First published in ITIJ 128, September 2011
Despite the pressures of a severe recession, the Baltic States are still improving their hospital provision. Roger St Pierre looks at the healthcare and assistance markets in the region
Serving as a strategic buffer between Russia to the east and Germany to the west, the so-called Baltic States of Lithuania, Latvia and Estonia have had a turbulent history. Though they enjoyed their own very brief periods of regional dominance down the centuries, these small but proud nations have for much of their history been merely geographical rather than political entities.
Vassal states of Imperial Russia, and in earlier times Sweden, they enjoyed brief freedom between the wars, suffered brutal Nazi occupation during World War Two and were then absorbed into the Eastern bloc as satellite Soviet republics during the late 1940s when, in the words of Winston Churchill: “An Iron Curtain has fallen across Europe.”
There were some bright spots during the dark days of the Communist era, with high literacy rates, good education, guaranteed employment and accommodation and a free-to-all-citizens health service resulting from the Socialist philosophy – though the health service was over-centralised, had too many beds and not enough staff or equipment, nor respect for patients’ rights and choice.
Longed-for independence from the fast crumbling USSR finally came with the heady days of 1990 and the famed Singing Revolution – sealed by the magical linking of hands to form a symbolic human chain that snaked across all three countries. Within a few weeks, the first Irish pub had opened in Tallinn, Estonia’s mediaeval capital city. Soon after, Riga – the beautiful capital of Latvia – became one of the stag and hen party Mecca’s of Europe, whilst, with its rich architectural heritage, the Lithuanian capital of Vilnius began to draw camera-clicking hordes of western tourists. With NATO and EU accession in 2004, the Baltic States were back as fully functioning members of the European family of nations.
Time to play catch-up
It hasn’t all been good news and smooth progress, however. As cronyism and corruption replaced the hard discipline of the Communist epoch, so the once effective universal healthcare system began to fall apart. In the heady days of privatisations and headlong merging into the free market system, welfare considerations were shifted to the back burner.
Today, stringent measures to halt the rot are being thwarted by the pressures of global economic turmoil and a long, deep, recession. As Algirdas Saullinas, international network manager at Atlas Assistance in the Lithuanian capital of Vilnius, puts it: “We are lagging behind the rest of Europe in healthcare provision and we badly need to catch up.”
Longed-for independence from the fast crumbling USSR finally came with the heady days of 1990 … Within a few weeks, the first Irish pub had opened in Tallinn
Viktor Strunskis, CEO at the German-based online insurance brokerage and risk management consultancy B2B Insurance Brokerage and Risk Management Consult OHG, which maintains an office in Riga, agrees: “The Baltic Countries’ state healthcare service is gradually being harmonised according to EU guidelines but will likely still be in transition for many years to come.”
Latvia is in particular need of attention, scoring just 449 points out of 1,000 and ranking 31st and last out of the countries rated in the latest Euro Health Consumer Index (The Netherlands rates first with 839 points). Latvia is lagging badly in e-health provision; it also has notoriously long waiting times for treatment and medicines are sometimes in short supply. Once strong, GDP growth has been throttled by 2008’s global financial crisis and what has been one of the worse recessions within the EU. Though Riga can offer 10 state hospitals, they are under-resourced.
There are major reforms going on right now within the healthcare market, however. From May this year, all citizens of the European Economic Area – that is, the EU member states plus Iceland, Liechtenstein and Norway – have enjoyed the freedom to travel and work in any European country without the need for either a work permit or a visa. While Switzerland is not in the EEA, its people enjoy the same right. Subsequently, a European Health Insurance Card (EHIC) is rapidly becoming recognised by the travelling public as being just as important as a passport or identity card. Comments Viktor Strunskis: “Consequently, there will be increasing demand for cross-border services, not just between the Baltic states but across Europe, for companies and individuals alike. At present, there is very little competition within the three countries when it comes to assistance provision but this will be a fast changing situation.”
Plan of action
The quality of healthcare is slowly improving and there are many highly trained medical professionals, many of whom speak good English; but unfortunately medical facilities are still suffering from under-funding and equipment shortages. Even in the major cities across the region, few private clinics offer services that match EU or US standards and, in the better ones, costs are beyond the means of most locals.
Ambulance provision is also patchy. Dial 112 from a cellphone anywhere in Latvia and help will be on its way but, across the three countries, response times can be very slow in more rural areas. Evacuation by air ambulance is expensive and either payment in advance or an insurer’s guarantee letter will be required before the service is provided. In Lithuania, Global Air Rescue operates from Kaunas International Airport and Palanga International Airport.
Estonia makes a good case study for what is going on across the three countries. Here, primary care reform began in 1991 and was successfully completed two years later, with the training of GPs and the introduction of a family doctor system at its core. “The family practitioner is now the pivot of it all and will provide referrals for specialist consultation,” comments the bursar at the University of Tartu, home of one of the nation’s biggest teaching hospitals and currently rated among the world’s top 600 university faculties.
“ … At present, there is very little competition within the three countries when it comes to assistance provision but this will be a fast changing situation.”
Healthcare is mainly publicly funded, with 66 per cent of the cost met by the public health insurance system (the Estonian Health Insurance Fund) and 21 per cent accounted for by patient contributions, the balance coming from a variety of national and municipal budgets. While state healthcare spending has continued to grow it has not kept pace with other government budgets and, over the past decade, patient contribution levels have more than doubled.
At the time of independence, Estonia had 120 hospitals, with 18,000 beds, in a country with a population of 1.5 million. As small, inefficient and outdated Soviet-era facilities were closed, the hospital roll dropped to 68 – and most of those were at least 25 years old and no longer truly fit for purpose. With no substantial level of funding available from the public purse, hospitals were forced to seek bank loans to finance renovation and new-builds.
In response, in 2001, the government instituted a new system for capital investment. The Estonian Hospital Development Plan 2015, which was updated in 2003, set a 25-year programme to dramatically reorganise the country’s hospital network, concentrating high-tech and specialist care into more efficient major centres while ensuring that all citizens would be within a 60-minute drive of their nearest appropriate facility.
At the same time, the Healthcare Services Organisation Act required that by 2003 all of Estonia’s public hospitals had to be incorporated as trust foundations or joint-stock companies, enabling them to remain in the public sector while being run as private companies. This gave the hospital management executives full control over assets, residual claimant status and access to the financial markets. Concurrently, great attention has been paid to ensuring patients’ rights in line with expectations of the mandatory health insurance scheme.
According to a spokesperson at the Estonian Medical Association: “Given the country’s large outflow of emigrants, mainly to other EU countries, the ratio of doctors to patients has been maintained – despite a fall in overall doctor numbers, with a drop of two per cent, or 500 doctors.”
Keeping health matters on track
A recent initiative to exploit hi-tech innovations to improve healthcare right across the Baltic region is Baltic eHealth, a scheme instituted by the Baltic Health Network to facilitate the use of telemedicine across national borders in the Baltic Sea Region. Currently, this involves East Central Tallinn Hospital, in Estonia, and Vilnius University Hospital, in Lithuania, as well as hospitals and other healthcare institutions in Denmark, Norway and Sweden – some 200 of them in all.
In addition to the closed network, an open-access service portal has been introduced on the Internet, providing a sort of online trade directory through which the demand and supply of telemedicine and e-health services can be fostered. Said Janne Rasnussen, from MedCom International, which is heading the project: “We are currently developing guidelines on how to overcome the various legal, economical, cultural and linguistic barriers we face. We can’t take in any more formal partners in the project at present but are keen to disseminate our results so they can be utilised by as many healthcare providers as possible.”
A joint conference of the Baltic eHealth and eHealth for Regions organisations took place in Stockholm back in May, with support from the European Commission. It was spotlighted that Latvia in particular needs to focus more attention on the use of the Internet in healthcare. Latvia also needs to invest more in prevention. For instance, the country currently suffers the highest road accident rates in all Europe, with some 4,674 traffic collisions reported last year. In total, 3,925 people were injured whilst 525 died.
Private healthcare is still a very small sector across all three of the Baltic States, and is only generally available in wealthier areas of the major cities, with much of their business coming from resident expatriates. Foreign nationals working in or visiting the Baltics are strongly advised to take out private insurance to assure western standards of treatment. Based in Antwerp, Belgium, Nordic ExpatPlus specialises in the Baltic market: “Despite the recession, it’s still a market of strong growth,” says a spokesperson.
Even in the major cities across the region, few private clinics offer services that match EU or US standards
A department of the Latvian Ministry of Health, the state-run SCHIA (State Compulsory Health Insurance Agency) serves as a collaborative pool for both public and private health funds: “Providers contracting with us are mainly private when it comes to primary care, public in the case of secondary care, with ownership concentrated at local authority level, and exclusively public for tertiary care, with ownership concentrated at the state level,” explained a SCHIA spokeswoman.
Baltic patients are now able to choose their hospital provider, and patient choice is reaching other areas too, with increasing representation of the general public on the boards of decision-making bodies. Universal health coverage has been maintained, life expectancy rates are rising and the healthcare systems have been coping, despite considerable social and economic turmoil. High fixed costs and relatively low funding impose some strains but increased efficiencies are helping keep things on track.