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Chapter 6 | The impact of the crisis on the health system and health in Latvia
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there is only one pharmaceutical product in a reference group (usually the one
with the lowest price). Prescriptions for new patients now have to be made by
the active ingredient (prescribing based on the INN) and pharmacists have to
dispense the cheapest drug (i.e. the only drug that is in the reference group).
If patients choose a different product, they pay the full price OOP (except
for existing patients for whom previously reimbursable products will remain
reimbursable; however, the co-payments have increased considerably for these
patients as the difference in price between the cheapest product and other
products is growing constantly). The goal of the new system is to achieve cost
savings – it stimulates competition between pharmaceutical companies because
they have to rapidly decrease their prices in order to receive the status of being
a reference medicine. It is estimated that this policy resulted in savings of about
LVL 3.7 million (€5.3 million) in 2012, when the NHS was able to achieve
price reductions for 600 pharmaceuticals. However, pharmaceutical companies
and medical professionals strongly opposed the reform claiming that it imposed
limitations on patient choice and the rational use of drugs (and the reform is
being challenged in the Constitutional Court).
In addition, the NHS has implemented a clawback system, where pharmaceutical
companies (depending on their market share) have to compensate the NHS to
a certain degree if the annual drug budget is exceeded. This clawback system
amounted to LVL 4 million (€5.6 million) in 2011 (Mitenbergs et al., 2012).
Measures to improve quality
Since 2009, accreditation of health care providers for inpatient and outpatient
care, which was long considered a cornerstone of the quality management system,
is no longer mandatory but instead has become voluntary (mainly to cut costs).
Later, in 2010–2011, voluntary and compulsory quality incentive systems were
introduced for GPs because, although GPs were “safe” from cuts during the crisis,
there was growing criticism from the emergency and hospital sectors claiming that
patients who should have been treated in the outpatient sector were in fact treated
in other settings. The compulsory system sets a number of criteria that have to be
achieved by GPs if they want to receive their full reimbursement (no pay for nonperformance).
The voluntary system incentivizes GPs to increase quality in order
to recieve more money (pay for performance). Quality criteria are intended to
improve disease prevention and health promotion and were inspired by the United
Kingdom's Pay-for-Performance scheme in primary care. However, only a small
number of GPs joined the scheme because quality criteria are difficult to achieve
and the financial benefits are relatively small. Therefore, a new mandatory quality
system for GPs replaced the existing dual system (mandatory and voluntary) in
2013. The new system, which has been in place since the beginning of 2013, is
compulsory for all GPs. It comprises 14 quality criteria, including preventive