Estonian health care system


Estonia’s health system benefits from strict separation of functions with the main actors being the Ministry of Social Affairs and its agencies, the Estonian Health Insurance Fund, and independent provider units operating under private law (so-called autonomized units). The Ministry of Social Affairs and its agencies perform the main stewardship role for the Estonian health care system, including the development of national health care policies and legislation, supervision of compliance with legal acts, collection and analysis of data on activity volumes and economic indicators of providers, as well as registration of health care professionals and licensing of facilities. The Ministry of Social Affairs is also responsible for financing emergency care for the uninsured, as well as ambulance services and public health programs. Both the Ministry of Social Affairs and local governments finance social care.

The Estonian Health Insurance Fund (EHIF), operates the national, mandatory health insurance scheme and performs some quality assurance activities. The national health insurance scheme covers approximately 95% of the population with a broad range of curative and preventive services as well as some monetary benefits. Revenues stem primarily from earnings-based employer and employee contributions, in addition to state contributions for certain population groups. The EHIF acts as a single purchaser, compensating all contracted providers under a sophisticated payment system (Box 1). It contracts with providers under agreements that specify case and cost caps and minimum service quality requirements (including waiting times). Combined, contract and payment arrangements provide for effective cost control.

All health care providers are independent entities operating under private law. Family physicians operate as private entrepreneurs or salaried employees of private companies owned by family doctors or local municipalities. Most hospitals are either limited liability companies owned by local governments or foundations established by the state, municipalities or other public agencies. The remaining few are privately owned. 

Structural reforms in the 1990’s established primary care provided by family physicians at the center of the health service delivery system. Family physicians serve as the first level of contact and gate-keeper of the system (a gatekeeper is a health care professional - usually a primary care physician - who coordinates, manages, and authorizes all health services provided to a person covered by a certain health (insurance) plan). There are currently about 800 family physician practices in Estonia, and while there has been a growing trend towards group practices, approximately 70% of family physicians continue to work in solo practices. Family physicians are responsible for providing a core package of services to their self-selected constituencies (individuals registering with them under a practice list-system). Each family physician’s practice list cannot contain more than 2000 patients or less than 1200 patients. All together, these practice lists cover the entire population. In addition, family doctors and nurses provide more than half of all ambulatory care visits, while ambulatory specialists deliver the remainder of these visits.

Secondary and tertiary care is provided in hospitals and outpatient centers. There are currently about 65 public and private hospitals in Estonia, including 35 nursing and rehabilitation hospitals. The EHIF has contracts with the 19 public hospitals that are included in the Hospital Network Development Plan (HNDP). This plan, approved in 2003, lists the investment needs of these hospitals in order to renovate their premises and restructure their services. The HNDP investment needs served as a basis for the implementation of EU structural funds from 2007-2013. HNDP hospitals are divided into regional, central, general, and local. Regional hospitals deliver the full range of services, central hospitals deliver most services with the exception of a few procedures, general hospitals provide 24/7 emergency care, intensive care and some surgical and medical specialties, while local hospitals deliver 24/7 emergency and some general surgery procedures. The EHIF also has contracts with other non-HNDP hospitals, including hospitals specialized in nursing or rehabilitation care. 

The majority of ambulatory specialist care is provided in hospital outpatient departments, with the remainder provided by health centers or specialists practicing independently. Day care, which is defined as treatment requiring at least a four-hour stay without the need for the patient to stay overnight, is provided by hospitals and ambulatory care providers with a day-care license. Rehabilitation care (inpatient and outpatient) is provided by licensed hospitals. Rehabilitation care is seen as an inseparable part of specialized medical care in Estonia, and includes services that focus on restoring impaired functions, preserving restored functions or adjusting to disability. Finally, nursing care services are delivered either in licensed nursing care institutions (hospitals) or in patient’s homes. The nursing care services financed by the EHIF include inpatient nursing care and home nursing (including home care for cancer patients). 

Box 1: Estonia’s Health Care Provider Payment System

Payment methods, service prices and benefits packages are regulated through a single, government approved health service list. Prices include capital costs, serve as maximum ceilings (with the option to for providers to offer lower tariffs) and apply universally (that is, without any further, provider-specific adjustments).

Family physicians

Monthly prepayments, recalculated four times per year; combination of:

  • Capitation: Five age groups: 0-2, 3-6, 7-49, 50-69, 70+ years
  • Fee-for-service: For diagnostic procedures up to 42% of capitation, a separate “therapeutic fund” up to 3% of capitation (cover services provided by psychologists and speech therapists) and activity fund with no cap including minor surgery and gynecological procedures that a family doctor can do by her(him)self
  • Quality Bonus Scheme (QBS): Mandatory since 2015, with annually negotiated, pro-rated lump sum with miinimum requirement of 80% compliance across38 indicators for (i) disease prevention, (ii) chronic disease management, (iii)others.
  • Allowance: Premises and transport, additional payments service in remote areas (i.e. the distance to the nearest hospital).

Specialist ambulatory care

Reimbursement of claims based on:

  • Case and cost caps by specialty
  • Fee-for-service

Acute inpatient care and specialist ambulatory services with surgical procedures

Reimbursement of claims based on combination of:

  • Case and cost caps
  • Diagnosis-Related Groups (based on Nordic DRGs, central grouper, constituting 70% of each case) with exemptions for outliers1
  • Fee-for-service including outliers (e.g. chemotherapy, organ transplant), constituting 30% of each case.
  • Per-diems (covering basic examination, diagnosis and treatment planning, nursing, meals, simple medical procedures, laboratory tests and pharmaceuticals).

Rehabilitation care

Reimbursement of claims based on:

  • Case and cost caps
  • Fee-for-service, which includes per-diems.
  • Inpatient rehabilitation included in acute inpatient care payment
  • Outpatient rehabilitation included in acute care payment

Nursing care

Reimbursement of claims based on:

  • Case and cost caps
  • Per-diems and fee-for-service for inpatient care and home nursing.


1 Outliers can be a) price outlier (too low or high cost based on FFS) b) specialty (psychiatric care) or activity related

Source: Estonia Health System Review, European Observatory on Health Systems and Policies; Personal Communication


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