Tweet
'FREE' MEDICINE MORE EXPENSIVE THAN MEDICAL INSURANCE
by Elita Babayan
arminfo
Tuesday, April 10, 18:53
Medical insurance is little known to most of the Armenian citizens,
but it has a century-old history in many economically developed
countries. Necessity and usefulness of this product is no longer
disputed, though many countries still have problems in the medical
insurance system. Although there is lack of the best practice of
medical insurance, the system exists and settles one of the major
problems of the public - health safety.
The healthcare system in Armenia has proved in an extremely problematic
situation after the collapse of the Soviet Union (before the collapse
it was considered the best in the Soviet area). The country with
imperfect model of economic relations is experiencing quite "marketable
relations" in the sphere of medical services. A patient is reluctant to
pay (formally or informally) rather big amounts of sum for once free
services. Therefore, people began to appeal for medical assistance
very rarely.
There is a serious need for a conceptually new healthcare model. Both
the authorities and the medical society of the country have alarmed
of that and, in fact, serious reforms were launched in the given field.
Unfortunately, these reforms are still fragmentary and many legislative
initiatives on the free medical aid are often populistic and doomed to
failure, for instance, the law on free obstetrics and free treatment
of children below 7 years adopted yet in 1996.
The law on free obstetrics was put into practice (not-fully) yet in
2008, while the law on the free inpatient treatment of children below
7 years came into effect yet in the beginning of the year. It is
noteworthy that in 2006 free ambulatory treatment of the population
was introduced in the country. In addition, a certain group of the
citizens, specifically, the people of the first and second disability
categories have a right to free drugs. The people of the third
disability category can buy drugs for half price. However, health
workers often say that the budgetary financing does not cover even
half of the needs of patients. In fact, many vulnerable adults have
to wait for "the next time", which often leads to grave consequences
for the health of patients.
Health workers say that there are very long queues for "free treatment"
at hospitals. They are not satisfied with the bonuses they receive
as part of the free medical assistance and complain for lack of any
additional payment to nurses. Health workers say that the salary of
physicians would grow for several times in case of full financing of
the (free) medical services from the state budget, which is, however,
not within the interests of some local officials. This problem is not
new for the medial workers and they think it will be hindering normal
work of medical establishments for many years creating additional
corruption risks in the enough corrupt field.
The sector still has many relevant problems. Many medical
establishments, especially in the regions, lack the necessary
infrastructure and funds to acquire technical equipment. There are
no single quality standards of medical aid. Neither there is a single
price making system for all the medical establishments. The healthcare
system needs optimization.
Experts in the insurance sector say that compulsory medical insurance
is able to settle many of the above problems, however, they think
that the country has no relevant economic and social background
for introduction of the given institute. High level of unemployment
and low salaries in the country is the problem number one hindering
introduction of compulsory medical insurance in the country, experts
and officials say.
Nevertheless, to transfer to the compulsory medical insurance, the
country has chosen quite a good scenario designed for a mainstream
audience, particularly, civil servants. Favoring them the authorities
rely on their loyalty especially on the threshold of elections. In
addition, they hope to test the new system of medical insurance on
civil servants. This system will prove its vitality, and reveal the
tariff efficiency of medical establishments and the quality of medical
services. The government, in turn, will have useful "informers" in
the face of civil servants regarding the problems that may emerge
when transferring to the compulsory medical insurance. The latter
will fully test the healthcare system, adjust insurers and medical
establishments to the new system of work, coordinate money flows
inside the system and reveal all its positive and negatives sides.
Executive Director of INGO Armenia Insurance Company Levon Altunyan
says the government's initiative will result in a threefold growth
of the medical insurance market in Armenia and will pave the way
to introduction of compulsory medical insurance in the public life
of Armenia. "The program will become an impetus for development for
the institute of insurance and the market of medical services in the
country. The quality of medical services will become more prior for
insurers; adequacy of medical aid to pathologies, reasonability of
expenses on treatment and diagnostics," Altunyan says.
Today, the medical insurance market capacity does not exceed 1.5
billion drams. Insurers reached such scales only after the government
amended the Law On Income Tax in 2010. Thanks to the given amendments,
the fees paid by the employers under medical insurance contracts with
employees are not taxable. Before that, annual insurance premiums of
companies did not exceed 1 billion drams, and the market was growing
mostly due to the corporate insurance (foreign companies). However,
as Executive Officer of Nairi Insurance Company Gor Khachatryan says,
this system had been developing on own specific rules for long years
deviating from the theoretical and practical bases of development.
Therefore, it is unable to pave the way to compulsory insurance like
it was done in many developed countries.
So, predicting the future of medical insurance in Armenia one should
not forget about the economic situation in the country.
Social-economic situation in the country impedes insurance relations,
deteriorates the market situation, and dilutes the economic nature
of insurance and its role in the financial system of the public.
Nevertheless, compulsory insurance in Armenia may become a real goal.
It requires a proper model of financing of the medical insurance
system, active financial support and political will of the
authorities. Simultaneously, on the example of the motor third party
liability insurance, it is necessary to set up a special Bureau that
would toughly regulate and control the sector. This system should
not be left unattended, for wild and unregulated competition leads to
unfair tricks and shadow plans to "beat" the rivals. The new system
should redistribute benefits and undertake a serious public burden
to restore the system of social security and protection.
From: A. Papazian
by Elita Babayan
arminfo
Tuesday, April 10, 18:53
Medical insurance is little known to most of the Armenian citizens,
but it has a century-old history in many economically developed
countries. Necessity and usefulness of this product is no longer
disputed, though many countries still have problems in the medical
insurance system. Although there is lack of the best practice of
medical insurance, the system exists and settles one of the major
problems of the public - health safety.
The healthcare system in Armenia has proved in an extremely problematic
situation after the collapse of the Soviet Union (before the collapse
it was considered the best in the Soviet area). The country with
imperfect model of economic relations is experiencing quite "marketable
relations" in the sphere of medical services. A patient is reluctant to
pay (formally or informally) rather big amounts of sum for once free
services. Therefore, people began to appeal for medical assistance
very rarely.
There is a serious need for a conceptually new healthcare model. Both
the authorities and the medical society of the country have alarmed
of that and, in fact, serious reforms were launched in the given field.
Unfortunately, these reforms are still fragmentary and many legislative
initiatives on the free medical aid are often populistic and doomed to
failure, for instance, the law on free obstetrics and free treatment
of children below 7 years adopted yet in 1996.
The law on free obstetrics was put into practice (not-fully) yet in
2008, while the law on the free inpatient treatment of children below
7 years came into effect yet in the beginning of the year. It is
noteworthy that in 2006 free ambulatory treatment of the population
was introduced in the country. In addition, a certain group of the
citizens, specifically, the people of the first and second disability
categories have a right to free drugs. The people of the third
disability category can buy drugs for half price. However, health
workers often say that the budgetary financing does not cover even
half of the needs of patients. In fact, many vulnerable adults have
to wait for "the next time", which often leads to grave consequences
for the health of patients.
Health workers say that there are very long queues for "free treatment"
at hospitals. They are not satisfied with the bonuses they receive
as part of the free medical assistance and complain for lack of any
additional payment to nurses. Health workers say that the salary of
physicians would grow for several times in case of full financing of
the (free) medical services from the state budget, which is, however,
not within the interests of some local officials. This problem is not
new for the medial workers and they think it will be hindering normal
work of medical establishments for many years creating additional
corruption risks in the enough corrupt field.
The sector still has many relevant problems. Many medical
establishments, especially in the regions, lack the necessary
infrastructure and funds to acquire technical equipment. There are
no single quality standards of medical aid. Neither there is a single
price making system for all the medical establishments. The healthcare
system needs optimization.
Experts in the insurance sector say that compulsory medical insurance
is able to settle many of the above problems, however, they think
that the country has no relevant economic and social background
for introduction of the given institute. High level of unemployment
and low salaries in the country is the problem number one hindering
introduction of compulsory medical insurance in the country, experts
and officials say.
Nevertheless, to transfer to the compulsory medical insurance, the
country has chosen quite a good scenario designed for a mainstream
audience, particularly, civil servants. Favoring them the authorities
rely on their loyalty especially on the threshold of elections. In
addition, they hope to test the new system of medical insurance on
civil servants. This system will prove its vitality, and reveal the
tariff efficiency of medical establishments and the quality of medical
services. The government, in turn, will have useful "informers" in
the face of civil servants regarding the problems that may emerge
when transferring to the compulsory medical insurance. The latter
will fully test the healthcare system, adjust insurers and medical
establishments to the new system of work, coordinate money flows
inside the system and reveal all its positive and negatives sides.
Executive Director of INGO Armenia Insurance Company Levon Altunyan
says the government's initiative will result in a threefold growth
of the medical insurance market in Armenia and will pave the way
to introduction of compulsory medical insurance in the public life
of Armenia. "The program will become an impetus for development for
the institute of insurance and the market of medical services in the
country. The quality of medical services will become more prior for
insurers; adequacy of medical aid to pathologies, reasonability of
expenses on treatment and diagnostics," Altunyan says.
Today, the medical insurance market capacity does not exceed 1.5
billion drams. Insurers reached such scales only after the government
amended the Law On Income Tax in 2010. Thanks to the given amendments,
the fees paid by the employers under medical insurance contracts with
employees are not taxable. Before that, annual insurance premiums of
companies did not exceed 1 billion drams, and the market was growing
mostly due to the corporate insurance (foreign companies). However,
as Executive Officer of Nairi Insurance Company Gor Khachatryan says,
this system had been developing on own specific rules for long years
deviating from the theoretical and practical bases of development.
Therefore, it is unable to pave the way to compulsory insurance like
it was done in many developed countries.
So, predicting the future of medical insurance in Armenia one should
not forget about the economic situation in the country.
Social-economic situation in the country impedes insurance relations,
deteriorates the market situation, and dilutes the economic nature
of insurance and its role in the financial system of the public.
Nevertheless, compulsory insurance in Armenia may become a real goal.
It requires a proper model of financing of the medical insurance
system, active financial support and political will of the
authorities. Simultaneously, on the example of the motor third party
liability insurance, it is necessary to set up a special Bureau that
would toughly regulate and control the sector. This system should
not be left unattended, for wild and unregulated competition leads to
unfair tricks and shadow plans to "beat" the rivals. The new system
should redistribute benefits and undertake a serious public burden
to restore the system of social security and protection.
From: A. Papazian