Estonian Competition Authority

Press release: The Estonian Competition Authority proposed to establish transparent criteria for the distribution of medical treatment funding

The Estonian Competition Authority made a proposal to the Ministry of Social Affairs to initiate the draft to amend the Health Insurance Act in order to add clear and transparent criteria for the distribution of treatment funding between health care institutions to the Act.

The proposal of the Estonian Competition Authority particularly relates to such speciality services that are provided outside of the hospitals listed in the Hospital Network Development Plan (HNDP), for example, services offered by an eye specialist, rehabilitation, psychiatry, etc. The HNDP includes mostly hospitals owned by local government or state and these have been automatically included in the funding list of the Health Insurance Fund.

The Health Insurance Fund currently prefers funding the health care services of the HNDP hospitals, therefore leaving other health care providers at a disadvantage.

Preferring solely the HNDP hospitals represents a market distortion, which would be excluded in a normal competitive situation. This may lead to situations where the more expensive and/or of lower quality service offered by the HNDP hospital is preferred over the others in distributing treatment funding. According to the Authority, possible counter arguments against free competition should be considered on a case-by-case basis and the HNDP hospital preference should not be automatic in the process of treatment funding. Currently, such a consideration is not carried out.

At the moment, there is no transparent and unambiguous regulation in current legislation, which could serve as the basis for deciding the distribution of funding between the HNDP hospitals and the rest of the health care providers. Therefore, the Estonian Competition Authority made a proposal to the Ministry of Social Affairs to add clear and transparent criteria to the Act. Only in the case of the fulfilment of these criteria, the Health Insurance Fund could have the right to prefer the HNDP hospitals in certain specialties without any restrictions to funding. In case of health care services that do not meet the criteria, all health care providers should have a chance to compete on equal terms.