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23 January 2025 | Country Update
An increased CHIF budget for 2025 -
06 January 2020 | Country Update
Parliament confirms increase in NHIF budget by 12% in 2020 -
10 December 2018 | Country Update
Health budget grows by 17% in 2019 -
19 December 2017 | Country Update
Public expenditure on health is set to increase further in 2018 -
12 January 2016 | Country Update
The Compulsory Health Insurance Fund budget of 2016 has been approved -
29 January 2015 | Country Update
Increase in health financing in 2015
3.1. Health expenditure
In 2010, total health expenditure accounted for 7% of GDP, which is similar to the average for the new EU Member States (7.1%), and less than the average for the 15 EU Member States before May 2004 (EU15) (10.6%) (Fig3.1). Total health expenditure increased between 1995 and 2000, decreased to 5.7% in 2004, and increased again subsequently to 7.5% of GDP in 2009 (Fig3.2). In 2010–2012, the proportion of total expenditure spent on health fell, to 6.6% in 2012. Total health expenditure per capita (measured in purchasing power parity US dollars) in Lithuania has remained stable in 2008–2010, amounting to about $1300 (Fig3.3). Since 1995, total health expenditure per capita in Lithuania has more than tripled (Table3.1) (WHO Regional Office for Europe, 2013).
| Fig 3.1 | Fig 3.2 | Fig 3.3 | Table 3.1 |
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Health-care financing in Lithuania has faced several major challenges since the early 1990s. In the 1990s, health expenditure was driven up largely by the rising energy costs and prices for pharmaceuticals; it then stabilized in the early 2000s. Recently, the 2008 economic crisis and the need to reduce the public deficit have affected public spending. The overall government budget declined through losses in tax revenue and the budget deficit tripled between 2008 and 2009 to 9% of GDP. This, in turn, led to pressure to reduce government spending across all sectors, including health care. The cuts mostly focused on reduction in costs in health service provision and pharmaceutical expenditure. Reduced NHIF revenues from falling employment were partially compensated by increased state contribution for the economically inactive population (van Ginneken et al., 2012).
Public sector health expenditure as a share of GDP fluctuated between 4% and 5% between 1995 and 2005. Since then it has increased, reaching 5.2% of GDP in 2010. It still accounts for 73.5% of the total health expenditure, which is similar to the 12 countries that joined the EU in 2004 and 2007 (EU12) (72.5%) and lower than the EU15 (77.3%) (Fig3.4).
Fig3.4
In 2010, 81% of public expenditure on health was attributed to medical services, of which over 50% was spent on inpatient care, 20% on outpatient services and 9% on home care. Health administration accounted for 2.8% of public expenditure on health, while public health and prevention accounted for only 1.1% (Table3.2).
Table3.2
In November 2024 the parliament approved an increased Compulsory Health Insurance Fund (CHIF) budget for 2025. The revenue and expenditures are set to rise by EUR 479 million (14%) compared to 2024, reaching EUR 3.94 billion. Key priorities include expanding reimbursable health services, improving access to medicines, increasing funding for healthcare providers to in line with inflation, and increasing remuneration for health professionals. Much of the rise is attributed to increase in health insurance contributions from both working population and the state budget (for non-contributing population groups), as these contributions are tied to average income.
The 2025 planned allocations include EUR 2.8 billion for curative services (with ongoing focus on primary care team expansion and shift to outpatient care); and EUR 711 million for medicines and medical devices, with additions to benefits package such as closed-loop insulin pumps and sports prostheses for children. Funding for public health programmes and preventive initiatives is set to see EUR 251 million, a 23% increase, to enhance early detection of treatable cancers and cardiovascular conditions.
Administrative costs account for 1% of the budget, totaling EUR 41 million. A reserve of EUR 625 million is set aside, ensuring the fund’s stability amid economic uncertainties.
Authors
In 2020, the revenues of the compulsory health insurance fund are estimated to increase by 11.9% from the previous year, amounting to €2.3 billion. Expenditures are planned to amount to about €2.1 billion, with the remaining amount going to the reserve fund. About two-thirds (€1.6 billion) of the revenues are envisaged to come from the compulsory health insurance contributions of the economically active population, followed by €650 million from health insurance transfers for population groups covered by the state, while other state transfers and other revenues amount to about €73 million.
Areas that are expected to see largest growth in spending in 2020 include priority prevention programmes (12%), curative health services and rehabilitation (about 9% each), and pharmaceuticals and medical products (about 3%).
There has also been a change in the Law on Health Insurance: from 2020, areas of health spending that experience deficit can be covered from surpluses in other areas. This measure allows more flexibility in assigning financing and improves efficiency in the use and management of health expenditure.
References
Ministry of Health (2019): http://sam.lrv.lt/lt/naujienos/seimui-pateiktas-patobulintas-2020-metu-psdf-biudzetas
NHIF (2019) http://www.vlk.lt
In 2019 the CHIF budget increased by 17% from previous year,
amounting to €2.6 billion (compared with €2.3 billion in 2018). Just
over half of the budget (€1.4 billion) is estimated to come from the
compulsory health insurance contributions of the economically active
population, followed by €560 million from health insurance transfers for
population groups covered by the state, and further €36 million of
state funding. The CHIF reserve is estimated to be about €230 million.
Regarding planned spending, €1.4 billion is expected to cover the costs
of curative health care services (with increase of almost €200 million
from previous year). Further €350 million is planned for pharmaceuticals
and medical devices (increase by €38 million). About €200 million is
estimated to go towards financing of priority health programs and other
health insurance costs (increase of €21 million).
References
Ministry of Health (2018)
http://sam.lrv.lt/lt/naujienos/seimui-pateiktas-patobulintas-2019-metu-psdf-biudzetas
Parliament of the Republic of Lithuania (2018)
https://e-seimas.lrs.lt/portal/legalAct/lt/TAP/e60a3e90f88511e895b0d54d3db20123?jfwid=10a2n9jfk4
In 2018 the Compulsory Health Insurance Fund (CHIF) will amount to €1.8 billion – an increase of 11% and €173 million in comparison to 2017. This growth is largely due to increasing average income, as two thirds of the CHIF budget come from SHI payments by those employed, while the rest is the Government’s input, largely to cover economically inactive population.
The increase is partly aimed to form a larger reserve fund, while actual spending is also set to increase by 7% or €117 million. One of the key objectives for 2018 is to substantially increase wages of health professionals. The MoH is also planning to form a working group to revise reimbursement costs as well as expand basket of services.
The biggest line of CHIF expenditure (€1.2 billion in 2018) is for healthcare services, with medicines and medical devices being next (€311 million). Programmes prioritizing disease prevention and early diagnosis together with other health insurance administration costs amount to about €100 million. Overall, all major spending areas will see an increase of 6–10%.
The Parliament of Lithuania has recently approved the 2016 budget for the Compulsory Health Insurance Fund (CHIF), which is the largest source of health care financing. This year’s budget consists of €1.44 billion, with revenues comprised of compulsory health insurance contributions (€995 million), contributions and allocations from the state budget (€423 million) and other revenues (about €20 million). It is expected that in 2016 CHIF budget expenditure for health care services will be about €1 billion, for medicines and medical devices – €281 million, for medical rehabilitation and spa treatment – over €44 million, for health programs and other costs – €75 million euros, for administrative health insurance functions – €21 million. There has been a growth of 4.1% (or €56 million) in funding compared to previous year. Increased budget will help to provide more treatment services for patients and increase provider payments for health care services by 4%. Also more people will be able to participate in various health programs, including prevention, which now receive increasing attention and 8% increase in funding.
Authors
References
Lithuanian Health Insurance Fund (2015) http://www.vlk.lt
In 2015, the financing for the compulsory health insurance fund (CHIF) increased by 7.8%, to 1.38bn euro, plus 88mln euro budget reserve. The largest share of funding, over 900mln euro is estimated to come from compulsory health insurance payments, while further 416mln euro will be covered from the state budget funds (including insurance payments for population groups covered by the state). Increase in financing allows an increase in baseline prices paid to health service providers. The CHIF Board has recommended service providers to use the increased financing to raise nurses’ wages to attract larger workforce.