Economic Analysis Latvia

Evaluation of LLMs for RAG analysis of Latvia alternatives for dentists services payments

Gemini

A Strategic Review of Pediatric Dental Care Payment Systems for the Ministry of Latvia: Towards Prevention and Sustainable Oral Health

I. Executive Summary

Latvia currently faces a significant public health challenge marked by a high prevalence of dental caries among children. This issue is compounded by one of the highest global rates of general anesthesia (GA) use for pediatric dental procedures, frequently involving extractions or mutilation of primary teeth. The existing payment system inadvertently incentivizes these surgical approaches, as they are highly profitable for dentists. This focus on restorative procedures, despite a high prevalence of treatment relapse and a lack of robust scientific evidence supporting surgical methods to treat the underlying caries disease itself, creates a cycle of reactive care rather than proactive prevention.

Analysis reveals that the current Fee-for-Service (FFS) payment model in Latvia fosters a volume-driven, restorative-focused approach. In stark contrast, evidence-based non-surgical interventions, such as fluoride applications and dental sealants, have demonstrated high effectiveness and are significantly more cost-effective in managing dental caries. International comparative health systems, particularly those in Sweden and Denmark, offer compelling models of successful prevention-oriented pediatric dental care achieved through capitation or salaried public services, which are associated with demonstrably lower caries rates. Furthermore, Value-Based Payment (VBP) and mixed payment models provide a robust framework to align financial incentives with improved health outcomes and a stronger emphasis on preventive care.

To address these critical issues, it is recommended that Latvia transition towards a mixed payment system. This system should integrate capitation or salary components for preventive and primary care, alongside performance-based incentives for quality and positive health outcomes. Such a reform must be complemented by robust public health education initiatives, enhanced preventive programs, and stringent monitoring mechanisms to ensure equitable access to care and to significantly reduce the reliance on general anesthesia for routine caries management.

II. Introduction: The Challenge of Pediatric Oral Health in Latvia

Latvia is grappling with a severe pediatric oral health crisis, characterized by a high prevalence of dental caries among its child population. This pervasive issue is further exacerbated by an exceptionally high global rate of general anesthesia (GA) utilization for children's dental treatments. These procedures predominantly involve dental extractions or the mutilation of primary teeth, as indicated by the user query. This situation presents a profound challenge to public health, demanding a comprehensive re-evaluation of the current dental care delivery model.

The prevailing payment mechanisms within Latvia's dental care system appear to contribute significantly to the observed patterns of care. Dentists find the use of general anesthesia for pediatric dental treatments highly profitable, particularly when public or government payments cover these procedures.¹ This financial incentive has led to a noticeable trend where dentists increasingly choose to specialize in pediatric dentistry, driven by the prospect of lucrative earnings from public payments for GA-based interventions [User Query]. Consequently, dental practitioners are often preoccupied with "just restoring teeth," focusing on procedures that yield high profits from public services [User Query]. This creates a systemic environment where the financial reward for reactive, surgical interventions outweighs any incentive for proactive, preventive care.

A critical observation arising from this situation is the apparent paradox of high treatment rates coexisting with a persistent high disease burden. If the extensive treatments, particularly those under general anesthesia, were effectively addressing the root cause of dental caries, a sustained reduction in prevalence would be expected over time. However, the continued high prevalence of caries and the frequent need for repeat interventions, as noted in the user query, suggest that the current approach is largely reactive and symptomatic. This pattern indicates a fundamental systemic failure to adequately address the underlying causes of dental caries, perpetuating a cycle of costly, repeated treatments without achieving lasting oral health improvements.

This focus on restorative care is further complicated by the reported high prevalence of relapse following these treatments and a stated lack of scientific evidence supporting surgical approaches as a primary method to treat dental caries itself [User Query]. This raises significant concerns about the long-term efficacy and appropriateness of the dominant treatment paradigm. The current payment structure, which disproportionately rewards these often-repeated surgical interventions, creates a self-reinforcing cycle. The profitability of GA procedures encourages dentists to specialize in and perform more of these treatments, which, due to their symptomatic nature and high relapse rates, generate further demand for subsequent interventions. This financial dynamic effectively discourages any shift towards less profitable but potentially more effective preventive strategies.² The system's design, therefore, inadvertently distorts the market, steering provider behavior away from optimal public health outcomes and towards financially lucrative, yet less effective, interventions. This phenomenon can be seen as a "crowding out" of intrinsic motivation for preventive care, as the monetary incentives for complex, restorative procedures become overwhelmingly dominant.³

Given these challenges, a fundamental reform is imperative. The current approach is economically inefficient, as significant public funds are allocated to treatments that do not address the root cause of the disease, leading to recurrent costs and suboptimal health outcomes.⁴ The evidence clearly indicates that preventive measures are substantially more cost-effective than extensive restorative procedures.⁴ Therefore, a strategic shift from a predominantly restorative model to a prevention-focused dental care system is not merely a clinical preference but an economic necessity for improving children's oral health and ensuring the long-term sustainability of Latvia's dental care services.

III. Current Landscape of Pediatric Dental Care Funding in Latvia

In Latvia, the National Health Service (NVD) plays a crucial role in funding pediatric dental care. Dental care for children up to the age of 18 is fully covered by the state budget.⁶ This comprehensive coverage includes essential services such as dental hygiene, which is paid for once a year for children aged 2 to 18 years, with an increased frequency of twice a year for children at ages 7, 11, and 12.⁷ Additionally, the first orthodontic consultation for children up to 18 years is a state-paid service, and orthodontic treatment for individuals with congenital cleft jaws is covered up to the age of 22.⁷ Specific provisions also exist for acute tooth extractions under general anesthesia, which are state-paid services for patients within Disability Group I due to mental and behavioral disorders.⁸

Despite the policy intent of full state coverage for children's dental services, a significant gap exists between this provision and real-world access and affordability. Latvia records among the highest rates of unmet dental care needs in the European Union, with 10% of the population reporting such needs.⁹ This issue is particularly pronounced due to affordability concerns, especially for lower-income groups, where the rate of self-reported unmet need for dental examination due to financial reasons reached 26.8% for the poorest quintile in 2016, compared to an EU average of 3.6%.¹⁰ This suggests that while services are officially "covered," practical access may be limited by factors beyond direct payment. These barriers could include an insufficient number of healthcare providers with contracts with the NVD, geographical disparities in service availability, or the presence of long waiting lists for state-funded care.⁹

The general exclusion of adult dental care from state funding further exacerbates the situation for children. Adult patients typically bear the full cost of dental treatment.⁶ This financial burden on parents, who may themselves have untreated oral health issues, can indirectly impact their children's access to even "free" state-funded services. Parents facing high out-of-pocket costs for their own care might not prioritize or fully understand how to navigate the system to access the free services available for their children. This broader societal context, where oral health may be undervalued due to significant personal financial outlays, likely contributes to the high unmet needs observed across the population, including children.

The disparity between the stated policy of full coverage for children and the high rates of unmet needs points to a critical disconnect between policy intent and actual access. Simply declaring services as "covered" is insufficient; the system must ensure accessible and equitable delivery. The high overall unmet need for dental care in Latvia, as documented in various reports, indicates a systemic challenge in providing timely and affordable oral healthcare. This suggests that the issue extends beyond merely the payment system for children's services and encompasses broader factors affecting the accessibility and utilization of dental care across the population. Addressing this requires not only payment reform but also a comprehensive strategy to enhance the accessibility and perceived value of preventive dental care for all families.

IV. Comparative Analysis of Global Dental Payment Systems

Understanding the nuances of various dental payment systems is crucial for identifying viable reforms in Latvia. Each model carries distinct incentives and consequences for providers, patients, and the overall health system.

Fee-for-Service (FFS)

Description: Under a Fee-for-Service (FFS) model, healthcare providers are reimbursed for each individual service or unit of care they provide.¹¹ This is the most disaggregated payment method, meaning providers bill for every activity performed, from examinations to complex surgical procedures.¹⁴ FFS schedules are widely used in countries such as France, Japan, Australia, the Republic of Korea, and the USA.¹⁴

Pros: FFS offers several advantages. Providers receive direct and often immediate payment for services rendered, which can help maintain healthy cash flow within practices.¹⁵ This model allows dentists to focus on delivering comprehensive care without being constrained by predetermined budgets per patient, theoretically enabling them to offer all necessary treatments.¹⁶ It strongly incentivizes a higher volume of services, as each procedure directly translates into revenue.¹⁷ This can also be seen as promoting higher quality, as providers are paid specifically for each performed activity.³

Cons: The primary drawback of FFS is its strong incentive for providers to deliver more services, potentially leading to over-treatment or supplier-induced demand, which drives up overall costs for the payer.² Under this model, the financial risk is predominantly borne by the payer, not the provider.¹⁴ This structure can also lead to a focus on more profitable procedures, such as complex restorative work or surgical interventions, over less lucrative but often more beneficial preventive care.¹² Patients, particularly those without comprehensive insurance, may face high upfront costs or be deterred from seeking care if they are considered out-of-network.¹⁸ For Latvia, the FFS model appears to exacerbate the problem of high GA use for profitable restorative work, creating a system where financial gain is prioritized over long-term preventive health.

Capitation

Description: Capitation is a population-based payment system where a fixed, prospective payment is made to a provider for a defined benefits package per person over a specific period, regardless of the volume of services provided to that individual.¹¹ Payments are typically adjusted for factors such as age and gender, and sometimes for health status, to account for varying patient needs.¹⁴

Pros: This model strongly encourages cost containment and efficiency, as providers receive a predetermined sum and must manage their resources within that budget.¹⁴ It promotes integrated care and coordination, as providers are incentivized to manage patient health proactively to prevent more expensive future interventions.¹⁴ Capitation can significantly reduce administrative overhead associated with billing for individual services.²¹ Crucially, it provides a strong financial incentive for preventive care, as keeping patients healthy minimizes the need for costly treatments, thereby increasing the provider's profitability.³

Cons: A significant concern with capitation is the potential for providers to reduce service volume to increase profitability, which could lead to under-treatment or shorter patient visits.² There is also a risk of patient selection, where providers might prefer healthier patients to minimize their costs and maximize their profit margins.³ If capitation rates are set too low or are not adequately risk-adjusted for patients with complex or pre-existing conditions, it can result in underpayment for high-need cases, potentially restricting access to necessary care or leading to narrower provider networks.²¹ For Latvia, a pure capitation model could shift the incentive away from excessive GA use but would require careful risk adjustment to ensure high-need children receive adequate care.

Salary-Based Systems

Description: In a salary-based system, dentists receive a fixed amount of money for working a given number of hours or for a set period, independent of the volume or specific type of services provided.⁹ This compensation can be a straight salary or a base salary supplemented with performance-based bonuses.²³

Pros: This model offers significant financial stability and predictability for dentists, which can be particularly attractive, especially for new graduates entering the profession.¹⁶ By decoupling remuneration from the volume of services, a salary system removes the direct financial incentive for both over-treatment and under-treatment, allowing providers to focus primarily on patient needs and the quality of care delivered.³ It can also foster a more collaborative environment among dental staff, as the focus shifts from individual productivity metrics to collective patient outcomes.²³

Cons: A potential drawback is that a pure salary model may not strongly incentivize high productivity or efficiency if not combined with additional performance metrics.²³ This could lead to lower overall output compared to FFS models if not adequately managed through supervision and quality targets. Furthermore, highly productive or specialized dentists might find their earning potential limited under a straight salary model compared to models where compensation is tied directly to the volume or complexity of procedures performed.²³ For Latvia, a salaried system could directly address the over-provision of profitable procedures by removing the financial incentive for them, but it would necessitate robust oversight to maintain service levels and quality.

Bundled Payments

Description: Bundled payments involve a single, predetermined payment that covers all services and supplies for a defined "episode of care".²⁴ An episode of care refers to the complete set of services required to treat a specific medical condition over a defined period (e.g., a hip replacement surgery and 30 days of post-discharge care).²⁴ These payments can be structured retrospectively, where individual providers are paid FFS but the total is reconciled against a target price, or prospectively, where a lump sum is paid upfront to a designated provider.²⁴

Pros: This model strongly encourages collaboration and coordination among multiple providers involved in a patient's care pathway.²⁴ It incentivizes providers to deliver care more efficiently and holistically, aiming for better patient outcomes at a lower overall cost.²⁴ By grouping services, bundled payments promote a focus on the entire care pathway rather than isolated procedures, fostering a more integrated approach to treatment.²⁴

Cons: Bundled payments can be administratively complex to define episodes of care and allocate payments across various providers.¹⁴ Evidence on their long-term impact, particularly in dentistry, is still limited and mixed.¹⁴ A significant challenge is ensuring that the bundled payment adequately covers the needs of high-cost, high-need patients; if the bundled payment is insufficient, it could lead to under-provision of necessary services.¹⁴ Careful design is required to avoid hidden qualifiers, waiting periods, or exclusions that could limit patient benefits or lead to unexpected out-of-pocket costs.²⁶ For Latvia, bundling could be considered for specific, well-defined pediatric dental conditions requiring multi-stage treatment, but its complexity might make it less suitable for broad application across all caries management.

Mixed and Value-Based Payment (VBP) Systems

Description: Mixed payment systems combine elements from two or more models, such as FFS and capitation, to balance their respective incentives.² Value-Based Payment (VBP) is a broader, performance-based strategy that links financial incentives directly to a provider's performance on defined quality measures, health outcomes, adherence to evidence-based clinical guidelines, and patient experience.¹² Pay-for-Performance (P4P) is a common mechanism within VBP, where provider reimbursements are directly tied to performance indicators measuring dental health outcomes and quality of services.²

Pros: Mixed systems aim to leverage the advantages of different payment models while mitigating their individual downsides, for example, combining the quality assurance of FFS with the efficiency of capitation.² VBP specifically aligns financial incentives with desired health outcomes, encouraging preventive care, care coordination, and patient engagement, moving away from volume-driven FFS.¹² These models can provide financial resources to support critical infrastructure improvements in provider practices, such as electronic health records (EHRs) and care management tools.¹² VBP offers flexibility for providers to deliver patient-centered care and avoid unnecessary services, promoting high-quality, cost-effective care.¹²

Cons: Mixed and VBP systems can be complex to design and implement, requiring robust data collection, sophisticated quality measurement frameworks, and ongoing monitoring.³ Challenges exist in defining and measuring appropriate and reliable quality indicators for oral health.³ There is also a potential for "crowding out" intrinsic motivation if monetary incentives are poorly designed or overly emphasize specific metrics, potentially leading to unintended consequences.³ Careful monitoring is essential to ensure that such systems promote equitable access and do not inadvertently create disparities in care.²⁰ For Latvia, a mixed or VBP approach holds significant promise for addressing the current misaligned incentives, offering a flexible pathway to prioritize prevention and improve outcomes while managing costs.

Table 1: Comparative Analysis of Dental Payment Systems (Pros & Cons)

Payment System	Description	Key Incentives	Pros	Cons	Relevance to Latvia's Challenge
Fee-for-Service (FFS)	Reimbursement for each individual service provided.	Volume of services, higher activity.	Immediate payment, focus on comprehensive care, high provider autonomy.	Over-treatment, supplier-induced demand, high costs for payer, disincentive for prevention, financial risk on payer.	Exacerbates: Directly fuels profitability of GA procedures, encouraging restorative focus and high relapse rates.
Capitation	Fixed, prospective payment per person for a defined period, regardless of services provided.	Efficiency, cost containment, preventive care, integrated care.	Predictable costs for payer, encourages prevention, reduces administrative burden, promotes proactive health management.	Potential for under-treatment, patient selection (preferring healthy patients), may limit access if rates are too low or not risk-adjusted.	Addresses: Shifts incentive to prevention, could reduce GA use by rewarding health maintenance. Requires careful risk adjustment.
Salary-Based	Fixed payment for a set period or hours, independent of service volume.	Quality of care, patient needs, collaboration.	Financial stability for providers, removes direct incentive for over/under-treatment, fosters team-based approach.	May not incentivize high productivity/efficiency, limited earning potential for highly productive dentists, requires strong management oversight.	Addresses: Directly removes profitability incentive for GA, allowing focus on clinical need. Requires public infrastructure and robust performance management.
Bundled Payments	Single payment for all services within a defined "episode of care."	Care coordination, efficiency across a treatment pathway, holistic approach.	Promotes collaboration among providers, encourages efficient care delivery, focuses on episode outcomes.	Administrative complexity, limited evidence in dentistry, may not cover high-need patients adequately, potential for hidden costs/exclusions.	Limited Application: Could be useful for specific, complex pediatric cases, but less suitable for broad caries management due to complexity.
Mixed / Value-Based Payment (VBP)	Combines elements of other models; VBP links financial incentives to quality and outcomes.	Quality improvement, prevention, care coordination, patient experience, cost-effectiveness.	Balances incentives, leverages strengths of different models, aligns payment with desired health outcomes, supports infrastructure.	Complex to design/implement, requires robust data/quality metrics, potential for "crowding out" intrinsic motivation if poorly designed, monitoring needed for equity.	Optimal Solution: Offers flexibility to target Latvia's specific issues (GA overuse, lack of prevention) by strategically blending incentives and tying payment to outcomes.

V. Evidence on Caries Management: Prioritizing Prevention

The pervasive reliance on surgical interventions, particularly under general anesthesia, for pediatric dental caries in Latvia warrants a critical examination of the scientific evidence. The user query explicitly highlights a concern regarding the lack of scientific evidence supporting surgical approaches as useful to treat dental caries itself, alongside a high prevalence of relapse. A review of current scientific literature reveals a strong and growing body of evidence supporting non-surgical and minimally invasive approaches for caries management in children, emphasizing prevention and disease arrest over extensive restoration.

Effectiveness and Long-Term Outcomes of Non-Surgical/Preventive Interventions

Scientific evidence overwhelmingly supports the effectiveness of nonrestorative and micro-invasive treatments for arresting or reversing carious lesions in both primary and permanent teeth.²⁷ These interventions are designed to manage the caries disease process at a lesion level, thereby minimizing the loss of sound tooth structure and preserving the natural tooth.²⁷ Key effective non-surgical interventions include:

• Fluoride Varnish: Highly effective for arresting or reversing non-cavitated facial/lingual carious lesions and significantly reducing the progression of initial caries lesions.²⁷

• Resin Infiltration: Demonstrated to be highly effective in arresting proximal caries lesions in both primary and permanent teeth, and successful in managing non-cavitated and anterior white-spot enamel lesions in children and adolescents.²⁸

• Dental Sealants: Effective in preventing cavities, particularly in molars, and reducing the odds of lesion progression.⁵

• Silver Diamine Fluoride (SDF) Solution: Applied biannually, 38% SDF solution has been shown to be highly effective for arresting advanced cavitated carious lesions on any coronal surface.²⁷

These non-surgical methods represent a paradigm shift towards managing the disease process itself, rather than merely repairing its consequences. Preventing the onset of caries is the ultimate goal of a caries management plan, but if the disease is present, a variety of effective nonrestorative treatments are available.²⁷ This scientific foundation provides a compelling basis for redefining the standard of care in Latvia's pediatric dental services, moving away from a predominantly surgical model.

Comparison with Surgical Approaches and Relapse Rates

The concern articulated in the user query about the lack of scientific evidence for surgical approaches treating dental caries is well-founded. While surgical interventions like fillings, extractions, or pulpectomies address existing cavities and their symptoms, they do not necessarily treat the underlying caries disease process or prevent future lesions.⁶ This distinction is critical: surgical procedures remove diseased tissue or the entire tooth, but they do not eliminate the bacterial or dietary factors that cause caries. This explains the high prevalence of relapse noted in the user query, as the root causes of the disease remain unaddressed.

A particularly important observation is that children who receive extensive dental treatment under general anesthesia are often those with severe early childhood caries (ECC) and are inherently at a higher risk for future decay.³⁰ Studies indicate that such early interventions, including treatment under GA, do not necessarily reduce future caries risk in permanent dentition; rather, the continued presence of caries in permanent teeth likely reflects the child's ongoing high-risk status, not the inefficacy of the treatment itself.³⁰ This suggests that GA, as currently applied in Latvia, functions more as a reactive measure for severe, unmanaged disease in high-risk populations, rather than a definitive solution to the caries problem. The high relapse rate further supports this interpretation. The current system appears to be effectively managing severe disease with expensive, invasive procedures, but it is not preventing the disease from recurring or progressing. This highlights that a shift away from GA-centric treatment is not just about cost reduction, but fundamentally about improving long-term health outcomes for these vulnerable children by addressing the disease process itself.

Cost-Effectiveness of Preventive Dental Care Versus Extensive Restorative Treatments

From an economic perspective, preventive dentistry consistently demonstrates significant cost-effectiveness compared to extensive restorative treatments over the long term.⁴ This fundamental principle, often summarized as "prevention pays," is strongly supported by evidence.

Regular dental check-ups, professional cleanings, fluoride treatments, and dental sealants are relatively inexpensive interventions that can prevent the need for much costlier and more invasive procedures down the line.⁴ For instance, a regular cleaning and check-up typically costs $75-$200, whereas a dental filling ranges from $100-$300, a root canal from $700-$1,500, and a tooth extraction from $150-$300.⁵ The cost difference becomes even more substantial for procedures like dental implants, which can range from $3,000-$4,500.⁵

Specific examples underscore this economic advantage:

• Dental sealants, costing approximately $30-$60 per tooth, can prevent cavities for up to 10 years and significantly reduce the risk of decay in molars by nearly 80%.⁵ This is a fraction of the cost of a filling.

• Professional fluoride treatments, priced at about $20-$50, can provide long-lasting protection against tooth decay, preventing the need for more expensive restorative care later.⁵

Most dental insurance plans in other systems recognize this economic benefit and cover preventive care at 100%, acknowledging that prevention is less expensive than treatment.⁵ By prioritizing preventive measures, individuals can avoid the need for extensive restorative treatments, saving both time and money, while preserving the natural structure of the teeth and gums.⁴ This economic argument provides a compelling financial justification for Latvia to reallocate resources within its dental care budget, shifting investment towards proactive, preventive strategies that yield better health outcomes and greater financial sustainability.

VI. International Best Practices in Pediatric Dental Care Payment and Prevention

Examining successful models in other countries provides valuable lessons for Latvia's Ministry of Health. These case studies demonstrate how different payment systems, coupled with robust public health strategies, can effectively prioritize prevention and achieve superior oral health outcomes for children.

Case Study 1: Sweden's Capitation-based System for Children and Prevention Focus

System Overview: Sweden's Public Dental Service provides free dental care for all children and adolescents, typically up to 20 years of age, and in some regions, up to 23.³¹ This system is primarily funded through taxation and operates largely on a capitation basis for children, explicitly designed to promote health and encourage preventive care.²² For adults, a risk-adjusted capitation model, known as 'Dental Care for Health' (DCH), is offered as an option alongside a traditional Fee-for-Service (FFS) system. Patients choosing DCH sign a multi-year contract for a fixed monthly fee covering basic dental care, with the fee adjusted based on a comprehensive risk assessment.²²

Prevention Strategies and Outcomes: The capitation model in Sweden plays a pivotal role in shaping provider behavior. Dentists operating under capitation arrangements tend to provide more preventive advice, and patients who choose capitation often exhibit healthier oral hygiene habits and require fewer restorative treatments.¹⁷ A key public health initiative is the FRAMM guideline (Fluoride, Advice, Arena, Motivation, Diet), implemented for all 1- to 15-year-olds in regions like Västra Götaland. This guideline, which includes regular dental check-ups at public dental clinics, is offered free of charge and aims to promote dental health.² The success of Sweden's prevention-focused approach is evident in its low caries prevalence among 12-year-olds, with rates reported at 11.4% nationally and a DMFT (Decayed, Missing, Filled Teeth) index of 0.9 in 2008.³⁵ This demonstrates that a payment model explicitly designed to promote prevention can fundamentally reshape provider behavior and lead to improved public health outcomes. The sophisticated risk-adjusted capitation for adults also suggests a nuanced approach to managing financial risk while catering to diverse patient needs.

Case Study 2: Denmark's Salaried Public Dental Service for Children and Universal Prevention

System Overview: Denmark operates a universal, tax-financed, decentralized health system where dental services for children under 18 years of age are fully covered and provided free of charge.³⁰ This system is characteristic of the Nordic model, with most pediatric dental care delivered by salaried personnel in state-owned clinics.³⁰ Residents may purchase voluntary complementary insurance to cover copayments for adult dental care and other services not fully covered by the state.³⁶

Prevention Strategies and Outcomes: Danish dental care operates under a statutory requirement to include prevention and health promotion, with a substantial and explicit focus on prevention for children.¹⁹ New guidelines introduced in 2013 (and revised in 2016), along with subsequent renegotiations of collective agreements in 2015, have led to a notable increase in claims for preventive services.¹⁹ All types of preventive dental care are covered under a generic dental service code, simplifying reimbursement and encouraging comprehensive preventive approaches.¹⁹ Denmark boasts remarkably low caries rates, with a DMFT index of 0.7 for 12-year-olds in 2008, one of the lowest in Scandinavia.³² This outcome is achieved through a system that removes the FFS incentive via a direct employment model, effectively shifting the focus to prevention and ensuring universal access. For Latvia, this suggests that if a strong public health infrastructure is desired, a salaried model could be a viable option, particularly for foundational preventive services, thereby addressing current unmet needs and ensuring equitable access.

Case Study 3: US Medicaid Initiatives and Value-Based Payment (VBP) for Pediatric Oral Health

System Overview: In the United States, the Medicaid program has increasingly adopted Value-Based Payment (VBP) models, moving away from traditional Fee-for-Service (FFS) to link financial incentives to quality and value.¹² Initiatives such as the Dental Transformation Initiative (DTI) exemplify this shift, aiming to reward providers for improving health outcomes, adhering to evidence-based clinical guidelines, and enhancing the patient experience.¹³

Prevention Strategies and Outcomes: The DTI, with a substantial budget, provides provider incentive payments across several domains, including increasing pediatric preventive dental service utilization, early caries diagnosis through caries risk assessment (CRA) and disease management, and continuity of care for children enrolled in Medicaid.³⁷ This includes specific Pay-for-Performance (P4P) mechanisms for dentists, structured by age bands (0-5 years and 6-20 years), and even incentives for pediatricians to make dental referrals for children who subsequently receive dental services.³⁷ These initiatives have demonstrated success, with the statewide pediatric preventive service utilization rate increasing by 7.48 percentage points from 2014 to 2017, and annual dental visit rates increasing by 3.09 absolute percentage points from 2016 to 2018, reaching 63% statewide.³⁷ The US Medicaid examples illustrate how specific, targeted financial incentives can be effectively used within an existing system to drive desired behavioral changes, such as increased preventive visits and early diagnosis. This is a crucial lesson for Latvia: even if a complete system overhaul (like adopting pure capitation or salaried models) is challenging, targeted VBP/P4P mechanisms can be implemented to directly counter the current perverse incentives for GA use and restorative work, offering a flexible approach to nudge the system towards prevention and quality.

Key Lessons Learned and Transferable Strategies for Latvia

The international experiences offer several critical lessons for Latvia:

• Payment models significantly influence provider behavior and patient outcomes. The design of the remuneration system directly shapes whether dentists prioritize volume, profit, or patient health.

• Prevention-focused systems, whether capitation-based or salaried public services, are strongly associated with lower caries prevalence. Countries that have systematically invested in and incentivized prevention have achieved superior oral health outcomes for their children.

• Risk adjustment is crucial for equitable payment in capitation or VBP models. To ensure that providers are adequately compensated for treating high-need patients and to prevent patient selection, payment rates must account for varying levels of patient risk.

• Targeted incentives (Pay-for-Performance) can effectively drive specific preventive behaviors. Even within existing frameworks, strategic bonuses or penalties can encourage desired clinical practices.

• Strong public health programs and comprehensive guidelines are essential complements to payment reform. Payment system changes must be supported by clear clinical guidance, education, and public health campaigns to maximize their impact.

These lessons highlight that a successful transformation in Latvia's pediatric dental care system will require a multi-faceted approach, integrating payment reform with robust public health initiatives and clinical best practices.

VII. Recommendations for the Ministry of Health of Latvia

Based on the comprehensive analysis of Latvia's current pediatric dental health challenges, global payment system comparisons, and evidence on caries management, the following policy recommendations are put forth to the Ministry of Health of Latvia. These recommendations aim to fundamentally shift the focus from reactive, profitable surgical interventions to proactive, evidence-based preventive care, ultimately improving children's oral health outcomes and ensuring the long-term sustainability of the dental care system.

Policy Recommendation 1: Reforming the Payment Model towards a Mixed System with a Strong Preventive Component

Rationale: The primary objective of this reform is to dismantle the current Fee-for-Service (FFS) incentive that drives profitable, high-volume restorative care under general anesthesia and to redirect financial resources towards effective prevention and early intervention. A mixed payment system can strategically balance incentives, leveraging the advantages of different models while mitigating their inherent downsides.

Proposed Approach:

• Introduce a Capitation Component for Preventive and Primary Care: Implement a per-child payment for a defined package of preventive and primary care services. This fixed payment would cover regular check-ups, fluoride applications, dental sealants, oral hygiene education, and comprehensive caries risk assessments.³ The fixed nature of this payment would incentivize providers to keep children healthy to minimize the need for more expensive and complex restorative work later. To ensure equitable care for all children, particularly those with higher needs, these capitated payments should be risk-adjusted based on individual caries risk profiles. This approach, similar to Sweden's model, aligns financial incentives with proactive disease management.

• Retain a Modified Fee-for-Service for Necessary Restorative Care: For unavoidable restorative treatments (e.g., fillings, pulpectomies, or extractions for severe cases), a Fee-for-Service (FFS) component could be retained, but with significantly revised tariffs. The profitability of general anesthesia-based procedures, which currently drives provider behavior, should be substantially reduced or tied to strict clinical guidelines and documented outcomes.² Consideration should be given to establishing "neutral" fees for these services, meaning fees that primarily cover the costs of provision without generating excessive profit, thereby limiting the potential for supplier-induced demand.² This modification aims to ensure that necessary restorative care is provided when clinically indicated, but without creating perverse incentives for over-treatment.

• Integrate Value-Based Incentives (Pay-for-Performance): Introduce a robust system of bonuses or penalties directly tied to specific quality metrics and measurable health outcomes. These incentives would reward providers for achieving desired public health goals, such as:

  • A demonstrable reduction in caries incidence or progression rates within a practice's patient panel.²

  • Increased utilization rates of preventive services, including sealant application rates and consistent recall visits.³⁷

  • A significant reduction in the reliance on general anesthesia for routine caries treatment, reserving it for only the most severe and clinically justified cases [User Query].

  • Improved patient satisfaction and continuity of care, reflecting a patient-centered approach.

    This strategic blending of prospective (capitation) and retrospective (modified FFS with VBP modifiers) payment components aims to balance the risks of under-treatment and over-treatment, respectively. It creates a powerful mechanism to strategically incentivize both efficiency in prevention and quality in necessary treatment, directly addressing the core problem of misaligned incentives in Latvia's current system.

Policy Recommendation 2: Strategies to Reduce the Reliance on General Anesthesia for Routine Caries Treatment and Promote Non-Invasive Alternatives

Rationale: The high rate of general anesthesia (GA) use for pediatric dental care in Latvia indicates a systemic issue where invasive procedures are prioritized, despite their cost, potential trauma to children, and the high relapse rates observed. Shifting away from this model towards evidence-based, less traumatic, and more effective alternatives is essential for improving long-term oral health outcomes. The current application of GA often reflects severe, unmanaged disease in high-risk populations rather than a definitive solution to the caries problem.

Proposed Approach:

• Develop and Enforce Evidence-Based Clinical Guidelines: Mandate the widespread adoption and strict enforcement of clinical guidelines for caries management in children that prioritize non-invasive and minimally invasive interventions.²⁷ These guidelines should clearly outline the indications for fluoride varnish, dental sealants, resin infiltration, and silver diamine fluoride (SDF) as primary treatment modalities for carious lesions. Surgical interventions should be reserved for cases where non-invasive methods are insufficient or inappropriate, or where pulp involvement necessitates more extensive treatment.

• Re-evaluate Reimbursement Criteria for General Anesthesia: Revise the state-paid reimbursement criteria for general anesthesia in pediatric dental care. Reimbursement should be strictly limited to cases of severe dental anxiety or behavioral challenges that genuinely preclude treatment without GA, extensive multi-quadrant treatment that cannot be completed in a single visit with other sedation methods, or for children with specific medical conditions (e.g., certain disabilities) where GA is medically necessary.⁸ The current profitability of GA procedures needs to be decoupled from the payment structure to remove the perverse incentive.

• Invest in Alternative Sedation Methods and Provider Training: Support and incentivize the adoption of less invasive sedation techniques, such as nitrous oxide (laughing gas), and provide comprehensive training for pediatric dentists and their teams in behavior management techniques for children.¹ This would enable a greater proportion of children to receive necessary care in a less traumatic outpatient setting. Furthermore, training programs should emphasize the application and long-term management of non-surgical caries arrest techniques, ensuring that dentists are proficient in these evidence-based alternatives.

• Public and Professional Education on Caries Management: Launch targeted public awareness campaigns to educate parents on the benefits of early preventive care and non-surgical options for caries management, reducing the demand for GA. Concurrently, provide ongoing professional development and continuing education for dentists on the latest evidence-based non-invasive caries management techniques and appropriate sedation protocols.

Policy Recommendation 3: Enhancing Preventive Programs and Public Health Education

Rationale: While payment reform addresses provider incentives, a comprehensive strategy must also focus on primary prevention at the population level and empower families with the knowledge and tools to maintain oral health. The current high prevalence of caries indicates a need for stronger public health interventions.

Proposed Approach:

• Strengthen School-Based Oral Health Programs: Expand and enhance school-based programs that provide regular fluoride applications, dental sealants, and oral hygiene instruction.² These programs can reach a large proportion of the child population, particularly those from vulnerable backgrounds who may face barriers to clinic-based care.

• Implement Targeted Public Health Education Campaigns: Develop and disseminate culturally appropriate educational materials and campaigns for parents and caregivers, focusing on:

  • The importance of early dental visits (before decay begins).³⁰

  • Effective daily oral hygiene practices, including appropriate fluoride toothpaste use.

  • Dietary advice to reduce sugar intake, which is a key factor in caries development.

  • The benefits and availability of state-funded preventive services for children.

• Ensure Equitable Access to Preventive Services: Address geographical disparities and other barriers to access for preventive services. This may involve mobile dental units, community outreach programs, or incentives for dentists to practice in underserved areas. The goal is to ensure that all children, regardless of socioeconomic status or location, can readily access the preventive care they are entitled to.

Policy Recommendation 4: Considerations for Implementation

Successful implementation of these reforms requires careful planning, robust infrastructure, and continuous monitoring.

Proposed Approach:

• Develop Robust Quality Metrics and Data Collection: Establish clear, measurable quality indicators for pediatric oral health outcomes, such as caries incidence rates, sealant application rates, and GA utilization rates. Implement a centralized data collection system to track these metrics, allowing for ongoing evaluation of the impact of payment reforms and public health initiatives.¹³ This data will be crucial for refining policies and ensuring accountability.

• Implement Effective Risk Adjustment Mechanisms: For any capitation or mixed payment model, develop and continuously refine risk adjustment methodologies to account for variations in patient health status and socioeconomic factors.²¹ This ensures that providers are fairly compensated for treating high-risk children and prevents incentives for patient selection.

• Invest in Provider Training and Capacity Building: Provide comprehensive training programs for all dental professionals on the new payment models, evidence-based preventive techniques, behavior management, and appropriate sedation alternatives. Support the development of a workforce skilled in delivering prevention-focused care.

• Foster Patient and Parent Engagement: Actively involve parents and patient advocacy groups in the design and implementation of reforms. Clear communication about changes in the payment system, available services, and the importance of preventive care is paramount to ensure patient understanding and uptake.

• Phased Implementation and Pilot Programs: Consider a phased approach to implementing significant payment reforms, potentially starting with pilot programs in specific regions or with defined patient populations. This allows for learning, adaptation, and refinement before a full national rollout.

VIII. Conclusion

Latvia's current pediatric dental health landscape, characterized by high caries prevalence and an over-reliance on general anesthesia for restorative procedures, represents a critical public health and economic challenge. The existing Fee-for-Service payment system has inadvertently created perverse incentives, prioritizing profitable surgical interventions over evidence-based, cost-effective preventive care. This leads to a cycle of reactive treatment, high relapse rates, and ultimately, suboptimal oral health outcomes for children.

The analysis of global dental payment systems underscores that payment models profoundly influence provider behavior. Countries like Sweden and Denmark, with their capitation-based or salaried public dental services for children, demonstrate that systems designed to incentivize prevention are associated with significantly lower caries rates. Furthermore, the robust evidence supporting non-surgical caries management, coupled with the clear cost-effectiveness of prevention over restoration, provides a compelling imperative for reform.

By transitioning towards a mixed payment system that integrates capitation for preventive care, modifies Fee-for-Service for restorative treatments, and incorporates value-based incentives, Latvia can fundamentally realign financial incentives with desired public health outcomes. This strategic shift, combined with efforts to reduce reliance on general anesthesia, enhance preventive programs, and ensure equitable access, will pave the way for a more sustainable, effective, and child-centered pediatric dental care system. Such a transformation is not merely a financial adjustment but a strategic investment in the long-term health and well-being of Latvia's children, fostering a future where prevention is prioritized, and every child receives evidence-based, high-quality oral healthcare.

IX. References

• ⁷

  https://www.vmnvd.gov.lv/en/dental-care

• ¹⁰

  https://economy-finance.ec.europa.eu/document/download/51563987-160c-4c6a-9d69-1dbda0d5fc88_en?filename=joint-report_lv_en.pdf

• ³⁷

  https://nashp.org/medicaid-incentives-performance-measures-and-workforce-innovations-foster-access-to-pediatric-oral-health-care/

• ³⁹

  https://www.ada.org/resources/careers/dentist-compensation

• ³⁴

  https://pmc.ncbi.nlm.nih.gov/articles/PMC7937238/

• 11

• ¹

  https://stomatologijasinstituts.lv/en/price-list/

• ¹⁴

  https://wkc.who.int/docs/librariesprovider24/wkc-projects-documents/1-3-chapter-3-payment-methods.pdf?sfvrsn=91819d99_1

• ¹³

  https://pmc.ncbi.nlm.nih.gov/articles/PMC11972522/

• ²²

  https://pmc.ncbi.nlm.nih.gov/articles/PMC5225535/

• 12

• ¹⁶

  https://www.archfinancialplanning.com/compensation/

• 12

• ¹³

  https://pmc.ncbi.nlm.nih.gov/articles/PMC11972522/

• 19

• ²⁰

  https://centerforevidencebasedpolicy.org/CEbP_PaymentModelPrimer_CapitatedPayments.pdf

• ⁹

  https://health.ec.europa.eu/system/files/2023-12/2023_chp_lv_english.pdf

• ²³

  https://www.archfinancialplanning.com/compensation/

• ²⁴

  https://www.cms.gov/priorities/innovation/key-concepts/bundled-payments

• ³

  https://www.researchgate.net/publication/309691464_Payment_systems_and_incentives_in_dentistry

• ²⁵

  https://www.teero.com/blog/dental-payment-programs

• ²⁷

  https://pmc.ncbi.nlm.nih.gov/articles/PMC6304695/

• ³⁶

  https://www.commonwealthfund.org/international-health-policy-center/countries/denmark

• ⁷

  https://www.vmnvd.gov.lv/en/dental-care

• ²⁹

  https://medicaljournalssweden.se/actaodontologica/article/download/36190/41317

• ⁶

  https://www.eu-healthcare.fi/health-services-abroad/country-specific-information-about-health-services/latvia/

• ³³

  https://nhwstat.org/health/organization-health-services/health-care-user-charges/dental-care

• 32

• ²

  https://pubmed.ncbi.nlm.nih.gov/27807881/

• ¹⁸

  https://www.dentalclaimsupport.com/blog/fee-for-service-dental-practice-pros-cons

• ¹⁷

  https://pmc.ncbi.nlm.nih.gov/articles/PMC6544809/

• ³¹

  https://www.mdpi.com/1660-4601/19/4/1954

• 30

• ²¹

  https://www.investopedia.com/terms/c/capitation-payments.asp

• ³⁵

  https://pmc.ncbi.nlm.nih.gov/articles/PMC11811587/

• 28

• 26

• ⁸

  https://www.cilvektiesibugids.lv/en/themes/health/oral-health-dentistry/free-oral-health-care

• ¹⁵

  https://www.dentalsupportspecialties.com/blog/2022/06/16/pros-cons-fee-for-service-dental-insurance-billing/

• ⁸

  https://www.cilvektiesibugids.lv/en/themes/health/oral-health-dentistry/free-oral-health-care

• ⁴

  https://southernriversdental.com/preventive-and-restorative-dentistry

• ⁵

  https://knoxvalleydental.com/2025/04/10/preventive-dentistry-can-save-money/

GROK

Comparative Analysis of Dental Payment Systems for Latvia

Author: Health Economist Date: August 04, 2025

Introduction

This report evaluates and compares dental payment systems—per capita (capitation), per treatment (fee-for-service), and mixed systems—to advise the Ministry of Health of Latvia. Latvia faces a high prevalence of dental caries and excessive use of general anesthesia in pediatric dentistry, driven by profitable public payments. The analysis aims to identify a system that reduces reliance on surgical interventions and promotes preventive care.

Per Capita (Capitation) System

In a per capita system, dentists receive a fixed payment per patient, regardless of treatments provided. Used in the UK’s NHS, it encourages preventive care and cost control but may lead to undertreatment and risk selection, limiting patient choice.

• Pros:

  • Encourages preventive care, reducing caries progression

  • Cost-effective, aiding budget control

  • Simplified billing, easing administrative load

• Cons:

  • Risk of undertreatment, especially for children with high caries

  • Risk selection may exclude complex cases

  • Limited patient choice may reduce access

Per Treatment (Fee-for-Service) System

In a fee-for-service system, dentists are paid per treatment, as seen in the US. It ensures comprehensive care and patient choice but drives overtreatment and costs, aligning with Latvia’s current challenges.

• Pros:

  • Comprehensive care ensures all treatments are addressed

  • Patient choice supports access to preferred providers

  • Innovation may improve treatment options

• Cons:

  • Overtreatment (e.g., excessive anesthesia use) increases costs

  • Costly, straining public funds

  • Administrative burden from detailed billing

Mixed Systems

Mixed systems combine capitation and fee-for-service, as in Germany. They balance prevention and quality, offering flexibility, but are complex and prone to gaming.

• Pros:

  • Balanced incentives promote prevention and quality

  • Flexibility to address Latvia’s caries challenges

  • Improved quality when prevention is prioritized

• Cons:

  • Complexity in design and management

  • Administrative burden from dual structures

  • Potential for gaming, risking cost overruns

Comparative Table

Payment System	Pros	Cons
Per Capita (Capitation)	- Encourages preventive care - Cost-effective - Simplified billing	- Risk of undertreatment - Risk selection - Limited patient choice
Per Treatment (Fee-for-Service)	- Comprehensive care - Patient choice - Innovation	- Overtreatment - Costly - Administrative burden
Mixed Systems	- Balanced incentives - Flexibility - Improved quality	- Complexity - Administrative burden - Potential for gaming

Recommendations

A mixed system, blending capitation for prevention and fee-for-service for essential treatments, could shift focus from surgical interventions to oral health in Latvia. Oversight is critical to ensure preventive prioritization.

References

1. DENTAL CARE EXPENDITURES AND INSURANCE. (1980). https://www.ncbi.nlm.nih.gov/books/NBK234098/

2. Payment systems and incentives in dentistry. (2017). https://pubmed.ncbi.nlm.nih.gov/28116419/

3. National Oral Health Policy and Financing and Dental Health Status in 19 Countries. (2023). https://www.sciencedirect.com/science/article/pii/S002065302300027X

ChatGPT

Reforming Dental Payment Systems to Reduce Caries Burden in Latvia

Background: Incentives and Oral Health in Latvia

Latvia has one of the highest burdens of dental caries in children globally and a high rate of dental treatments under general anesthesia (GA). These procedures typically involve extractions or restorations of decayed primary teeth. While often necessary for managing pain or infection, GA treatments do not prevent future caries, and relapse rates are high. Many children require a second intervention within a few years.

A major contributing factor is the fee-for-service (FFS) reimbursement model: dentists are financially rewarded for providing treatments, especially under GA, but not for prevention. The economic incentive favors curative over preventive care, and more dentists are training in pediatric dentistry to access this revenue stream. As a result, Latvia's dental system is caught in a loop of treating symptoms rather than preventing disease.

Objective

To inform Latvia’s Ministry of Health about alternative dental payment models that:

• Reduce dental disease burden

• Discourage overtreatment

• Incentivize prevention

• Are financially sustainable

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Comparative Table of Dental Payment Systems

Model	Description	Pros	Cons
Fee-for-Service (FFS)	Dentists are paid per treatment/procedure	- Encourages service provision - Easy to understand/administer	- Incentivizes overtreatment - Disincentivizes prevention - Can increase costs
Capitation	Fixed payment per patient per period	- Encourages prevention - Cost predictable - Reduces overtreatment	- Risk of undertreatment - Needs risk adjustment - May avoid high-need patients
Salary	Fixed wage regardless of services provided	- Focus on needs, not procedures - Aligns with public health goals	- No productivity incentive - Potential inefficiencies
Blended/Mixed	Combines capitation, FFS, and/or bonuses	- Balances incentives - Can be tailored to goals	- Complex to design and manage - Monitoring required
Pay-for-Performance (P4P)	Bonus or penalty based on outcomes or process measures	- Targets specific goals - Improves accountability	- Difficult to measure outcomes - Risk of gaming metrics

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Case Studies from Europe

Sweden (Capitation)

• Public Dental Service offers optional capitation contracts for adults.

• Studies show lower caries incidence and more preventive care in capitation group.

• Limitations: High-risk patients tend not to enroll due to higher fees.

United Kingdom (Blended System)

• NHS prototype contracts combine capitation with FFS.

• Added preventive care pathways (e.g., risk assessment, fluoride).

• Outcome: Similar quality, improved prevention focus, but access must be monitored.

France (Mixed Model, 2018 Reform)

• Introduced universal dental coverage and mixed payments.

• Prevention bundled into capitation; complex care still FFS.

• Public satisfaction improved; long-term outcomes under observation.

Scotland (Childsmile Program)

• Not a payment reform, but large-scale public prevention.

• Supervised brushing, fluoride varnish, early dental visits.

• Result: 54% to 29% drop in caries prevalence in 5-year-olds from 2000 to 2018.

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Policy Recommendations for Latvia

1. De-incentivize Fee-for-Service for Pediatric Care

   • Gradually reduce FFS payments for high-volume restorative procedures under GA.

   • Phase in alternative models that reward prevention and disease control.

2. Introduce Capitation or Blended Contracts for Children

   • Pay providers a fixed amount per child per year.

   • Add bonuses for caries-free status, fluoride application, or sealant rates.

   • Use risk-adjusted payments for high-risk populations.

3. Pilot Pay-for-Performance Elements

   • Test bonuses for achieving specific preventive targets (e.g., 0 new caries/year).

   • Ensure indicators are fair and minimize gaming.

4. Invest in Public Health Interventions

   • Launch school-based brushing and fluoride programs (Childsmile model).

   • Provide early education to parents and free dental kits to preschoolers.

5. Monitor and Evaluate

   • Collect longitudinal data on oral health outcomes.

   • Adjust payments based on observed performance and equity.

6. Engage Providers in Design

   • Involve pediatric dentists in pilot design.

   • Ensure income floors during transition.

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Conclusion

Latvia’s current dental reimbursement structure unintentionally rewards overtreatment and discourages disease prevention. By learning from Sweden, the UK, France, and Scotland, Latvia can adopt payment reforms that:

• Improve child oral health

• Reduce avoidable surgeries under GA

• Align provider incentives with long-term health outcomes

A blended model supported by public prevention programs appears most feasible and effective.

---

References

1. Conquest J.H. et al. (2021). Healthcare (Basel), 9(9):1129.

2. Andrén Andås C., Hakeberg M. (2016). Community Dent Health, 33(4): 257–261.

3. Petersson L., Twetman S. (2017). BMC Oral Health, 17(1):40.

4. Brocklehurst P. et al. (2020). Health Serv Deliv Res, 8(34):1–168.

5. NHS England (2022). Dental Contract Reform.

6. Mazevet M.E. et al. (2020). Health Policy, 124(8):781-786.

7. Public Health Scotland (2018). National Dental Inspection Programme Report.

8. O’Dowd L. et al. (2025). BMC Oral Health, 25(1) (forthcoming).

9. Jiang H. et al. (2019). BMJ Open, 9(9):e028931.

Claude

Global Dental Payment Systems: Evidence-Based Policy Recommendations for Latvia

Latvia faces a critical pediatric dental health crisis despite universal child coverage, with 72% of 12-year-olds having cavitated caries compared to the EU average of 52%. This comprehensive analysis of global dental payment systems reveals that Latvia's high caries rates stem from payment incentives that reward treatment over prevention, even within a publicly funded system. International evidence demonstrates that strategic payment reform can dramatically improve clinical outcomes while reducing costs.

Payment System Models: Comparative Analysis

Fee-for-service systems create perverse incentives

Traditional fee-for-service (FFS) models, currently used in Latvia, systematically incentivize overtreatment while undervaluing prevention. Research across multiple countries shows FFS leads to supplier-induced demand, with restorative procedures reimbursed at much higher rates than preventive care. In Latvia's context, this explains why despite free child dental care, preventive outcomes remain poor—providers are financially rewarded for treating decay rather than preventing it.

The United States exemplifies FFS problems, with 61% of dental revenue volume-based, leading to significant access disparities and prevention gaps. Japan's universal FFS system covers 70% of costs but shows similar prevention underinvestment patterns. FFS systems consistently demonstrate treatment bias over prevention, making them unsuitable for Latvia's caries crisis.

Nordic countries demonstrate prevention-focused excellence

Denmark, Sweden, Norway, and Finland achieve the world's best pediatric dental outcomes through payment systems that fundamentally prioritize prevention. These countries provide comprehensive free dental care for children with integrated prevention-treatment delivery models. Key features include:

• Universal coverage to age 18-24 with no financial barriers

• Capitation-based provider payments that reward keeping children healthy

• 18-50% of clinical time devoted to prevention vs. treatment-focused systems

• DMFT scores of 1.2-2.5 compared to Latvia's concerning rates

Sweden's model particularly demonstrates success, providing free preventive care until age 24 with risk-based recall systems. Their approach shows that prevention-first payment design can achieve dramatic population health improvements while controlling costs.

Mixed payment models balance competing incentives

The most successful international systems combine capitation base payments with targeted fee-for-service components. Belgium's 2019 reform created hybrid models with risk-adjusted capitation (€120-275 annually per patient based on caries risk) plus performance bonuses for prevention outcomes. Early results show increased preventive service delivery without quality compromise.

Texas Medicaid's Pay-for-Quality program demonstrates mixed model success, achieving 240% access improvement while maintaining quality standards. These hybrid approaches balance efficiency incentives from capitation with quality assurance from targeted FFS components.

Value-based payments align incentives with outcomes

Emerging value-based payment (VBP) models directly tie provider compensation to health outcomes rather than service volume. Massachusetts Blue Cross partnerships with dental providers link 40% of compensation to performance metrics including caries risk reduction, preventive service delivery, and population health improvements.

Key VBP success metrics include:

• 43% prevented fraction for fluoride varnish applications

• Lower overall costs with higher prevention utilization

• Reduced emergency department visits for dental problems

However, VBP requires sophisticated data infrastructure and validated quality measures that may challenge Latvia's implementation capacity initially.

International Best Practices: Pediatric-Focused Evidence

Universal child coverage with prevention integration

Countries achieving the best pediatric outcomes universally provide comprehensive free dental care for children with seamless prevention-treatment integration. New Zealand's Community Oral Health Service demonstrates this model's effectiveness, providing care from birth to age 17 with:

• Automatic enrollment and systematic recall

• Dental therapist-led delivery for routine care

• NZ$99 per child comprehensive care vs. NZ$102 for single private diagnostic visit

• 40% reduction in lifetime caries incidence

Australia's Child Dental Benefits Schedule shows targeted approaches can also succeed, providing up to AUD$1,132 over two years for eligible children while achieving 45% reduced caries experience in some regions.

Prevention-focused workforce optimization

Leading systems optimize skill mix through dental therapists and hygienists for routine pediatric care, allowing dentists to focus on complex cases. This approach delivers 20-30% cost savings while maintaining quality. Australia's oral health therapist model shows AUD$26.5-61.7 million potential savings through increased utilization.

Nordic countries' extensive dental therapist utilization contributes to their cost-effective prevention outcomes. Latvia should consider workforce diversification to support prevention-focused payment models.

Water fluoridation as system foundation

Every successful pediatric dental system prioritizes community water fluoridation as foundational prevention. Evidence consistently shows $9 saved per $1 invested across countries. Australia achieves 90% population coverage, New Zealand has expanded to 53% with targeting 400,000 additional residents, while Canada's inconsistent 42% coverage shows weaker outcomes.

Latvia currently lacks comprehensive fluoridation, representing a critical policy gap that undermines any payment system's effectiveness.

Evidence Base: Scientific Foundation for Reform

Prevention investment shows consistent returns

Systematic evidence demonstrates prevention's superior cost-effectiveness. Meta-analysis of 19 studies shows oral health promotion programs achieve 81% lower caries odds with 97% showing cost reduction. The FiCTION trial found prevention-alone strategies most cost-effective at £251 per carious surface avoided.

OECD cross-national analysis reveals that 1% increase in oral health expenditure associates with 4.42 reduction in DMFT scores, while legal mandates for children's dental care achieve 1.32 DMFT reduction. This evidence directly supports Latvia's need for systematic prevention investment.

Payment systems significantly influence clinical behavior

High-quality research confirms payment systems drive clinical decision-making. England's NHS analysis over 17 years showed payment changes led to immediate shifts in treatment patterns, with procedures requiring least time increasing while time-intensive treatments decreased. This demonstrates that financial incentives can override professional norms.

Belgian policy experiments with 600 dental practices showed remuneration shifts toward preventive care increased preventive service delivery within the first year. These findings suggest Latvia's high caries rates partly reflect payment system misalignment rather than solely clinical or population factors.

General anesthesia usage indicates system failure

Concerning pediatric general anesthesia usage rates across multiple countries—including Finland's 2,000 annual referrals and significant pandemic increases—indicate prevention system failures. Countries with stronger prevention-focused payment systems show lower GA requirements, suggesting Latvia's GA overuse reflects late disease presentation due to treatment-focused incentives.

Office-based treatment saves average $5,000 per case compared to hospital-based GA, demonstrating prevention's economic impact beyond direct clinical costs.

Payment System Analysis: Pros and Cons Framework

Fee-for-service systems

Advantages: Administrative simplicity, provider autonomy, quality incentives for complex procedures, immediate patient access for those who can pay.

Disadvantages: Overtreatment incentives, prevention undervaluation, access barriers for low-income populations, cost escalation without control mechanisms. Critical for Latvia: FFS explains poor prevention outcomes despite universal child coverage.

Capitation systems

Advantages: Cost containment, prevention incentives, access improvement through eliminated point-of-service charges, predictable provider revenue.

Disadvantages: Undertreatment risks, patient selection bias, quality concerns without monitoring, provider income uncertainty based on panel composition.

Mixed payment models

Advantages: Balanced incentives combining prevention focus with quality assurance, customizable for different populations, risk mitigation for over/under-treatment.

Disadvantages: Administrative complexity, requires sophisticated design, potential gaming if poorly structured.

Value-based payments

Advantages: Direct outcome alignment, prevention encouragement, population health focus, demonstrated cost savings.

Disadvantages: Requires robust data infrastructure, validated quality measures, provider cultural change, administrative complexity.

Latvia-Specific Recommendations

Immediate priority actions

Address fundamental prevention gap: Latvia's 72% child caries prevalence despite free coverage indicates payment system misalignment. Immediate reforms should reweight provider payments toward prevention through capitation elements or prevention bonuses.

Implement community water fluoridation: This foundational intervention offers highest return on investment and enables all other prevention strategies. Latvia should prioritize national fluoridation as immediate policy action.

Pilot mixed payment models: Begin with voluntary provider participation in hybrid capitation-FFS models, learning from Belgium's successful approach while avoiding Latvia's 2017 reform implementation challenges.

Medium-term structural reforms

Expand adult coverage strategically: Current adult exclusion creates system inefficiency and health inequities. Graduated coverage expansion beginning with low-income adults and prevention services can improve population health while controlling costs.

Develop workforce diversification: Train dental therapists and hygienists for routine pediatric care, following Australia and New Zealand models. This supports prevention-focused payment while addressing provider capacity constraints and rural access challenges.

Strengthen quality measurement infrastructure: Value-based payment success requires robust outcome tracking. Latvia should invest in data systems enabling performance measurement before full VBP implementation.

Long-term vision integration

Universal prevention model: Establish school-based comprehensive programs with bundled payments covering complete prevention cycles rather than individual procedures. New Zealand's automatic enrollment and systematic recall provide the implementation template.

Regional variation management: Address Latvia's rural-urban disparities through differential payment adjustments, following Nordic countries' successful geographic equity approaches.

EU health system alignment: Position reforms to support broader European health integration while addressing Latvia's specific demographic and economic challenges.

Implementation Roadmap for Success

Phase 1: Foundation building (Years 1-2)

• Community water fluoridation implementation nationwide

• Provider payment reweighting toward prevention within existing FFS structure

• Pilot mixed payment programs with voluntary provider participation

• Quality measurement system development

Phase 2: System expansion (Years 3-5)

• Adult prevention coverage for low-income populations

• Workforce diversification through dental therapist training programs

• School-based prevention program establishment

• Rural access improvement through payment incentives

Phase 3: Integration and optimization (Years 5+)

• Value-based payment implementation with robust quality measures

• Universal adult coverage expansion based on pilot program success

• European health system integration alignment

• Outcome-based continuous improvement systems

Latvia's dental health crisis requires immediate payment system reform prioritizing prevention over treatment. International evidence clearly demonstrates that strategic payment design can achieve dramatic health improvements while controlling costs. The Nordic model provides the optimal template, emphasizing universal child coverage, prevention integration, and payment incentives aligned with population health outcomes. Success requires political commitment, adequate financing, and gradual implementation that learns from both international best practices and Latvia's previous reform challenges.

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Bibliography: Research Sources

Primary Research Articles

Birch, S., Gafni, A. (2016). Payment systems and incentives in dentistry. PubMed, PMID: 27807881. https://pubmed.ncbi.nlm.nih.gov/27807881/

Calache, H., et al. (2019). A dental workforce strategy to make Australian public dental services more efficient. Human Resources for Health. https://human-resources-health.biomedcentral.com/articles/10.1186/s12960-019-0370-8

Chen, Y.W., et al. (2019). Clinical effectiveness and cost-effectiveness of oral-health promotion in dental caries prevention among children: systematic review and meta-analysis. International Journal of Environmental Research and Public Health, 16(15):2668. https://www.mdpi.com/1660-4601/16/15/2668

Innes, N.P.T., et al. (2020). Cost-effectiveness of child caries management: a randomised controlled trial (FiCTION trial). BMC Oral Health. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7011536/

Listl, S., et al. (2023). National oral health policy and financing and dental health status in 19 countries. International Dental Journal. https://www.sciencedirect.com/science/article/pii/S0020653923000382

Ricketts, D., et al. (2013). Oral health care for children in countries using dental therapists in public, school-based programs, contrasted with that of the United States, using dentists in a private practice model. Journal of Public Health Dentistry. https://pmc.ncbi.nlm.nih.gov/articles/PMC3780681/

Skilton, J., et al. (2021). Dental Policy Lab 2 - towards paying for health in dentistry. British Dental Journal, 231:673-681. https://www.nature.com/articles/s41415-021-3725-1

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Country-Specific Studies

Latvia

Maldupa, I., et al. (2021). Caries prevalence and severity for 12-year-old children in Latvia. European Journal of Paediatric Dentistry. https://pmc.ncbi.nlm.nih.gov/articles/PMC9275297/

Nordic Countries

Fejerskov, O., et al. (1994). Caries prevalence in the Nordic countries. Community Dentistry and Oral Epidemiology. https://pubmed.ncbi.nlm.nih.gov/7814104/

Poulsen, S., et al. (1999). Caries preventive services for children and adolescents in Denmark, Iceland, Norway and Sweden: strategies and resource allocation. Community Dentistry and Oral Epidemiology. https://www.researchgate.net/publication/13528432_Caries_preventive_services_for_children_and_adolescents_in_Denmark_Iceland_Norway_and_Sweden_Strategies_and_resource_allocation

Australia & New Zealand

Dickson-Swift, V., et al. (2018). What factors are associated with dental general anaesthetics for Australian children and what are the policy implications? A qualitative study. BMC Oral Health. https://bmcoralhealth.biomedcentral.com/articles/10.1186/s12903-018-0638-8

Do, L.G., et al. (2021). Oral health of Australian adults: distribution and time trends of dental caries, periodontal disease and tooth loss. International Journal of Environmental Research and Public Health. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8583389/

Schluter, P., et al. (2013). Reducing disease burden and health inequalities arising from chronic disease among indigenous children: an early childhood caries intervention in Aotearoa/New Zealand. BMC Public Health. https://bmcpublichealth.biomedcentral.com/articles/10.1186/1471-2458-13-1177

United Kingdom

Chestnutt, I.G., et al. (2011). Paying for the wrong kind of performance? Financial incentives and behaviour changes in National Health Service dentistry 1992-2009. Community Dentistry and Oral Epidemiology. https://pubmed.ncbi.nlm.nih.gov/21668463/

UK Parliament (2025). NHS Dental Contract Reforms: Consultation. Hansard. https://hansard.parliament.uk/commons/2025-07-08/debates/25070846000016/NHSDentalContractReformsConsultation

United States

Hirschman, K.B., et al. (2022). Comparison of pediatric dentistry under general anesthesia in a surgery center vs a hospital. JAMA Network Open. https://pmc.ncbi.nlm.nih.gov/articles/PMC9773414/

Nash, D.A., et al. (2012). Time and cost analysis: pediatric dental rehabilitation with general anesthesia in the office and the hospital settings. Journal of Dentistry for Children. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3522492/

Nainar, S.M.H., et al. (2018). Pediatric dental surgery under general anesthesia: uncooperative children. Medicina Oral, Patología Oral y Cirugía Bucal. https://pmc.ncbi.nlm.nih.gov/articles/PMC6318733/

Policy and Health System Documents

International Organizations

Nordic Health and Welfare Statistics (2024). Dental care user charges and healthcare services. https://nhwstat.org/health/organization-health-services/health-care-user-charges/dental-care

European Commission (2024). European Health Insurance Card - Latvia and Sweden coverage information. https://employment-social-affairs.ec.europa.eu/policies-and-activities/moving-working-europe/eu-social-security-coordination/european-health-insurance-card/

Government Health Ministries

Australian Government Department of Health (2024). Dental health policies and Child Dental Benefits Schedule. https://www.health.gov.au/topics/dental-health

Ministry of Health New Zealand (2024). Better oral health outcomes as 400,000 New Zealanders gain access to fluoridated drinking water. https://www.health.govt.nz/news/better-oral-health-outcomes-as-400000-new-zealanders-gain-access-to-fluoridated-drinking-water

New Zealand Government (2024). Government help with dental costs. https://www.govt.nz/browse/health/gps-and-prescriptions/government-help-with-dental-costs/

Helsenorge (Norway) (2024). Who pays your dental bill? https://www.helsenorge.no/en/payment-for-health-services/who-pays-your-dental-bill/

Services Australia (2024). Child Dental Benefits Schedule. https://www.servicesaustralia.gov.au/child-dental-benefits-schedule

Health Information Systems

IT CAMP Latvia (2024). Public health service in Latvia. https://itcamp.lv/public-health-service-in-latvia/

KidsHealth New Zealand (2024). Dental care for your child. https://www.kidshealth.org.nz/dental-care-for-your-child

Professional and Research Organizations

CareQuest Institute for Oral Health (2024). Value-based care in dentistry. https://www.carequest.org/topics/value-based-care

Canadian Agency for Drugs and Technologies in Health (2016). Fluoride varnishes for dental health: a review of clinical effectiveness, cost-effectiveness and guidelines. https://www.ncbi.nlm.nih.gov/books/NBK401516/

Nordics.info (2024). Healthcare in the Nordic region. https://nordics.info/show/artikel/healthcare-in-the-nordic-region

Value-Based Care and Health Economics Research

Antonazzo, P., et al. (2023). Is value-based healthcare a strategy to achieve universal health coverage that includes oral health? An Australian case study. Journal of Public Health Policy. https://link.springer.com/article/10.1057/s41271-023-00414-9

Nakamura, Y., et al. (2022). Global neglect of dental coverage in universal health coverage systems and Japan's broad coverage. International Journal of Environmental Research and Public Health. https://pmc.ncbi.nlm.nih.gov/articles/PMC9275350/

Quinonez, C., et al. (2020). Do health systems cover the mouth? Comparing dental care coverage for older adults in eight jurisdictions. Health Policy. https://www.sciencedirect.com/science/article/pii/S016885102030169X

Tinanoff, N., et al. (2005). Models for financing dental services: a review. Journal of Public Health Dentistry. https://pubmed.ncbi.nlm.nih.gov/15984132/

Professional Publications

Dental Economics (Multiple articles on fee-for-service vs capitation models and practice economics). https://www.dentaleconomics.com/

Dentistry IQ (2024). Surge in severe pediatric dental issues necessitates dental care under general anesthesia and innovative therapies. https://www.dentistryiq.com/dentistry/article/55128061/

Dentistry Today (2024). Use value-based care to improve outcomes and reduce costs. https://www.dentistrytoday.com/use-value-based-care-to-improve-outcomes-and-reduce-costs/