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Yeghiazaryan Margarita Raphayelovna, Yerevan State University, PhD, Associate Professor, Faculty of Economics, Department of Economic Theory E-mail: a.martirosyan@rambler.ru Martirosyan Arman Rubenovich, Yerevan, State University, PhD, Associate Professor, Faculty of Economics, Department of Economic Theory E-mail: a.martirosyan@rambler.ru
Socio-Economic Aspects of the Health Care System Development in the Republic of Armenia
Abstract: the article discusses the issues of health care system in the Republic of Armenia, current situation and development trends. Health of the population is considered as one of the main indicators of socio-economic development of the country. In this respect some basic suggestions to mitigate and overcome problems caused by the crisis in this sphere are introduced.
Key words: healthcare system, medical insurance, healthcare cost, public expenditures, private expenditures, free medical and copayment medical assistance, poor and needy people.
Health of the population, nation and citizen has an important role in the process of social development as well as it is one of the most important indicators of social-economic development of the country. The effectiveness of this indicator depends not only on material and spiritual needs of a family, but also on satisfaction in participating in working and social life, in scientific, cultural and similar activities.
Still A. Marshal noted: ‘Strength and health of the population are the basis for productivity. Material wealth depends on it. Reasonable use of the material wealth is essential to increase physical and spiritual potential of the society. Health is the first and the main condition of the human capital. The latter cannot function effectively without it [1, 268].
Life duration is the important indicator of human development. At the same time it is taken into account that not only life duration is important but also its healthy way from the aspect of expanding human opportunities and freedom as far as diseases prevent and restrict the possibilities of self expression and self realization. In this respect satisfaction of health needs has a vital importance for human development, and the problem of the healthcare system should be not only the treatment of diseases but also their prevention as far as the disease itself is a restriction of opportunity. And if we consider serious disease or diseases that affect person’s life and activity, in this case prevention of diseases has more vital importance.
After the declaration of independence, radical reforms implemented in the Republic of Armenia affected the health care system.
According to N. Semashko model, USSR healthcare system was strictly centralized. Medical services were available to the entire population. After the Independence free medical services could not be provided to the entire population in terms of adverse socio-economic and political situation. Majority of the population had to cover expenditures of medical services fully. Although Government tries to provide free medical treatment to the vulnerable groups of population, partial funding assumes that even people involved in above mentioned groups sometimes should make private payments.
Surely, low efficiency of the sphere reforms first of all is due to the lack of coordinated policy as well as the lack of effective management systems of financial flows.
Compulsory medical insurance is not yet introduced. Because of the insufficient investments in healthcare sphere, corruption and shadow turnover has been increased. Paid medical services are hardly available for the majority of the population. All this contributed to the deterioration of population’s health. And the latter led to serious loss of human capital.
Statistic figures show that during the recent 10-12 years almost all indicators of RA healthcare system had a tendency to decrease. The number of both hospitals and patients have been reduced. At the same time it does not mean that the number of deaseases has been reduced. On the contrary, currently observed demographic and healthcare sphere indicators are disturbing and upcoming tendencies are alarming. Unfortunately, the latest official statistical data are presented as of 2011 year, but we believe that significant changes in this sphere haven’t been made since that time. In 2010-2011 total birth rate coefficient was 1,6. This figure is lower than the fertility coefficient providing population’s natural reproduction. Cardiovascular diseases, cancers continue to hold leading positions in the structure of mortality. Moreover the age of these diseases got younger among the population. Year by year continuous increase of them is noticed.
Population capacity to pay necessary expenses for healthcare services is rather low. Experimental data indicate that the majority of the population belongs to such social groups, where ability to pay healthcare cost is extremely low. As a result funds provided by households for medical services are reduced year by year. According to 2011 data of Integrated Survey of Household Living standards in Armenia expenses for medical services constituted only 7,6 % of expenditures on services done by household, whereas in 2009 it was 11,2 % [2]. Thus healthcare expenses per capita are reduced year by year; if in 2009 it was 888 AMD per month average then in 2011 it was 686 AMD. It is evident that the patient will not be saved with it. The situation is worse in rural areas of the Republic where the person spends 537 AMD average on healthcare [3, 133-134].
These results emphasize the importance of free healthcare package especially for poor consumers. So taking into consideration the fact that it depends on family benefits, it is important to increase not only targeting of benefits, but also the level of involvement of poor and extremely poor population.
Historically the state budget was the primary source for healthcare system funding. At present the system is funded both with local (state budget and payments by the citizens) and international sources (humanitarian assistance, international programs, etc.).
In the Republic of Armenia public expenditures play substantial role, because of shortage of the funds (almost 35 % of the population is poor) and high fees for medical services. However state expenditures for healthcare system are not sufficient to meet the public needs. Thus for 2010-2011 the level of expenditure for healthcare in the state budget as compared with previous years remained almost unchanged and it constituted about 6.3 %. At the same time these expenses never exceeded 1,5 % of the GDP. Such level of expenses is one of the lowest in the world; it is nearly four times less as compared with the corresponding indicators of EU member states and it makes nearly half of the CIS member states’ average. [4, 95] In the result of the amendments to the legislation the institute of private voluntary medical insurance introduced in the RA. However in 2009 expenditures through insurance constituted 0,4 % of total private expenditures [5]. Generally total expenditure indicators for health in Armenia are one of the lowest among middle-income countries. Almost all countries with low and middle income in total (public and private) spend 4-8 % of their GDP on healthcare. Total/public and private/healthcare expenditures in Armenia constitute 4,6 % of GDP [5].
Nevertheless the number of positive changes has been implemented in the health sector including the following:
1. Since February 1, 2011 the state-guaranteed free medical care and services copayment reimbursement system was invested which is applied for emergency obstetric and medical assistance programs.
2. Free medical care program for children between 0-7 years.
3. Free maternity assistance program.
4. Program of providing free medical treatment and medicines to socially needy people.
However many administrative, corruption and informative obstacles reduce the efficiency of programs that especially provide free medical and copayment medical assistance. In case of serious diseases people do not rely on free medical treatment services and they often make shadow payments for proper medical assistance to doctors. Although these payments cause serious tension for needy and poor families but they often have to turn to paid medical assistance with debts, by the help of relatives, or by selling family property.
Nevertheless, above mentioned programs have a positive impact to health care services and now it enables provide minimum medical assistance to people if necessary. Thus if a person does not have necessary funds and possibility to get high quality medical care he can rely on free medical assistance program.
With regard to the problems of systemic nature, we can distinguish the following:
1. Overcoming quality disproportion between marz and regional healthcare services;
2. Simplification of administration that prevents access to high quality medical services and elimination of corruption-generating mechanisms;
3. Improving access to healthcare services for groups that not involved in socially needy beneficiary groups but who are actually in heavy social conditions.
Special attention should be given to early diagnosis, prevention and treatment of diseases. At the same time issues of access to prior services (especially in marzes), quality (appropriate personnel and logistics) as well as issues related to institutional relations must be taken into consideration.
Problems of providing professional medical treatment in hospital for socially needy groups are very important. In the result of comprehensive analyses of medical insurance system, the Government of Armenia is planning to review funding mechanisms of medical services for socially needy people with the purpose of providing guarantees for medical services and for increasing the efficiency level of the corresponding program. Summing up we can distinguish the following groups of the poor and needy people:
1. Need for prophylactic healthcare services;
2. Need for diagnostic health services;
3. Need to receive high quality treatment in hospital;
4. Need to purchase medicine.
Taking into consideration both positive and negative aspects we can definitely say that in Armenia high quality medical services which will contribute to the human development is not secured especially for poor and socially disadvantaged groups.
In this respect we would like to introduce some basic suggestions to mitigate and overcome problems caused by the crisis in this sphere.
Short-term programs to solve urgent problems:
1. Regular implementation of free diagnostic and preventive healthcare programs among the population for at least twice a year. Beneficiaries are to be considered all those who want to take advantage of those programs, initially providing a high level of public awareness.
2. To develop and implement the system for socially disadvantaged, but not involved in any social program people to receive free health services.
3. To spread the principle of co-payment in all sectors of healthcare (at present it refers only to gynecological and urgent diseases).
4. To organize regular campaigns over high quality medical services for the population of marzes and rural area to ensure high quality healthcare services.
5. To provide funding of above mentioned programs.
6. To improve the cooperation with different charity or non-governmental organizations, synchronize their programs with state programs in the healthcare.
7. To form database for healthcare needs of vulnerable groups of population and disseminate information among all possible actors in this field.
8. To improve the mechanisms of the quality of free healthcare services for the poor and needy people.
References:
1. A. Marshall, Principles of economics, T., M., 1933.
2. RA National Statistical Service (Integrated Survey of Household living Standard, 2011).
3. Social Snapshot and Poverty in Armenia, 2012, www.armstat.am.
4. G. Gharibyan, A. Hakobjanyan, Population’s income distribution and redistribution relations in the transition economy of the Republic of Armenia, Yerevan.
5. Электр. ресурс. Режим доступа: http://www.who.int.
Zhelyuk Tatiana Leontiivna, Ternopil National Economic University (Ukraine),PhD, Professor, Department of State and Municipal Management E-mail: Zheluk_tan@mail.ru Revun Konstantin Ivanovich Ternopil National Economic University, postgraduate student, the Department of State and Municipal Management E-mail: trinity@dch.com.ua
Management paradigm balanced development of the national economy
Abstract: The article discusses conceptual approaches to understanding the essence of balanced development and the need to manage this process in the context of target, functional, instrumental subsystems. Based indicators of management performance balanced development of the national economy.
Keywords: optimal quantitative and qualitative development of the proportion of the national economy, imbalances of national economic development, balanced development indicators, management mechanism balanced development.
