Quality healthcare is one of the pillars of a successful economy. If it keeps Estonian people as healthy as possible and extends their healthy years and life expectancy, it helps improve and maintain the most important part of society, human capital.

Although Estonian people have considered healthcare services to be of high quality, unfortunately, they are increasingly dissatisfied with the accessibility of medical care. Last year, half of the population was not satisfied with our healthcare system. The healthcare system is underfunded, and there are not enough doctors and nurses. At the same time, health is the second-largest sector in this year’s state budget, with expenditures amounting to 2.5 billion euros.

The expectations of Estonian society do not align with our low tax burden.

If we compare Estonia’s public sector healthcare expenditures as a percentage of GDP, they are significantly lower than the European Union (EU) average. Partly, this is due to our relatively low tax burden (around 34% of GDP this year). For example, if Estonia’s tax burden were at the same level as the EU average, it would mean an additional 2.7 billion euros in tax revenue for us. With Finland’s tax burden, this would be an additional 3.5 billion euros. This, of course, assumes that raising the tax burden does not slow down economic growth. At the same time, healthcare “competes” with other sectors that also need additional funding – national defense, education, climate goals, the pension system, and many others. The proportion of the working-age population in the long term is decreasing, meaning that fewer people in the labor market contribute to the overall tax revenue. To at least partially compensate for the decline in the working-age population, companies’ productivity should see a significant increase.

However, should all public services be funded by raising the general tax burden, thereby involving the entire economy – companies, people, and the state? Or should individuals who need healthcare services contribute more themselves? Estonian people’s out-of-pocket expenses for healthcare are already quite high. While Estonia’s healthcare expenditure as a percentage of GDP is below the EU average, our people’s out-of-pocket expenses are higher than the EU average and also higher than recommended by the WHO, according to the Health Development Institute. Therefore, the problem of underfunding in the Estonian healthcare system cannot be solved solely by increasing people’s out-of-pocket expenses. Moreover, with Estonia’s predominantly proportional tax system, which is largely regressive in nature, people with lower incomes pay a larger share of their income in taxes than people with higher incomes. Another issue is whether all people should receive the same healthcare services.