H ow institutions can work together to ensure financial sustainability

by Ivi NormetMinistry of Social Affairs of Estonia

 How institutions can work together to

ensure financial sustainability

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 Performance Assessment Analysis of Financial sustainability of health financing (cooperation with WHO)Analysis of Financial sustainability of social insurance system (cooperation MoF)

Health system analysis

• Broaden the public revenue basenon-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

Monitoring the impact of crisis

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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%)

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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

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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