Capital drifting to Estonian clinics, research

Slowly but surely, Estonia is moving from a centralized, state-run healthcare system toward one based on individual health insurance, and many hi-end medical service companies driven by private capital are reaping their first successes in both high-risk research and traditional medicine.

EGeen International, a California-based company, was founded in order to market gene data to Western drug companies. Known as the Estonian Genome Project, which takes DNA samples from large segments of the Estonian population, the gene data could be a boon to drug companies hoping to develop state-of-the-art pharmaceuticals aimed at curing gene-based illnesses. The company received its first order in March.

FIT Biotech, a Finnish company working on how to crack the AIDS epidemic, has developed an HIV vaccine (for one strain of the virus) with the help of Mart Ustav, an Estonian doctor.

Developers hope the vaccine, which has tested positively on monkeys, will receive financial support from the International AIDS Vaccine Initiative, after which it could later be tested in India and Africa.

Estonian clinics have a solid reputation for performing services that are either too expensive or too limited abroad. Andrei Soritsa's fertilization clinic, for instance, is especially popular among single Finnish women who are unable to undergo artificial insemination at domestic clinics.

But these are high-risk, specialized ventures with significant upside potential. Far more important is traditional medical care, and here Estonia has made enormous strides to freeing up the market to competition.

As of January 2003 the state owns only two hospitals - Tartu University Clinic and Northern Estonian Regional Hospital - while the rest of Estonia's 219 medical institutions have been either partially or 100 percent privatized.

The industry deregulation was part of the social welfare reform carried out in 2002, and a recent report prepared by Scandinavian Care Consultants AB on behalf of the Social Affairs Ministry stated, "In Estonia there are too many hospital beds in relation to the number of inhabitants."

Still, though there may be too many hospitals, they are either too large or too run-down. For this reason, the report suggested that Estonian hospitals change their focus over the next several years.

According to Ivi Normet, head of the healthcare department of the Social Affairs Ministry, this is precisely what the government is doing. The ongoing reorganization of the national healthcare system will gradually reduce the number of hospital beds while focusing on so-called "one-day surgery" and convalescence services.

"One of Estonia's priorities in the healthcare field is to carry on with optimization of the number of hospitals on a more-quality-less-quantity basis," said Normet.