Latvia

Health systems in transition
Latvia
3.5 Pooling of funds
The NRS is responsible for pooling tax revenue. It distributes the revenue directly
to the National Treasury and then to the corresponding agency, including the
Ministry of Health. The amount of funds distributed to each Ministry or sector
depends on the relevant approved budgets. The Ministry of Health allocates and
transfers central budget funds to the SCHIA, which acts as purchaser of services
on behalf of the entire Latvian population. The SCHIA in fact distributes the
majority of health care funds allocated from the central government health care
budget, absorbing approximately 96% of these in 2004.
The remaining share of the health budget remains with the Ministry of Health
(approximately 4% in 2005) and is allocated for the purposes listed here.
• Education: financing of educational facilities of clinics where medical
education is carried out.
• Monitoring, control and expertise: this includes pharmaceutical surveillance,
forensic medicine, health service quality control, environmental health;
sanitation monitoring, food safety control, etc.
• Culture programme: this is a relatively small budget assignment for library
and museum facilities.
• Health sector management: financing of the structures of the Ministry of
Health.
At the time of writing, there are two frameworks of payment arrangements
by the SCHIA: the contractual framework, which applies to the majority of the
financial flows; and the budgetary framework, involving direct transfers from
the SCHIA to the state agencies for national health programmes (for example,
HIV/AIDS, drug abuse, TB, mental health). Specifically, approximately 85%
of the SCHIA resources are allocated for use in contracts with providers, with
the remaining 15% are allocated through national health programmes to the
state agencies.
The SCHIA, in its primary capacity as purchaser, is responsible for financial
management of services provision through contracting and reimbursement
of prescription pharmaceutical. In compliance with government regulations,
it acts as the sole general purchaser of the whole range of services covered
by government budget resources, including primary, secondary, tertiary and
emergency care, as well as reimbursement of pharmaceuticals.
The structure of the SCHIA consists of a Central Office and five territorial
branches. The Central Office manages the budget allocation for inpatient
(secondary and tertiary) and ambulance emergency services. Territorial branches
receive allocations for outpatient services (GPs services, secondary-level
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