The City of Tallinn and the Ministry of Social Affairs are currently negotiating if and how to merge city-owned hospitals with the state-owned North Estonia Medical Center (PERH). Tallinn aims to have the state co-finance a new medical campus in Lasnamäe, projected to cost over €800 million.

According to Prime Minister Kristen Michal (Reform), he had already advised then-mayor Mihhail Kõlvart (Center), while serving as a Tallinn City Council member, that the issue is less about funding construction and more about integrating the hospitals in Tallinn to improve healthcare services.

"The focus shouldn't be too fixated on concrete," Michal said. "If we envision a new hospital in Tallinn, it's not about the concrete itself; rather, it's symbolic of the broader project to unify the capacity of hospitals in Tallinn. Each party should evaluate what services they provide, how cost-effective they are and how we could work together with PERH. That's the primary plan the state and Tallinn need. Only after that should we consider what, if anything, needs to be poured in concrete – what the city will handle, what can be done in cooperation with the private sector and how responsibilities will be divided."

The premiere added that the hospital building project shouldn't be an end in itself but rather a means to reorganize Tallinn's hospital network. "The goal must be to enhance healthcare workers' ability to provide better services and improve patient care – not simply to pour concrete."

"Only then can we discuss how it will be funded," the prime minister concluded.

Tallinn and the state began discussions in August about merging the city-owned East Tallinn Central Hospital (ITK), West Tallinn Central Hospital (LTK) and Tallinn Children's Hospital with the state-owned North Estonia Medical Center (PERH). This merger is also outlined in the new hospital network development plan, which envisions a unified Tallinn hospital operating across two campuses: one in Mustamäe, where PERH is currently located, and a new campus to be built in Lasnamäe.

Given that constructing the new Lasnamäe facility would cost around €850 million, Tallinn's budget cannot cover the expense. The city is therefore seeking for the state to cover half of the cost.

Last week, Tallinn's Deputy Mayor Karl Sander Kase (Isamaa) told ERR that without a guarantee from the state to finance the new medical campus, reaching an agreement would face significant obstacles. "Merging institutions on paper alone holds no value for Tallinn. The city's interest and goal in negotiations is to ultimately resolve the issue of building the new Tallinn Hospital," Kase said.

Prime Minister Michal expressed concern that Tallinn is once again rushing toward construction as the solution. "I have advised the current mayor, Jevgeni Ossinovski (SDE), not to repeat the mistake of the previous mayor, Kõlvart, who saw construction as a panacea. Pouring concrete cannot be that. The real question is how we can provide better hospital services for the people of Tallinn and North Estonia, and how healthcare professionals, doctors and staff can better perform their duties there. That is more important than the location and size of the building," said Michal.

Maarjo Mändmaa, secretary general of the Ministry of Social Affairs, who represents the state in the negotiations, stated that the agreement with the city is structured to make the new hospital complex a North Estonian center of excellence, attractive for both European Union funding and loans. He emphasized that the state must finance the construction. "This is not just a local government service; it is a state service – to ensure access to healthcare in the region with the highest population in Estonia. We must, therefore, support this funding through the state budget," Mändmaa said.

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