FINANCING OF THE HEALTH CARE SYSTEM IN TURKEY 01/10/2009

Dimensions of the analysis of health care sector financing in Turkey Financing of the health care services Production of the health care services Functions of the health care services Kind of cost Financing sources Financing agents Curative and rehabilitative care Providers Social Security Institution Salaries Hospitals Long-term care Insurance contribution State budget Pharmaceuticals and medical equipment Provision of health care services Health Centers / Public Health Centers Local Government Taxes Health administration and health insurance Non-medical costs of treatment Households Offices of physicians and dentists Corporations Employer’s expenditures Administration Ancillary services to health care Private insurers Family Physicians Upkeep of infrastructure Household’s disposable incomes Associations and Foundations Prevention and public health Outsourcing Pharmacies SOE’s and SOE’s in privatisation Functioning of the system Investments

Reformation of the Insurance System Since 2006 – General Health Insurance Previously Emekli Sandığı (Government Employees’ Retirement Fund ) Bağ-kur (Social Security Institution for Artisans and Self-employed ) SSK (Social Insurance Institution – Workers and employees in private sector) Now SGK (Social Security Institution)

The Green Card System established in 1992 Ministry of Health is authorized to issue directly funded by the Government poor people earning less than a minimum level of income (not covered by any insurance) gives free access to outpatient and inpatient care at the state and some university hospitals

covers inpatient medical drug expenses excludes the cost of outpatient drugs 11 million Green Card holders expenditure exceeded Government allocations causes big gaps in the budget

MEDULA essential data source for compiling Health Accounts fee-for-service remuneration system used for hospital inpatient and outpatient care and for family doctors automated web-based information exchange installed between care providers and the Social Security Administration

National Medicine Policy Reimbursement Commission has been established under the directorate of the Ministry of Health This commission has enabled ‘The Single Reimbursement System’ With the consortium of the imbursement institutions, the prescribed bioequivalent medical products is to be reimbursed on condition that their price is within certain limits

Reimbursement Comission Consists of representatives from SGK Ministry of Labour and Social Security Ministry of Finance State Planning Organization Undersecretariat of Treasury

Comission responsible for Determining prices for Health care services Pharmaceuticals Making changes in SGK assured packet Under this comission Health Care Pricing Comission Responsible for - undertaking technical studies to assist Reimbursement Comission in its decisions

Some medical firms that are out of this circle have diminished their prices voluntarily in order to benefit from the reimbursement system The VAT rates for medicine have been reduced to 8 % from 18 % leading to another decline in medicine prices. The negotiation of medicine prices by the public insurance institutions as the sole buyer and the resulting reduction further decreased the cost of the medicine prices to the public.

Determination of Prices in accordance with the reference price system: We identified 5 countries in which the prices of medicine are the lowest (for the year 2006 Italy, Spain, France, Portuguese and Greece) We determine the highest price of medicine based on the lowest price in these five countries (reference price). The annual public saving achieved thanks to the reference price system is 900 million $

Performance-Based Additional Payment In previous implementation, institutions with a high level of revolving fund could offer their personnel an extra payment that could reach up to 100 % of their salaries The new implementation, offers an extra payment varying from 150 % to 800 % depending on different professions and work styles Producers have a share as much as they produce

Motivated the personnel and thus efficiency was increased Services provided in hospitals became measurable Personnel extended work hours by their own will which means that operating rooms are kept open for a longer time Most specialists closed their private offices and began to give all their energy to hospitals

2002 - 11 % of the doctors were working full-time 2008 - 78 % The system also paved the way for a regular registration system 20 % of the hospitals were automated in the past 100 % are automated now

Family Physicians 2004 included in the primary care aims improvement of preventive care for individuals close to residences of families easy to access

responsible for health, health problems and diseases of all members in a family examine children periodically and vaccinate them refer patients to a specialist, if necessary 23 provinces 20 % of population registered 1:3400 per family physician

general practitioners in primary and secondary health care units work independently can return to previous position 10 days training (1st phase of training) can work in health centers (have to pay rent)

obliged to take 2nd phase of training (more intensive) more referral less paid no obligation for referral to secondary helth care units (previously there was obligation – cancelled due to burden of family physicians)

public health centers in provinces with family physicians services given by these centers preventive health care vaccination campaigns reproductive and children’s health treatment rehabilitation In other provinces – the old system of health centers

Financing Lower level Health Care Units of MoH don’t have own budgets or revolving funds Health centers Dispenseries Provincial Health Directorates control these Sometimes have a revolving fund managed by a nearby hospital

FIRST EXHAUSTIVE INFORMATION FOR HEALTH ACCOUNTS IN TURKEY Project 2002-2003 Data of 1999-2000 Realized by credit from the World Bank Related Institutions: TURKSTAT (Demography Department) Ministry of Health Hacettepe University Harvard University

For 2001-2004 Revision was made The data of 1999-2000 was used Related department: TURKSTAT National Accounts Department For 2005 Estimation by Ministry of Health

Project October 2007– February 2008 Framework Contract (USSDT2) Consultant: Gunter Brückner

CURRENT SITUATION

Private institutions prototype questionnaire was developed and approved will be sent to at least 2000 associations private enterprises with more than 15 employees are required to provide basic healthcare for their employees either by own-operated service units or by third-party providers it was established that questionnaires sent to these enterprises have an extremely high non-response rate, approaching 100 %.

New Turkish Hospital Statistics is being collected on a routine basis from January 2009 designed to include all information necessary for compiling Health Accounts feasibility data showed that hospitals can provide all required information.

New Analytical Budget compiled in the Ministry of Finance follows the COFOG nomenclature (COFOG-based budget data can easily be transformed into Health Account data) in use since 2004 municipalities, special provincial administrations, annexed budgeted administrations were included in 2006

FUTURE WORK

- by local expert Will Be Done Expenditure items will be compared (OECD vs MEDULA) A model will be developed for estimating for working people and with green cards - by local expert MEDULA: uses an internal classification system the medula specific classification needs to be translated into the Health Accounts classification (ICHC, ICHP)

Future Work (cont’d) Pilot on HH expenditures Pilot on Private Corporations’ expenditures Questionnaire for associations and foundations Questionnaire for Insurance companies

THANK YOU