RIGA, March 31, 2026 — Latvia’s Competition Council of Latvia has concluded a market study into competition conditions in the country’s secondary outpatient and inpatient healthcare services, identifying several risks that could affect service availability despite finding no overall distortion of competition caused by public funding.
The study, launched in 2023 following concerns raised by industry stakeholders, examined whether public support in the healthcare sector could create risks to competitive neutrality between public and private providers.
While the authority did not find evidence of systemic competition distortions, it identified several structural challenges that could negatively affect the accessibility and sustainability of healthcare services.
One key finding was that tariffs for state-funded healthcare services often fail to cover the actual cost of providing those services. The regulator noted that the share of physician remuneration within these tariffs is significantly lower than for equivalent privately paid services, placing financial pressure on healthcare providers.
As a result, many providers use revenues from privately paid services to offset losses incurred when delivering state-funded treatments, effectively meaning patients paying privately may indirectly subsidise publicly funded care.
The authority also observed that, historically, public funding has been more readily available to public sector healthcare providers. However, it welcomed more recent developments allowing private providers delivering state-funded services to access funding on equal terms.
Additional risks were identified in municipal practices, such as providing facilities free of charge through delegation agreements, which in some cases could raise questions about the justification of public support.
The authority also called for improvements to the transparency of provider selection procedures conducted by the National Health Service of Latvia, including earlier publication of quality criteria and clearer evaluation processes to address concerns among market participants about potential preferential treatment.
Among its recommendations, the competition authority urged the Ministry of Health of Latvia and the National Health Service to ensure that tariffs for publicly funded services reflect actual costs and incorporate a component for sector development. It also called for more transparent healthcare planning, improved management of patient waiting lists and equal access to public funding for all service providers.
The authority warned that failing to implement these recommendations could lead to financial instability among healthcare providers, longer waiting times for patients, reduced incentives for providers to offer state-funded services and weaker investment in the sector.
The findings were discussed at a roundtable with healthcare stakeholders on March 20, attended by representatives from government institutions, hospitals, business associations and healthcare employers. The authority said the discussion provided valuable feedback on the sector’s competitive challenges and future development.
