Prior to the economic crisis of 2007-2008, Latvia implemented institutional centralization and shifted away from hospitals towards outpatient care, dramatically reducing the number of hospitals. In 2013 a system of qualitative and quantitative indicators for inpatient care was introduced that is used for purchasing today. Since 2013 there has been a focus on financial sustainability. In 2017, parliament passed the Law on Health Care Financing to introduce the Compulsory Health Insurance System to increase revenues for health. The new reform would enable full entitlement to the health benefits packages based on contributions to national health insurance.
However, the reform was first postponed to 2021 and then abandoned. The one percentage point payroll contribution, equally split between the employee and the employer, introduced by the government in 2018, was abolished in 2021. The proportion of general social security revenues earmarked for health care remained the same at 2.78%.
Latvia’s social health protection system today
The Latvian National Health System (NHS) is the main purchaser of publicly funded health services and ensures the availability of health care services. The NHS works under the supervision of the Ministry of Health. Providers contracting with the NHS may be public or private; primary care providers are mostly private, while tertiary care is mostly public, with ownership concentrated at the national or municipality level.
Health spending has been steadily increasing since 2000. In 2019, current health expenditure (CHE) as a share of GDP was 6.6%, and spending per capita was Int$ 2,098. Although Latvia is among the lowest spenders on health across countries in the European Union (EU), the spending amount per capita is more than double the average for countries of the Commonwealth of Independent States. The public share of CHE was 61% in 2019, and public expenditure on health as a share of general government expenditure was also low at 10%. Both were below respective numbers in neighboring Lithuania and Estonia and many other EU countries. Out-of-pocket spending amounted to 37.1% in 2019, more than double the EU’s average of 15%.
Despite near universal population coverage, the benefits package is limited in scope and excludes, among other services, dental care for adults and most rehabilitative and physiotherapy services. The restricted package limited access to care and waiting lists, and high OOP payments indicate that underfunding is a major challenge. Nevertheless, the government boosted health financing by increasing spending since 2018 and was able to increase health worker salaries and the volume of services. In addition, it introduced an e-health system for convenient access to health information by citizens and providers.