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Chapter 6
The impact of the crisis on the health
system and health in Latvia
Maris Taube, Uldis Mitenbergs and Anna Sagan
Introduction
Latvia's economy and its health system were not well prepared for the financial
crisis. As a result of growth in GDP driven by consumption and real estate
investment, in addition to a growing current account deficit, the economy
developed dangerous imbalances and fiscal space was constrained when capital
inflows from abroad stopped. Population health was relatively poor compared
with the rest of Europe, total spending on health was low (including as a share
of public expenditure), OOP payments were high and there was not enough
emphasis on primary care and prevention. Although the financial crisis brought
enormous social and economic challenges, the presence of external agents and
Latvia's commitment to loan conditionalities provided strong impetus for the
Ministry of Health to push through less popular reforms that had been difficult
to implement previously.
Health system reforms introduced in response to the crisis did not always follow
objective and verifiable criteria and were sometimes influenced by political
opportunities. Nevertheless, many necessary changes were made, including
a shift away from hospital care to ambulatory and home care, concentration
of state functions into fewer institutions with reduced staff numbers and
rationalization of publicly financed pharmaceutical care. Throughout the
reform process, the government tried to protect the most vulnerable groups
of the population. The challenge now is to continue the reform effort in the
context of an improving economy and less political pressure for change. The
key challenges are to ensure a stable flow of funds to the health sector, while
increasing public spending on health and reducing heavy reliance on OOP
payments, and to continue to improve efficiency and equitable access to
health care.