How institutions can work together to
ensure financial sustainability
by Ivi Normet
Ministry of Social Affairs of Estonia
the role of the MoSA in health
financing policy in Estonia
Estonia’s health system is largely publicly
financed through an earmarked tax on wages
(the social tax). 2/3 of total health financing
comes from the social tax.
The single payer system – autonomous agency
Health Insurance Fund (EHIF).
The health insurance is separated from other
forms of social insurance (e.g. pensions and
unemployment benefits).
EHIF is governed by a 15-member Supervisory
Board, with the Minister of Social Affairs as its
Chairman.
At national level, the MoSA is responsible for
health, social and labour policy.
MoSA is responsible for overall health system
stewardship regarding:
•policy development,
•regulation and supervision of health services.
The MoSA finances services available to the
whole population such as emergency care, public
health programmes, emergency care services
provided to uninsured individuals etc.
Main policy document
National Health Strategy 2008–2020 follows the
health for all principles and sets out the basis for
all activities and investment areas for all
ministries and agencies that aim to improve the
public health situation in Estonia.
responding to the challenge of
financial sustainability
Health system analysis
Health System Performance Assessment
Analysis of Financial sustainability of health financing
(cooperation with WHO)
Analysis of Financial sustainability of social insurance
system (cooperation MoF)
• Broaden the public revenue base
non-employment-based taxes on capital and
consumption;
social tax to dividends from capital investment;
central government contributions to EHIF
• Improve financial protection
review user charge policies for all health services
• Improve health system performance through
better resource allocation and purchasing
MoSA should develop a stronger strategy for
guiding investment in and the design of hospital
infrastructure.
.....work closely with other ministries to generate
sufficient investment in public health
programmes and prevention
...... work with EHIF to boost the primary care
focus of the health system.
• Maintain strong governance of the health
system
Monitoring and evaluating provider activity across
the health system
Investing in e-health
Providing policy direction for the whole health
system, ensuring a sufficient flow of resources...
respond to the financial crisis
Social tax and EHIF expenditures, 2001 – 2012
900000 000
800000 000
700000 000
600000 000
euros
500000 000
400000 000
300000 000
200000 000
100000 000
0
2001
2002
2003
2004
2005
2006
expenditures
2007
social tax
2008
2009
2010
2011
2012*
*budget
Monitoring the impact of crisis
Decisions affecting health system made
due to financial crisis
cancelled compensation of capital costs from the
state budget to Health Insurance Fund (EHIF)
increased general value added tax (18%→20%)
increased the value added tax on medicines
(5%→9%)
decreased funding of public health programmes
(26%) - mainly NCD, but also ambulance services
budget (3.4%)
increase of unemployment tax (0.9%→1.5% →
4.2%)
17
Priorities and measures to maintain health
EHIF started use its accumulated reserves
health budget is less affected than general state
budget and other sectors
within health budget primary care and communicable
diseases prioritised
rising of excise taxes for tobacco and alcohol (four
times since 2008)
state contributes insurance of unemployed
state pays for emergency care of uninsured people
18
Other measures
use of EU structural funds: acute and nursing care
hospitals infrastructure + public health activities
use of funds from carbon dioxide quota trading to
renovate hospitals more energy saving
use of Norway and Swiss grants
19