Minister: Only extra money will solve healthcare funding problems
The only way to solve the budget problems of the Estonian Health Insurance Fund (EHIF) is to find, in cooperation, additional money, Minister of Health and Labor Jevgeni Ossinovski said in reply to Minister of Finance Sven Sester's demand to eliminate the fund's budget deficit.
In his reply to the Minister of Finance, Ossinovski said he was counting on successful mutual cooperation to come up with the necessary extra money needed for the healthcare system in order to ensure the performance of of the duties expected of the EHIF as well as the functioning of the healthcare system as a whole.
The minister admitted that the performance of the EHIF during the first half of the year was indeed considerably weaker than anticipated, and that the supervisory board now wants to adjust the fund's four-year budget position, but he added that the accumulated retained earnings wuld ensure that the fund could cope financially during that period.
"The EHIF must base its activity upno the key objectives of health insurance and the volume of outlays must be estimated on this basis," said Ossinovski, who also chairs junior coalition partner Social Democratic Party (SDE). "Consequently, the EHIF cannot be made responsible or the satte budget, including the structural fiscal position of the government sector."
The general demographic situation, the drop in the number of working insured persons and an increase in the number of persons receiving specialized medical are all indicate that Estonia's population is aging, which increases the burden of illness and need for healthcare services, said Ossinovski.
"Given this situation, the supervisory board of the EHIF made the only possible responsible decision — not to reduce the volume of healthcare services and endanger access to treatment for the population, but to propose to the government to adjust the budget position of the fund as was done last year," he continued.
The present situation only confirmed that fundamental decisions are required with regard to long-term sustainability of healthcare funding, noted the minister.
Last week, Minister of Finance Sven Sester sent Ossinovski a letter demanding that he promptly come up with proposals regarding how to restore the balance off the EHIF's budget, as the fund's growing deficit was in conflict with fiscal strategy and may jeopardize the state's finances.
"On your proposal, the supervisory board of the EHIF adopted decisions on Aug. 19, as a result of which the shortfall in the EHIF's budget will grow from 10.8 million euros compared with the budget in 2017, to 12.1 million euros and may hit 15.7 million euros by 2020," Sester wrote in his letter, adding that as Minister of Finance, he was against that decision. "Please note that the decision to this effect was made running counter to the 2016 State Budget Act as well as the government's budget strategy for 2017.2020."
While the government has decided to give the EHIF money for additional expenses, it did so based upon the assumption that the fund would stick to the levels of spending as set out in its budget and the additional money would help it gradually leave the deficit behind, noted the Minister of Finance.
"Please note that the decision to increase the deficit of the EHIF was made in a situation where the available funds of the EHIF during the first half of 2016 had increased by 12.6 million euros compared to the approved budget," continued Sester, a member of the Pro Patria and Res Publica Union (IRL).
The supervisory board of the EHIF decided at its meeting last month to keep the volume of healthcare services at the present level during the next four years as well as proposed to the government to adjust the financial position of the fund.
The fund's revenue increased by 7 percent to 510.9 million euros in the first six months of the year, while operating costs grew 11 percent to 543.8 million euros, making for a deficit of almost 33 million euros — 14.5 million euros bigger than projected.