|Implemented in this survey?|
In 2009 Estonia is facing a GDP drop of 10-15% and the Government is fighting to cut another 8% of the budget after a 6% decrease 3 months ago. Dramatic drop in Estonian Health Insurance Fund (EHIF) budget could lead to closure of smaller hospitals. Patients will feel the burden of VAT increase on drugs and additional unpaid sick leave days. Employers must take over 6 days of sick leave benefits from EHIF. The unthinkable has become real in a very short time and without a grand plan in sight.
Estonian public sector expenditure has grown 10 times in the last 14 years and 6.5 times in the last 10 years. In 2009 the economic situation of growth has changed and the Estonian Government cut public sector spending by 6.6% (420 million EUR) of the national budget (Supplementary State Budget Act, 01.03.2009). This takes the total public sector spending 100 million EUR lower than in 2008, of which ca 50 mln EUR has been cut from the health insurance expenditure.
Estonian total health expenditure decreased from 5.6% of GDP to below 5 in 2006. Having low relative spending on health services as compared to other European countries and yet a very transparent and high quality health care system, Estonia is unique in the EU. Estonian Health Insurance Fund (EHIF) revenues were 818 Million EUR and expenditure on health care 792 Million EUR in 2008. In 2008 there was an increase in spending on health care services by 90 Million EUR compared to 2007. Nominal growth of financial volume in the health sector has been 100% since 2004. Most of the increase has been absorbed by a rapid increase of health workers' salaries.
Suddenly the picture has changed dramatically. Currently 6.5% of the health care services' budget compared to 2008 has already been cut. The government intends to cut another 5% in order to balance the overall public sector deficit and prepare for even harder times in the forthcoming years.
In 2009 the world, Europe as well as Estonia are facing an economic slowdown. In Estonia, people are being laid off from their jobs, a rapid drop (20%) of salaries in private companies has occurred and unemployment is increasing. By the end of 2009 it is expected to rise up to 15% from 3% a year ago. This poses a serious threat on the revenues of the EHIF (66% of total health expenditure in Estonia is financed from earmarked social tax on salaries) as well as household budgets (21% of total health expenditure is financed through out of pocket payments by individuals). Ambulance services, emergency care for uninsured people and public health programmes are facing similar merciless cuts as government revenues are decreasing in days.
The health sector feels additionally punished as EHIF was able to collect over 250 mln EUR of reserves during the boom years. The spending on health services is relatively transparent and efficiency of the system has increased to the level that it is considered among the best in Europe. Yet the Government prohibits using of the reserves as this would necessitate additional cuts in other sectors to balance the overall public spending. The latter has been defined as the absolute short-term goal for the government in order to be able to fulfil the Maastricht criteria and join the Euro area in 2011.
Apart from the budget cuts the impact of economic slowdown is felt through several changes in recent months, which shape the health system remarkably. The changes that the Government has introduced and the Parliament confirmed are:
|Medienpräsenz||sehr gering||sehr hoch|
The changes have been made in a hurry and are not based on any analysis but the budget expenditure, which has been the sole driver behind the changes. No alternatives have been put on the table (at least in public) and no long term policy cost analysis has been conducted. The impact of these changes will become evident in some years in public health. These changes (except for abolishing the VAT differentiation) are not listed in the Government coalition activity programme.
|Implemented in this survey?|
All 4 changes affecting health care funding or public health in Estonia have been initiated by the national government based on the general economic slowdown and resulting budget income decreases.
In general, the government is reducing public expenditure in all fields of activity.
Rating stakeholders' opinions is somewhat difficult because their opinion changes depending on which measure (VAT increase, working hours increase, change in sickness leave days compensation and reduction of NHIF budget) is being referred to. Therefore some stakeholders appear more than once in the figure on actor position and influences and their position and influence is explained below.
The government initiated VAT increase on medicines from 5% to 9% and agreed on that with coalition parties.
EHIF - opposed; weak
Estonian Medical Association - opposed; neutral
Estonian Employers' Confederation - opposed; weak
Estonian Hospitals Association - opposed; weak
Increase in working hours of health sector workers
Estonian Medical Association - strongly opposed; weak
Ministry of Social Affairs - very supportive; strong
Service providers - strongly opposed; weak
Introduction of 2 unpaid sickness-leave days and placing the responsibility of sickness payment for days 3-8 on the employer. This is instead of EHIF payment from the 1st sickness leave day.
EHIF - supportive; very strong
Estonian Employers' Confederation - strongly opposed; neutral
Ministry of Social Affairs - neutral; strong
Estonian Medical Association - opposed; weak
Ministry of Finance - very supportive; strong
Reducing EHIF budget by 40 Million EUR
EHIF - Opposed; weak
Ministry of Social Affairs - supportive; strong
Ministry of Finance - very supportive; very strong
Estonian Medical Association - supportive; neutral
Reducing EHIF budget by another 44 Million EUR
EHIF - Opposed; neutral
Ministry of Social Affairs - supportive; strong
Ministry of Finance - very supportive, very strong
Estonian Medical Association - supportive; weak
|Ministry of Social Affairs (on working hours increase)||sehr unterstützend||stark dagegen|
|Ministry of Social Affairs (on sickness leave days)||sehr unterstützend||stark dagegen|
|Ministry of Social Affairs (on budget cuts)||sehr unterstützend||stark dagegen|
|Ministry of Finance (on budget cuts)||sehr unterstützend||stark dagegen|
|Ministry of Finance (on sickness leave days)||sehr unterstützend||stark dagegen|
|Estonian Medical Association (on VAT increase)||sehr unterstützend||stark dagegen|
|Estonian Medical Association (on working hours)||sehr unterstützend||stark dagegen|
|Estonian Medical Association (on sickness leave days)||sehr unterstützend||stark dagegen|
|Estonian Medical Association (on budget cuts)||sehr unterstützend||stark dagegen|
|Estonian Hospital Association (on VAT increase)||sehr unterstützend||stark dagegen|
|EHIF (on VAT increase and budget cuts)||sehr unterstützend||stark dagegen|
|EHIF (on unpaid sickness leave days)||sehr unterstützend||stark dagegen|
|Privatwirtschaft, privater Sektor|
|Estonian Employers' Confederation (on VAT increase)||sehr unterstützend||stark dagegen|
|Estonian Employers' Confederation (on sickness leave days)||sehr unterstützend||stark dagegen|
|Media||sehr unterstützend||stark dagegen|
The original proposal of reducing the EHIF budget by 40 mln EUR in 2009 was accepted and implemented in consensus with all parties involved - vested in the state budget act by the parliament. Another 44 mln EUR cut is negotiated and the situation is very controversial.
The VAT increase on medicines has been vested into a VAT act by the parliament.
Pension payment freezing for 2 years has been approved by the Government and is yet to be passed by the Parliament.
The increase of working hours has been passed by the Parliament.
|Ministry of Social Affairs (on working hours increase)||sehr groß||kein|
|Ministry of Social Affairs (on sickness leave days)||sehr groß||kein|
|Ministry of Social Affairs (on budget cuts)||sehr groß||kein|
|Ministry of Finance (on budget cuts)||sehr groß||kein|
|Ministry of Finance (on sickness leave days)||sehr groß||kein|
|Estonian Medical Association (on VAT increase)||sehr groß||kein|
|Estonian Medical Association (on working hours)||sehr groß||kein|
|Estonian Medical Association (on sickness leave days)||sehr groß||kein|
|Estonian Medical Association (on budget cuts)||sehr groß||kein|
|Estonian Hospital Association (on VAT increase)||sehr groß||kein|
|EHIF (on VAT increase and budget cuts)||sehr groß||kein|
|EHIF (on unpaid sickness leave days)||sehr groß||kein|
|Privatwirtschaft, privater Sektor|
|Estonian Employers' Confederation (on VAT increase)||sehr groß||kein|
|Estonian Employers' Confederation (on sickness leave days)||sehr groß||kein|
All changes have been rapidly introduced within 6 months and implemented in a very short time frame. The main stakeholder with most power in all processes has been the National Government. The parliament or political parties have not interfered. The Ministry of Social Affairs has kept a low profile following unanimous Government decisions. It has mainly acted as an implementing body not a policy making and analytical body.
Mostly affected groups are all employers, all employees, all people with health insurance. All of them have been allocated more direct responsibility and more financial and health risks.
None of the policy changes have foreseen evaluation or monitoring procedures. No strategy has foreseen such dramatic expenditure cuts, and no political party has expressed a strong vision that any of the current policy measures would fit in. As the decisions have been adopted in a rush and accompanied by thin analysis, but also lacking serious consideration of alternatives or mitigation measures, it is difficult to predict the end result. Most probably there will be a series of follow-up policy initiatives, which makes the proper evaluation of current policies relatively complicated.
The intended objective is a balanced national budget. This has been/will be achieved. At the same time the impact on public health has not been evaluated at all. The main risk is the rise of unemployed and thus uninsured individuals (10-15% of the working-age population), who have limited access to health services. Reduced capacity of service providers exaggerates the negative effect even further. Local health experts have made serious attempts to treat social expenses equal to other public expenditure categories. Nevertheless, the Government has a very limited room to maneuver, because Estonia has one of the lowest public sector (40.9% of GDP in 2008 and 35.5% respectively in 2007) and the revenue is largely based on consumption taxes.
The care quality might even stay the same, provided that the quantity will be reduced and less people served. In case all people will still be served the quality will also suffer. People who can afford it will seek medical treatment in private settings or abroad and will not be affected. The long-term impact of higher medicine prices, unpaid sickness days and reduced care availability (longer waiting lists due to less financing for service providers) on Estonians' public health has not been assessed, but the experience from previous periods of economic downturn during 1991-1994 and 1997-1998 predict that population health will react relatively rapidly in a negative way. Especially vulnerable are children and elderly people. If the slowdown lasts more than 2 years, all age groups are in a risk to fall back in their health.
Within 2 years (there will be new parliamentary elections in 2011) different options for increasing health financing are on the table. The Social Democratic and the Center Party are openly talking about increased and progressive taxation to fund social expenses. The Reform Party (a right-wing liberal party) and Pro Patria (a conservative party) have been pushing for private schemes for health financing. Regardless of the final results of the Government decisions during the current crisis, the Estonian health system most probably needs additional funds. Yet, due to path dependency the options may be partially prescribed by the events of 2009 and 2010.
|Qualität||kaum Einfluss||starker Einfluss|
|Gerechtigkeit||System weniger gerecht||System gerechter|
|Kosteneffizienz||sehr gering||sehr hoch|
Läänelaid, Siret and Ain Aaviksoo