The Latvian Health System

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1 The Latvian Health System Uldis Mitenbergs Wilm Quentin 9th Baltic Policy Dialogue, Riga, Latvia, December 2012

2 Health Systems in Transition Describeshealth system and key reform initiatives Enables easy cross-country comparisons Providesinformation to support policy-makers and analysts in the development of health systems

3 Health Status

4 Health Status IMPACT OF FINANCIAL CRISIS SDR per did not change: 952 (2009) vs 939 (2010) CHALLENGES Reducing mortality and morbidity due to diseases of circulatory system and external causes

5 Organization and governance

6 Organization and governance IMPACT OF FINANCIAL CRISIS The development of a more centralized system One institution for purchasing health care Delivery system with a focus on primary care CHALLENGES NHS taking advantage of its single payer status More market in delivery of services

7 Financing

8 Financing

9 Financing IMPACT OF FINANCIAL CRISIS Reducing financing to hospitals, increasing user charges, reducing health worker salaries and administrative spending Changes in provider payment mechanisms Social Safety Net Strategy CHALLENGES Increasing public expenditure on health and reducing the dependence on OOP payments Reforming provider payment mechanisms to improve efficiency

10 Physical and human resources

11 Physical and human resources IMPACT OF FINANCIAL CRISIS Reduction of the number of hospitals, hospital beds and NHS contracted hospitals CHALLENGES Management and planning of capital investment (e.g. buildings, equipment) Reductions in excess infrastructure Human resources management (age, distribution, remuneration, retention)

12 Provision of services

13 Provision of services IMPACT OF FINANCIAL CRISIS Substitution of less costly outpatient care for inpatient care CHALLENGES Provider choice and availability, waiting lists, pharmaceuticals

14 Principal health reforms Early reforms in the 1990s and early 2000s: initiation of a decentralization and the subsequent reversal Master Plan ( ): slow and incomplete implementation, officially discontinued at the height of the economic crisis in : a shock-type reform: shifting away from hospital care, concentrating state functions,establishing NHS, rationalizing paid pharmaceutical care, Social Safety Net Strategy Public Health Strategy for : to increase by two years the healthy life years of individuals and to decrease by 20% the potential years of life lost

15 Principal health reforms Government s agenda: Public expenditures on health to 4.5% of GDP by 2014 Long-term and coherent financial planning, better use of the health care infrastructure Human resource development activities, including a new salary policy e-health system DRG system for hospital payment, quality bonus system for hospitals and GPs Cooperation between SEMS, GPs and the home care system New regulations and activities regarding state financing for pharmaceutical products

16 Principal health reforms At the end of the day, Latvia is the only country in the EU that has made structural reforms in response to the economic crisis. The rest have either done nothing or have cut across the board

17 Assessment: Financial protection The share of OOPs in Latvia is high and has increased since 2008

18 Assessment: Financial protection A large proportion of the population foregoes care because of costs

19 Assessment: Equity of access Unmet need for examination or treatment is higher amongst the poor

20 Assessment: Equity ofoutcomes Health status improvements for the poor: result of safety net?

21 Assessment: Efficiency Successful shift of expenditures towards ambulatory care

22 Conclusions: Findings (Healthy) Life expectancy in Latvia remains low- because of cardiovascular diseases. Financial protection remains limited because of high OOP payments The SocialSafetyNet Strategywas an important step to protect the poor Efficiency ofthesystemislikelytohave considerably improved by shifting service provision to ambulatory care

23 Conclusions: Moving ahead Improving population health: Public Health Strategy and healthy living Increasing government spending on health: reducing OOPs and improving access Spending wisely: increasing coverage of prescription drugs and extending social safety net Further improving efficiency: psychiatric vs. longterm care, hospital payment and more competition.

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