On Friday, the Health Insurance Fund supervisory board approved the draft budget for next year, and Minister of Social Affairs Karmen Joller said the goal for the coming years is to bring the fund out of its financial crisis so that by 2030 the budget reaches balance — or even a surplus.

University of Tartu econometrics lecturer and healthcare expert Andres Võrk said that there is still little information about Health Insurance Fund's plans, and only one clear measure is known so far — postponing the pay rise for healthcare workers.

"It's clear that this immediately creates significant tension with healthcare workers, who have said during wage negotiations that salaries should rise at least at the pace of average wage growth, if not more," he said.

Võrk added that if the Ministry of Finance forecasts average wage growth of 5.6 percent this year and 4.7 percent next year, it is hard to see where such an increase could come from if it is not reflected in the price component of healthcare services.

"The minister suggested that Health Insurance Fund will not raise wages and that healthcare institutions should find internal buffers for pay increases. But considering that salaries make up a very large share of total costs — about half for hospitals and more than half for family‑doctor centers — finding such a buffer while other input prices rise is unlikely," Võrk said.

He noted that Health Insurance Fund can save costs not only by limiting price growth but also by reducing the number of services. But to assess this, more information is needed: how much the volume of services is expected to change, where reductions might occur, and how this would affect waiting lists.

Although Health Insurance Fund has said that access to healthcare services will not be reduced, Võrk said this may not be enough: the population is aging and demand for healthcare services is increasing. If the number of visits remains at the current level, waiting lists will grow.

"Both the minister and the head of Health Insurance Fund have emphasized the need for greater efficiency in the system — better care pathways. That is always important, whether money is abundant or scarce; efficiency must always be improved," Võrk said.

He explained that when money is lacking, hospitals are forced to become more efficient — but funding must be directed to areas where it creates the most added value.

"This may mean different choices between specialist care and primary care, or between different fields of specialist care — increasing funding in some areas more than others," Võrk said.

As a health economist, Võrk believes Health Insurance Fund should be much better staffed and have significantly stronger analytical capacity. While the fund is proud of its low administrative costs and efficient management, he said it should actually be a stronger negotiating partner for healthcare institutions when discussing prices and the value of services.

Confido CEO: Fund should act like an insurance company

Medical center Confido CEO and general surgeon Edvard Garder said that although little is known about the Health Insurance Fund's budget plans, in general it is certainly possible to achieve accounting balance. The question, however, is how unbalanced Estonia's healthcare system will be afterward.

"Tervisekassa cannot significantly influence its revenue side. Balance therefore means cuts. Budget lines can be renamed or new ones created, but the substance remains cuts," Garder said.

He noted that the think-tank Foresight Center has previously described the deficit as structural — meaning new annual cuts would be needed every year.

"Maintaining the same volume and quality of services without cuts would only be possible if operations were made more efficient. Given the current situation, I do not believe it is possible to achieve tens of millions in efficiency gains year after year when all input prices keep rising," Garder said.

Garder added that Estonia should abandon state‑planned pricing: Health Insurance Fund should not spend time calculating prices itself but should behave like an insurance company — which, in essence, it already is.

"Health Insurance Fund should purchase services based on quality and price from different providers, regardless of ownership form. The market will set the prices," Garder said.

He added that nothing currently forces hospitals within the hospital network development plan (HVA) to operate more efficiently or cheaply, whereas providers outside the HVA are forced to compete on price.

Minister Joller's promise that Health Insurance Fund's budget will reach balance — and hopefully even a surplus — by 2030 sounds very ambitious when stated publicly, Garder said.

"Of course I hope for the best for Estonian health care and I am very interested to see how this surplus will be achieved. But fundamentally, it is wrong to speak of Health Insurance Fund's budget balance as the goal. The goal should be a sustainable healthcare system as a whole, not simply 'Health Insurance Fund at zero by 2030'," Garder said.

He added that without major reforms — such as ownership‑neutral service purchasing or allowing funding to follow the patient to whichever provider they choose — he does not consider the goal realistic.

Health Insurance Fund costs surged after Covid

Võrk said that looking back at why Health Insurance Fund's costs have grown, the rapid surge occurred after the Covid pandemic. In 2023 and 2024, there were large pay increases for healthcare workers and rising input prices across the economy.

"Before Covid, in 2019, Health Insurance Fund's costs made up five percent of GDP; now they are six percent. One percentage point may seem small, but in reality that is nearly 20 percent growth," Võrk said. "Costs grew quickly, and everyone has gotten used to it."

But if the goal is to bring this share back down to pre‑Covid levels — where healthcare costs made up a smaller portion of the economy — the problem is that wages and input prices cannot be reduced. Expectations for the healthcare sector have risen.

"That is very hard to do. It seems the minister and Health Insurance Fund are trying to reduce the fund's role again, but this likely means cuts to services, because I do not believe healthcare workers would accept a decline in real wages," Võrk said.

He added that this means providers will offer fewer services for the price Health Insurance Fund pays and will find work elsewhere in the private sector — funded by individuals or companies. Movement from publicly funded to privately funded health care has increased in recent years.

Some service prices may contain 'air'

Võrk said that in terms of how much public funding goes to healthcare, Estonia is around the European average. Estonia spends 13 percent of public funds on health care, compared to 15 percent in Finland and 17 percent in Norway. This means Estonia does not value health care as highly as wealthier countries — but that is typical, he said: the richer a country becomes, the more it spends on health care.

He pointed out that some services funded by Health Insurance Fund may contain "air" — meaning prices may be higher than necessary. For example, laboratory service prices were cut by 15 percent last year because technological advances allowed a review. Next, diagnostic services such as radiology may be reviewed.

"Looking at the whole picture, hospitals' profits have decreased in recent years — they are not swimming in money. Some services with buffers, like lab or diagnostic services, help subsidize loss‑making services," Võrk explained. "If price lists are reviewed, everything should be reviewed."

How the changes will affect patients is not yet known, because details of how Health Insurance Fund plans to save costs are unclear. Võrk said the fund is right to emphasize that patients do not always need to see a specialist — often advice from a family doctor or nurse is enough, and e‑consultations are widely used.

But overall, as people live longer and have more illnesses, cutting the volume of services or allowing demand to grow faster than supply will lengthen waiting lists.

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