Tartu University Hospital scales back campus plans over funding shortfall
Friday 2nd October 2026 on 06:45 in
Estonia
Tartu University Hospital has reduced the scope of its next construction project because it cannot afford the originally planned investment, ERR reported. The hospital will proceed with a new building at its Maarjamõisa medical campus in Tartu, but will not demolish the existing F building for now.
The new S building is planned for a current parking lot at the corner of Lunini Street and a spur of the street. Earlier plans also called for demolishing and rebuilding the F building, completed in the 1970s, which houses mainly heart clinic units and part of the pulmonology department.
Hospital business development and administration director Tauno Vanaselja said the new building would accommodate functions that require high-tech infrastructure. Existing buildings will continue to be used for services that do not need extensive technical system upgrades. Keeping the F building in use will also allow the hospital to continue operating during construction and reduce the need for temporary replacement space, he said.
The estimated cost of the construction work is 51.3 million euros excluding VAT, plus the cost of medical technology. The S building is expected to be completed between 2027 and 2031. The hospital plans to fund the investment with its own money and a loan.
Finance director Indrek Essenson said costs had risen faster than revenue, reducing the hospital’s capacity to invest in infrastructure. He said revenue depends largely on how much the Estonian Health Insurance Fund allocates to specialist care and on the prices set for medical services. This year, the fund cut laboratory service prices by 15 percent, significantly affecting the hospital’s revenue.
Staff costs account for about 60 percent of the hospital’s expenses, followed by direct medical costs, including medicines and supplies, at about 25 percent. Essenson said cumulative inflation over the past five years had exceeded 50 percent, while service prices had not risen fast enough to offset it.