The government, in cooperation with the City of Tallinn, plans to merge four hospitals in Tallinn — North Estonia Medical Center (PERH), East Tallinn Central Hospital, West Tallinn Central Hospital and Tallinn Children's Hospital — into a giant hospital with an annual turnover of approximately €750-800 million and nearly 10,000 employees. This facility would employ 50 percent of Estonia's doctors and nurses and would control about 50 percent of the country's specialist medical care funding.

Neither stakeholders in the healthcare system nor the wider public have been offered any opportunity to discuss the analyses or action plans underlying this change. There has been no open debate about the potential impacts of this significant decision and many involved parties were surprised to learn that documents establishing the merged hospital have been submitted among the materials for the government cabinet meeting scheduled for May 8.

Given the importance, scale and long-term, irreversible impact of this decision on Estonia's healthcare system, I will highlight aspects of how this decision will affect Estonian healthcare, the medical profession, the development of medical science and society at large.

The starting point for a merged hospital

Despite the lack of public discussion, we can assume that the goal of creating the merged hospital is to achieve greater efficiency, quality and accessibility in healthcare.

Indeed, it would be possible to consolidate certain medical specialties within the large hospital and reduce duplication between Tallinn's hospitals. As volumes increase, it is also possible to improve the quality of care, since it is generally recognized that a higher number of patients and procedures leads to better quality in medicine.

The merged hospital could also have a stronger presence on the international job market and be a more attractive employer for the globally mobile medical workforce. With good management and an effective management model, a large hospital would allow for more economical investments and procurements related to medical services, infrastructure and innovation. Benefits could also come from better-integrated information systems, and improved patient access to medical care is certainly anticipated.

In addition to these substantive arguments in favor of merging Tallinn's hospitals, the architects of the plan have undoubtedly also conducted a thorough analysis of the merged hospital's budget and financial position.

A simple comparison of annual reports places the following basic financial indicators at the center of the financial analysis: after the merger, the merged hospital's expected turnover would likely reach €700-800 million, with annual profits of €40-50 million. Based on a two- to three-fold pre-tax and pre-dividend profit multiplier, the group's investment plan for the next decade could be estimated at around €1 billion for the construction of buildings and infrastructure, the purchase of medical equipment and IT development.

Effects a merged hospital would have on the healthcare market

Merging the four hospitals would create an oligopolistic market dominated by a single player, with one large hospital controlling 50-60 percent of the market volume and workforce.

Economic theory confirms that, in certain sectors, markets with such a structure can achieve scale-driven cost efficiencies if they are stable and well managed. An oligopolistic market seeks a balance between fully open competition and a complete monopoly.

International and domestic history shows that oligopolistic markets must be well managed and regulated to function properly; otherwise, resources become consolidated, responsibility becomes diffused and innovation stagnates.

Examples of oligopolistic markets in Estonia's more recent history include energy, aviation and telecommunications, and unfortunately, none of these have proven beneficial to consumers. Our energy and internet costs are among the highest in Europe because we have neither been able nor known how to manage these markets effectively. Will the emergence of an oligopoly in healthcare be any different?

The creation of the merged hospital will undoubtedly harm the diversity of Estonia's healthcare system, reduce the pressure to innovate and diminish competition in both medical treatment and research. I believe that healthy competition among hospitals of roughly equal market share for patients, employees and service contracts is a better choice for Estonians. It forces hospitals to strive for quality, accessibility, a good working environment and soft values such as friendliness and openness. The creation of the merged hospital will stifle healthy competition.

I am certain that after the merged hospital is established, regional inequality will increase significantly and access to care for patients outside Tallinn will deteriorate, while access for patients in Tallinn will remain largely unchanged or may even worsen. This will occur as a side effect of increased efficiency, because reducing duplication of specialties and procedures will inevitably increase their distance from the average patient outside the capital.

The argument of reducing duplication is also conveniently used as a distraction. As a public limited company, the merged hospital will be profit-oriented, and it is unlikely that the enterprise will refrain from focusing on high-profit-margin specialties of the future, such as those currently being actively developed by Tartu University Hospital — be it oncology and cardiology innovations based on genomics, personalized and preventive medicine, cell line development, psychiatry or other fields.

Carelessly eliminating duplication would directly undermine one of the core values underpinning the success of solidarity-based health insurance systems and Estonia's healthcare system: equal access to care. Duplication would not disappear with the merged hospital; domination would emerge.

Supporters of the merged hospital repeatedly cite competition among hospitals for doctors, workforce mobility and the heavy burden of working multiple jobs.

However, the merged hospital will do nothing to address the main threat facing Estonian healthcare: the shortage of doctors and the dramatic decline in the medical workforce over the next decade. If career and choice opportunities for doctors diminish, if we do not sufficiently invest in expanding medical education and if innovation in medicine does not increase, we will be unable to meet the inevitable future challenge: doing more work with fewer people.

It is well known that sectors of the labor market with high intellectual capital require greater freedom and mobility to move between market participants. International literature clearly shows the movement of leading physicians between healthcare systems in the United States, which forces those systems to compete for talent.

Greater closure in the labor market will undoubtedly hinder the mobility of Estonian doctors, and limited opportunities in state hospitals will drive doctors toward the private sector or abroad. I believe that a large hospital will also find it much harder to establish value-based management and create a supportive organizational culture for doctors starting work in 2030, especially for Generation Z doctors who value principles, personal development and identity more than money or career advancement.

The centralization resulting from the creation of the merged hospital will also increase the vulnerability of our healthcare system. The very existence of centralized IT systems will expose the large hospital to numerous external risks, whether cyberattacks, pandemics, large-scale emergencies or even wartime situations. Having experienced all of these in the past decade, decentralization is certainly a wiser approach than consolidation.

Effect on clinical medical science and University of Tartu

The creation of the merged hospital will directly impact clinical medical research and the University of Tartu. Currently, the University of Tartu ranks among the top 350 universities worldwide in reputable global rankings, and the university's goal is to move closer to the top 100 universities in the world.

The university's key area of research influence is clinical medicine, which, along with international clinical trials, immunology, microbiology, molecular biology and genetics, pharmacology and toxicology, drives the university's international standing.

It is no secret that supporters of the merged hospital are interested in relocating part of the undergraduate medical education to Tallinn, bringing it closer to both patients and students. Several reasons are behind these proposals: a sincere desire to participate in teaching, to provide students with better access to patients and clinical cases, to improve the quality of education and to be closer to students.

Undoubtedly, there are also other reasons that often go unspoken but are equally significant: the desire to control the future generation of specialists within their respective fields and, consequently, to balance Tartu's influence in the allocation of residency positions; as well as the opportunity, in addition to practicing medicine, to engage in an academic career and obtain positions such as professor or lecturer. These are pragmatic and understandable considerations, but together they conceal a risk that, as a nation, we must recognize.

If part of the undergraduate medical education is moved to Tallinn's so-called academic merged hospital — with its large patient base, workforce and budget — we would create fertile ground for the gradual decline of medical education in Tartu. A larger center, with more patients, jobs, faster transport connections and a bigger budget, would inevitably drain people and funding from the smaller center.

Urban geographers have studied the gravitational pull of cities and have identified historically well-known pairs, of which only a few have managed to function effectively: Uppsala-Stockholm, Coimbra-Lisbon, Brno-Prague, Turku-Helsinki, Lille-Paris, Leipzig-Berlin, Padua-Milan.

If we viewed the healthcare system in isolation, society might still tolerate this erosion. However, its cumulative effect — the decline of clinical medical science and medical education — would significantly and permanently harm the University of Tartu's position, reducing it to just another ordinary university on Europe's periphery.

I assert that the creation of the merged hospital will establish conditions that, within 10 to 20 years, will lead to the loss of high-level, extensive clinical medical research and education at the University of Tartu. In 2032, when the national university celebrates its 400th anniversary, it will remain a key institution for our statehood and international standing, as well as a cornerstone of our culture, language, people and country. Weakening the University of Tartu's position through the establishment of the merged hospital is a red line that Estonia's doctors, scientists and the broader society will not tolerate.

Solutions: Two merged hospitals and healthy competition

While recognizing the rational arguments in favor of creating the merged hospital, I also see the fundamental risks it poses to both access to care and to academic clinical medicine and medical education. Therefore, a balanced and reasonable alternative to the megahospital plan should be sought.

I agree that students and university hospitals need access to a larger pool of patients; that, at present, many excellent and academically capable doctors are excluded from teaching and academic career paths; that duplication of specialties should indeed be minimized; and that the quality of care should be improved.

Instead of an academic merged hospital that would dominate half the market, a system should be established that supports healthy competition, where hospitals of roughly equal size compete under market-like conditions for patients, staff and finances, guided by owners' expectations and regulatory limitations.

Such a system could be created by merging the North Estonia Medical Center with Tallinn Children's Hospital and forming a new Tallinn Hospital based on West Tallinn and East Tallinn central hospitals. Alongside the University of Tartu Hospital, this would establish three healthcare centers in Estonia of roughly equal size, none of which would have unchecked control over resources. Market-like conditions and regulation would ensure a balance of power among hospitals, internal mutual oversight and healthy competition. I also believe it would be easier for funders to ensure the efficient use and oversight of resources with reasonably sized hospitals.

A modern solution to reduce duplication of healthcare services, improve the quality of care and save money is not a large-scale concrete megahospital but rather nationwide, detailed care pathways supported by modern IT solutions and payer-side decision-making. Care delivered in this manner is patient-centered, and the benefits would be nationwide — not concentrated in one densely populated city.

This proposal does not imply maintaining the status quo or freezing change in other areas either. The University of Tartu and the University of Tartu Hospital could expand clinical medical research and development work together with Tallinn's hospitals, increase the export volume of medical science and research and attract additional resources to the system rather than competing solely over existing ones.

The University of Tartu could consider opening its academic career model to Tallinn's doctors and increasing the number of doctoral students and supervisors in Tallinn. This would require direct ownership participation in the relevant hospital, representation on the hospital's supervisory board and a shareholders' agreement granting the university a decisive vote on research and education matters through a preferred shareholding structure. Such corporate governance methods would ensure a reasonable balance of interests and power.

Under this model, all undergraduate medical education would remain entirely in Tartu and the residency program would continue to operate nationwide, as it does now, with all stakeholders involved in decision-making as provided by law. The University of Tartu and the University of Tartu Hospital, as the primary trainers of medical professionals and the center of clinical medical research, represent a valuable asset supported by all hospitals in Estonia.

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