Currently, various payment models are used in the Estonian healthcare system. One example is a service-based model, where the Health Insurance Fund pays a hospital or family doctor based on how many analyses, appointments, or operations were performed for a patient.

However, in the future, the healthcare system could increasingly adopt value-based funding models. This would see a healthcare provider receive payment from the fund for the whole course of treatment, also taking into account how the patient recovers.

"First, it is agreed which services exactly are included in one treatment pathway, and the comprehensive cost of such a pathway is calculated. If we add quality indicators that do not describe only the price but also the agreed outcome we aim to achieve, then this is one value-based payment model," said Liis Kruus, head of healthcare services development at the Health Insurance Fund.

Minister of Social Affairs Karmen Joller (Reform), and a former family doctor, added that implementing a value-based approach requires cooperation between healthcare institutions, which could also reduce duplicate activities in the system.

"Funding is arranged so that if a person recovers or their health improves using fewer resources, then the so-called surplus remains with the healthcare provider, meaning the provider actually benefits if the person recovers more quickly. In other words, we align the interests of people and healthcare institutions," she explained.

Major systemic change.

A report by the Riigikogu's Foresight Center also addressed value-based healthcare. The center's expert Kaupo Koppel said that transitioning to value-based healthcare would mean a major systemic change.

"It is not only about changing funding; it also means continuous measurement of outcomes, and the medical sector must genuinely begin to cooperate in order to share health data. But it would certainly be a step worth striving for," he said.

However, value-based approaches could not be applied to all services. In Estonia, several pilot projects have already taken place, for example, in stroke treatment and in hip or knee replacement procedures.

Liis Kruus, from the Health Insurance Fund, said that transitioning to such a system cannot happen overnight.

"A new development plan for the Health Insurance Fund for the period 2026–2029 is currently being prepared. The smart use of healthcare funding will certainly play an important role there, including value-based healthcare models. Our broader goal is to increase outcome-based funding, which directly reflects our plan to move toward value-based healthcare," she said.

Kaupo Koppel, said based on the experience of other European countries, value-based healthcare results in a few percent savings in funding, while the quality of healthcare services has improved significantly.

"Even if cost savings are absent or very small, in 46 out of 47 studies it was found that some quality indicator improves. Therefore, I am quite certain that in Estonian healthcare as well, we will see an increase in quality," he said.

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