ARMENIA: introduction of mandatory health insurance will not affect efficiency and quality of the healthcare system

1 February 2023 —
Introduction of the mandatory health insurance system will lead to a change in the sources of financing of the healthcare system, while it will not affect efficiency and quality of the system, ArmInfo writes with reference to Tigran Jrbashyan, Director of the Management Consulting Service of Ameria Company.

If consider current health care spending as a percentage of GDP, we can see that, according to the latest data from the World Health Organization, in 2020 this indicator in Armenia (12% of GDP) exceeded the indicators of such countries as Israel (8%), Italy (10%), Finland (10%), and comparable to France (12%) or Germany (13%). At the same time, over the past 20 years, health spending per capita in Armenia, both public and private, has grown almost 10-fold, from USD 26 in 2000 to USD 524 in 2019. As a result, cost of medical services in Armenia is currently much higher than in other countries of the region. According to this indicator, Armenia surpasses the indicators of both Georgia (USD 291) and Azerbaijan (USD 193), Tigran Jrbashyan noted.

The expert believes that in addition to sources of funding for healthcare costs, it is necessary to address the issue of efficiency and productivity of the system, which is clearly low in terms of key indicators. Back in 2015, Armenia had 4.2 hospital beds per 1,000 inhabitants, which is more than 1.5 times the global average (2.7). This indicator of Armenia is comparable with a number of Western European countries, including Greece (4.2), Luxembourg (4.3), Switzerland (4.4), and exceeds that of such countries as Sweden (2.1), Norway (3.5) and Denmark (2.6). ). In terms of the number of doctors per 1,000 inhabitants, Armenia (4.4 doctors per 1,000 inhabitants) outperforms both the world average (1.7) and the averages of upper-middle-income countries (2.3) and high-income countries (3.7).

At the same time, in terms of effectiveness of the health care system, Armenia faces serious problems. Speaking about mortality from noncommunicable diseases, Armenia exceeds both the global average (73% of total mortality) and the average of upper middle-income countries (85% of total mortality). According to the index of accessibility and quality of healthcare, in 2016 the index of Armenia was 71, and in 2019 - 63.2. Although Armenia surpasses Azerbaijan and Georgia (57.2 and 53.3 respectively), considering the cost of medical services, it is significantly inferior to its neighbors in terms of price/quality ratio.

The expert noted that over the past 30 years, health system reforms have been carried out without focusing on its efficiency and effectiveness, in order to maintain the system in its current form, including increasing quantitative indicators. As a result, Armenia is currently in a situation where it surpasses most European developed countries in terms of the relative number of hospitals, doctors and beds, and lags behind less developed countries in terms of healthcare efficiency.

The expert, based on the above-mentioned problems and the current situation, considers it necessary to gradually introduce a system of mandatory health insurance, taking into account the number of voluntarily insured persons, the objective characteristics of citizens and the amount of income, using differentiated approaches. The phased introduction of the mandatory health insurance in Armenia will begin in 2024.