Latvia

2. Organizational structure
2.1 Overview of the health system
The Latvian health care system has undergone a remarkable transformation
in the 15 years since independence and, following experimentation
over this period of time with numerous approaches to organization and
financing, is now in the process of consolidating its structures and institutional
arrangements. The key components of the system are shown in Fig. 2.1.
The health care system is a unique combination of general tax-financed
statutory health care provision, within a social insurance institutional structure
embodying a purchaser–provider split, together with a mix of public and private
providers. The main features of this system are listed here.
• Statutory health services are financed mainly by the central government
through tax revenues. Additional financing sources are direct patient
payments as well as voluntary health insurance (VHI).
• Tax revenue allocated by Parliament for health-related purposes flows from
the Ministry of Finance through the Treasury to the State Compulsory Health
Insurance Agency (SCHIA), a state-run organization under the Ministry of
Health, which acts as a “pooler” of health funds.
• The SCHIA contracts with a variety of service providers under the statutory
system. These include:
o organizations under the direct jurisdiction of the Ministry of Health;
o organizations that have acquired the legal status of “capital companies”
in which the Ministry of Health is a shareholder, also under the Ministry
of Health (these include tertiary care facilities);
o organizations under the ownership of local governments, which include
health centres (for primary care provision) and hospitals (providing
outpatient as well as inpatient care);
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