Lithuania Health Profile 2012

The Republic of Lithuania inherited a model of health care provision typical for the former USSR. This was  over-centralized, had little room for patient choice or respect for patients’ rights. There were too many beds, shortages of drugs and little attention to primary and social care. In the health sector, wages and morale were often low. On the other hand, medical facilities were quite evenly distributed throughout the country, public transport was relatively well developed and financial barriers to health services (even including under-the-table payments) were low. Basic vaccinations covered the whole population and communicable diseases were adequately controlled. In term of health status, the country compared favourably with the rest of the USSR. Reforms in Lithuania were motivated by a desire to deal with a number of specific problems as well as to address issues of equity, health gain, consumer choice and quality of care. In general, reforms have been embarked on with caution as it was decided from the outset that radical health reform should follow structural reforms in the industrial and financial sectors. This gradual approach, particularly during the early 1990s helped maintain political and social stability in the country during a time of severe economic crisis. Although it is acknowledged that there were significant unofficial out-ofpocket payments under the previous system, the financial burden was relatively equitably distributed, being tax-financed. Much of this equity in financing has been preserved, even as financing since 1997 has progressively switched to astatutory health insurance system based on contributions. This has been due to the compromize agreement to finance the statutory health insurance system through a combination of insurance contributions and tax revenues, with a larger share of the latter. While there are co-payments on pharmaceuticals, there is evidence that unofficial payments are declining due to the new financing mechanisms and new models of provision.

Moreover, opening parallel health care systems to all citizens has eliminated an additional source of inequity, and access to health care services has increased. However difficulties still remain in connection with inequities in regional allocations of resources. In addition, there are indications that private expenditures on health care are on the rise. The effects of the reforms on efficiency appear to be mixed. Lithuania historically has had a large number of hospital beds per capita and one of the highest numbers of doctors per capita in Europe. Both of these show declining trends, although the decline in student numbers has only been slight. Average length of stay in hospitals has been substantially reduced as a result of the introduction of new payment methods, and occupancy rates have increased, however admissions per population are on the rise. The new referral system does not appear to have helped much in this respect (partly because it is not always observed), and the capitation system used for primary health care remuneration seems to have created incentives for supplier-induced demand for hospital services. However the new system of remuneration to be implemented in 2000 proposes to deal with this problem. In addition, efforts are being made to direct services provisions toward primary health care. Improved health status is one of the most positive developments of recent years. In the early years of independence there had been a deterioration, marked by reduced life expectancy. Since 1995, alongside an economic recovery as well as certain improvements in public administration, the health status of the population has once again begun to improve. In 1998 life expectancy at birth exceeded the highest figures ever achieved in the pre-reform period. In the area of patient choice, a number of improvements have occurred. All citizens are free to choose their primary health care institution and primary health care physician within that institution, and are also free to change physician once a year. The national period of registration began in 1997, and 90% of the population was registered with a primary health care provider within one year of implementation. In addition, patients are free to choose their hospital provider, thereby encouraging competition between hospitals. There has also been some democratization of decision-making processes with greater participation of the general public through increased representation in decision-making bodies. However there is still substantial room for progress. Despite increasing cooperation between administrators, providers and consumers, consumers remain in a relatively weak position.

The Lithuanian health care system has managed to remain stable at a time of considerable social and economic upheaval. Universal coverage has been maintained, and there have been successes with respect to infant mortality, drug supplies, and increasing public involvement in the health care system. Nevertheless high fixed costs, due to large numbers of physicians and hospital beds, are competing with relatively low levels of funding. This situation is aggravated by the relatively high proportion of expenditure on pharmaceuticals. On the other hand the economic revival of recent years has permitted health care expenditures to increase, and reform momentum has picked up with the implementation of the new statutory health insurance system and efforts to develop the institutional and legal capacity necessary to make the health care system envisaged fully functional.