How collaboration is transforming healthcare in the Baltics

In the last decade, Latvia and Lithuania have made significant progress in healthcare to achieve greater efficiency and quality of service. However, compared with other EU countries, they still have a long way to go. 

Latvian healthcare system has three important components: tax-financed statutory healthcare run by the National Health Service (NHS), a split between purchaser–provider, and a service delivery mechanism involving public as well as private hospitals. In Lithuania, the healthcare system is mainly funded by the National Health Insurance Fund (NHIF), catering to the needs of the entire population. The NHIF, through its regional branches, purchases healthcare services. Access to health services for a large part of the population is limited due to high waiting times, uneven distribution of resources and geographic distance. 

It was in these circumstances that the ministries of health in Latvia and Lithuania approached the European Commission for support in making structural reforms in their healthcare systems.  The Commission appointed the Directorate-General for Structural Reform Support (DG REFORM) to design and implement the reforms. DG REFORM assists EU member states in designing and implementing technical and structural reforms to support sustainable growth. The EY organization was contracted by DG REFORM in both the countries to plan and support the reform.

Latvia and Lithuania have scarce healthcare resources, especially nurses. While some specialties have doctors in excess, some others face scarcity of doctors. The health workforce was under tremendous pressure. For instance, the number of physicians per population in Latvia is below the EU average, and the number of nurses per capita is very low. In Lithuania, one of the main challenges was the imbalance in the distribution of doctors across the country — rural areas had fewer general practitioners. Ageing of the healthcare staff and emigration to other EU countries were also putting severe pressure on the system. 

It was vital to develop a model for hospitals to ensure a balanced distribution of sparse resources — especially personnel — and better usage of infrastructure. A hospital cooperation model would ensure this while necessitating efficient use of public services and improvement of healthcare quality. 

The EY approach 

EY professionals from France, Norway and Sweden supported the EY teams in Latvia and Lithuania to help DG REFORM design and implement the structural reforms in healthcare. EY teams and DG REFORM placed patients as the most important cog in the solution. Hence, the decision was to stay away from a top-down approach.

The EY teams did multiple analyses across hospitals in Latvia and Lithuania; and concluded that the healthcare system in both countries require thorough restructuring to improve quality, efficiency and accessibility. 

Why did we advise the restructuring of the existing system?

The biggest of the hospitals in both the countries are owned by the state. Regional hospitals are mostly owned by local bodies such as municipalities. Some of them are co-owned by multiple municipal bodies. Each of these hospitals work as an independent unit, a profit center in itself. What that means is, they are all competing with each other all the time — for resources, funding and even patients. This also means that they are forced to offer a wide array of services to attract patients, further thinning the available resources — including doctors and nurses — across the country. The funding that these hospitals receive from the state is proportional to the services that the state buys from them. This puts additional pressure on them.   

The team found that the specialist doctors divide their time between state hospitals and private health care providers. Essentially, they shuttle between places making them available only for a few hours in each location every week. Thus, competing with each other, public hospitals are overpaying for the services of doctors. Since the number of patients are unevenly distributed across hospitals, medical staff in some of the hospitals would not get the exposure that they require. They fall way short of the critical number of patients required to accumulate experience and knowledge.  

The attempts in the past to address these systemic problems simply did not work out. The top-down approach from the state met with huge resistance. 

Collaboration starts with discussions 

As the first step, we pulled all the hospitals together, facilitated dialogues, and provided them with inputs, good practices and examples. We encouraged them to come up with solutions. We aimed at bringing the perspective of patients as well, keeping in mind their health, the quality of service they receive, ease of access and continuity of treatment.

Recommendation 1: Move to a cooperation model of healthcare

EY teams along with DG Reform would support the hospitals in developing a collaborative model, focusing on quality of services — the plan was to centralize certain key services to some hospitals. Essentially, not all hospitals would offer every service. They would not compete among themselves for resources, especially doctors and nurses.

 This plan was to help the hospitals ensure:

• Efficient distribution of resources such as doctors and nurses
• Better exposure for medical staff to various situations, making them more experienced in their choice of specialization

In the new cooperation model of networked hospitals, central university hospitals could remain referral hospitals. Ultimately, the idea and the challenge were to ensure wise distribution of resources – both personnel as well as infrastructure. EY teams facilitated the collaboration of hospitals by identifying the right processes, prerequisites and ways to implement these changes.

Recommendation 2: Adopt a uniform patient information system

Since these hospitals did not have a common patient information system, tests were getting repeated for patients who move from one hospital to another. The low information exchange between hospitals, thus, led to duplication of tests and investigations, resulting in wastage of valuable resources. Moreover, the additional time taken for tests could delay treatments.

Along with a unified patient info system and eHealth applications, we suggested additional tools that enable hospital-to-hospital collaboration.

Country-specific recommendations: Latvia

The most important recommendation was to vest the ownership of hospitals with the state or a newly created regional collaboration platform of hospitals. Another suggestion was that the state should start from patient pathways — identifying what the patients require — looking at each and every diagnosis of the patient, the services needed, and the doctor and the hospital that could provide that service. First- and second-level hospitals should provide the basic services. Tertiary-level care could be given by university hospitals. In essence, there should be a logical distribution of services among hospitals. However, in services such as waste management, HR, procurement and finance, the hospitals could collaborate to optimize expenditure.  

Implementation of the proposed structural reform in healthcare would eventually lead to efficient delivery of healthcare services in Latvia and Lithuania. The most important transformation that would make this possible is the change in mindset that accelerated changes across the board. After debates, deliberations and scrutiny, every stakeholder accepted that change was needed. All — from the ministries and hospitals to doctors, nurses and administrators — were discussing potential ways of cooperation.

Though EY teams supported DG REFORM in making the recommendations, the ministries and the hospitals in both countries would ultimately drive it. In the process, from each region, new leaders emerged. All of them came up with ideas, plans and ways to implement the reform. EY teams and DG Reform merely planned the transformation. It was the dawn of a new beginning; collaboration was the way forward.

The results:

• Defined, proposed and tested multiple scenarios of hospital cooperation
• Communicated the benefits of hospital cooperation to every stakeholder impacted
  
•  Eliminated or reduced the fear of change
  
• Developed long-term plan for hospital cooperation and healthcare service provision improvement