Compulsory Medical Insurance System in Azerbaijan
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The book was translated and published under support Center for Economic and Social Development of the Friedrich Ebert Stiftung (CESD) Compulsory Medical Center for Economic and Social Development (CESD) Insurance System in Shirin Mirzeyev 76 "a"/33, Baku, Az1002, Azerbaijan AZERBAIJAN Phone; (99412) 5970691 (99412) 4954248 Fax (99412) 4373240 Email; [email protected] [email protected] URL; www.cesd.az Format: 60x84, 1/16. Quantity: 150 copies. Baku - 2009 2 Preface application of compulsory medical insurance was not possible in 2005. The law assigns 4% of employer salary fund to the medical insurance, but this law is Implementation of compulsory medical insurance in not yet applied. Besides, some insurance companies Azerbaijan is planned within the health care refrom still have not identified and selected the health care framework. Like in most of the European countries, in entities to work with. The issue is that, only 0,52 our country too, the application of compulsory million manats, out of 102,56 million manats for medical insurance has been accepted as a positive insurance payments, are for life insurance. This is not step. Besides raising people’s access to health care only because of people’s dicreased interest in life services, this might also prevent unofficial payments insurance, but also due to the insurance companies within the system. But the successful transition into not being able to work with health care entities. In compulsory medical insurance highly depends on the some cases, the amount requested from insurance mechanisms for the application of this new system, companies by health care entities is so big that the and these mechanisms have not been fully identified insurance companies lose their interest in getting yet. This, may result in the failure of the reform in involved with life insurances. This makes the life Azerbaijan; the reform which is seriously accepted in insurance an activity not financially attractive for European countries. insurance companies. Law on “Medical Insurance” has been adopted The compulsory medical insurance of in 1999. But at that time the President Heydar Aliyev unemployed population has not precisely been put a veto on this law until 2005. But during this identified. This is a compulsary insurance, therefore period three more legal documents on “Public health all citizens, including unemployed population, who protection”, “Private health care” and Medical are unable to make payments, should have access to insurance” were developed and adopted. Yet the 3 4 this system. In this case, the state needs some Diagram 1. Financing of Health Sector in financial support. Azerbaijan 2% 5% Informal payments The application of compulsory medical insurance, as a part of health care system reforms, 23% Financial resources from the State Budget should be accompanied by complex actions. It will not Medical Insurance, Private have an effect if implemented as a seperate Medical Services 70% component. Also, it is important to note that the Foreign Investments insured people are not requested to pay unofficial payments and they receive free services as mentioned Source; World Bank 2007 in their insurance contracts. But, this requires strengthening the control on the system, besides the In Azerbaijan, the number of hospital beds per application of compulsory medical insurance. thousand capita is 7.6. This indicator is 3.8 in According to the World Bank, 70% of health care Germany, and 2.3 in Turkey. The number of beds is expenses go to unofficial payments as showed in the high, but the use of these beds is very low in table. The share of the state budget is 23%. comparison with other countries. Only 26,1% of hospital beds are used in Azerbaijan. This indicator is 89.5% in Germany, 86.0% in Russia, 61.0% in Turkey, 76.9% for EU and 85.9% for CIS. Even though the number of beds is high, they are not efficiently used. Allocations from the state budget is based on the number of hospital beds, and more beds leads to more money from the budget. That is why, 5 6 besides the application of compulsory medical houshold budget of 2007, in Azerbaijan 3,4% of insurance, improvments of health care financing houshold budget is spent on health care. The capital system is also important. Otherwise, insurance will changes according to the household size. As in not make big changes in the health care system. household with one person health care expense is 10,9 manat, for 2 people - 6,8 manat, for 3 people - Application Issues of Medical Insurance 4,5 manat, for 4 people it is 3,2 manat. Diagram 2. Public Health Expenditures in Azerbaijan 332 Even though law on medical insurance has been 257,2 adopted in 1999 in Azerbaijan, the pace of reforms in this direction is not satisfactory. The budget for 162 115,3 health care is increasing in Azerbaijan, but the share 73,5 42 44,8 55,3 of health care budget in GDP is still low (it was 3% in 2005). Health care budget’s organizational division is 2001 2002 2003 2004 2005 2006 2007 2008 the following: 95,3% Ministry of Health Care, 2,3% National Oncologic Scientific Center under Ministry of Health Care, 1,9% State Railway Department and Source; Ministry of Health, Azerbaijan, 2009 1,7% other entities. Functional division of the health care expenditures for the 2008 year: 55,6% other Payment of insurance amount by the services which has to do with health care, 15,7% government in centralized manner is under policlinics and out-patient hospitals, 0,8% applied consideration for the compulsary medical insurance researches in health care field and 2% other services base services package for the people financed from in health care field. According to the finals of the budget and for privileged groups. At the present 7 8 time, the work is going on in identifying the minimum 2. Normative legislative regulation of health care services. healthcare funding reform process According to the January 1, 2008 information, Application of best international practices the total number of doctors with different and capacity building of the State Agency on specializations is 32,4 thousand, the number of compulsary medical insurance by the medical staff with lower education is 62,2 thousand Cabinet of Ministers; and the total number of hospitals is 1 692. Since 3. Improvment of healthcare funding system; 2005 the state’s financial resource have increased 4. Training and enlightenment; significantly due to the oil revenues. The amount 5. Monitoring and evaluation. allocated to the health care from the state budget is increasing every year. But still people pay the 70-75 According to the plan, in 2008 the Ministries of percent of total amount of health care services by Health Care and Finance will conduct the monitoring themselves. of current situation (funding the first medical-sanitary aid, and out-patient services, the quality of health In August 11, 2008 The Cabinet of Ministers of care material and technical basis and etc.) of health Azerbaijan Republic has adopted a decree on care funding system. During the year Ministries of appoving “The action plan on health care funding Health Care, Finance and also Labor and Social system reforms of Azerbaijan Republic and Protection will evaluate the current salary system (the application consept of compulsary medical factors identifying salaries, the level of average insurance”. This decision includes the following: monthly salary, the effect of salary to the quality of 1. Evaluation of current situation of healthcare labor). financing system; 9 10 According to the Action Plan, suggestions on • Azerbaijan Republic’s Law on making development of information bank of compulsary additions and changes to some of the medical insurance and on establishment of single legislative acts of Azerbaijan Republic (Baku, information system will be prepared in 2009-2010 07 December 2007) years. The bank will ensure the application of new • The order of the Prezident of Azerbaijan financing system. Republic on establishment of State Agency on Compulsary Medical Insurance by According to the “Health care funding system Cabinet of Ministers of Azerbaijan Republic reforms of Azerbaijan Republic and the application (27 december 2007) concept of the compulsary medical insurance”, it is • The order of the Prezident of Azerbaijan important to carry out sound reforms to achieve more Republic on “Approving the healthcare efficient use of state funds allocated to the health funding system reforms of Azerbaijan care. The main directions of health care reforms are Republic and the application concept of the improving health care funding mechanism and compulsary medical insurance” (Baku, 10 application of compulsary medical insurance. January 2008) • The decree of the Cabinet of Ministers of The following are included into the legislative Azerbaijan Republic on approval of the base of compulsary medical insurance system of “Action Plan on implementation of the Azerbaijan Republic: healthcare funding system reforms of Azerbaijan Republic and the application • “Medical İnsurance” Law of Azerbaijan concept of the compulsary medical insurance Republic (Baku, 28 October 1999) for the 2008-2012 years” (№179 Baku, 11 August 2008). 11 12 Opportunities for Application of Medical According to the law, in compulsary medical Insurance in Azerbaijan insurance system the insurers pay the amount to working citizens, and the compulsary medical According to our country’s legislation on insurance, insurance fees as identified by the appropriate there are life and non-life insurance (general executive bodies. insurance) depending on the operation directions of • Compulsary medical insurance fee is identified the insuring companies, and there are personal and by the amount which makes the properity insurances depending on the object of implementation of the compulsary medical insurance. Each insurance field consists of some insurance possible. insurance classes.