Public–Private Healthcare Dynamics After Covid-19: A Lithuanian Case Study

Imagine the healthcare system as a giant, bustling city. In some cities, the government builds and runs all the schools, hospitals, and parks (the "public" side). In others, private companies run everything, and you pay them directly. But most modern cities, like the one in this story, are a mix. They have a government "purchaser" that collects money from everyone (like a subscription fee) and then pays bills to both public and private shops to keep the city healthy. This is called a compulsory health insurance system. It's a bit like a massive, organized potluck where the government manages the budget and invites both family-run kitchens and big restaurant chains to serve the food.

Now, imagine a sudden, massive storm hits the city—a pandemic. The main public kitchens get overwhelmed, the lines get too long, and people start going hungry. The city managers have a choice: do they just close the gates, or do they quickly call in the private restaurants to help serve the extra food? This is the big question researchers have been asking since the COVID-19 storm passed: Did the city just borrow a few extra chefs for a week, or did they permanently change the recipe and let the private restaurants take over the whole kitchen? This paper investigates exactly that, looking at how a country called Lithuania handled this "storm" and what happened to its mix of public and private healthcare afterward.

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The Storm and the Kitchen Helpers

In Lithuania, the government runs a system where everyone pays into a big health fund (the Compulsory Health Insurance Fund, or CHIF). This fund acts like a giant wallet that pays doctors and hospitals to take care of people. Usually, most of the money goes to public hospitals and clinics. But there are also private doctors and clinics that can sign contracts with the government to get paid from this same wallet.

When the COVID-19 pandemic hit in 2020, it was like a sudden, massive influx of customers into the city's kitchens. The public hospitals were swamped, staff were tired, and routine check-ups were getting delayed. To keep things running, the government had to get creative. They turned to the private sector, asking private doctors and clinics to step in and help clear the backlog.

The big question for the researchers was: Did this emergency help turn into a permanent takeover? Did the private sector grow so big that it started replacing the public system, or was it just a temporary fix?

What the Data Revealed: A Temporary Boost, Not a Takeover

The researchers looked at the numbers from 2020 all the way through 2025, tracking how much money the government spent on private providers versus public ones. Here is what they found, broken down into simple terms:

1. The Money Didn't Shift Dramatically
The study found that the private sector did get a little more money, but it wasn't a huge takeover. In 2020, private providers got between 7% and 9% of the total health fund money. By 2025, that number had crept up to between 11% and 12%.

• The Analogy: Imagine the government's wallet had 100 coins. Before the storm, the private chefs got 7 or 8 coins. After the storm, they got 11 or 12. They got a few more coins, sure, but the public kitchens still held the vast majority of the wallet (88% to 92%). The government didn't hand over the keys to the private chefs; they just gave them a slightly bigger tip for the extra work.

2. The "Where" and "What" Mattered
The private help wasn't spread out evenly. It was very focused. The private providers mostly helped with ambulatory care (like regular doctor visits) and diagnostics (like X-rays and lab tests). These are the "easier" tasks that don't require massive, complex hospital buildings.

• The Analogy: Think of the public hospitals as the heavy-duty construction crews fixing the foundation of a building. The private clinics were like the handyman team brought in to fix the leaky faucets and paint the walls. The handyman team got busier, but they never started rebuilding the foundation. The complex, heavy-duty work stayed firmly in the hands of the public system.

3. Location, Location, Location
The study also looked at different regions in Lithuania, like Vilnius, Kaunas, and Klaipėda. They found that the amount of private help depended entirely on what was already there before the storm.

• The Analogy: In the city of Klaipėda, where there were already lots of private handyman teams, the government hired a lot more of them during the storm. By 2025, private providers in Klaipėda were handling between 20% and 25% of the work. But in Panevėžys, where there were fewer private teams to begin with, the private share only went up to about 9% to 12%.
• The Lesson: The storm didn't create a new map of who does the work. It just made the existing map look a little more active. If you didn't have private chefs in your neighborhood, you didn't suddenly get a bunch of them just because of the pandemic.

4. The Calm After the Storm
Perhaps the most important finding is what happened after the worst of the pandemic was over. If the government had decided to permanently switch to private chefs, the numbers would have kept climbing. Instead, they stabilized.

• The Analogy: Once the storm clouds cleared and the lines at the public kitchens got shorter, the government didn't keep hiring the extra private chefs at the same frantic pace. The system settled back into a "normal" rhythm where the private chefs were still there, helping out, but they didn't take over the whole kitchen.

The Verdict: Bounded Adaptation, Not a Revolution

The researchers call this "bounded adaptation." It's a fancy way of saying the system stretched to fit the problem, but it didn't break or change its shape.

The paper explicitly rules out the idea that Lithuania underwent a structural transformation. There was no "privatization" where the government stepped back and let the private sector run the show. The public sector kept its dominant role in financing and organizing care. The private sector's role remained:

• Modest: Only a small slice of the total money.
• Selective: Mostly for check-ups and tests, not complex hospital care.
• Regional: Dependent on what was already available in each town.
• Stable: It stopped growing aggressively once the emergency passed.

Why This Matters

This story is important because it shows that when a health system gets squeezed by a crisis, it can flex and use private help without losing its public soul. The government in Lithuania managed to use the private sector as a "shock absorber" to keep the system running during the pandemic, but they didn't let that temporary fix become a permanent rule.

For anyone watching how countries handle health crises, this suggests that you can call in the private reserves to help out in an emergency without necessarily changing the whole game. The system adapted, but it stayed true to its original design. The private chefs helped clear the dishes, but the public kitchen is still the one running the show.