Estonian Human Development Report
Estonian Human Development Report - Eesti Koostöö Kogu
Estonian Human Development Report - Eesti Koostöö Kogu
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Health care financing<br />
Health and health care are treated as a right in both the<br />
<strong>Estonian</strong> Constitution, which speaks of everyone’s right to<br />
health protection (Estonia…, 1992), and in the European<br />
Union Charter of Fundamental Rights, which defines preventive<br />
health care and treatment as a right based on the<br />
terms of domestic legislation and practices, (European<br />
Union Charter of Fundamental Rights, 2004). This right is<br />
defined by the general objectives of the health care system,<br />
which include the good health of the population, satisfaction<br />
with the system and protection against financial risks<br />
(The World Health <strong>Report</strong>, 2000).<br />
Estonia, like the majority EU countries, implements<br />
the principle of national health care insurance, whereby<br />
a third party (the Health Insurance Fund) provides the<br />
population with financial protection for the use of services.<br />
The money is collected as a social tax, the insurance<br />
is compulsory, the insurance coverage is universal<br />
and availability depends on need. These principles generally<br />
apply although various countries may organize<br />
the financing from general taxation, from income taxes,<br />
or from compulsory private insurance (Aaviksoo, Paat,<br />
2007).<br />
In addition to national health insurance and the<br />
national budget, which provide financing for the treatment<br />
costs of uninsured persons, financial coverage is also provided<br />
by private insurance. This component is currently<br />
marginal in Estonia.<br />
The other important aspect of health care related<br />
to financial resources is the distribution of costs or the<br />
rate of the patients’ cost-sharing. The largest portion<br />
of health care costs was covered by the Health Insurance<br />
Fund (in 2004, 66%, and the national budget 8.5%)<br />
and the self-financed portion was 21% (Aaviksoo, Paat,<br />
2007). Moreover, the patients’ cost-sharing has continually<br />
increased; in 1999 it was only 14%. The increase of<br />
health care costs in budgets is also confirmed by household<br />
surveys (Household Budget Survey, 2006). This is<br />
primarily related to paying for medicine, although in<br />
2003 and 2004, visit and in-patient fees were established<br />
and the procedure for paying for adult dental care was<br />
changed (Aaviksoo, Paat, 2007).<br />
Due higher health insurance tax revenues, the quantity<br />
of services financed by the Health Insurance Fund<br />
has also increased although, as mentioned above, the<br />
patients’ contribution has increased even more. Health<br />
insurance coverage has improved, although in 2007,<br />
there were still 60 thousand uninsured persons in Estonia.<br />
The waiting period for out-patient visits to specialists<br />
has constantly increased. However, assessments for<br />
the availability of medical treatment have not significantly<br />
worsened during the last few years (Aaviksoo,<br />
Paat, 2007).<br />
On the one hand, the situation in the health care system<br />
reflects the state of country’s well-being, while on the<br />
other hand it affects what happens in the economy. Statistics<br />
confirm that the greater the role of market relations<br />
in this field, the greater the increase in health care cost<br />
as related to the increase in the standard of living, both<br />
absolutely as well as in relationship to GDP. At the same<br />
time, this does not guarantee equal access to health care<br />
services. The US is a typical example of this (Paying for<br />
Healthcare, 2004).<br />
Figure 6.3.6. Assessment of the availability of medical<br />
services, 2001–2006<br />
100<br />
90<br />
80<br />
70<br />
60<br />
50<br />
40<br />
30<br />
20<br />
10<br />
0<br />
2001 2002 2003 2004 2005 2006<br />
Source: Aaviksoo, A., G. Paat (2007).<br />
Cannot say<br />
Poor<br />
Rather poor<br />
Rather good<br />
Good<br />
Figure 6.3.7. Figure 6.3.7. Average gross wages,<br />
old-age pensions and inflation, 1997=100%<br />
350<br />
300<br />
250<br />
200<br />
150<br />
100<br />
50<br />
0<br />
1997<br />
1998<br />
1999<br />
2000<br />
Source: Statistics Estonia.<br />
2001<br />
2002<br />
The financing of the <strong>Estonian</strong> health care system<br />
is designed according to a European model, whereby<br />
the basic part is covered by health insurance tax, and<br />
the service side is standardized to a great extent. This<br />
system, which has functioned with only small problems,<br />
has been implemented under conditions of certain<br />
economic growth. The expansion of the tax base<br />
has guaranteed the increasing flow of resources and<br />
has smoothed the faults of the system. Economic recession,<br />
the reduction in tax revenues and possible deficit<br />
of services will increase dissatisfaction with the system<br />
and will create pressure for the expansion of private<br />
insurance.<br />
Social insurance and the economy<br />
Expenditures on social insurance include pensions and<br />
pension supplements financed from social tax revenues<br />
and the national budget, national family and parental benefits,<br />
social benefits for disabled people, and other benefits<br />
paid to families (for instance funeral benefits, student<br />
loan write-offs). The largest ratio of these costs is pensions,<br />
which constituted 6% of GDP in 2007. In the same year,<br />
national family benefits constitute 1.1% of GDP, including<br />
parental benefits totalling 0.5% of GDP.<br />
The average old-age pension has increased 2.7 times<br />
between 1997 and 2007, while actual purchasing power<br />
has only increased 78.7%, since a portion of the nominal<br />
pension increase has been eaten away by inflation. During<br />
the same period, average gross wages increased 3.2 times<br />
and the actual wage increase was 106% (2.06 times). The<br />
2003<br />
2004<br />
2005<br />
2006<br />
2007<br />
Average<br />
gross wage<br />
index<br />
Average<br />
old-age<br />
pension<br />
index<br />
Inflation<br />
Actual average<br />
gross<br />
wage index<br />
Actual average<br />
old-age<br />
pension<br />
index<br />
135 |