Analytics, Estonia, Financial Services, Funds
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Friday, 19.04.2024, 00:20
Estonia: Foresight Center predicts drastic increase in deficit of Health Insurance Fund
The share of own funding by patients in Estonian healthcare
has reached the maximum limit of 25% set out in the national
health development plan. Estonia's healthcare expenditures equal 6.4% of
gross domestic product (GDP), which is almost half the level of Sweden, 11
percent, and much lower than the level of 9.2% registered in Finland,
while being largely on a par with the Lithuanian and Latvian levels
of 6.5% and 6.0%, respectively. In the mid 1990s, Estonia's
healthcare expenditures were on a similar level as they are now, but dropped to
5% by the beginning of this century.
The ratio of healthcare expenditures has been growing since.
Average life expectancy of Estonian residents is estimated
to grow to 81.7 years by 2035, up from 78.5 years in 2018, but since the number
of years lived healthily has not increased in recent years, this will pose a
major challenge for the financing of the healthcare system. With the present
financing model, the deficit of the budget of the Health Insurance Fund would
expand to 900 mln euros a year by 2025, an estimation model put forward by
the Praxis foundation suggests.
The main problem with the financing of healthcare in Estonia
is its link to labor taxes, the Foresight Center finds. In 2018, 99% of
the expenditures of the Health Insurance Fund were financed with labor taxes.
In 2019, the respective ratio was 90%. The connection with labor taxes
poses a problem foremost because the forms of working are changing, work is
becoming more global, the population is ageing and the share of working-age
population is decreasing.
According to the Foresight Center, the available options
include changing the financing model so that it was not so tightly connected
with labor taxes, or increasing the share of appropriations from the budget, or
further increasing patients' own contribution. A further option would be to reduce
the scope of services offered or treatment volumes.
Patients' own contribution already stands at 25%, the
ceiling set out in the national development plan, with most of that money spent
on medicines and dental services. In 2018, an average household spent 700 euros
on healthcare. If the present model were to be left unchanged, the share of own
contribution would triple in Estonian healthcare over the next 15 years.
Nor can the volumes of medical services be reduced, as
Estonia already has the highest unmet demand for medical services in the EU due
to long doctor wait times. Unmet demand in Estonia amounted to 16.4% in
2018, compared with 2% in the EU on the average.
Estonia also has one of the highest percentages of people
without medical insurance in the EU -- 6%. While many countries have
insured ratios of close to 100%, the ratio of uninsured people is 2% in Lithuania and 7% in Poland.
Besides, the Estonian healthcare system is suffering from a
staff shortage, having lower ratios of doctors and nurses per 1,000 population
than Europe on the average. Where European countries have on the average 8.5
nurses per 1,000 inhabitants, the ratio for Estonia is 6.2.
The Foresight Center is about to publish a report in October
titled "Estonian Healthcare in Foresight -- Key Trends," which will
offer an insight into the challenges and opportunities of Estonian healthcare
for the period until 2035. As part of the same line of research, potential
scenarios for health insurance will be offered.
The Foresight Center is a think tank at the Estonian
parliament; its tasks include analyzing long-term developments in the society,
identifying new trends and development avenues, and drafting development
scenarios. Operating under the chancellery of the Riigikogu, the Foresight
Center bases its studies on a variety of possible developments and outlines
alternative scenarios.
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