The Estonian healthcare system is currently being transformed from a state-controlled, hospital-based system to a decentralised, Western European-style model. The healthcare sector has been undergoing extensive restructuring since 2000 when the government announced its major reform plan, the Estonia Health Project 2015. Hospital and related bed numbers are gradually decreasing, as closures take place and the focus shifts towards primary care.

Funding for healthcare in Estonia is principally through compulsory health insurance, operated by the Estonian Health Insurance Fund. The EHIF replaced the Central Sickness Fund and 17 regional funds in 2001. Private expenditure has increased in recent years and is estimated to account for 23.6% of total spending in 2007.

Estonia has a small yet well-established medical equipment industry, which should become more competitive in the future. Medical device legislation has been amended to harmonise manufacturing and marketing operations with those in the EU, following EU membership in May 2004. Western Europe has become increasingly important to Estonia in recent years, especially in terms of medical device exports. Around 63% of the medical device market is supplied by imports. Germany, Finland and Sweden were the leading suppliers in 2006, accounting for over 50% of imports. The value of imports increased by 50.8% in 2006. These countries have replaced the former Soviet states as principal export markets. This trend was initiated by the collapse of the rouble, but will continue with the strengthening of political and economic ties with other European countries.