Estonia’s health care system is built on the principle of compulsory solidarity-based insurance and the general availability of services provided by the private providers. The management and supervision of health care system and development of health policy is under the scope of the Ministry of Social Affairs and its agencies.

Estonia's health care system is governed by Health Services Organisation Act, which provides the organisation of and the requirements for the provision of health services, and the procedure for the management, financing and supervision of health care.

Provision of health care is organized according to the specifics of provision:

- provision of emergency care

- provision of general medical care

- provision of emergency medical care

- provision of specialised medical care

- provision of nursing

- provision of midwifery care

Additionally, to ensure the quality of health services provided to the patient in situation where health service is only provided by private legal persons, in 2002, the state established quality requirements for health service and established surveillance system for monitoring the activities of health care providers.

Health care is financed from the state budget under the health insurance budget through the means of the Estonian Health Insurance Fund, and also through direct allocations from the state budget, and municipal and city budget's, the patient's finances and other sources.

Description of the health system of Estonia

Estonian health system is built on the principle of compulsory solidarity based insurance and the all-round availability of services of private service providers. The Ministry of Social Affairs and its institutions are responsible for the management and supervision of the health care system and development of health policy. The key institutions responsible for planning, management, regulation and funding of health system functions are the Ministry of Social Affairs and institutions under its management, such as the State Agency of Medicines and the Health Board and the public independent institution Estonian Health Insurance Fund. Publicly owned hospitals and private primary health care institutions, and several non-governmental organizations and professional associations are the parties of a complex organizational structure of the health care system. The state, through Ministry of Social Affairs and its agencies, is responsible of the development and implementation of the overall health policy, including the development and implementation of public health strategies and the monitoring of quality and availability of health care services. The main task of the Ministry is the legal regulation of health sector. The Ministry of Social Affairs was established in 1993 by merging three separate ministries (the Ministries of Health, Social Welfare and Labour). Consequently, the Ministry operates in three main areas of policy: health, social services and employment. In health sector, the key tasks of the Ministry of Social Affairs include the development of health policy, monitoring population health and organization of public health by determining the extent of general and specialized medical care and public health.

The health sector of the Ministry of Social Affairs coordinates the activities of the Health Board, the State Agency of Medicines and the National Institute for Health Development, although all these institutions answer directly to the Minister.

The key tasks of the Health Board include the licensing of health care service providers and the registration of health workers, monitoring the quality of health care services and funding and organization of emergency care services.

The State Agency of Medicines responsible for ensuring that medicines used in Estonia are effective, of high-quality and safe, that they are used for their intended purpose, and their import/export and distributions follows established set of rules. The clinical trials conducted in Estonia and cells, tissues and organs used in the treatment of people are under the supervision of the State Agency of Medicines.

The National Institute for Health Development is responsible for applied research and analysis of public health, environmental health and communicable diseases, and is also involved in the surveillance and reporting on the public health status.

The key task of the Estonian Health Insurance Fund is to be an active purchaser of services, whose responsibilities include signing contracts with health care providers, payment for health care services, compensating the cost of medicinal products, reimbursement of temporary disability costs and payment of maternity benefits.

Additionally, the Ministry of Finance has a strategic role in health sector by finance management of health care through the state budget.

The Ministry of Justice is responsible for the provision of inpatient and outpatient health care for imprisoned persons. The Ministry of the Interior organizes the provision of health surveillance in houses of detention for persons kept under constant surveillance but not necessarily in captivity.

The Ministry of Defence manages the medical care system for the outpatient treatment of its employees during military service. Inpatient care is provided in civilian hospitals. Military personnel are covered by compulsory health insurance during the course of the military service, but all the costs of health care and medicinal products are covered by the state budget.

In Estonia, the provision of health services is almost completely decentralized. Health care services may be provided by persons and institutions who act as legal persons governed by private law: companies, foundations or sole proprietors. Most hospitals are either public limited company owned by local governments or foundations established by state, local governments or other public organizations. Businesses providing family medicine services may only provide general medical care and nursing services. The main rules and initiatives for the prevention of health-care related harm are based on the Health Services Organisation Act and the Law of Obligations Act. Estonian health care system does not record medical errors on systematic basis, but the health insurance fund conducts regular clinical audits of health care services in different health care institutions. In case of treatment errors, the provider of health care service must compensate the patient for the moral and material harm caused by the patient in the course of providing the health care service.

Estonia's pharmaceutical market is strictly regulated. Arrangements are in place for reporting adverse drug reactions directly to the State Agency of Medicines.

The list of health services includes more than 2000 different items. In specialized care, the payment methods include primary the service, bed-day and diagnosis-based payments. In outpatient care, the main payment method is service-based payment (laboratory tests, radiology, etc.) in inpatient care; the payment method includes the combination of service-, bed-day- and diagnosis-based payment.