Lessons from Estonia: How Bahrain is improving its healthcare

“I should have called the Estonians when we were setting up our health care website,” quipped US President Barack Obama last September, referring to Estonia’s cutting-edge health sector IT systems. Shortly after Obama made his remarks, delegations from the Gulf state of Bahrain and the World Bank were boarding planes for the Baltic state of Estonia.

The journey to Estonia was part of a study tour organized to support an ambitious health sector reform plan in Bahrain, whose national Health Council aims to implement a wide range of reforms.

As a World Bank reimbursable advisory service, the visit was designed to learn first-hand about health insurance reforms in other countries. “Estonia provides a ‘good practice’ example of long-term successful reforms,” said Firas Raad, World Bank Task Team Leader for the project. “This is especially true in the areas of health insurance, e-health systems, payment systems and provider autonomy.”

Though located in very different parts of the world, Estonia and Bahrain share many similarities in terms of demographics and epidemiological trends (patterns of disease). To start with, both have small populations of around 1.3 million people, with those aged between 30 and 70 representing about half the population in each—about 52 percent in Estonia and 49 per cent in Bahrain. Both have been experiencing epidemiological transitions, with non-communicable diseases placing a greater burden on health care, causing almost 92 percent of deaths in Estonia and 78 percent in Bahrain.

Since regaining independence from the Soviet Union in 1991, Estonia has achieved near universal health coverage, with about 95 percent of its population covered by its Social Health Insurance (SHI), which is backed by the Estonian Health Insurance Fund (EHIF).

This is how it works: all Estonians are obliged to enroll in the SHI and their contributions are linked to their wages. The health contributions of non-contributors—such as children and pensioners—are subsidized by wage earners in the workforce. A sophisticated payment mechanism covers expenses for specialist care and pharmaceutical drugs. All Estonians are entitled to the same benefit package. 

Estonians are highly satisfied with their health care system, surveys show. Yet only two decades ago, their health system looked entirely different—centralized and financed by the government. So, what policy lessons can Estonia’s health reform experience offer to Bahrain?

1. Strong political commitment and leadership are not just buzzwords. In the late 1980s and early 1990s, Estonia—home of the “Singing Revolution”—was opening up to socio-economic change and a market economy. Its parliament passed the first Health Insurance Act even before independence. Professional organizations strongly supported health reforms, which was instrumental in the early stages of the reform process. In the early 2000s, Estonian physicians were actively involved in developing the Diagnosis Related Groups that classify the cost of various hospital stays. Today, the Ministry of Social Affairs plays an important leadership role in the health sector, bringing together various stakeholders to develop policy.
   
   
2. "Big bang" reforms should be followed by incremental adjustments. In the 1990s, Estonia embarked on comprehensive reforms to reorganize the way health care was financed, delivered, organized and planned. The SHI was instrumental in establishing a sound revenue base for the health sector. It created 22 regional “sickness” funds and introduced an obligatory 13 per cent contribution from salaried and self-employed workers. Estonian policy makers continue to examine and adjust reforms to improve their performance. For instance, in 1994, the separate sickness funds were consolidated into a central fund that pooled revenues and relocated them. Recent reforms include more autonomy for service providers (2002); revising regulations on pharmaceuticals (2004); establishing the health information system (2008); and centralizing aspects of organizing primary care (2012).
   
   
3. Complementing health insurance reforms with changes in service delivery can be beneficial. Estonia reduced the number of hospitals from 120 to 19. Primary care reforms were initiated as early as 1991. To increase the number of family physicians, family medicine was introduced as a medical specialty in the early 1990. Today, it is mandatory for all Estonians to register with a family physician. In addition to these reforms, the pharmaceutical sector has been modernized with the development of the essential drugs list (1992) and regularly updated guidelines for medicine usage and reimbursement.
   
   
4. A bigger role for information technologies pays off. All service providers, patients and the EHIF are electronically linked (for example, the EHIF receives all its billing data electronically). A countrywide system allows service providers to create a single record for each patient. The system contains a wide range of medical data, including the patient’s blood group, test results and prescription history. Thanks to another innovation, the e-Prescription system, today early all prescriptions are handled electronically.

The delegation was not in Estonia for long, but the knowledge it gathered will serve as a guide for its reforms. “Policy lessons from Estonia will be invaluable as we develop our future health insurance and IT policies,” said one Bahraini official, summing-up the visit.