Sikkut: Funding for healthcare must come from tax revenues

Riina Sikkut.
Riina Sikkut. Source: Ken Mürk/ERR

Health Minister Riina Sikkut (SDE) said on the program "Otse uudistemajast" that healthcare financing cannot rely solely on labor taxes and that the tax base must be reevaluated, but that funding from tax revenues, rather than an increase in the proportion of private healthcare, are potential solutions.

The pre-pandemic rules for sickness benefits will be reestablished in July of this year and benefits will once again begin on day four.

The Social Democrats, according to Sikkut, wanted sickness payments paid on the second day, but there was no agreement among coalition members. Moreover, the Estonian Health Insurance Fund (Tervisekassa) analysis failed to demonstrate that it would have had a significant impact.

Sikkut said that the prolonged compensation was justified. "Given the lack of knowledge at the time of the coronavirus outbreak about the nature of the infection, how it spreads, and its effects, I believe that the second-day illness compensation and other measures that were implemented were appropriate. In retrospect, we could consider whether the money could have been used more effectively, but it was undoubtedly the right choice at the time," she said.

She said that the current level of government cooperation is exceptional. "If we can maintain this positive attitude and working culture the next four years will be a success," she said.

Coalition partners, however, have not agreed to raise the minimum wage.

Any public discussion of the minimum wage, according to Sikkut, is important as it is an essential tool for combating inequality. "Each side has their own viewpoint on how negotiations should proceed and the intended outcome, and that for there was for the first time such a strong political expectation for a minimum wage increase is a positive indicator," she added.

Increasing the minimum wage, Sikkut explained, requires a substantial quantity of labor for businesses with a large number of low-paying jobs. "Decades have been spent trying to increase the value produced by our economy and the productivity of our businesses, which lags behind the European average. The government is unable to influence or alter the course of this situation. In Estonia, low wages discourage any endeavor that requires low-cost labor. We presently lack these employees and will have even fewer in the future," Sikkut said.

"Personally, I am very pleased that it [economic consideration] is forcing a rethinking of our values," she added.

Involvement of private money needs analysis, but own contribution is already high

The financing for healthcare, according to Sikkut, should be independent of yearly political decisions. The government cannot rely solely on labor taxes because the social tax base will not grow as it did in the past. A social tax increase was neither discussed nor suggested by coalition negotiators.

Theoretically, these options are known: adding something to the 13 percent social tax or modifying the entire tax base. However, the issue remains one of healthcare solidarity and public funding, not private funds. "People's co-payments are already quite high. Nevertheless, an analysis of the role private money has played thus far, as well as possible future scenarios involving it, are necessary," Sikkut said.

According to Sikkut, the coalition agreement's intent to consider private healthcare financing is primarily technical and does not imply a decision to increase the proportion of private funding.

"Estonian copayments for healthcare are extremely high, exceeding WHO and OECD recommendations and they are distributed in an unequal manner," Sikkut explained.

The problem of medication shortages has intensified, she said. "There were supply shortages prior to the pandemic, but the covid crisis and the war caused supply chains to be reorganized, affecting the availability of raw materials and packaging," she explained.

"This is by no means an Estonia-specific issue; other EU countries face same difficulties. Some of them, however, are pharmaceutical manufacturers, so their supply chain is shorter," she explained.

Vaccines were purchased collectively and disseminated based on need during the pandemic in Europe. The question has arisen as to whether this could also be done in the event of medicine shortages. This issue will also be discussed at a meeting of European health ministers later this week.

Last year, the Ministry of Social Affairs intended to combine the Agency of Medicines, the Health Board and the National Institute for Health Development.

Sikkut pointed out that the previous government did not advance this plan in the Social Affairs Committee and that the first order of business now is to modify the constitution of the ministries.

"Both in terms of structure and budgets, we are not going to do anything concurrently," the minister said, explaining that a fifth of the ministry of social affairs, or the section dealing with employment, will be transferred to the ministry of economic affairs.

"The suggestion will not be implemented immediately, but that does not mean there will not be any changes in four years," she explained.

The City of Tallinn has announced that the design of the new Tallinn hospital which will not receive state funding, will proceed. Sikkut said that she supports the idea, but she is concerned about the funding.

She does not rule out the possibility that financing for the hospital's construction will become available again if the budget situation improves in the coming years. "It is true that there are also investment needs in other areas, including healthcare," the minister said, "but it was not possible to make such a cost-increasing decision in the short term under a strict budget."


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Editor: Barbara Oja, Kristina Kersa

Source: "Otse uudistemajast"

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