TALLINN — The Estonian Health Insurance Fund decided Monday to cut its budget for next year to meet funding shortages — meaning that government-paid doctors will have to absorb the losses. Doctors say patients will suffer as a result.

The cut to the budget was equal to 6 percent of the total funding, coming down to 11.5 billion krooni (€735 million) from 12 billion, not including supplements, but the Estonian Medical Association told Baltic Reports that doctors will likely be slugged with a 12 percent wage drop.

“The salaries of doctors are altogether 50 percent of the costs of a hospitals. Hospitals say the only place they can cut something is salaries. So if you cut the budget 6 percent and the only place you can cut is wages, then it becomes 12 percent — this is pure mathematics,” Katren Rehemaa, spokeswoman for the medical association said.

The fund has dismissed the claim saying cuts in wages would likely be between 6 and 8 percent across the board, citing Finance Ministry statistics that the average doctor in Estonia earns around 25,000 krooni per month.

Rehemaa said the association petitioned parliament and the president for larger funding, but is yet to receive a reply. She said that politicians are disregarding the association’s proposal and thus ignoring patient treatment.

“Politicians say this won’t mean anything for patients, but it’s not true. This will hurt patients — it will mean patients have to wait longer and if they want to get this treatment for this price it will influence quality. They might have to cut from diagnostics and from medicine as well,” Rehemaa said.

The medical association warns of a flight of doctors to other neighboring countries in the European Union.

“We are afraid that many people will leave abroad and this will hurt patients too. Since we joined EU in 2004, about 1,000 doctors and nurses left already and this declined in 2007, but now this will grow certainly because the residents have to choose where to work and they will probably choose abroad,” Rehemaa said.

The cuts are a compromise say the fund’s spokesperson after they extended maximum waiting times for scheduled and non-emergency treatment from four to six weeks in spring this year.

“The hospital budgets are still larger than 2007’s, we just cut back on last year’s budget. These cuts aren’t so drastic that doctors have to close down or leave the country,” insurance fund spokeswoman Evelin Koppel told Baltic Reports after the decision was made.

“We agreed with them in spring when we extended the waiting line for patients by two weeks, but they (patients) are already suffering and now it is their turn. Its cruel, but we have to make decision,” she said. “We lowered the prices 6 percent because we don’t want waiting lines to lengthened next year. This is optimal.”

Although the original target was 11 billion krooni, the insurance fund was able to draw on 500 million krooni (€32 million) in supplements available by law in its reserves. Doctors had originally asked to use more reserves, a request that was shelved in fear that it could jeopardize qualification for the eurozone, a major concern for the country.

The cuts to budget will be valid from Nov. 15 this year until Dec. 31, 2010.