AmCham Latvia: link healthcare funding to GDP growth

Take note – story published 2 years and 9 months ago

The American Chamber of Commerce in Latvia (AmCham) has released a 'position statement' calling for increased public funding for healthcare by linking the healthcare budget to GDP growth.

"AmCham calls stakeholders to create a sustainable healthcare funding model and increase public funding for healthcare by increasing the state base budget for healthcare and considering the possibility to link the healthcare budget to the GDP growth and providing funding for the control of oncological diseases in accordance with the Plan for the Improvement of Healthcare Services in the Field of Oncology for 2022–2024," the influential business organization said.

According to AmCham President and Chairperson of the Board Zinta Jansons: “Availability of talent and human capital is one of the key factors in attracting investment and economic growth. It is necessary to provide human resources that are healthy and able to work with modern skills. Latvia's demographic situation in recent decades has been critical and has become not only a factor holding back the economy, but also a direct threat to the country's sustainability. Although there have been some improvements in recent years, in the face of rapid population decline, more and better targeted public investment in healthcare is needed to increase life expectancy and life quality and reduce disability and chronic illness.”

AmCham Latvia infographic
AmCham Latvia infographic

AmCham pointed out that the healthcare budget in 2022 is planned to form 4.51% of the GDP, significantly lagging behind the European Union’s and OECD average of 7.0% and will not be sufficient to cover all the needs accumulated over the years.

In comparison with our neighboring countries, public investment in health in the same period was more than 48% in Lithuania (6.2% of GDP) and by 26% more in Estonia (5.3% of GDP). According to the calculations of Olegs Krasnopjorovs, Economist of the Bank of Latvia, by prioritizing investments in healthcare since 2000, the country would have 60,000 more inhabitants, 4,000 lives would be saved every year, and there would be 40,000 more people of working age, which would promote faster economic growth, providing 0.2% GDP growth every year, as a result of which the GDP in Latvia would be by 4% higher than it is now.

AmCham indicates that oncological disease is the second most common cause of death in Latvia, and mortality from oncological diseases in the economically active age group has not significantly improved in the last decade. During this period, 175,952 life years have been lost, causing Latvia a GDP loss of EUR 2.174 billion as unearned GDP at current prices in the respective year from 2010-2020, it said.

Moreover, it claimed GDP losses over 10 years are estimated at EUR 4.8 billion, "thus causing a negative impact on the economy and outlining risks to Latvia's sustainable development".

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