Latvia: Health system review

Abstract

This analysis of the Latvian health system reviews recent developments in organization and governance, health financing, health care provision, health reforms and health-system performance. Latvia has been constantly reforming its health system for over two decades. After independence in 1991, Latvia initially moved to create a social health insurance type system. However, problems with decentralized planning and fragmented and inefficient financing led to this being gradually reversed, and ultimately the establishment in 2011 of a National Health Service type system. These constant changes have taken place against a backdrop of relatively poor health and limited funding, with a heavy burden for individuals; Latvia has one of the highest rates of out-of-pocket expenditure on health in the European Union (EU). The lack of financial resources resulting from the financial crisis has posed an enormous challenge to the government, which struggled to ensure the availability of necessary health care services for the population and to prevent deterioration of health status. Yet this also provided momentum for reforms: previous efforts to centralise the system and to shift from hospital to outpatient care were drastically accelerated, while at the same time a social safety net strategy was implemented (with financial support from the World Bank) to protect the poor from the negative consequences of user charges. However, as in any health system, a number of challenges remain. They include: reducing smoking and cardiovascular deaths; increasing coverage of prescription pharmaceuticals; reducing the excessive reliance on out-of-pocket payments for financing the health system; reducing inequities in access and health status; improving efficiency of hospitals through implementation of DRG-based financing; and monitoring and improving quality. In the face of these challenges at a time of financial crisis, one further challenge emerges: ensuring adequate funding for the health system through increased public expenditure on health.