Latvia

Health systems in transition
Latvia
3.2 Health expenditure
Published data concerning total health care expenditure in Latvia vary according
to different sources, for a variety of reasons. National accounting and financial
statistics do not yet use the Organisation for Economic Co-operation and
Development (OECD) National Health Accounts approach, and therefore
the definitions, data collection and interpretation may not fully comply
with the international OECD reporting framework. The SCHIA compiles
its financial reports based on data provided by service providers’ activity
records. Traditionally, these data report on provider revenue according to the
source: the state budget, user charges and “other income”, whereby “other”
may include voluntary insurance, direct payments, or investments (private or
by local governments). Expenditure reporting, in turn, includes staff salaries,
and administrative, capital and current expenditure. Thus, national statistical
reporting rather reflects a kind of summarized balance sheet of the providers’
enterprises, rather than expenditure by specific health/medical service
categories.
Moreover, the hyperinflation of 1992, along with the introduction of the
national currency (the Lat) in 1993 and the banking crisis of 1995 have further
negatively affected the accuracy of financial statistics.
Finally, private OOP expenditures are estimated differently from source to
source. The SCHIA reports only expenditure associated with services that are
statutorily financed and provided and that also include patients’ co-payments as
part of the private expenditure. All other approaches to estimating public and
private spending provide different results, which helps to explain the difference
in figures between national sources and the WHO Health for All database later
in this profile.
Table 3.1 indicates how estimates of health expenditures have developed
in Latvia in the period 1995–2004. As a share of GDP, health expenditures
show a slightly increasing trend in recent years, climbing from 6% in 2000 to
6.4% in 2004 (after falling at the end of the 1990s). The public share of total
health expenditure has been steadily falling since the mid-1990s, from the very
high level of 95% in 1995, and appears to be stabilizing after 2001 at 51–52%
of total health expenditure. However, taking into consideration that there are
different approaches to estimation private expenditure, these figures must be
treated with great caution.
The very large increase in the private share of spending is due to the
introduction of user charges in the form of “patient fees” in 1996, which
were supplemented by the introduction of co-payments in later years (see
Section 3.3 Population coverage and basis for entitlement and Section 3.4
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