein

Origins of health policy idea

The change has been very Estonia-centred and there is no information available if such reimbursement schemes are used in other countries. In Estonia, until 2001 health service providers were used to provide more treatments than specified in contracts and could apply for additional reimbursement at the end of every year. After 2001 the EHIF refused additional reimbursement of health services if it has not been agreed previously with the health service provider.

In 2005 there was a debate between EHIF and Tartu University Clinicum. Tartu University Clinicum claimed that EHIF should also reimburse overproduced cases. To avoid litigation, EHIF made calculations and partial reimbursement on the level of 30% of actual costs was approved by the Board of EHIF. The 30% of actual costs are to cover the non-fixed costs of additional services provided by the health service provider.  The left-over (fixed) costs are already covered by the general contract of health services.

With the introduction of the partial reimbursement method the EHIF has gained satisfactory results - it has not exceeded the health insurance budget and at the same time have increased the cases of treatement by 2%.

But this process supports providers only when there is overcapacity of workforce. In 2006 there was only very few providers who applied for such kind of partial reimbursement. That means the health care services provision is very well optimized and providers cannot overwork. Another reason mentioned by the providers is that in 2006 the HIF paid only 92% of service prices calculated by the Activity Based Costing model.


Initiators of idea/main actors

  • Regierung
  • Leistungserbringer
  • Kostenträger

Approach of idea

The approach of the idea is described as:
amended: The partial reimbursement mechanism is an amendment to the health service provision and financing contract between EHIF and service providers.

Innovation or pilot project

Within institution - The partial reimbursement for additional specialised health services is available only for 19 hospitals who are listed in the Estonian Hospital Master Plan.

Stakeholder positions

The Estonian Health Insurance Fund has managed the health services list and prices since 1992. Today there is the Health Insurance Act which states that EHIF and health care providers have to agree on the minimum number of cases and the costs of these cases. The EHIF makes contracts with all health care providers based on its yearly budget approved by the Board of EHIF. During 2001-2006 the budget of EHIF has been balanced due to a strict budgetary policy and nonreimbursement of overproduced cases of treatment. Now the EHIF has approved the right of health care providers to be reimbursed for the overproduced volume of services as well. Providers will receive 30% of actual costs for overproduced services. The main reason for the introduction of partial reimbursement is to avoid litigations which may result in changes to the Health Insurance Act and therefore jeopardize the balance in the limited budget of EHIF. In 2006 there is already the situation that EHIF budget is bigger than the capacity of providers for provision health care services. The result is that some few providers who apply for partial reimbursement of overwork will be reimbursed without any complications.

The Estonian Hospital Association (EHA) has supported the Tartu University Clinicum in negotiations with EHIF to be also reimbursed for services provided over the contract limit. The EHA joins the 21 hospitals in Estonia and is the main partner to the EHIF in discussions of the costs and volume of health care services that should be available for patients. The EHA stays for the correct prices of health care services and has strong influence on health services price policy. EHA has been rather supportive of partial reimbursement of health services but it says also that the prices are not adjusted to the real costs of resources and that therefore EHIF can run a budget surplus during next years. Providers, on the other hand, would be more interested in real (higher) prices for the remaining volume of services.

The Ministry of Social Affairs has been supportive of the idea of partial reimbursement of health services as it seems that the mechanism is an opportunity to increase accessibility of health services for the population. But the Minister of Social Affairs, due to being Chairman of the EHIF Board at the same time, is also responsible for the balance of the EHIF budget and supports strong contract limits to avoid a shortfall of the overall EHIF budget.

Actors and positions

Description of actors and their positions
Ministry of Social Affairssehr unterstützendunterstützend stark dagegen
Estonian Hospital Associationsehr unterstützendunterstützend stark dagegen
Estonian Health Insurance Fundsehr unterstützendsehr unterstützend stark dagegen

Influences in policy making and legislation

The decision of partial reimbursement of services is made in the situation where one hospital started a dispute over the Health Insurance Act statutory stipulating that the contract between provider and EHIF is based on the minimum volume of services. The hospital argued that the contract does not limit reimbursement of overproduced cases and that EHIF is obligated to pay for these cases, as well, according to the price list. The EHIF has argued on the basis of the same statutory saying that it cannot reimburse the costs of overproduced cases if this has not been agreed beforehand in the contract.

As EHIF wanted to avoid litigation and potential changes in the Health Insurance Act, changes have been made only on the level of EHIF: the Board of EHIF decided on the partial reimbursement of health services. The decision does not have any influence on the Health Insurance Act but it is generally based on that regulation. In the longer perspective that mechanism will work only within the conditions of a limited health insurance budget and apparently will not lead to changes in the Health Insurance Act.

Legislative outcome


Actors and influence

Description of actors and their influence

Ministry of Social Affairssehr großgroß kein
Estonian Hospital Associationsehr großgroß kein
Estonian Health Insurance Fundsehr großsehr groß kein
Estonian Health Insurance FundMinistry of Social Affairs, Estonian Hospital Association

Positions and Influences at a glance

Graphical actors vs. influence map representing the above actors vs. influences table.

Adoption and implementation

The main discussions about the adoption of the partial reimbursement mechanism were held between EHIF and the Estonian Hospitals Association, but EHIF was quite rigid about its proposition.

Partial reimbursement of health services is an amendment to the health service provision and financing contract between EHIF and service providers.  In this contract, other conditions are stated as well such as the volume and cost of services. At the end of every quarter health service providers are to negotiate with EHIF if they want to make changes in the contract. Partial reimbursement with the coefficient 0,3 is negotiated at the end of the year if needed and EHIF accepts the amount of cases overproduced.

Monitoring and evaluation

Each hospital is to provide information about service volumes and costs regularly every three months to the Estonian Health Insurance Fund. If there is a need for changes in the contract volume or budget then it is made at the end of every quarter.

Review mechanisms


Dimensions of evaluation

Prozess, Ergebnis

Results of evaluation

In 2005 six agreements were made between EHIF and hospitals about the partial reimbursement of overproduced services. The overall outcome was that the number of specialised care cases increased by 2% against the planned cases and altogether 7612 additional cases were bought by the EHIF. The total cost of additional cases was 4.5 million Estonian kroons which is only a 0,12% increase in the budget of EHIF. Most of the additional cases were provided in outpatient care and therefore access to outpatient care was increased in 2005.

Expected outcome

The increase in the number of cases occured mainly in the out-patient care sector which has the strongest impact on the accessibility of specialised health care. Also, cost-efficiency has increased to some degree as more cases have been bought at lower average prices because only non-fixed costs of additional services were reimbursed. 

It may also be considered that the mechanism of partial reimbursement will not have a big impact negative on the EHIF budget. Therefore, the balance of the health insurance budget is guaranteed, especially when health care service prices will not increase quickly in the coming years. There is already seen that by the current prices and volume of services there is surplus of health insurance budget in 2006 and this mechanism of partial reimbursement of overproduced cases is not needed this year.

Impact of this policy

Qualität kaum Einfluss neutral starker Einfluss
Gerechtigkeit System weniger gerecht System gerechter System gerechter
Kosteneffizienz sehr gering high sehr hoch

The mechanism of partial reimbursement of health services does not have a very big impact on EHIF budgetary policy and EHIF's role as purchaser as EHIF already has a strong enough position in the system. However, the new reimbursement scheme has some impact on the behaviour of health care providers who can use their resources more flexibly and also increase the cost-efficiency of their services. It can be assumed as well that the system of financing will be more equitable as providers can choose freely if they want to over-produce and get partial reimbursement of costs or not. This policy also has a minimal effect on health care service quality and accessibility: the volume of cases has increased by 2% in 2005.


Sources of Information

Author/s and/or contributors to this survey

Agris Koppel, Ain Aaviksoo

Empfohlene Zitierweise für diesen Online-Artikel:

Agris Koppel, Ain Aaviksoo. "Partial reimbursement of overwork". Health Policy Monitor, November 2006. Available at