Healthcare Muddle


Economic News

22 Jul 2010
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While Turkey's progress in meeting many of its economic targets has been recently praised by international bodies, one key area still lies outstanding - tackling structural change, especially regards health care. With a growing social security deficit, focusing on health, pensions and benefits is likely to be the major challenge facing the government as it works towards next year's elections.

Indeed, when it first took office back in 2002, the Justice and Development Party (AKP) issued an urgent action plan to streamline health insurance by unifying the three social security organisations that serve the workforce. A universal health insurance scheme has been an objective of every Turkish government since 1963 - to no avail. It will take considerable political muscle and co-operation for the government to create an integrated healthcare system.

Funding for a new system is one of the central areas of dispute. The Turkish Industrialists' and Businessmen's Association (TUSIAD) recommends that payroll-based premiums and general taxpayers should foot the bill for the new plan.

However, some doctors and health-sector employees have also recently protested over the merger of the social security organisations - the SSK, Bag Kur, and the Emekli Sandagi pensions fund - saying that this is simply a way of making cuts in services, and that it does nothing to address the substantial debts hospitals now owe to pharmaceutical companies, thanks to a combination of under-funding and - many argue - overcharging. Some 63 Turkish hospitals are currently facing bankruptcy and court actions over this issue.

Meanwhile, the government's goals for the health sector also include increasing local control over health matters and developing primary care that is based on family physicians and the privatisation of services.

The result of historical developments rather than a rational planning process, Turkey's healthcare system is a hotchpotch of centralised and fragmented components. Over the last 40 years, infrastructure has been successfully developed in most rural areas, but rapid urbanisation during the same period was not anticipated, resulting in the healthcare infrastructure being relatively weaker in the cities.

Some 10m Turks are uninsured, and lack access to the social security system, the insurance programme for the unemployed or the small private insurance industry. Agricultural workers, for example, fall through the cracks as they cannot be covered completely by the social security schemes. The green card system that was supposed to cover the poorest of the poor, providing them with free health coverage at state hospitals, has been widely abused.

Coverage and benefits under Turkey's healthcare system are highly variable and lack standardisation. In rural areas and in the eastern provinces, health conditions are significantly worse than in the rest of the country, and 20% or more of health centres nationwide do not have a doctor.

Currently, health care is financed by the government through the Ministry of Finance, social security institutions and out-of-pocket payments. Private health insurance has enormous potential to grow, but currently covers just 1% of the population.

Additional sources of healthcare funding are provided by public, quasi-public, private and philanthropic organisations, but relations among them are not well structured or regulated.

However, since 1988, a major additional source of tax revenue has become available to the Ministry of Health through special funds from earmarked excise duties on fuel, cigarettes, alcohol and the sale of new cars. Revolving funds have become a progressively important source of financing for the Ministry of Health, into which fees are paid by insurers and individuals.

Yet as of 2007, a general insurance plan is set to pick up the tab for nearly 60m people seeking medical care - public or private.

Mehmet Ali Aydinlar, CEO of the Acibadem private hospital in Istanbul, which is associated with the Harvard Medical Foundation, said the new provision had already made a drastic impact on the private sector. Aydinlar said leading hospitals such as his are not developing fast enough to serve the number of patients who come to them for care. Private hospitals are under construction all over the country in anticipation of growing demand.

Meanwhile, there has also been a rethink of another key aspect of health care: preventive medicine.

The Ministry of Health is the only agency that provides preventive health services currently, with public health expenditure allocated to this area decreasing from 12% in 1996 to 6% in 2001, according to the World Health Organisation (WHO).

With salaries and pharmaceuticals taking the lion's share of available health funding, scarce resources remain to pay for preventive and essential curative care.

As Dr Murat Dayanýklý, CEO of the Anadolu Medical Center in Istanbul, put it, "If we establish preventive medical services as a network in Turkey and keep patients out of the hospital, Turkey will get a much better output."

Indeed, the inadequacy of health centres has led many patients to seek primary care in the outpatient departments of Ministry of Health hospitals, university hospitals and polyclinics.

One other way of improving care is for the training of general practitioners to practice family medicine. Family doctors, or primary care physicians, would make referrals and follow patients' medical histories, helping to relieve the overwhelmed hospitals of some non-urgent cases.

Meanwhile, as accession to the EU approaches, public organisations will be held to new standards, creating even more challenges for the national healthcare system. How the government responds to this and brings about the type of overhaul that can bring more equity, efficiency and effectiveness in the Turkish healthcare system will be a key political as well as economic question in the year ahead.

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