High-quality healthcare is one of the cornerstones of a successful economy. When it keeps the people of Estonia as healthy as possible and extends their years of healthy life and life expectancy, it helps to improve and maintain the most important part of society, human capital.

Although Estonians have considered healthcare services to be of good quality, unfortunately, there is increasingly less satisfaction with the accessibility of medical care. Last year, half of the people were dissatisfied with our healthcare system. The healthcare system is underfunded, and there are not enough doctors and nurses. However, health is the second largest area in this year’s state budget with expenditures of 2.5 billion euros.

Estonian society’s expectations do not fit our low tax burden.

When we compare Estonia’s public sector healthcare expenditures to 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 EU average level, it would mean an additional 2.7 billion euros in tax revenue for us. At Finland’s tax burden level, this would mean an additional 3.5 billion euros. This is, of course, assuming that raising the tax burden does not hinder economic growth. However, healthcare “competes” with other areas that also need additional funds – defense, education, meeting climate goals, pension systems, among many others. The proportion of the working-age population in the population in the longer term is decreasing, meaning that fewer and fewer people in the labor market contribute to the general tax revenue. To partially compensate for the decrease in the working-age population, companies should achieve a strong increase in productivity.

But should all public services be funded by raising the general tax burden, involving the entire economy – companies, individuals, and the state? Or should the individual who, for example, needs healthcare services, contribute more? Estonians already have a significant out-of-pocket spending on healthcare. While Estonia’s healthcare expenditure as a percentage of GDP is below the EU average, according to data from the Estonian Institute for Health Development, our people’s out-of-pocket spending is higher than the EU average and also higher than the WHO recommendation. Therefore, increasing only individuals’ out-of-pocket spending cannot solve the underfunding problem of the Estonian healthcare system. Furthermore, with Estonia’s predominantly proportional tax system, which is largely regressive in nature, lower-income individuals pay a larger share of their income in taxes than higher-income individuals. It is a separate issue whether all individuals should receive the same healthcare services.