Estonian care reform boosts nursing home access but stalls home care

The Estonian government implemented a care reform three years ago to reduce the financial burden on citizens and improve access to general care services. The reform increased state funding for local governments and provided extra benefits for people with lower incomes.

An analysis by the Center for Applied Research (CentAR) and the think tank Praxis found that the reform successfully improved financial access to nursing homes. The number of care places grew from 10,000 in 2021 to 12,000 last year.

While the reform helped many, a shortage of places remains for people with severe or complex dementia needs. Additionally, the reform increased the administrative burden on local governments because they must now assess everyone entering the service. The analysis also revealed that home care services failed to develop. Although more people received home care, the average amount of service provided per person decreased.

CentAR director Epp Kallaste explained that local governments used the extra state funding to pay for general care subsidies instead of investing in development activities. The Ministry of Social Affairs plans to address these gaps by focusing on a second part of the reform that targets home and community based services. Nursing homes saw an increase in operating profit margins, which rose from 6 percent in 2022 to 15 percent last year.

However, the reform also improved staffing; the number of nursing homes meeting staffing requirements rose from 40 percent in 2022 to 72 percent last year. The Ministry of Social Affairs reported that the share of costs paid by clients fell from 78 percent to 53 percent over the same period as public sector contributions increased.