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Chapter 6 | The impact of the crisis on the health system and health in Latvia
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3.3 Changes to health service planning, purchasing and delivery
A number of efficiency-seeking measures have been implemented in response
to the crisis. Key measures include reduction of administrative expenditures,
restructuring of the hospital sector, reform of emergency medical services,
changes to pharmaceutical reimbursement and changes to the quality of
care system. Moreover, increased emphasis on ambulatory care, through, for
example, the introduction of home care services, was another measure through
which efficiency savings were sought.
Changes to state health administrations and health sector
salaries
Reduction of administrative expenditures was the main driving factor for
institutional reforms in 2009. Between 2009 and 2012, both the number of
employees and salaries were cut at the Ministry of Health and its agencies: overall,
the number of employees at the Ministry and its agencies was reduced by 55%
(Cabinet of Ministers, 2012). Numerous agencies were closed down within one
year, including the State Agency of Health Statistics and Medical Technologies,
the State Centre of Medical Professional Education and even the previously
strengthened Public Health Agency. The financial pressure behind the closure of
these institutions was so high that the process was at times chaotic and lacked a
clear plan about which institutions would take over responsibilities of those that
ceased to exist. For example, almost all public health functions were unassigned
for three years after the Public Health Agency was closed down.
Health system restructuring
In November 2011, the NHS was created 7 by merging two institutions (both
established in 2009): the Health Payment Centre (responsible for purchasing)
and the Centre of Health Economics (responsible for economic analysis and
HTA), which had an overlap in responsibilities for the evaluation of medicines
and formulating tariffs for services. The NHS is now the most important
national institution for the implementation of health policies, administering
public resources, determining the content of the benefits package (including
the positive list of pharmaceuticals), contracting with providers, implementing
the e-health system and registering clinical guidelines and medical technologies.
However, by merging the two institutions, the HTA function may have been
somewhat weakened (even though the NHS has increased the number of staff
working in this area) as the payer (the NHS) is now also responsible for setting
tariffs. This poses a risk that some tariffs are set below real costs, affecting quality
7 During the 20 years since independence, Latvia has experimented heavily with different approaches to health care
organization and financing. Health reforms in the early 1990s aimed to create a social health insurance type of system.
However, apparent problems with decentralized planning and financing subsequently led to a reversal of this process. For
more information, see Mitenbergs et al. (2012).