by Ivi Normet

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 How institutions can work together to ensure
financial sustainability

• by Ivi Normet
• Ministry of Social Affairs of Estonia

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• the role of the MoSA in health financing policy
  in Estonia

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• Estonias 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).

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• 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.

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• 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.

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• The MoSA finances services available to the
  whole population such as emergency care, public
  health programmes, emergency care services
  provided to uninsured individuals etc.

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Main policy document

• National Health Strategy 20082020 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.

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• responding to the challenge of financial
  sustainability

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Health system analysis

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

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• Broaden the public revenue base
• non-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

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• 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.

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• 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...

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• respond to the financial crisis

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Social tax and EHIF expenditures, 2001 2012
euros
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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