Report No. 24358-TU Turkey Reforming the Health Sector for Improved Access and Efficency (In Two Volumes) Volume II: Background Papers March 2003 Human Development Sector Unit Europe and Central Asia Region Document of the World Bank Currency Eouivalents Exchange Rate Effective = September 1, 2001 Currency Unit = Turkish Lira (TL) US$ 1 = TL 1,500,000 Government Fiscal Year January 1-December 31 Wei&hts and Measures Metric System Abbreviations annd Acronyms AIDS Acquired Immune Deficiency Syndrome COPD Chronic Obstructive Pulmonary Disease CPI Consumer Price Index CPR Contraceptive Prevalence Rate DHS Demographic and Health Survey DPT Diptheria, Polio, Tetanus ECA Europe and Central Asia ES Emekli Sandigi (Pension Fund) EU European Union GDP Gross Domestic product HFA Height for Age HIV Human Immunodeficiency Virus IMR Infant Mortality Rate LBW Low Birth Weight MDG Millenmum Development Goals MOF Ministry of Finance MOH Ministry of Health MOLSS Ministry of Labor and Social Security OECD Organization for Economic Co-operation and Development PKU Phenylketonuria PPP Purchasing Power Parity SPO State Planning Organization SSK Sosyal Sigortalar Kurumu (Social Security Organization) STD Sexually Transmitted Diseases TDHS Turkey Demographic and Health Survey TFR Total Fertility Rate TL Turkish Lira TTB Turkish Medical Association UNDP Umted Nations Development Progamme UNFPA United Nations Population Fund WFA Weigh for Age WFH Weigh for Height WHO World Health Organization Vice President: Johannes F. Lmn Country Director: Ajay Chlubber Sector Director: Annette Dixon HNP Sector Manager: Armin H. Fidler Task Team Leader: Mukesh Chawla ACKNOWLEDGEMENTS This document was prepared by Mukesh Chawla, Task Team leader and principal author. Contributions to specific chapters were made by Nedim Jaganjac, ECSHD & Daniel S. Miller, HDNHE (Ch. 1), William M. Tracy, ECSHD (Ch. 2); Monika Huppi, Consultant (Ch. 3); Ibrahim Akcayoglu (ECSHD), Sahin Kavuncubasi & Adnan Kisa, Consultants; (Ch. 4), Betty Hanan, ECSHD & Mary-Jane Rivers, Consultant (Ch. 5), Aziz Konukman, Consultant (Ch. 6, 7 & 8), Vildan Verbeek-Demiraydin, Consultant (Ch. 8), and Elizabeth Lule & Nandini M. Oomman, HDNHE (Ch. 9). Jennifer Manghinang and Selma Karaman assisted in the production of the manuscnpt. The preparation of this report drew heavily from discussions with members of the Counterpart Working Group appointed for this purpose by the Ministry of Health, Government of Turkey. Members of the Counterpart Working Group included Candan Ozcan (Treasury), Sedat Cetik (SPO), Hasan Bin (Gazi University), Hasan Yildirimkaya (SSK), A. Biliker (MOH), and Mehmet Fettahoglu, Salih Mollahaliloglu and Osman Toprak (PCU). The authors gratefully acknowledge the cntical review and comments provided by the Ministry of Finance, the Ministry of Health, the Ministry of Labor and Social Security, the State Planning Organization, the Council for Higher Education, Directorate General of State Economic Enterprises, University of Cukurova, Faculty of Medicine, University of Dicle, Faculty of Medicine, University of Ege, Faculty of Medicine, University of Hacettepe, Faculty of Medicine, University of Istanbul, Faculty of Medicine, University of May 19, Faculty of Medicine, Turkish Medical Association, Association of Health Care Organization, Association of Turkish Pnvate Hospitals, Union of Turkish Insurance Association. The main findings of the report were discussed in several workshops, with the Turkish Medical Association, the medical faculties and students at Dicle University, Diyarbakir, the medical faculties and students at Yuzuncuyil University, Van, the medical faculties and students at Aegean University, Izrnur, the medical faculties and students at May 19th University, Samsun, and with the representatives of Pnvate Hospitals in Istanbul, and with the representatives of the Ministry of Health and SSK in various district and province offices including Adana, Ankara, Diyarbakir, Istanbul, Izmir, Samsun and Van. Isil Demirakin provided excellent translation and interpretation services. The authors are grateful for all the comments and suggestions made dunng these sessions. The report has benefited from discussions with Ajay Chhibber, Country Director, Sally Zeijlon, Country Manager, Alex Preker and George Schieber (peer reviewers), Enis Bans, Ismail Arslan and Jim Parks. Special thanks are due to Monika Huppi who, besides contributing the background chapter on supply of health services, critically reviewed the full report at various stages of preparation, and to Ibrahim Akcayoglu who, besides contnbuting the background chapter on human resources, provided useful insights into the health system in the country and did an excellent job of organizing the vanous field visits and discussions. Armin Fidler, Sector Manager, HNP, ECSHD, Maureen Lewis, Sector Manager, HDE, ECSHD, and Annette Dixon, Sector Director, ECSHD, provided overall guidance to the team. Turkey: Reforming the Health Sector for Improved Access and Efficiency Table of Contents Page No. Executive Summary ........................................................................i Chapter 1: Status and Trends in Health Indicators 1: Introduction ........................................................................ 1 2. Reproductive Health and Fertility Outcomes ..................................................................... 1 3. Morbidity and Mortality Among Infant and Children ................................... ........................ 7 4. Nutritional Outcomes and Child Nutritional Status ............................................................. 11 5. Morbidity and Mortality Among Adults ........................................................................ 14 6. Emerging Risk Factor: Smoking ........................................................................ 20 7. Conclusion ........................................................................ 23 Chapter 2: Demand for Health Services 1. Introduction ....................................................................................... 25 2. Data ........................................................................ 25 3. Estimation and Results: Univanate Compansons ................................................................ 26 4. Estimation and Results: Multivanate Analysis ...................................... 37 5. Conclusion ....................................... 39 6. Appendix I .................................................. 41 7. Appendix 2 .................................................. 45 Chapter 3: Supply of Health Services 1. Introduction .................................................. 49 2. Public Sector Health Services: Outpatient Care .................................................. 49 3. Public Sector Health Services: Secondary Level Outpatient Care ........................................... 60 4. Public Sector Health Services: Inpatient Services .................................................. 63 5. Private Sector Health Services: Outpatient Care .................................................. 78 6. Prnvate Sector Health Services: Inpatient Care .................................................. 84 7. Patient Rights and Liability Policy .................................................. 88 8. Pharmaceutical Sector .................................................. 89 9. Conclusion .................................................. 91 Chapter 4: Human Resources in Health 1. Introduction .................................................. 93 2. Health Personnel: The Legal Basis .................................................. 93 3. Health Personnel in Turkey: Present Status and Trends .................................................. 95 4. Distribution of Health Personnel .................................................. 96 5. Salaries and Income of Health Personnel .................................................. 98 6. Productivity and Quality of Health Personnel .......................................... ....................... 101 7. Medical Education .................................. 104 8. Nurses and Other Health Professional .................................. 107 9. Conclusion ........................................... 110 Chapter 5: Organization of the Health Sector 1. Introduction ..................................... 115 2. Key Players in the Health System .................................................................................. 115 3. Organizational Decision-Making ..................................... 119 4. Conclusion ..................................... 125 Chapter 6: Health Care Financing 1. Introduction ..................................... 127 2. Defining the Domain of Public Expenditures ..................................... 127 3. Structure of Health Financing ..................................... 129 4. Public Expenditures on Health ..................................... 130 5. Population Coverage ............................................. 142 6. Delivery of Services ..................................... 145 7. Public Expenditures on Health and Efficiency ..................................... 146 8. Consideration of Equity ..................................... 149 9. Public Expenditures and Health Policies ..................................... 151 1O.Conclusions and Recommendations .. ................................... 157 Chapter 7: Consumption and Production of Pharmaceutical Products 1. Introduction ...................................... 159 2. Consumption of Pharmaceutical Products ..................................... 160 3. Production of Pharmaceutical Sector ..................................... 162 4. Prices and Pcing Procedures ..................................... 164 5. Conclusion ..................................... 166 Chapter 8: Economic Crisis and the Health Sector I . Introduction ..................................... 167 2. Background: The Dynamics of Macroeconomic Instability .................................................. 168 3. Economic Cnsis and Supply of Health Services ..................................................... 174 4. Economic Crisis and Demands for Health Services ..................................................... 175 5. Economic Crisis and Health Insurance ..................................................... 179 6. Conclusion ..................................................... 181 Chapter 9: Meeting the Millennium Goals for Health 1. Introduction ..................................................... 185 2. Status and Use of Reproductive Health Services ..................................................... 186 3. Mortality and Morbidity Among Children .....................................................1 91 4. Inequalities in Adolescent Health Status and Health Services Utilization .................................... 193 5. Discussion: Strategy for Reaching the Poor ..................................................... 195 List of Tables Chapter I Table I - Population D ata ............................................. ...........I Table 2 - Total Fertility Rate for Women Age 15-49 years, by Region and Education ......... 3 Table 3 - Contraception Use ....................................................... 5 Table 4 - Induced Abortions ....................................................... 5 Table 5 - Maternal Mortality Rates ....................................................... 6 Table 6 - Infant, Child and Under-Five Mortality Rates, 1983-88 to 1993-98 .................... 8 Table 7 - Gender Differences in Infant, Child and Under-Five Mortality Rates ..................9 Table 8 - Infant and Under-Five Mortality per 1,000 Live Births, 1993 .......................... 9 Table 9 - Reported Percent of Target Population Vaccinated and Reported Cases of Vaccine-Preventable Childhood Ilnesses, 1995-2000 .................... .......... I I Table 10 - Nutntional Status of Children, 1998 ........................., 12 Table 11 - Children (under 5) Classified as Moderately Under-Weight and Moderately Stunted .13 Table 12 - Regional Differences in Percentage of Children Classified Moderately Stunted, Wasted and Under-Weight in Turkey, TDHS 1993 and 1998 .............. 14 Table 13 - Percent Distribution of Notified Infectious Diseases, 2000 ........................... 14 Table 14 - Hospital Deaths, 1999 .................................................... 15 Table 15 - Admittance to Hospital Due to Accidents (1999) ....................................... 20 Table 16 - Selected Surveys on Smoking Prevalence among Turkish Youth .................... 22 Table 17 - Smoking Prevalence by Type of Cigarette and Income Group, 1994 ................. 22 Chapter 2 Table I - Out-of-Pocket Payments on Health Care (by quintile), 1999 ......................... 32 Table 2 - Out-of-Pocket Payments on Health Care, (by quintile), 2001 ........................ 36 Table 3 - Arc Pnce Elasticities, Turkey 2001 .................................................... 39 Chapter 3 Table I - Public Primary and Preventive Health Care Facilities, 2000 ......................... 51 Table 2 - Regional Distribution of Health Centers, 2000 ......................................... 51 Table 3 - Regional Distribution of SSK Pnmary Health Care Facilities ........................ 52 Table 4 - MOH Health Centers and Health Posts Lacking Key Staff, 2000 .................... 53 Table 5 - Regional Distribution of MOH Pnmary Care Medical Personnel, 2000 ............ 53 Table 6 - Percentage of Pnmary Care Health Staffing Posts Filled, 2000 ..................... 54 Table 7 - Utilization of Health Centers, 2000 .................................................... 58 Table 8 - Visits to Hospital Based Outpatient Facilities, 2000 ................................... 61 Table 9 - Visits to Out Patient Facilities by Type of Hospitals, 2000 ............................ 62 Table 10 - Utilization of Health Center and Outpatient Facilities by Region, 2000 ............ 63 Table 11 - Distribution of Hospital Beds and Physicians by Provider, 2000 .................... 63 Table 12 - Evolution of Hospital Capacity, 1995-2000 ............................................ 64 Table 13 - Distribution of Hospital Capacity by Type of Hospital, 2000 ........................ 64 Table 14 - Regional Distnbution of Hospital Capacity, 2000 ..................................... 65 Table 15 - Share of Hospital Capacity and Hospital Doctors in Ankara, Istanbul and Izmir, 2000 .................................................... 65 Table 16 - Hospital Beds and Admission in Turkey and Selected Other Countries ............ 66 Table 17 - Distribution of Hospitals by Number of Beds, 2000 .................................. 67 Table 18 - Distnbution of Hospital Admissions, Surgeries and Births by Hospital Provider, 2000 ............................................. 68 Table 19 - Provincial Distribution of Hospital Occupancy Rates, 2000 ........................ 68 Table 20 - Hospital Utilization and Efficiency by Hospital Type, 2000 ......................... 69 Table 21 - Hospital Utilization and Efficiency by Provider Type, 2000 ........................ 69 Table 22 - Hospital Efficiency by Provider Type, 2000 ........................................... 70 Table 23 - Hospital Efficiency by Region, 2000 ............................................. 70 Table 24 - Hospital Efficiency by Hospital Size (all Hospital Types), 2000 .................... 71 Table 25 - Hospital Efficiency of MOH General Hospitals, 2000 ................................ 71 Table 26 - Hospital Efficiency of General SSK Hospitals, 2000 ................................. 73 Table 27 - Importance of Revolving Funds in Hospital Financing, 2000 ........................ 73 Table 28 - Evolution of Hospital Financing .......................................... 74 Table 29 - Private and Part-Time Private .......................................... 78 Table 30 - Regional Distribution of Full Time Private Physicians, 1998 ....................... 79 Table 31 - Private Laboratory and Diagnostic Services, 1998 .................................... 82 Table 32 - Evolution of Private and Other Non-Governmental Hospital Capacity, 1998- 2000 .................................................... 84 Table 33 - Concentration of Private Hospitals in Ankara, Istanbul, Izmir, 2000 .............. 85 Table 34 - Utilization of Non-Public Hospitals, 2000 ............................................. 86 Table 35 - Consumption of Drugs by Treatment Group, 2000 .................................... 90 Chapter 4 Table 1 - Distribution of Health Personnel by Agencies in Turkey, 1999 .................... 96 Table 2 - Institutions Providing Health Care .................................................... 106 Chapter 5 - None Chapter 6 Table 1 - Expenditures on Health Care, 1998 (selected countres) ........................... 129 Table 2 - Average Fees in Public and Private Hospitals (million TL, July 2001) .......... 130 Table 3 - Public Expenditures on Health, 1996-2002 .......................................... 132 Table 4 - Public Expenditures on Health 2001 ................................................... 133 Table 5 - Distnbution and Collection of Revolving Funds, 2001 ............................. 135 Table 6 - Population Covered by Green Cards, 1992-2001 .................................... 141 Table 7 - Appropriation and Expenditures on the Green Card Program, 1992-2002 ....... 142 Table 8 - Population Coverage (Health Insurance & Green Card), 1999-2000 ............. 144 Table 9 - Economic,Composition of Total Public Expenditures on Health, 1996-2002... 147 Table 10 - Economic Composition of MOH Expenditures on Health, 1996-2002 ........... 147 Table 11 - Health Sector Investment Projects and Balance ..................................... 148 Table 12 - National Health Policy: Targets for Health .......................................... 152 Table 13 - National Health Policy: Health Services Delivery .................................. 153 Table 14 - National Health Policy: Support for Health Development ......................... 154 Chapter 7 Table I - Per Capita and Total Consumption of Pharmaceutical Products ................. 160 Table 2 - Consumption of Medicines by Therapeutic Classes, Turkey .. ................... 161 Table 3 - Top 5 Therapeutical Classes in the World (by value) ........... . ................. 161 Table 4 - Pharmnaceutical Products Manufactures in Turkey and Selected Countries...... 162 Table 5 - Production of Pharmaceutical Products ............................................... 162 Table 6 - Production of Raw Materials in the Pharmaceutical Industry ... ................ 163 Table 7 - Value of Imported and Domestically Produce Raw Matenal, 1998 ........ ....... 163 Table 8 - Exports and Imports in the Pharmaceutical Industry ....... . .... .................. 164 Chapter 8 Table I - Net Debt of the Consolidated Public Sector .................................... 170 Table 2 - Debt in Relation to 1999 Stand-By Targets ..................... ............... 171 Table 3 - Macroeconomic Balances, in percent of GNP .................................... 172 Table 4 - Projection of Key Indicators .......................... ...................... 173 Chapter 9 Table 1 - Top-Down and Bottom-Up Strategies .......................... ................... 198 List of Figures Chapter I Figure 1 - Percent Decline in Total Fertility Rates, 1970-99 ...................................... 2 Figure 2 - Matemal Mortality Ratios, Selected European Countnes, 1998.7 Figure 3 - Trends in Infant Mortality in Turkey ................................................. .... 7 Figure 4 - Urban-Rural and Regional Variations, 1993-98 ........................................ 9 Figure 5 - Number of Children Treated for Diarrhea ............................................. 10 Figure 6 - Hospital Discharges, Ischemic Heart Disease and Cerebrovascular Disease, 1980-98, Turkey .16 Figure 7 - Numencal Distribution of Cancer Notifications Reaching Cancer Registration Center (1983-1995) .17 Figure 8 - Incidence of Tuberculosis, 1970-1999 ................................................. 18 Figure 9 - Incidence of Malaria, 1983-2001 .................................................... 18 Figure 10 - HIV-AIDS Cases, 1985-2000 .................................................... 19 Figure II - Per Capita Cigarette Consumption .................................................... 21 Chapter 2 Figure 1 - Percent Reporting Illness in the Last Six Months ................................... 27 Figure 2 - Percent Seeking Treatment Among Those Reporting Illness ..................... 27 Figure 3 - Propensity To Seek Treatment When Ill (by Province and Location) ............ 28 Figure 4 - Gender Differences in Reporting and Seeking Treatment for Illnesses .......... 29 Figure 5 - Percent of Individuals Reporting an Illness in the Last 6 Months ................ 30 Figure 6 - Mean Payment for Out Patient Care by Province and Urban-Rural Status......31 Figure 7 - Mean Payment for Out Patient Treatment by Insurance ........................... 32 Figure 8 - Percent Reporting Illness in the Last Month by Quintile ........................... 33 Figure 9 - Percent Sought Treatment Among Those that Reported Illness .................. 34 Figure 10 - Propensity to Seek Treatment (by Region and Location) .......................... 34 Figure 11 - Propensity to Seek Treatment for an Illness by Insurance Type .................. 35 Figure 12 - Mean Payment for Out-Patient by Insurance ........................................ 36 Chapter 3 - None Chapter 4 Figure 1 - Trends in Health Personnel Numbers (1990-1999) .................................. 95 Figure 2 - Trends in Specialist and Practitioner Numbers (1990-1999) ....................... 96 Figure 3 - Distribution of Physicians Across Provinces ......................................... 97 Figure 4 - Distnbution of Health Personnel .......................................... 98 Figure 5 - Salaries of Health Personnel and Civil Servants ..................................... 99 Figure 6 - Average Net Salaries in the Health Sector, 2001 prices ........................... 100 Figure 7 - Composition of Income of Health Personnel ........................................ 100 Figure 8 - Outpatient Visits Per Physician .......................................... 102 Figure 9 - Patient Days per Physician and Nurse .......................................... 102 Figure 10 - Hospital Discharges per Physician and Nurse ...................................... 103 Figure 11 - Number of Health Personnel per Physician (1980-2000) ......................... 104 Chapter 5 - None Chapter 6 Figure I - Public Expenditures on Health, 1996-2002 (2001 prices) ........................ 131 Figure 2 - MOH Health Expnditures,1996-2002 ................................................ 134 Figure 3 - Health Expenditures by Social Secunty Institutions (% of GNP) ............... 137 Figure 4 - Functional Distribution of Public Expenditures on Health, 1996-2002 ......... 146 Figure 5 - Annual Health Expenditures and Income, 2001 .................................... 149 Figure 6 - Regional Per Capita Health Expenditures, 1996-2002 ............................ 150 Figure 7 - Population Covered by Green Card .................................................. 150 Chapter 7 Figure 1 - Expenditure on Pharmaceutical Products by Social Security Institutions ...... 159 Figure 2 - Yearly Average Percentage Change in CPI and Pharmaceutical Prices, 1994-2001 .................................... 165 Figure 3 - Distribution of Drugs According to Price Categories ............................. 165 Chapter 8 Figure 1 - GNP Growth Rates, 1990-2001 ....................................................... 169 Figure 2 - Primary Surplus and Budgetary Disposable Income .............................. 174 Figure 3 - Public Expenditures on Health, 1998-2001 ......................................... 175 Figure 4 - Annual Per Capita Income ............................................... 176 Figure 5 - Percent Population Seeking Treatment When IlI, 199-2001 ...................... 178 Figure 6 - Unemployment and Underemployment, 2000-2001 ............................... 179 Figure 7 - Bagkur Health Expenditures ............................................... 180 Figure 8 - New Green Card Applications, 1998-2001 ......................................... 181 Chapter 9 Figure 1 - Use of Selected Health Services in Turley: Poor-Rich Differences ............ 187 Figure 2 - Fertility and Use of Modem Contraception ........................................ 187 Figure 3 - Antenatal Care Visits ............................................... 188 Figure 4 - Number of Antenatal Visits ............................................... 189 Figure 5 - Skilled Attendance at Delivery ............................................... 190 Figure 6 - Skilled Attendance at Delivery and Infant Mortality Rates: Rich-Poor Ratios ................................................... 190 Figure 7 - Place of Delivery .................................................... 191 Figure 8 - Deaths per Thousand Births ................................................... 191 Figure 9 - Immunization Coverage ................................................... 192 Figure 10 - Age-Sex Population Pyramud (2005) ............................................... 193 Figure 11 - Early Marriage and Childbearing ................................................... 194 Figure 12 - Use of Modern Contraception in Adolescent Females (ages 15-19 years) .... 194 Figure 13 - Utilization of Maternal Health Services Among Adolescent Women ......... 195 List of Boxes Chapter 5 Box I - Initiatives Taken by Some Hospitals to Improve Efficiency and Effectiveness.123 Chapter 9 Box 1 - Millennium Development Goals for Reproductive and Child Health .......186 EXECUTIVE SUMMARY Despite considerable progress achieved in the recent past, Turkey continues to rank far behind most middle-income countries in terms of the health status of its people. Life expectancy is nearly ten years below the OECD average, and infant and matemal mortality rates are among the highest of middle-income countries. By most accounts, the health sector in Turkey is under-performing in achieving health outcomes, and if the current situation is any indication, substantial and sustained efforts will have to be made in the coming years if Turkey is to meet the health targets of the Millennium Development Goals by the year 2015. The reasons for such low outcomes are varied. On the financing side, in addition to the fact that there are multiple problems with mobilization of resources, the available resources are not allocated efficiently and equitably. Public provision of health is characterized by poor incentives for managers and providers alike, leaving them open and vulnerable to alternative sources of income to augment their meager salanes. The delivery of health care is also fragmented, and the practice of integrated health services is rare. The potential of the private sector is not fully realized and its role and responsibilities are not adequately defined. Access to clean water, satisfactory sanitation and education - all known to be powerful determinants of good health - is uneven, and large populations in rural areas and in the Eastern regions of the country lack even the basic amenities. The present situation, therefore, is one in which reported health expenditures are low for a country at the level of economic development of Turkey, the poor do have erratic access to health services and the health status of the population is well below that of countries of comparable income. Many efforts have been made in recent years to identify the root causes of the problems in the Turkish health-care system, but the assessments have frequently been inadequate and incomplete. This study makes a start at thinking about these issues, and takes stock of the current situation in the health sector in Turkey in an effort to identify and examine the key issues related to the various constituents of the health system. An evaluation at this juncture is meant to lay the foundations for the development of a medium-term health sector strategy and a prioritized action plan aimed at improving access to health services, enhancing equity in utilization, increasing cost-effectiveness, enhancing quality of care and improving health outcomes overall. Detailed background studies were carred out to examine the trends in health status of Turkey's population and evaluate the structure of production, finance, delivery and organization of the country's health system. The key findings of these studies are: * The health status of Turkey's population is poor, both in absolute terms as well as in comparison with other countries at same levels of income; in particular, maternal and child mortality and morbidity rates are very high. * There are huge locational and regional disparities in health outcomes across almost all indicators. * Not all those who are ill are able to get treatment for their illness; in particular, the poor are significantly more likely to not get treatment when ill compared to the non-poor. i Matemal Mortality Ratios, Selected European Countries, 1998 t 140- B 120- _ oo - ,,.., ., O 80 - ° 60 -_ b40 $20 G. - p. gD B B B _ 0 CD c o Knowledge of health conditions and treatments has a significant beanng on seeldng care, and those with greater awareness of health conditions and treatnents seek care more often compared to those with lower levels of awareness. O Health insurance is also a strong determinant of seeking care when ill, and those without any form of financial protection seek care less often when ill relative to those who have some form of financial protection. o The pnmary health care system is substantially underfunded and ineffective; in particular, most people circumvent public primary care facilities and either directly seek care at outpatient facilities of hospitals or, if they can afford it, from the private sector. O A large number of health centers are understaffed and many do not have even one physician; the situation is particularly gnm in rural areas in general and in the Eastern and South Eastern Anatolia regions of the country. O Majority of general hospitals in Turkey are run inefficiently and are responsible for considerable waste of resources. O The large number of very small hospitals under the Ministry of Health is a major contributor to an inefficiently run hospital system; in particular, they suffer from a lack of manpower and outdated or ill-functioning equipment. As a result, people utilize larger facilities even if they are further away, and the bed-occupancy rates in the smaller hospitals are very low. O There are huge gaps in the distribution of health personnel among the provinces and regions; in particular, there is a concentration of physicians in the big cities and towns and rural areas are significantly understaffed. O Considerable imbalance exists between physicians in pnmary and specialty care in Turkey, and almost half of all physicians in patient care are specialists. o There is little or no coordination between the Ministries of Health and Labor who, between them, control most financing and provision of health care in Turkey; in particular, even though their activities overlap across most services and they have facilities in the same towns and cities, there is very little discussion and dialogue between them and almost no plannig or collaboration at any level. o Very little is spent on preventive care and on maternal and child health; in fact, allocations to preventive activities have fallen in real terms over the last five years. ii Distribution of Health Personnel ao2500 kv~~~,-*--'- - ~150OU - tD 5000 CV 500 0 0 Physicians Nurses Midwives | Richest Ten Provinces * Poorest Ten Provinces| * Large segments of the population do not have adequate health insurance or any other form of financial protection; in particular, over 50 provinces have 10 percent or more of their population not covered under any insurance or Green Card program. * The distribution of public expenditures on health is not equitable; in particular, the richer regions spend more public money per person on health care compared with the poorer regions. * Income mequality and inequity in health status and utilization constitute a formidable barrier to meeting the health-related Millennium Development Goals. These findings suggest that in order to meet the ultimate objective of improving the health status of the people, fundamental and systemic changes would be required m the ways that health care is financed, delivered, organized and managed in Turkey. Piecemeal changes at the margin are unlikely to revitalize the health system, and nothing short of major restructurng and reorganization of the health system will work if the country's population has to be given access to quality health services produced and delivered in an economically and institutionally sustainable environment. Any reform strategy aimed at addressing the health sector problems in Turkey thus has to essentially be shaped around at least five programmatic areas, that include (i) improvements in resource mobilization and allocation; (ii) enhanced access to health services; (iii) increase in demand and utilization of health services; (iv) improvements in efficiency in production and delivery of health services; and (v) improvements in clinical effectiveness of health services. The key elements of the proposed health reform strategy are as follows: Compulsory universal social health insurance, with optional supplemental private insurance The different health insurances being offered through SSK, Bagkur and Emekli Sandigi, and the coverage provided to civil servants and welfare programs like the Green Card should be combined into one compulsory social health insurance system, or the Health Fund (HF). The establishment of the Health Fund - which should be founded as an autonomous legal umbrella organization, preferably under the Ministry of Labor and Social Security, the only govemment administrative body with experience in managing insurance - should be part of an overall reform of the social secunty system, so that SSK and Bagkur continue to function as social security institutions but transfer all health insurance premium collections to the Health Fund. Similarly, all active civil servants should become members of the Health Fund, with their parent departments paying the health insurance premiums directly on their behalf. Likewise, Emekli Sandigi should also transfer all health insurance premiums to the Health Fund, and the Green card program should be folded into the Health Fund, with the state paying premiums on behalf of those who cannot afford to pay themselves. The Health Fund should enjoy a high degree of autonomy and be professionally managed. The services covered by the Health Fund should include routine physician visits, routine obstetrics and gynecological visits, well baby visits, immunizations, emergency room visits, general ward hospital stays, surgeries, ambulatory surgenes, chemotherapy and radiation therapy, deliveries, mental health and substance abuse, routine eye exams, hearing aids, laboratory services, X-rays, and prescription drugs (genencs where available). Services not covered by the Health Fund - such as over-the-counter drugs, brand name prescription drugs where generics are available, frames, lenses and contact lens, cosmetic surgery unless required as rehabilitation, non- emergency use of emergency room, shared and single-room stays in hospitals, speech therapy for non-acute medical conditions, long-term rehabilitation, home health care, durable medical equipment, and home nursing - may be covered by optional supplemental pnvate health insurance. Developing a package of essential services and targeting public spending Several factors other than health services, genetics and lifestyles affect health at the population level, and malnutrition, poor water supply, sanitation and personal hygiene, and tobacco use are among the major risk factors for population health. In order to reduce maternal and child mortality and morbidity, therefore, health care should be delivered as part of a package of essential services, which should include (i) evidence-based and cost- effective medical interventions based on such tested initiatives as WHO's "Making Pregnancy Safer Initiative" and WHO/UNICEF's "Integrated Management of Childhood Illness"; and (ii) a series of measures aimed at providing all-purpose health education, clean drinking water, basic household sanitation, timely immunizations, home care of pregnancy and home management of diarrhea. In order to reach the package of essential services to the poor, incentive-compatible strategies should be devised so as to get medical personnel to work in areas where the poor live. These incentives may include extra remuneration, shorter duration of posting, posting in place of choice after serving in a shortage area, and admission to specialization programs. Another approach worth considering is that of cluster staffing, whereby physicians accept posting in a district or sub-distnct location and, by rotation, attend to patients in nearby traditionally shortage areas. iv District and sub-district hospitals should supply transportation and support staff to facilitate the movement of physicians to these areas. The role and effectiveness of paramedical staff in bringing the package of essential services to the poor and the vulnerable in underserved areas also needs to be examined. The key question in this context is whether the basic services that are likely to reduce maternal and child morbidity and mortality are such that paramedical personnel, without the direct supervision of physicians, can deliver them. This is an area that needs further research, but if it is found that a large number of services can, in fact, be delivered by nurses and other paramedical staff, then the obvious strategy would be to hire and train nurses locally in the underserved areas - so that they are less likely to feel the pressure of the location - and deliver the package of essential services for the reduction of maternal and child morbidity and mortality through them. Not only would this be a much less expensive proposition, it would also lead to higher utilization of health services because of the greater familiarity of the patients with the health care provider. Reorganizing public hospitals and providing greater autonomy In order to improve hospital efficiency, it is suggested that all hospitals, particularly MOH and SSK hospitals, be granted administrative and financial autonomy and autonomy in the procurement of necessary inputs to produce and manage health services. The autonomization of MOH and SSK hospitals should be done in a phased manner. In the first phase, the collective organization of hospitals will be given autonomy. All MOH hospitals should be consolidated under one quasi-public legal entity under the Ministry of Health, and this quasi-public legal entity should be made autonomous of the parent Ministry. Likewise, the health facilities of SSK should be separated from rest of SSK operations and consolidated under a separate quasi-public legal entity, and this quasi-public legal entity should be made autonomous of the parent Ministry of Labor and Social Security. Both autonomous organizations should have their own governing bodies, and in order to ensure coordination and collaboration, both ministnes of Health and of Labor and Social Security should be represented at a senior level on both the governing bodies. In the first phase, the employees of MOHHC and SSKHC will retain their civil servant status. In the second phase, individual facilities should be given autonomy on a selective basis. In order to become autonomous, the individual facilities would need to demonstrate their capacity and readiness for self-govemance. All employees of the health facilities will become contract employees of the respective corporations m this phase, and have long-term open-ended contracts. The phased introduction of autonomy will allow time and opportunity for individual facilities to gather the required knowledge, experience and managerial acumen necessary for self-govemance. Consolidating and redefining institutional responsibilities Both Ministry of Health and the Ministry of Labor and Social Security have critical roles to play in the health care system in the country, given their experience, their existing investments and their respective influence in the health sector. Yet, the present responsibilities and relationships - that result in much duplication and waste in the use of resources - are the least efficient of all possible configuration. In a sense, neither Mimstry should really be in the direct business of producing and providing health care, a function that is so central to both in the present setup, for both have other more crtical functions to perform that are given relatively low priority at the moment. The relationship between the two Ministries needs to be completely overhauled so that they function as two arms of the same govemment, with the same shared values and beliefs, instead of the present adversarnal stances that the two adopt. As far as the Ministry of Health is concerned, its primary role and responsibility should be that of policy formulation and providing regulatory oversight. Other areas that the v Ministry of Health in Turkey needs to focus on are quality control and consumer education. The Ministry of Health should develop the capacity to focus priority setting for the health sector, and on quality monitoring and regulation, accreditation of institutions and licensing of professionals, insurance regulation and oversight and leading public health functions and epidemiological surveillance. As far as the Ministry of Labor and Social Security is concerned, its primary role in the health sector should be that of providing oversight and guidance in the management and functioning of the universal health insurance system, considering that it is proposed to establish the Health Fund under the overall supervision of this Ministry. Strengthening delivery ofprimary care services In the existing setup in Turkey, primary care does not form the basis of a well-designed and performance-focused health care system, and is not organizationally situated to have power and control over other levels of care. Any reform in the delivery of primary care would have to start by improving the relative position of pnmary care providers in both the medical as well as the patient community. In other words, in delivenng the essential package of services in Turkey, primary care professionals in Turkey would need to be given the necessary levers to steer patient treatment, either in home-care setting or in the hospital setting, so as to ensure integration of the different health service delivery sectors. One such way is by adopting the concept and practice of "family medicine". Family medicine physicians provide health services for the -whole family, treating common illnesses across such medicine domams as internal medicine, gynecology, pediatrics, prevention and health propagation. Patients are provided with diagnostic services, laboratory services, and consultations, so that almost all services are provided under a "single- window" system by one provider. Family medicine brings the physician and members of a family into closer and more personal contact, and the physician plays an important role in health education, prevention of diseases, and general betterment of health. Timing and sequencing are critically important to allow the system to prepare itself to absorb the changes and to not overwhelm the implementation machinery. Therefore, a two-phase gradual implementation is suggested, with the first phase spread over three to five years and the second phase a further three to five years after completion of Phase I. Phase I is essentially the preparatory phase, to enable the finalization of all legal and institutional requirements. Phase II is the completion phase, during which the reform measures are actually implemented. vi CHAPTER 1: STATUS AND TRENDS IN HEALTH INDICATORS 1. Introduction This chapter describes the current situation in Turkey in terms of health status, key nrsk factors and trends in health indicators, to the extent that the data permits. In fact, the comprehensiveness and universality of the analysis of epidemiological trends in Turkey is somewhat compromised by the availability and reliability of the available data, since some data are simply not collected, and in many instances where the collection exercise is undertaken, under-reporting and misclassification pose huge challenges. In some cases, such as in the data on maternal mortality, huge variations exist depending on when, how and by whom is the data collected. In other cases, such as in the data on adult mortality, most of the available mortality data is based on hospital deaths and thus heavily weighted towards non-communicable diseases. These general caveats qualify most of the findings reported in this chapter. The rest of the chapter is organized as follows. Section 2 contains a discussion of reproductive health and fertility in Turkey. Morbidity and mortality among children are examined in Section 3, followed in Section 4 by a discussion of their nutritional status. Morbidity and mortality among adults is presented in Section 5, and Section 6 contains a short presentation on smoking. Section 7 concludes. 2. Reproductive Health and Fertility Outcomes Home to 67.85 million people, Turkey is among the 20 most populous countries in the world (SIS 1999). High fertility and growth rates of the past have resulted in a young population structure and, as Table 1 shows, 30 percent of the population is under the age of 15 and almost 11 percent under the age of 5 (2000). Over 17.8 million women are in the reproductive age group of 15-49 years. Total fertility rate (TFR) has declined steadily in the last three decades, from 4.9 in 1970 to 2.53 in 1999, and crude birth rates declined from 39.47 per 1,000 to 21.62 per 1,000 over the same period. The TFR decline was more rapid in the 1980s than in the 1990s, a trend that is not unusual and the experience of many countries suggests that rapid initial declines with the start of family planning programs are followed by more gradual and difficult to achieve reductions in fertility rates. Table 1: Population data (in thousands) 2000 1999 1998 1997 1996 19951 1990 1980 Female 15-49 years 17,828 17,536 17,20 16,830 16,441 16,045 14,01 10,564 Population less than 15 years 20,021 19,926 19,873 19,852 19,846 19,840 19,630 17,515 Population less than 5 years 7,108 7,192 7,271 7,316 7,295 7,186 5,92( 6,044 Total population 66,668 65,67i 64,652 63,609[ 62,554 61,493 56,098 44,645 Source "World Population Prospects The 2000 Revision ", New York, United Nations, 2000 Overall, the reduction in TFR of 48 percent between 1970 and 1999 in Turkey compares well with the experience of other countries, though the current TFR level of over 2 is significantly higher when compared to most countries in the European region, which are currently experiencing negative population growth rates and TFR levels well below 2. As Figure I shows, China, the world's most populous country with a lower GDP per capita than Turkey, reduced TFR by 61 percent; Turkmenistan and Uzbekistan, also with lower per capita GDPs, reduced their TFRs by 52 and 53 percent respectively and Iran reduced its TFR by 50 percent during the same period. Thailand, with a similar per capita GDP, reduced its TFR by 58 percent in the same period. Figure 1: Percent Decline in Total Fertility Rates, 1970-99 )K61 058 - 53 - 52 >o50 A48 El39 X>38 D2 0 1000 2000 3000 4000 5000 6000 7000 8000 GDP per capita (PPP US$ 1999) O hIan 0 Poland A Turkey X Egypt x China 0 Thailand Turlinenistan - Uzbekistan Q India Source. Human development report 2001, UNDP. Turkey's countrywide TFR, however, masks considerable variation in fertility across urban-rural Turkey and across regions. As the Turkey Demographic and Health Survey (TDHS) results in Table 2 show, TFR in rural areas was 3.08 in 1998, almost 29 percent higher than the TFR of 2.39 in urban areas. The Eastem region has the highest TFR (4.09), almost twice as high as that in the Western region (2.03), a rate that is comparable to that of many Western European countries. The Northern, Central and Southem regions are grouped around a TFR of 2.6. TFR falls as education levels rise, and is 2.4 times higher among women with no education or minimal education (3.89) compared to those who have at least secondary school education (1.61). The urban-rural and regional differences in TFR are indicative of disparities in access to health and family planning services, differences in income and education levels and differences in cultural values across locations and regions. 2 Table 2: Total Fertility Rates for women age 15-49 years, by region and education Background characteristics Total Fertility rate Residence Urban 2.39 Rural 1 3.08 Region West 2.03 South 2.55 Central 2.56 North 2.68 East 4.19 Education No education/ Primary school incomplete 3.89 Primary school complete/Secondary school incomplete 2.55 Secondary School complete 1.61 Income groups Lowest 20% 3.71 Highest 20% 1.49 Source. TDHS, 1998 (based on the three- year period preceding the survey) Birth Intervals Repeated pregnancies with short birth intervals, particularly intervals of less than 24 months, are known to be deleterious to the health of babies. TDHS 1998 shows that in Turkey the median birth interval is slightly over 3 years (37 months), which is 12 months more than the minimum interval considered safe, and 3 months more than the median birth interval as reported in 1993 (33.6 months). Although a quarter of births occur with a birth interval less than two years, it is encouraging to note that more than a third (36 percent) of all births occur with birth intervals of more than 48 months. Birth intervals vary by region, with the highest proportion of short birth intervals occurring in the East. Shorter birth intervals following a female birth are more frequent than following that for male births. Women's educational levels also influence the birth interval: 17 percent of women with at least a secondary education have births intervals of less than 24 months compared to 28 percent of women with no education who post birth intervals of less than 24 months. Age atfirst birth The age at which a woman has her first child has important demographic consequences as well as implications for the health of the mother and child. Postponement of first births in many countries has contributed to the overall decline in fertility. Additionally, the proportion of women who have their first child before the age of 20 is a measure of adolescent fertility, a major health and social concern in many countries. In Turkey, the median age of childbearing has increased from 20.6 years in 1988-93 to 22.2 years in 1993-98. Women living in rural areas have their first childbirth a year earlier than their urban counterparts, and women in the Eastern Turkey become mothers 1.6 years earlier than women in the Western Turkey. Education has the 3 greatest impact on the age at first birth, and women with at least a secondary education delay first births by 4 - 6 years compared to women with no education (TDHS 1998). Incidence of low birth weight Low birth weight (LBW) is defined as a birth weight of less than 2,500 grams, indicating an infant at greater risk of illness, malnutrition and death. In Turkey, 8 percent of infants were LBW in the period between 1995-1999; in comparison, the incidence of low birth weight is 7 percent in Romania, 6 percent in Bulgaria, 6 percent in Greece, 5 percent in France, 4 percent in Spain and Ireland. Some East European and Central Asian countries have a higher share of LBW infants than Turkey, and include Hungary, 9 percent, Armenia, 9 percent and Kazakhstan, 9 percent. Contraceptive Prevalence and Use Contraceptive prevalence rate (CPR) is a commonly used indicator measuring the success of family planning programs, and higher contraceptive prevalence rates are generally associated with lower fertility rates. Overall, only 64 percent of married women in Turkey were using a method of contraception, traditional or modem, in 1998, significantly lower than contraceptive use in other countries with GDP per capita similar to that of Turkey, such as Bulgaria (86 percent), Thailand (72 percent) and Iran (73 percent).' As Table 3 shows, the use of contraceptive methods, traditional or modem, has remained unchanged at around 64 percent since 1988, though the use of modem methods went up from 31 percent in 1988 to almost 38 percent in 1998. Most of this increase came from the use of IUDs and condoms, while the use of pills declined during the period 1988-98. The proportion of women not using any contraception remained unchanged. Contraceptive use varies with the number of living children, peaking at 78 percent among women with two children, and is more frequent among women with higher levels of education. Regional differences in the use of modem contraceptive methods are marked, with over 71 percent women in Westem Region reporting use of modem contraceptives compared to 42 percent in Eastern Region. The majority of women in Turkey who practice contraception rely on a modem method, and the IUD is the most commonly used modem method followed by condoms, pills and female sterilization. Withdrawal, a traditional method, is the most popular method among currently married women in Turkey. Abortions Women resort to induced abortions when they lack access to contraceptive services, experience social barriers that prevent them from using family planning methods to avoid unplanned pregnancies or in the case of contraceptive failure. Extensive use of pregnancy termination can, therefore, be the result of poor accessibility to safe and affordable family planning services. 'Source: Human Development Report 2001, UNDP. 4 Table 3: Contraception Use (% of married women,) Contraceptive method TPHS 1988 TDHS 1993 TDHS 1998 Any method 63.4 62.6 63.9 Any modem method 31.0 34.5 37.7 Pill 6.2 4.9 4.4 IUD 14.0 18.8 19.8 Condom 7.2 6. 6 8.2 Female sterilization 1.7 2.9 4.2 Other modern methods 2.0 1.3 1.1 Any traditional method 32.3 28.1 25.5 Periodic abstinence 0.1 1.0 l.1 Withdrawal 25.7 26.2 24.4 Other methods 6.5 0.9 0.6 Not currently using 36.6 37.4 36.1 Source: TPHS 1988, TDHS 1993 & 1998 Table 4: Induced abortions (per 100 pregnancies) Background characteristics TDHS 1993 TDHS 1998 Age 15-19 3.8 5.8 20-24 8.3 7.7 25-29 20.4 12.6 30-34 27.9 23.3 35-39 36.2 33.4 40-44 47.1 42.5 45-49 47.6 66.2 Residence Urban 21.3 16.1 Rural 12.4 11.6 Region West 24.9 18.0 South 16.3 13.7 Central 19.8 16.7 North 17.0 15.6 East 8.7 7.6 Total 18.0 14.5 Source: TDHS 1993, 1998 Abortion was legalized in Turkey in 1983 with the enactment of the new population policy. According to TDHS, 1998, 23.2 percent of all pregnancies in Turkey ended in abortions, of which 63% were induced. As Table 4 shows, locational and regional variations are significant, with fewer induced abortions in the Eastern region compared to the rest of the country. 5 Mother's age and number of living children are strongly associated with the likelihood that a woman will have had an induced abortion, with older women and women with more than two children being more likely to undergo an abortion. Maternal mortality Data on matemal mortality is not entirely reliable, and wide variations exist between the years depending on who is collecting and reporting the data. Table 5 shows the different rates for maternal mortality provided by various sources. Table 5: Maternal Mortality Rates (selected years and sources) Source Period Matemal Mortality (deaths per 100,000 live births) MoH 1974 207 MoH, SIS 1981 132 UNFPA / WHO / MoH study 1983 138 HFA-DB WHO European region 1990 180 MoH 1996 100 HFA-DB WHO European region 1998 130 UNDP / WHO / MoH study 1999 52 MoH (Health Statistics 1998) 1980-97 130 UNDP 1980-99 130 A study undertaken by the Ministry of Health and Hacettepe University, with support from UNFPA and WHO, suggests that matemal mortality declined from 138/100,000 live births in 1983 to 52/100,000 live births in 1999. This data on maternal deaths, however, is hospital based and excludes the deaths that occur from births taking place at home and some that occur after discharge from hospital. According to the TDHS, 1998, 73 percent of all deliveries took place at a health facility and antenatal care was received by 68 percent of pregnant women, which leaves a quarter of the births taking place at home and a third of pregnant women not receiving any antenatal care. The figure of 52 per 100,000 live births is, therefore, likely to be an under- estimation. Although Turkey has achieved significant declines in the recent past, maternal mortality still remains much higher than that of other countries in the European region as well as the EU average. As Figure 2 shows, matemal mortality in 1998 in Turkey was the highest of all countries in the European region. There are several causes of high maternal mortality in Turkey. Some studies list infection2 as the most common cause of death while others list toxemia3 as the most common cause. An analysis of hospital-reported maternal mortality for the year 1997 reveals the problem of misclassification 2A retrospective analysis of 117 maternal deaths at Hacettepe University hospital between 1968 and 1992 showed infection to be the most conmnon cause of death at 60 percent. Trends in maternal mortality at a university hospital in Turkey. A Ayhan et al. International Journal of Gynecology and Obstetrics, 1994 March 44(3): 223-228. 3In 1996 a hospital based study on maternal mortality and its causes was designed by MoH in collaboration with WHO, UNFPA and Hacettepe Umversity Public Health Department. According to the intermediate evaluation of this study, the maternal mortality rate was estimated as 54.2 per 100,000 live births and the rmin causes of maternal deaths was found as toxemia (28.2 percent), hemorrhage (5.6percent) and infections (5.6 percent). 6 that complicates accurate estimation of maternal mortality. The most common cause at 31 percent of the deaths has been labeled as "other complications of pregnancy, birth and pueperium." This definition could include anything from obstructed labor, uterine rupture, and infection to hemorrhage. Another 21 percent of the deaths are listed as "delivery without mention of complication." Apart from these two causes, the most common cause of maternal mortality is related to abortions. Figure 2: Maternal Mortality Ratios, Selected European Countries, 140 1Q8 120 - 100 80- 6 g0 , i,e-7 llll 40 20 , 2 0 c O N C7 >0C _ i ' B D mx 0< 0' 0 0~~~~~~~~~~0 Source HFA-DB, WHO European Region, 2000 3. Morbidity and Mortality among Infant and Children Turkey has achieved significant success in reducing infant mortality rate (IMR) in the last few decades, during which IMR has fallen from over 150 per 1,000 live births (in 1970) to under 40 per 1,000 live births (in 1998).4 Data on infant mortality is probably the best available data on mortality for Turkey. As Figure 3 shows, following a sharp decline during the 1970s and 1980s, the reduction in EMR became more gradual in the 1990s. Nevertheless, infant mortality rates in Turkey remain significantly above the European Union average (8 per 1,000 live births). Figure 3: Trends in Infant Mortality in Turkey (per 1,000 live births) 200 150- laM 100 0 I !g__ 50- 4 E V H&A, 1970 1975 1980 1985 1990 1993 1994 1995 1996 1997 1998 Source WHO - HFA Database, 2000 4 Source: The Situation of Children and Women in Turkey, UNICEF, May 1998. 7 Table 6 demonstrates that Under 5 Mortality is comprised of Infant Mortality (penrnatal mortality defined as death during the first month of life plus post-neonatal mortality defined as death between the second and twelfth month of life) and Child Mortality (defined as death between the age of 13 and 59 months). The Turkey Demographic Health Surveys of 1988, 1993 and 1998 (Table 6) show that infant mortality declined by 19 percent between the 1993 and the 1998 survey, mainly due to a substantial decline in post-neonatal mortality (28 percent). The data also provide a breakdown of deaths under the age of 5 (U5MR) into infant mortality (as defined above) and child mortality (defines as mortality between the ages of 1 and 5 years), and shows that 81 percent of the under-five deaths during 1988-1993 occur in the first year of life and a majority of those (60 percent) happen in the first month of life, implying that perinatal causes of death are the leading cause of infant mortality. Table 6: Infant, Child and Under-Five MortRlity Rates, 1983-88 to 1993-98 Period Neonatal Post-neonatal Infant Child Under-five mortality mortality mortality mortality mortality (1) (2) (3=1+2) (4) (5=3+4) TPHS 1983-88 34.7 47.4 82.2 16.7 98.9 TDHS-I 1988-93 29.2 23.4 52.6 8.8 61.4 TDHS-II 1993-98 25.8 16.9 42.7 9.8 52.5 Percent change, 1988-93 to 1993- -11.6 -27.8 -18.8 +11.3 -14.4 Source: TDHS-I 1993, TDHS-II 1998. Post neonatal mortality slowed dramatically between 1988/93 and 1993/98 compared to the period 1983/88 to 1988/93 (50.6% vs. 27.8%), the rate of decline in neonatal mortality was almost similar during the period (15.9% and 11.6%), while a dramatic decline in child mortality (47.3%) occurring between the periods 1983/88 to 1988/93 reversed and increased by 11.3% between 1988/93 and 1993/98. Note, however, that the underlying health system processes and public health issues that affect neonatal mortality and post-neonatal mortality are quite different. For example, neonatal mortality is largely affected by maternal health status, maternal characteristics (e.g., age), the extent to which there was prenatal care, prenatal maternal nutrition, and perinatal infections (frequently related to maternal infections prior to delivery). On the other hand, post neonatal mortality is more related to complications resulting from premature birth, low birth weight, infections (e.g., diarrhea), and feeding practices (i.e., lack of breastfeeding). Child mortality (i.e., age 12-59 months) is heavily influenced by infections (e.g., respiratory tract infections, diarrhea, and vaccine-preventable diseases. The countrywide infant mortality rate masks considerable variation across urban and rural Turkey and across regions. As Figure 4 shows, IMR and U5MR are lower than the national average in the urban areas and Western and Southern regions, and almost 40 percent higher than the national average in the rural areas and the Eastern region. While IMR and U5MR declined in most regions in the period between the two most recent surveys, regional disparities widened due to increases 8 in the Eastern region between the periods 1988-93 and 1993-98, of IMR from 60 to 62 per 1,000 live birth and of U5MR from 70 to 76 per 1,000 live births. Under-5 mortality was almost twice as high in the Eastern region compared to the Western region. Figure 4: Urban-Rural and Regional Variations, 1993-98 80 70 6n <0 41l) lL Infant mortality Child mortality Under-five mortality E Urban U Rural 0 West * South G Central * North 0 East Similar to patterns in many other countnes, neonatal mortality rates are lower and child and post-neonatal mortality rates are higher among female children compared to male children. Overall, as Table 7 shows, infant and under-five mortality rates are somewhat lower among female children compared to male children. Table 7: Gender Differences in In ant, Child and Under-Five Mortality Rates TDHS -1 1988-93 TDHS-II 1993-98 Male Female Male Female Infant mortahty 70.5 66.0 51.0 45.5 Child mortality 12.4 13.6 10.4 13.4 Under-five mortality 82.0 78.7 60.9 58.3 Source TDHS 1993, 1998 The TDHS permit a comparison of infant and under-five mortality rates across quintiles of households ranked by wealth. As Table 8 shows, IMR and U5MR are 3.9 and 4.6 times higher respectively in the lowest income quintile relative to the nchest income quintile. The difference between the fourth and the top quintile is also significant (about 50 percent), while the second and third quintiles group together. Factors such as inadequate access to health care services, lower utilization of health services, poor nutntional levels and lack of environmental hygiene (availability of safe drinking water and sanitation) contribute to these differences in infant and under-five mortality rates across wealth quintiles. Table 8: Infant and Under-Five Mortality per 1,000 Live Births (by wealth q intiles), 1993 Wealth Quintiles Infant mortality Under-five mortality First quintile 99.9 124.7 Second quintile 72.7 84.0 Third quintile 72.1 83.2 Fourth gumtile 54 4 61.8 Top quintile 25.4 27.1 Population average 68.3 80.5 Source Socio-Economic Differences in HNP, World Bank, May 2000 (using TDHS data) 9 Diarrhea Diarrhea is an important cause of morbidity among children under 5 in Turkey, even though significant progress has been made in recent years. As Figure 5 shows, the number of children treated for diarrhea went up from a little over 89,192 in 1983 to 710,163 in 1996, before falling to 288,333 in 1997 and to under 188,000 in 2000, probably a reflection of improved awareness and availability of oral rehydration therapy.5 Figure 5: Number oif Children Treated for Diarrhea 800,000 700,000 - r- - __a 600,000 - - - - . L 500,000- __J_i 400,000 300,000 ___; lt ' -- __- 200,000-~ ' , ,. - -'- ----- 100,000 -0 si- -l- FiLt -i, - 6{ L 0 $ 19e4 1 5s 19,68 1987 1988 1989 1990 1991 1-2 1993 1994 1995 199 19 7 1 M 1 5 2000 Respiratory disease Acute respiratory infections are also a cause of morbidity and mortality in children under five- years of age. According to the TDHS 1993, 12 percent of children had an episode of acute respiratory infection in the two-week period preceding the survey, with a higher percentage of children suffering in rural than in urban areas (15.7 percent versus 10.3 percent respectively) and in the eastern than in the western region (15.4 percent versus 7.5 percent respectively). The Control of Acute Respiratory Infections Program was initiated in 1986, and has since been expanded to cover half the population of Turkey by 1998.6 Vaccine-preventable diseases Although the immunization program has led to a decrease in the number of cases due to vaccine preventable diseases, immunization coverage in Turkey remains below that of other countries with similar or even lower GDP per capita, and varies from year to year. As Table 9 shows, only about 46 percent of children (between 12-23 months) completed the vaccination schedule before the age of 1 year, while 4 percent of children did not receive any vaccinations at all. This indicates a high drop out rate for vaccinations such as DPT and Polio that require repeated administration. The survey shows that almost a quarter of children who receive the first dose of these vaccines do not receive the rest of the 3-dose course. There is significant urban-rural and 5 According to TDHS 1998, 30 percent of children under-five-years of age had an episode of diarrhea in the two weeks preceding the survey, 5 percent higher than that reported in TDHS 1993. As is well known, diarrheal diseases fluctuate according to the season when the survey is made and to this extent, data that gives the number of cases m two weeks prior to the survey is not the best mdicator of annual incidence but better used for program evaluation. 6A total of 64,785 cases of pneumonia were recorded among chludren less than five years of age in 1998. 10 inter-regional variation in immunization coverage, and coverage is lowest in rural areas and in the Eastem region (TDHS 1998). Table 9: Reported Percent of Target Population Vaccinated (by antigen) and Reported Cases of Vaccine-Preventable Childhood Illnesses, 1995 to 2000 1995 1996 1997 1998 1999 2000 BCG vaccine coverage (%) 68 69 73 77 78 77 Polio 3 coverage in percent 67 84 79 76 79 80 Polio cases 32 17 6 26 0 0 DPT vaccine coverage (%) 66 84 79 81 79 80 Diphtheria cases 4 22 2 6 4 2 Pertussis cases 347 672 694 429 222 528 Tetanus total cases 63 42 51 60 83 25 Measles vaccine coverage (%) 65 84 76 79 80 81 Measles cases 14,351 27,171 22,795 27,120 16,329 16,010 TT-2 vaccine coverage (%) 29 32 36 35 36 35 Source: Vaccmes, Global summary, WHO 2000 for 1995-98; MOH for 1999 and 2000. Genetic diseases: Phenylketonuria Phenylketonuria (PKU) is an inborn error of protein metabolism caused by an impaired ability to metabolize the essential amino acid phenylalanine. Phenylketonuria results in developmental delays and mental retardation, although the latter can be prevented if the condition is detected early. Turkey has the highest incidence of phenylketonuria in the world, with approximately 1 case of PKU in 2600 births. A national countrywide screening program is in place, and the number of samples tested has gone up almost twelve-fold, from 71,839 in 1988 - of whichl6 cases were found to be PKU positive - to 816,227 cases in 2000, of which 96 cases were found to be PKU positive. 4. Nutritional Outcomes and Child Nutritional Status Three nutritional indices are typically used for predicting the nutritional status of children: height for age (HFA), weight for height (WFH) and weigh for age (WFA). Height-for-age is an indicator of linear growth retardation for children. Children who are 2 standard deviations below the median of the reference population in terms of height-for-age are considered 'stunted', or chronically under-nourished, while those who are 3 standard deviations are considered 'severely stunted'. Stunting reflects the outcome of a failure to receive adequate nutrition over a long period of time, and is also affected by recurrent and chronic illnesses. Weight-for-height measures body mass in relation to height. Children who are 2 standard deviations below the median of the reference population terms of weight-for-height are considered too thin or 'wasted', reflecting acute under-nourishment in the period immediately prior to the survey. Weight-for-age takes into account both acute and chronic under-nutrition. Table 10 presents the nutritional status of children in Turkey for the year 1998. Malnutrition does not appear to be a serious problem among children under 6 months of age but becomes serious thereafter. The incidence of malnutrition increases rapidly after the age of 6 months and continues to grow through the second and third years of life, flattening out in the fourth and fifth year of life. Twenty percent of children between 2 and 4 years of age are chronically under-nourished, or stunted, and around a quarter of the children are stunted at the age of 5 years. The determinants of stunting include short birth intervals and birth order, and 25 percent of children born with a birth interval of less than 24 months and nearly a third of the children with a birth order of more than 6 are found to be below two standard deviations for the height-for-age index. Compared to stunting, wasting is a less significant problem in Turkey, and less than 2 percent of children under 5 years of age have a weight-for-height index below two standard deviations of the reference population. Wasting is, however, present in almost 4 percent of children between 6 to 11 months of age and in 3 percent of children between the first and second years of life before returning close to the reference population, reflecting probable incorrect weaning practices. Weight-for-age takes into account both acute and chronic under-nutrition. According to the TDHS 1998, a little over 8 percent of children are underweight, 17 percent of who are severely underweight. As with stunting, determinants of acute and chronic under-nutrition include birth order and birth intervals. Twelve percent of the children with birth intervals of less than 24 months and 15 percent of the children with a birth order of 6 + are seen to be under-nourished on the weight-for-age index. In the reference population, only 2.3 percent of children fall below 2 standard deviations for each of the three indices.7 Table 10: Nutritional status of children, 1998 (% children under-five years of age) Background characteristic Height-for-age Weight-for-height Weight-for-age Percentage below Percentage below Percentage below 3SD 2SD 3SD 2SD 3SD 2SD Child's age Under 6 months 0.4 2.0 0.2 2.1 0.5 1.7 6-11 months 1.0 4.6 0.9 3.7 0.9 7.0 12-23 months 4.9 16.7 0.6 2.9 2.6 10.5 24-35 months 7.1 17.4 0.3 1.4 1.7 8.2 36-47 months 10.8 20.1 0.3 1.4 1.8 9.7 48-59 months 7.8 23.7 0.0 0.7 0.5 9.0 Gender Male 5.8 16.0 0.6 2.1 1.7 8.4 Female 6.4 16.0 0.1 1.7 1.0 8.1 lBirth linterval First Birth 4.0 13.4 0.4 1.9 1.0 7.6 Under 24 months 12.2 24.9 0.5 2.6 2.3 12.3 24-47 months 7.4 18.3 0.4 1.6 2.0 8.8 48+ months 3.7 11.3 0.1 1.6 0.7 5.9 7UNICEF data indicate that 8 percent of Turkish children under the age of 5 years are malnourished in termns of weight-for-age (below two standard deviations of the reference population) and 16 percent are undernounshed in terms of height-for-age (below two standard deviations of the reference population) for the penod 1995-00 (HDR 2001, UNDP). 12 Background characteristic Height-for-age Weight-for-height Weight-for-age (con't) Percentage below Percentage below Percentage below 3SD 2SD 3SD 2SD 3SD 2SD Birth Order 1 4.1 13.5 0.4 1.8 1.0 7.5 2-3 5.7 14.2 0.3 2.0 1.2 7.0 4-5 7.1 17.5 0.8 2.4 2.5 10.2 6+ 14.1 32.2 0.0 1.2 2.5 14.8 Total 6.1 16.0 0.4 1.9 1.4 8.3 Source TDHS 1998 Under-nutrition among children under-five years of age has decreased slightly between 1993 and 1998 (TDHS 1993, 1998). The reduction in the prevalence of wasting is more significant - dropping by 36 percent between 1993 and 1998 - as compared to reductions in the prevalence of stunting (12.6 percent during this period). The nutritional status of children varies significantly across households grouped by wealth quintiles. As Table 11 shows, children in the poorest quintile were almost 9 times more likely to be stunted and almost 7 times more likely to be under-weight than those in the richest quintile. These differences persist in both urban and rural areas. Table 11: Children (under 5) classified as moderately under-weight and moderately stunted Percent children stunted Percent children underweight (below -2SD z-score) (below -2SD z-score) Poorest quintile 36.3 22.1 Second quintile 26.3 10.9 Middle quintile 18.8 7.7 Fourth quintile 9.4 4.7 Richest quintile 4.3 3.0 Source: Socio-economic differences in HNP, World Bank, 2000 based on data from TDHS 1993. Gender differences in the prevalence of stunting and children being under-weight do not appear to be significant. Male children are slightly more wasted than female children, but the numbers fall well within the normal limits of the reference population. Rezgional variations The nutritional status of children varies significantly among regions and urban and rural areas. As Table 12 shows, both stunting and under-weight are almost twice as prevalent in rural than in urban areas (22 percent versus 12.6 percent for stunting and 11.9 versus 6.2 percent for under- weight in 1998). Regional differences also exist: three times as many children were stunted in the Eastern than in the Western region (30 percent versus 9.9 percent) in 1998, and the prevalence of under-weight children was four times higher in the Eastern region than in the Western region (17.1 percent versus 3.8 percent). It is encouraging to note that most regions of the country registered declines in the prevalence of stunted, wasted and under-weight children between 1993 13 and 1998. The Southem region is an exception, registering a 23 percent increase in the prevalence of under-weight children and a 36 percent increase in prevalence of wasting. Table 12: Regional differences in percentage of children classified moderately stunted, wasted and under-weight in Turkey, TDHS 1993 and 1998 Stunted Wasted Under-weight 1993 1998 1993 1998 1993 1998 Resibean1e Urban 14.8 12.6 2.9 1.7 7.9 6.2 Rural 25.2 22.0 3.0 2.3 12.0 11.9 Region l West 10.2 9.9 2.6 1.5 4.8 3.8 South 14.8 13.5 1.4 2.2 6.8 8.9 Central 18.8 11.6 1.8 1.3 7.0 5.4 North 12.9 12.8 1.4 1.6 6.4 4.8 East 33.3 30.0 5.9 2.9 19.7 17.1 Source TDHS 1993, 1998 5. Morbidity and Mortality amoong AduRts8 The Ministry of Health in Turkey requires mandatory notification of certain communicable diseases, such as the vaccine preventable childhood illnesses (Diphtheria, Pertussis, Tetanus, Measles and Polio), Dysentery (amebic and bacillary), Hepatitis (A and B), Typhoid and Para-Typhoid fevers, Rabies, Brucellosis, Malaria and Tuberculosis as well as of some non-communicable diseases such as Cancer. As Table 13 shows, among the notified infectious diseases (Table 4), Group A Beta Hemolytic Streptococci Infections9 account for almost one- Table 13: Percent Distribution of Notified Infectious Diseases, 2000 Infectious Diseases Number of Cases % Of Total Group A Beta Hemolytic Streptococci Infection 65 236 31.13 Typhoid Fever 25 731 12.28 Amoebiasis 23 723 11.32 Malaria 20 963 10.00 Tuberculosis 20 222 9.65 Measles 16 244 7.75 Brucellosis 10 742 5.13 Hepatitis A 10 654 5.08 ' This section is particularly problematic in terms of the reliability of the data. The surveillance systems for communicable and for cancer are notonously incomplete and underdeveloped. In addition, lab capacity is very linited m Turkey making under-reporting of the other commumcable diseases a real problem for the morbidity discussion. So conclusions about the leading morbidity may not be entirely accurate; but there are certamily patterns of diseases that potentially tell a lot about the health sector. 9 The Group A Strep is "non-news" for the most part. This is the bug that causes tonsillitis, sore throats, scarlet fever, and impetigo - which have little public health significance and probably should not be a reportable disease unless it were causing sepsis. 14 Infectious Diseases (con't) Number of Cases % Of Total Scarlet Fever 4 856 2.32 Hepatitis B 4 111 1.96 Leprosy 2 514 1.20 C. Leishmaniasis 1 135 0.54 Dysentery 1 083 0.52 Paratyphoid 782 0.37 Meningitis 512 0.24 Pertussis 429 0.20 Anthrax 396 0.19 Trachoma 156 0.07 Tetanus 60 0.03 Diphtheria 6 0.00 Rabies 3 0.00 Poliomyelitis 0 TOTAL 209 556 100.00 Source. MOH, 2001 third of all infections, followed by Typhoid (12%), Amoebiasis (11%) and Malaria (10%).Io Infections such as Amoebiasis, Para-Typhoid, and Typhoid are transmitted primarily by contaminated water (and food), indicating improved water and sanitation needs; Brucellosis is transmitted by contaminated meat, indicating the need for improved food safety and inspections programs; while measles, tetanus, pertussis, diphtheria are vaccine-preventable diseases, indicating the need to improve preventive services in primary health care. Table 14: Hospital Deaths, 1999 Number of deaths Percentage Group I - Communicable diseases 10,990 13.45 Group II - Non-communicable diseases 63,259 77.42 Group III - Injuries and accidents 7,466 9.13 Total 81,702 100 Source Health Statistics 2000, MOH Among non-communicable diseases, coronary heart disease and cancers are the two leading causes of death in Turkey. Cardiovascular disease As in many other countnes, this group of diseases forms a major component of the non-communicable disease group in Turkey. As Figure 6 shows, morbidity and mortality associated with this group of diseases has increased considerably over the years, with a 327 percent increase recorded in hospital discharges for ischemic heart disease and a 429 percent increase in hospital discharges for cerebro-vascular diseases over the last 18 years. Discharges due to diseases of the circulatory system have also increased 1.5 times over '0 With the exception of the International Health Regulations, reporting requirements for infectious diseases are nationally or sub-nationally determined. There are differences from country to country, and even withm countries in how the reporting of each disease is camed out which introduces an element of non-comparability into global disease surveillance systems, since information on the same disease is collected in a somewhat different way depending on the country. 15 the same period. These chronic diseases often require long term medical care both in outpatient settmgs and in hospitals, while leading to sigmficant disability Cardiovascular diseases are more prevalent in urban areas in Turkey, and aggressive preventive health programs targeting life-style changes, risk factors such as smoking and diabetes, high fat diets, obesity, and sedentary lifestyle as well as programs for early detection and treatment are necessary to reduce them." Figure 6: Hospia Discharges, Ischernic Hear lDisease and Cerebrovascular Dl)sase, 19-98, Turkey 200 150 - 100 50 * O 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 --| Cerebrovascular disease ~ Ischengc heart dsease Source: HFA-DB, WHO regional officefor the European Region. Cancer Cancer has emerged as a significant health problem in Turkey and is the second-leading cause of death. As Figure 7 shows, there has been an almost three-fold increase in cancer incidence in Turkey in the period 1983-1999, with the number of reported cases increasing from 9,868 to 24,650 during the period.12 Lung cancer is the most common form of cancer, accounting for almost 20% of all cancer cases. High rate of smoking (and, to a smaller extent, increased pollution) is thought to have influenced the growth in lung cancer prevalence. Breast cancer is the most commonly seen cancer in women, and its incidence has increased by almost 240 percent from 3.66 per 100,000 in 1984 to 12.83 per 100,000 in 1999. Breast cancer incidence data is also one of the cancers most sensitive to changes in utilization of screening services (mammography). Trends in breast cancer incidence data are very hard to interpret without data on mamnmography utilization. Stomach, skin, bladder, colon, larynx, and bone marrow are the other frequently reported forms of cancer. " The notion that CVD and cancer are diseases of the affluent is fallmg by the wayside, In most middle income countries and countries n epidemuological transition, CVD and cancer strike lower socioeconomic groups as well with less ability to pay for the expensive services and medications needed on a long term basis. 12 It is not clear, however, to what extent this is related to population agemg. 16 Among the regions, the largest number of cancer cases is reported in the Aegean region (7,385 cases in 1999), followed by Central Anatolia (6,277 cases), Marmara (4,369 cases), Black Sea region (3,188 cases), East Anatolia (3,012 cases) and South East Anatolia (828 cases).13 Figure 7: Numerical Distribution of Cancer Notifications Reaching Cancer Registration Center (1983-1995) 40000 35000 -_ 30000-__. "Z 25000- i- 0 gasoo 150001 R, W 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Years Source: HFA-DB, WHO Regional Office for Europe Respiratory Infections Respiratory infections are also common among adults. Increased urbanization with its accompanying increase in pollution and high rates of smoking, particularly among men, appear to be contributory factors. Hospital discharges due to respiratory diseases increased 2.5 fold between 1980 and 1998 (from 330 per 100,000 to 801 per 100,000). The prevalence of chronic obstructive pulmonary disease (COPD) increased 2.75 times from 0.08 percent to 0.22 percent during the same time (HFA-DB, WHO- Europe). As discussed earlier, respiratory system cancer also rose significantly. Tuberculosis The incidence of tuberculosis (TB) in Turkey has fallen from 83 per 100,000 to 34 per 100,000 cases in the 19-year period between 1980 and 1999. Though the incidence is still higher than the European Union average, Turkey has had greater success in combating TB compared to many Central and Eastern European countries, where the incidence of TB has been on the rise, particularly since 1995. The National Tuberculosis Control Program in Turkey operates countrywide through a network of 265 dispensaries.14 The most common type of TB is that of the respiratory system followed by TB of the gastrointestinal system. Tuberculosis of the bones and joints is the least common form of tubercular infections seen in Turkey (MOH 1998). 13 The cancer data is so incomplete and poor quality, the regional distnbution can be very rmsleading. Note that the data refer to cancer reporting rather than cancer incidence. 14 Turkey has not implemented DOTS nor has contributed data to WHO's global database smce 1999. Unfortunately, age, gender, or geographic distnbutions of the disease are not known 17 Figure 8: Incidence of Tuberculosis, 1970 to 1999 90 80 40- -.. 30 _- _ 20 -, -_ o 70 060 1975 1980 1985 1990 1995 1999 -|- Turkey --- EU average zg CEE average Source HFA-DB, 2000, WHO Europe Malaria Malaria has been a long-standing health problem in Turkey. A recent surge in the incidence of malaria was observed between 1993 and 1996, largely due to changing agricultural practices that created conditions favorable to growth of malaria vectors and due to the migration of workers from the eastern areas. The majority of malaria cases are reported in the South-Eastern provinces. Deaths associated with malaria have declined over the years, and only 1 hospital death was reported out of 338 hospital discharges in 1997.15 Figure 9: Incidence of Malaria 1983-2001 160 0140- 2 _______ 0 120 _ _v_ _ _ _ _ _ _-_- C) 120a 0 . _ _ - - o, a) a) CO r ) )a)a a)0 0 LO a) a) ax a)0a ~~~~~C9 Source Health Statistics, MOH, 2001 15Health Statistics 1998, MOH. Care needs to be taken here m interpretation if death registration does not exist or is very incomnplete in this region. 18 HIV/AIDS The first case of HIV infection was reported in 1985, and as Figure 10 shows, a total of 1,051 cases were identified by the end of 2000. Of these, 300 were in the 25-34 age group, 200 in the 35-49 age group and a little less than 100 in the 15-24 age group (UNAIDS, 2000 update). Heterosexual transmission is (still) the main route of HIV transmission, accounting for half of all infections, while, mother-to-child transmission accounts for 1 percent of infections. The number of cases diagnosed among intravenous drug users (IDU) is small. While the number of cases is increasing progressively, effective prevention programs at this stage may keep infection rates low and the problem manageable in the future. HIV testing is mandatory in blood donors, commercial sex workers and military service conscripts abroad. The TDHS 1998 indicates that even though 84 percent of women and 93 percent of husbands overall had heard of HIV/AIDS, awareness regarding ways to prevent infections was poor. Regional variations were also reported with 58 percent of women in the eastern regions of the country reporting having heard of HIV/AIDS compared to 92 percent in the westem region. Figure 10: HIV-AIDS cases, 1985-2000 120 M 80 060 40 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 | HIV (+) HAIDS| Accidents, injuries and poisoning. Increasing urbanization in over the past two decades in Turkey has brought with it an increase in accidents, injuries and poisoning. The significant increase in this group of health problems has added to hospital admissions and consequently the shift towards an increased disease burden from communicable to non-communicable disease conditions. Hospital discharges from injury and poisoning have increased by 15 percent from 358 per 100,000 in 1980 to 421 per 100,000 in 1998. Persons injured in road traffic accidents have increased almost three-fold over the last 3 decades (61 per 100,000 in 1970 to 176 per 100,000 in 1999). This is a trend that is characteristic of many developing countries experiencing economic expansion, rapid urbanization and increased traffic. 19 Table 15: Admittance to Hospital De to Accidenets (1999) Accidents Number Fatality Rate (%) Motor Vehicle 65,002 4 Other vehicle 13,307 2 Falls 79,833 1 Fire 7,468 5 Water 1,050 2 Firearms 6,870 4 Work-related 11,822 3 Animal bites 4,702 <1 Other 26,400 . . . TOTAL 216,454 3 Source: Health Statistics, Turkish Republic MoH Survey Planning and Coordination Directory Publication, 1999 Micronutrient - Iodine deficiency Turkey's geographic location and its mountainous terrain make it an iodine-poor area. Iodine deficiency is a major health concern, with 31 percent of the population being geographically at risk for iodine deficiency. Four percent, or 2.4 million of those at risk, actually have goiter (UNICEF 1998). lodination of salt has been legally mandated since 1968. The Salt Iodination program initiated in 1994 attempts to implement this legislation. However, in 1998 only 5 percent of the 48 salt producers in Turkey were actually producing iodized salt and distributing it through the supernarkets in larger cities, and only a third of the salt produced in Turkey was iodized (UNICEF 1998). The problem is particularly serious in rural areas, where only 9 percent of all salt consumed is iodized, compared to 23 percent of all salt consumed in urban areas. The consumption of iodized salt was to the tune of 23 percent in urban areas and 9 percent in rural areas. The problem is also acute in the Eastern region where there is a cultural preference for granular or block salt, which is not iodized. In a recent development, the salt producers of Turkey have agreed to iodize all salt being produced after 2000; its implementation will, however, need to be monitored. 6. Emerging risk factor: smoking Cigarette smoking is a common habit in Turkey, and both the number of smokers and the number of cigarettes consumed have increased significantly over time. The total number of cigarettes consumed in Turkey increased from 37,506 mnillion pieces in 1970 to 115,500 million pieces in 2000, an increase of 207 percent overall and 34 percent in per capita cigarette consumption. Following the free import of foreign brand cigarettes into the country in 1986, there was an increase in absolute and relative numbers of smokers, along with a shift in favor of the imported foreign cigarettes. During the 10-year period between 1990-99, Turkey experienced the second highest growth rate in cigarette consumption in the world. The increase for this period was 52 percent, second only to Pakistan (71 percent). As Figure 11 shows, Turkey's per capita consumption in 1999 (1734 cigarettes per person per year) was above that of many other countries in the European region and above the European average of 1675 cigarettes per person per year. In 1999, Turkey consumed 15 percent of total cigarettes smoked in the European and Central Asia (ECA) region. The total consumption in ECA was 757,151 million pieces, which was 15 percent of the global consumption in that year. Overall, Turkey accounted for 2.25 percent of total world 20 cigarette consumption in 1999 (World Bank). Turkey is also a major producer of tobacco, and accounts for around 4 percent of the world production. Smoking Prevalence by Gender and Age. Smoking is quite popular with both males and females, across all ages and in most professions. In 1997, 51 percent of males and 49 percent of females were smokers (OECD Health data 1999). Other survey results place these figures between 51-65 percent male and 38-49 percent female smokers. Among adolescents (7-13 years) around 14 percent males and 9 percent females smoke (Emri, S. et al, 1998). According to a 1993 survey done in the Antalya province, more than half of Turkish male physicians were smokers (Dedeoglu, N. et al 1993). The percentage was slightly lower for their female counterparts. Figure 11: Per Capita Cigarette Consumption, 1999 #A .r3000- u) 2500 - _ T9 t - i- 2000 a~~ CO 3_ 1J .2 E 013 E 0 0 0~~~~~~~~~~~0C Table 16 presents the results of some other surveys. A nationally representative survey done in 1992 revealed that more than 20 percent of high school students aged between 15 to 17 years smoked every day. Another survey in Ankara shows that over 24 percent of Grade 11 students smoked every day, and over 5 percent of Grade 8 students smoked every day. Smoking was found to be very high in a survey in South-Eastern Turkey, in which 60 percent of 15-18 year old boys were found to be smoking everyday. Data compiled from national household consumption surveys indicate differences in smoking prevalence based on household wealth. Table 17 shows that smoking prevalence is 25 percent higher in households from the highest income quintile than in those from the lowest income quintile. Consumption patterns taken from the 1994 National Household Consumption Survey indicate an overall preference for local brand filtered cigarettes (53 percent of all cigarettes smoked). Income also influences the type of cigarette smoked, and households in the lowest income quintile use unfiltered local brands to a larger extent than those in the highest income quintile (7.25 percent prevalence versus 1.22 percent prevalence respectively). 21 Table 16: Selected Surveys on Smoking Prevalence among Turkish Youth Survey Year Daily smoking Sample size prevalence (%) Survey of high school students (national representative) 1992 20.1 12781 Survey of high and secondary school students in Ankara 1983 2428 Grade 11 students 24.1 Grade 8 students 5.2 Survey of apprentices in Elazig (SE Turkey) 1995 935 Aged 12 or less (males) 20.5 Aged 13 (males) 29.5 Aged 14 (males) 50.5 Aged 15-18 (males) 60 Source: World Bank Tobacco Survey Table 17: Smoking prevalence by type of cigarete and income group, 1994 Description l Income Quintiles Overall [Lowest Second I Third I Fourth Highest Smoking prevalence percent Filtered 52.55 47.98 59.80 62.42 64.35 63.05 Unfiltered 3.73 7.25 4.97 3.71 2.29 1.22 Foreign Brand 7.42 1.47 3.15 4.93 9.14 18.43 All 63.70 52.04 62.59 65.14 68.15 70.34 Number of Smoker Households Filtered 13,749 2,514 3,128 3,266 3,366 3,299 Unfiltered 977 380 260 194 120 64 Foreign Brand 1,942 77 165 258 478 964 All 16,668 2,727 3,274 3,408 3,565 3,680 Sampled households 26,166 5,240 5,231 5,232 5,231 5,232 Source: National Household Consumption Survey 22 7. Conclusion The data presented in this chapter - all the caveats related to comprehensiveness and reliability notwithstanding - unequivocally show that the overall health status of Turkey's population is poor, both in absolute terms as well as in comparison with.other countries at the same levels of income. The reasons for such low health outcomes are varied, and are probably related in some degree to the health system in the country and to the people's lifestyles. Whatever the causes, it is clear that Turkey lags behind the health outcome levels potentially attainable with the available financial and human resources in the country. Of the many areas of concern insofar as health outcomes in Turkey are concerned, at least four are particularly stark and demand immediate attention. First, maternal mortality rates are very high. Although significant declines have been achieved in the recent past, maternal mortality in Turkey remains the highest for all countries in the European region, even if the most conservative figure of 52 deaths per 100,000 live births is considered the most accurate. While the main clinical causes of the high rates of maternal mortality are believed to be complications due to infections and toxemia, the fact that a quarter of all births take place at home and a third of pregnant women do not receive any antenatal care also contribute to increasing the risks associated with infections and toxemia. Whether this is a reflection of the inability of the health system in the country to provide access to antenatal care and delivery facilities or an indication of poor demand for health services as a result of certain socio-cultural perceptions and low levels of knowledge of health issues is moot; what is important is that maternal mortality rates are very high in Turkey whereas even many poor countries have succeeded in containing pregnancy and delivery-related fatalities. A second area of concern is the very high rate of infant mortality. Here again, despite significant reduction in the last few decades, infant mortality rates in Turkey remain higher than most other countries in Europe. Of the many factors that can potentially explain these high rates in infant mortality, the most significant are low weight of the child at birth, short birth intervals and lack of adequate care during pregnancy and delivery. Low education levels of the mother are also positively correlated with higher mortality rates. A third area of concern relates to the huge locational and regional disparities in health outcomes across all indicators. By and large, rural areas are worse off on all counts compared to urban areas, and regions in Eastern Turkey are worse off on all counts compared to the national average and to the regions in Western Turkey. Whether it is maternal mortality, infant mortality, nutritional outcomes, or morbidity and mortality among adults, the rural areas and Eastern regions in Turkey compare rather unfavorably with the rest of the country. Some of the reasons for this are obvious, for there is a strong positive correlation between economic wealth and health, and few of the economically wealthy in Turkey live in rural areas or in Eastern provinces. The economically wealthy are also typically better educated and generally have a better awareness of health issues and treatment options, and to this extent have a higher demand for health care. The other reasons for such wide disparities are supply-related, and it is here that the effectiveness of public expenditures on health needs to be revisited. 23 The fourth area of concem relates to behavior and associated risk factors for health, and in the case of Turkey the obvious reference is to smoking. The incidence of cigarette smoking is very high in Turkey, and a large number of men and women, and even secondary and high school students, smoke. Smoking is well documented to be a major risk factor for lung cancer, heart diseases and respiratory infections. Though no direct evidence to this effect is documented in the case of Turkey, it is worth noting that lung cancer is the most commonly seen cancer among men, and generally, cancer has emerged as the second leading cause of health in Turkey in recent years. Unless effective measures are taken soon to curb the growing use of tobacco, both in terms of the number of smokers and the number of cigarettes consumed, the health-related problems that this trend will produce will soon become very serious. As the data presented and analyzed in this chapter shows, Turkey is experiencing an epidemiological transition with the twin challenges of addressing communicable and non- communicable diseases. In resolving the huge regional and income disparities in health outcomes, especially for infant and child health, special efforts will need to be undertaken to enhance immunization coverage, improve access to health services and change attitudes and practices with regard to maternal, infant and child health. In addition, prevention programs would need to address lifestyle choices and behaviors. HIV infection and AIDS are still not a major health problem for Turkey, but no country - Turkey included - is invulnerable to this problem, and early action is always advisable to control the spread before it takes on epidemic proportions. One of the challenges in conducting this analysis of health outcomes and epidemiological trends in Turkey has been the availability and reliability of data. Incomplete and inadequate data cannot form the basis of effective policy and action; on the contrary, it poses the definite risk of distorted emphasis and attention. The importance of an effective and rigorous disease surveillance system and information and data collection can, therefore, not be over-emphasized. In addition to what has been noted above in terms of high mortality rates, regional and economic disparities and behavioral risk factors, this is also an area to which the health system in Turkey needs to give immediate attention. 24 CHAPTER 2: DEMAND FOR HEALTH SERVICES 1. Introduction Knowledge of household demand for health care in developing countries is important for a variety of reasons. First, scarce resources in the health sector can be allocated more effectively if the structure of demand for health services is known. Second, consumer preferences greatly impact critical choices about the organization of health care. Third, the role of the government in the production, finance, delivery and management of health services can be appropriately defined only if the factors affecting the demand for health care are known and understood. Fourth, the role of the private sector and goverunent policies towards encouraging and supporting the health sector's growth can be appropriately defined only if consumer decisions about medical treatment and choice of providers are known. Fifth, knowledge of the demand for health care is necessary to set cost sharing goals for the publicly provided medical services. Finally, decisions regarding facility design, scope of services, intensity of services and location would be better informed if the patterns of utilization of health services were known. This chapter inquires into the determinants of health care seeking behavior and choice of provider in Turkey. The decision to seek care is modeled jointly with the choice of provider in a nested decision making framework for the country as a whole. Price and income elasticities are computed for different providers and across different income groups. Finally, implications for household willingness to pay for health care are drawn from the analysis. The rest of the chapter is organized as follows. Section 2 contains a brief description of the data sources. Univariate and multivariate estimation results are discussed in Sections 3 and 4 respectively, and the chapter concludes in Section 5. A discussion on modeling the demand for health care can be found in the technical appendix at the end of the chapter. 2. Data Two sets of data are used in this analysis. The first data set pertains to the year 1999 and was collected on behalf of the Ministry of Health of the Government of the Turkish Republic by Makro Research and originally used in the research and analysis of user satisfaction with health services provided in public and private facilities. The survey was conducted in six provinces, representing five different regions, and covered Adiyaman in the Southeastern Anatolia Region, Bilecik in the Marnara Region, Corum in the Black Sea Region, Eskisehir in the Central Anatolia Region, and Malatya and Van in the Eastern Anatolia Region. The Aegean and the Mediterranean Region were not represented in the sample. The sampling-with-probabilities- proportionate-to-size method was used to select districts, sub-districts and villages within each province surveyed, and the simple random sampling method, which employed a list of homes provided by the appropriate local authority, was then used to select households within the district or village. A total of 400 households were interviewed in each province in which the survey was conducted. 25 The second data set used in this analysis pertains to the year 2001 and was collected during a baseline survey commissioned by the World Bank as part of the Social Risk Mitigation Project. Using a multi-stage stratified cluster sampling technique, the survey covered 62 provinces, of which 7 are in the Mediterranean Region, 8 in the Aegean Region, 10 in the Marmara Region, 7 in the Southeast Anatolia Region, 8 in the East Anatolia region, 11 in the Central Anatolia Region and 12 in the Black Sea region. A total of 4,000 households were interviewed. Note that the 1999 and 2001 surveys are not comparable, since the former was carried out in a limited number of provinces and covered only a few regions while the 2001 survey is nationally representative. Where made, qualitative and quantitative comparisons are subject to this caveat. Two statistical methods are used in the analysis of the data: univariate comparisons of sample statistics across different parameters and across regions, and a multivariate nested logit model of the decision process underlying treatment seeking and choice of provider. 3. Estimation and results: Univariate Compairisons The two data sets are very different, not only in the scope of coverage but also in the survey instruments used and issues addressed. Univariate analysis is therefore carried out separately for the years 1999 and 2001, and presented as such. 1999 Of the 11,724 individuals' for whom relevant information is available, 4854 (41 percent) reported an illness event or medical need during the recall period of the previous 6 months. Illness events or medical needs (hereafter called simply "illness") include, febrile disease, diarrhea, skin symptoms, accident/injury, psychological disorder, pregnancy, vaccination, check- up, and other illnesses. The incidence of reported illness is directly proportional to income (Figure 1). Among the individuals in the bottom quintile, 33 percent report an incidence of illness, significantly less than the 47 percent of individuals in the top quintile that report an illness (p < 0.0001). Among the bottom two quintiles, the combined incidence of illness is 35 percent, which is also significantly different from the 47 percent incidence if illness among the top two quintile (p < 0.0001). Without evidence or a plausible argument as to why the group reporting a lower incidence of illness would be healthier, it is logical to assume that this difference is a difference in the propensity to report an illness and not a difference in the level of health. ' Individuals who did not provide family income (49) were dropped before this number was calculated. There were also 163 individuals who reported receiving medical treatment m the last 6 months, but did not report how much they spent on that visit. For these individuals, the amount spent on their last health visit was estimated using a model in which cost of health services is taken to be a linear function of age, income, gender, location (urban or rural), type of health institution, insurance, hospitalization, and illness. 26 Figure 1 Percent Repoiling Illness in the Last Six Months (by income quintile) 32.98% 36.63% 44.14% 46.27% 46.99% 1 2 3 4 S Quintile by Family Income Of those reporting illnesses, 3983 (82 percent) report seeking some form of medical treatment for the reported illness. Sick individuals with higher incomes are more likely to seek treatment compared to sick individuals with lower incomes, and this trend is consistent across all income quintiles (Figure 2). Among the poorest 40 percent, 73 percent seek care, which is significantly different from the 87 percent of individuals in the top two quintiles (p < 0.0001). Figure 2 Percent Seeking Treatment Among Those Reporting Illness 71.54% 74.27% 84.83%io 86 .64% 88.38% 1 2 3 4 5 Quintile by, Family Income Of those who had a medical visit, the vast majority (91 percent) sought treatment for a disease or illness, and very few sought preventive care. The richer quintiles record only a slightly greater utilization for preventive services. Among individuals in the richest quintile who sought treatment, 89 percent do so because of a disease or illness. This is not significantly different from the 92 percent in the lowest quintile (p = .0635). There is a significant difference in the proportion of the population from rural and urban areas that report illness. Compared to 46 percent of the urban population, only 35 percent of the rural population reported an illness in the last 6 months (p < 0.0001). It is unlikely that this is the result of a healthier rural population. Readiness to report an illness is probably related to the availability of means to obtain treatment for that illness, and the difference between the rates at 27 which illness is reported in urban and rural areas may well be the result of under-reporting in rural areas caused in part by the difference in access to health care. Health care is far more accessible in urban areas than in rural areas. The survey data shows that 84.7 percent of urban dwellers can walk to the nearest health facility, compared to only 37 2 percent of rural inhabitants. For those living in rural areas, the mean cost of getting to the nearest health facility is over 16 times greater than the mean cost for those living in urban areas (605,528 TL and 37,062 TL respectively).3 This discrepancy is reflected in the self reported burden associated with traveling to a health facility; 57 percent of those living in rural areas reported that it was difficult to pay the cost of transportation to the nearest health facility, compared to only 33 percent of urban residents.4 As shown in the cost analysis, rural inhabitants also pay considerably more for medical treatment when they seek it. Similarly, a greater proportion of these who report illness in urban areas seek treatment (86 percent and 75 percent respectively). Figure 3 provides a breakdown of propensity to seek treatment when ill, by province and location. Figure 3 Propensity to Se0k Treatment when M (by Pronce and LcaVon) X S 95.00% o o 90.00% 85.00% - _ C s 80.00%- - o 75.00%0 W i s 70.00% 65.00% > , > 60.00% - COL E > c.- X c ES CD 2 .s X w |Rural < CUrban Province Under reporting of illness seems to be most pronounced in Corum, Adiyaman, and Van provinces. These provinces show not only the greatest differences between urban and rural reporting of illness, but also the lowest overall levels of reported illnesses. However individuals 2 Estimates based on the responses of the 7,425 individuals who answered the relevant survey question. 3Estirnates based on the responses of the 11,209 individuals who answered the relevant survey question. Estimates based on the responses of the 2,128 individuals who answered the relevant survey queshon. 28 who report illness in Corum province show the highest propensity to seek treatment, both in urban and rural areas (91 percent and 89 percent respectively). The rural residents of Malatya appear to be the worst off, where only 67 percent of those who report an illness seek treatment. The propensities to report an illness and seek treatment for that illness also vary by gender. Woman are both more like to report an illness and more likely to seek treatment for that illness (Figure 4). Both these differences are significant, (p < 0.0001). Even when individuals who listed pregnancy, family planning and child related health needs were removed from the sample, the differences between men and woman remained significant. Figure 4 Gender Differences in Reporting and Seeking Treatment for Illnesses 85% 79% [3Male 46% E Female 36% Xg Report Illness Receive Treatment for Illness Gender differences in the likelihood of reporting and seeking treatment for an illness do not exist among children under 18. Among boys 34 percent reported an illness in the last six months, 82 percent of whom received treatment. With girls, 34 percent reported an illness in the last six months, 83 percent of whom received treatment. Gender difference in the propensity to seek treatment for an illness was not significant among children (p = .43333). There does not seem to be a clear correlation between education level and either the propensity to report an illness or the propensity to seek treatment for a reported illness. However there are clear links between the reporting and seeking treatment for illnesses and the family's general knowledge of health issues. The Makro 1999 health survey included a questionnaire designed to test the respondents' general knowledge of health related issues. This questionnaire consisted of six multiple-choice questions and was administered to the individual in the home who was primarily responsible for childcare. The number of questions correctly answered can be used as in indicator of the family's general health knowledge. Definite trends exist between the families score on this indicator and the individual's propensity to seek treatment or the incidence with which the individual reported illnesses. When the incidence of reported illness is plotted against the family's health knowledge indicator, and inverted-U pattern emerges (Figure 5). This is most likely the result of two competing 29 forces. First, as the families' health knowledge increases, their ability to identify both the existence of illness and the need for medical treatment increases. This results in the initial direct relationship between the reporting of illnesses and the health knowledge indicator. However, general health knowledge also results in better utilization of preventive health. Thus with very high health knowledge indicators there is a decline in reported illnesses. It is unlikely that this is due to a decrease in the propensity to report an illness. Rather the decrease in reported illnesses is likely caused by a decrease in the existence of illness. The more knowledgeable about preventive health a family is, the more likely members of that family are to use preventive health measures. The more a family employs preventive health measures, the lower the frequency of illness among family members. Figure 5 Percernt of lndividuals lReporting an liEness in the Last 6 Months 65%- 41% 42% 4 41% 45% - 33%37% 0 1 2 3 4 5 6 Health Knowledge Indicator Score Note: the difference between I and 5 is sigmficant (p <0.0001), as is the difference between 5 and 6 (p = 0.0160). When comparng the propensity to seek treatment for an illness with the famnily's health knowledge indicator score, the picture is less clear. Although there is a significant difference between those whose family score is 2 and those whose family score is 6 (p - 0.0036), there is no significant difference between those whose family score is 0 and those whose family score is 6 (p = 0.0595). Additionally there is no significant difference between families that answered 0, 2, 3, 4, and 5. Insurance also affects the propensity to report an illness and the propensity to seek treatnent for an illness. The difference in the propensity to report an illness is significant between individuals with no insurance and individuals with insurance. While more than half of those with insurance reported an illness during the recall period, only one-third of the uninsured reported an illness event. The exception is individuals who have Green Card insurance. The difference between individuals with no insurance and individuals with Green Card insurance is not significant (p 0.1404). Possession of any insurance, including Green Card insurance produces a significantly A similar argument could be used to explain the highei level of reported illness among members of families who answered none of the questions correctly. While the lack of knowledge makes them less like to observe and report illnesses, it also mnakes illness more likely to occur. It is irnportant to note however that the difference m the incidence of reported illness between those who received no correct answers and those who received only one correct answer is not significant (p = 0.2065). 30 different propensity to seek treatment for a reported illness when compared to that of individuals who do not possess insurance, and while almost 90% of those reporting ill seek treatment if they have insurance, only about 70% of the uninsured who report an illness seek treatment for the illness. The average (mean) payment for outpatient treatment was 14,900,000 TL and the median payment for outpatient treatment was 4,000,000 TL. Of the 3,725 individuals who received outpatient treatment, 720 did not report having to pay for their treatment. For individuals who were hospitalized, the mean payment for treatment was 68,500,000 TL and the median payment was 30,000,000 TL. Of the 285 individuals in the survey who were hospitalized, 33 did not report having to pay for their treatment. There is a significant difference in the average payment for outpatient care between rural and urban patients (p < 0.0001). In urban areas, the average payment for outpatient treatment was 12,200,000 TL but in rural areas it was 20,000,000 TL. Figure 6 Mean Payment for Out Patient Care by Province and Urban - Rural Status 40,000,000 35,000,000 30,000,000 m 25,000,000 20,000,000 Rural 15,000,000 X Urban 10,000:000'0 5,000,000 Co > ° cX U) .- ) o w < Note: All costs are m TL Insurance was also a determinant of treatment expenditures. Individuals without insurance and individuals with Green Card insurance spent more out-of-pocket on health than other individuals (Figure 7). 31 Figure 7 Mean Payment for Out Patient Treatment by linsurance 22,600,000 Green Card Baokur 15,400,000 Erldi Sandyoy : 10,600,000 SSK 8,381,172 21,600,000 No Insurance . Note: All costs are m TL Out-of-pocket expenditures on health pose a greater burden on the poor compared to the rich. The poor spend disproportionately higher amounts on health care relative to the rich. As Table 1 shows, average out-of-pocket payments for visits to a health facility are higher for those in the lower income quintile groups relative to those in the higher quintile group, and within each quintile group, out-of-pocket payments are higher for those in the rural areas. Table 1: Omut- -Pocket Payments on Health Care (by guintile) 1999 Quintile ocation Mean Payment of Last Visit to aPercent of Individuals in Group ____________ ___________ Health Institution (TL with Insurance Quintile I Rural 30500,000 28,400,000 9.313 13.48 Urban 1,9100,000 13.25 Quintile 2 Rrhan 31,900,000 27,900,000 30.07 18.38 Quintile 3 Rrbal 19,600,000 15,100,000 63.54 53.13 Quintile 4 Rural 19,400,000 14,700,000 42.80 763.54 __________Urban 113,100,000 72.77 Rural 17,700,000 57.92 Quintile _rban 11,900,000 12,800,000 86.06 80.98 Note All costs are in TL Note Possession of Green Card insurance is not counted as possession of insurancefor these calculations 2001 Of the 15,304 individuals for whom relevant information is available 1,584 (10.3 percent) report an illness event or medical need during the recall period of the previous month. Illness events or medical needs (hereafter called simply "illness") include fever headache, pain, stomach disorder (such as dysentery), abnormal growth, toothache or related problems, upper respiratory tract disorder, sleeping disorder, anxiety depression, fatigue, general tiredness, muscular/joint pain, 32 and other ailments. An additional 552 reported having an illness that required hospitalization at some point in the last 6 months. Of these individuals, 355 received hospital treatment. The incidence of reported illness during a one-month period appears to be inversely proportional to income (Figure 8). Among the individuals in the bottom quintile, 13.9 percent report an incidence of illness, significantly more than the 9 percent of individuals in the top quintile that report an illness (p < 0.0001). These results stand in sharp contrast to the 1999 results. There are several possible explanations for this difference. First, unlike the 2001 survey, the Makro 1999 survey was not nationally representative. In 1999, residents living in the six provinces covered in the Makro survey had a significantly lower per-capita income than did Turkey as a whole.6 More importantly Turkey experienced a real decrease in per-capita income between 1999 and 2001. It is possible that psychological effects of this negative growth had a greater impact on the propensity of reporting illness for the rich - who may well be liberal in reporting illness during times of economic prosperity - relative to the poor, who may be reporting only critical illnesses.7 Figure 8 Percent Reporting Illness in the Last Month by Quintile 13.90% 12.93% 9.09% 8.21% 8.98% 1 2 3 4 5 Quintile by Family Income Of those reporting illnesses, 1141 (72 percent) report seeking some form of medical treatment for the reported illness.8 Sick individuals with higher incomes are more likely to seek treatment compared to sick individuals with lower incomes (Figure 9). Among the poorest 40 percent, only 68 percent seek care, which is significantly different from the 77 percent of individuals in the top two quintiles (p = 0.0002). 6 In 1999 the mean per-capita mcome for Turkey was 1182 million TL, but the mean per-capita income for the 6 provmces covered m the Makro Survey was only 821 million LT. Source: 1999 - 2000 If one were to multiply the monthly propensity to report an illness produced by the 2001 survey by six, the result would be a number far higher than that six month propensity to report illness derived from the 1999 survey data It is unlikely that thus is due to a real increase in the propensity to report an illness. Rather, it is well documented that a shorter recall period produces a higher recall Scott and Amenuvegbe (1990), for instance, found that in the Ghanaian Living Standards Survey, expenditures on frequently purchased items fell by approximately 2 9 percent for each day that the recall period was increased. 8 It is important to note that this figure is 10 percent lower than the figure produced by the 1999 survey data. This reflects the impact on health care of the economrc downturn experienced between 1999 and 2001. 33 Figure 9 Percent that Sought Treatment Among Those that Reported fllness 78.10% 76.87% 68.37% 67.77% 1 2 3 4 5 Quintile by Family Income Note: Figures for out-patient treatment There is a significant difference in the proportion of the population from rural and urban areas that report illness. Compared to 13 percent of the urban population, only 10 percent of the rural population reported an illness in the last month (p < 0.0001).9 Figure 10 Propensity to Seek Treatnment (by region and locatlon) 4m0 100% = sE 0 90% - 0 co80%- 70% _'E 60% - W_st > t, 0 E 0%- r 4~ 0% E~~~ gL L! c XE E X 2 5 Q Fm Q Rural co E Urban Region Note: Figures for out-patient treatment 9 Like the relationship between income and reporting of illness this trend is the reverse of that which was observed using the 1999 Makro data set. The 2001 survey misclassified approxunately 12 percent of the population as urban when, in fact, they were rural. Tins rmsclassification is the most likely source of the discrepancy between the 1999 Makro dataset and the 2001 dataset. 34 The propensities to report an illness and seek treatment for that illness also vary by gender. Woman are more likely to report an illness (p < 0.0001), and marginally more likely to seek treatment for that illness. There are no significant gender differences among children under 18 in the likelihood of reporting and seeking treatment. Individual with higher levels of education are more likely to seek treatment when ill compared to those with lower levels of education, but the differences are not significant. Insurance also affects the propensity to report an illness and the propensity to seek treatment for an illness (Figure 11). Possession of any insurance, including Green Card insurance produces a significantly different propensity to seek treatment for a reported illness when compared to that of individuals who do not possess insurance. Figure 11 Propensity to Seek Treatment for an Illness by Insurance Type 87% 79% 81% 74% 78% ES SSK BAGKUR Prvate Green Other None card Note: Figures for out-patient treatrnent The mean payment for outpatient treatment was 38,400,000 TL and the median payment for outpatient treatment was 10,000,000 TL. Of the 1169 individuals who received outpatient treatment, 343 did not report having to pay for their treatment. Excluding those who did not have to pay for outpatient treatment the mean payment was 54,300,000 TL. For the 355 individuals who were hospitalized, the mean payment for treatment was 106,000,000 TL and the median payment was 36,000,000 TL. Of the 355 individuals in the survey who were hospitalized, 143 did not report having to pay for their treatment. Excluding those individuals who did not have to pay for hospitalization, the mean payment was 178,000,000 TL. There is no significant difference in the mean payment for outpatient care between rural and urban patients (p = 0.5572). In urban areas, the mean payment for outpatient treatment was 35,700,000 TL and in rural areas it was 39,200,000 TL. Insurance, was also a determinant of the payment for treatment. Individuals without insurance and individuals with Green Card insurance pay much more than other individuals (Figure 12). 35 Figure 12 Mean Payment for Out Patient Treatment by Insurance Other 4,333,334 SSK 1 24,200,000 BAGKUR 25,100,000 ES 27,100.000 Green card 1 30,700,000 Rivate I 31,600,000 None 1 32,100,000 Note: All costs are in TL Out-of-pocket expenditures on health pose a greater burden on the poor compared to the rich. The poor spend disproportionately higher amounts on health care relative to the rich. As Table 2 shows, average out-of-pocket payments for visits to a health facility tend to be higher for those in the lower income quintile groups relative to those in the higher quintile group. Within each quintile group, out-of-pocket payments are generally higher in urban areas (the only exception being the third quintile group). Table 2: Out-o Pocket Payme ts on Health Care (by guintile), 001 dean Cost of Last Visit to aPercent of Individuals in Group Quintile tirban I Rural Health Institution with Insurance Quintile I Rural 42,300,000 43,100,000 28% 46% Quintile 2 ural 23,500,000 37,000,000 62% 73% ___________ Urban 42,000,000 7__ _ __ _ _ 7% Quintile 3 ural 55,200,000 40,800,000 05% 70% ___________ Urban 37,000,000 7__ _ __ _ _ 5% Quintile 4 urbal 21,200,000 30,300,000 87% 86% Quintile 5 ural 27,900,000 8,600,000 8% 86% ______ _____ Urban 40,600,000 .. ___600 _000 88% _ _ _ _ _ _ Note: All costs are in TL. Payments arefor outpatient visits only Note Possession of Green Card insurance is not counted as possession of insurancefor these calculations 36 4. Estimation and results: Multivariate Analysis This section presents the results of the demand and provider choice models estimated separately using the 1999 and 2001 data. Both probit and nested logit models are used to estimate the effect of various factors on health seeking behavior and choice of provider.10 Various factors affect the probability that a person reporting an illness will seek treatment for the illness." Utilization of health care in Turkey increases with income, as is indicated by the positive and significant coefficient on income in both, the nested logit and the probit results (See Appendix). The insured are significantly more likely to seek health care when ill compared to the uninsured, as is evident from the very significant and positive coefficients on the insurance dummies in both variants. Similarly, patients who perceive their illnesses to be severe are more likely to seek care when ill. Surprisingly, education does not play a significant role in influencing the decision to seek care, and those with higher education are as likely to seek care or not seek care when ill as the relatively under-educated persons. Neither does location play a significant role in shaping individual health care seeking behavior. Gender appears to play a significant role in influencing the probability that an individual will seek care when ill. Females are more likely to seek treatment when ill compared to men. However, health utilization is likely to be low in households headed by females relative to the male-headed households. Marital status does not seem to affect the decision to seek care other than self-care. Individuals in larger households are less likely to seek care when ill relative to the smaller households. Similarly, households speaking the Kurdish language are significantly less likely to seek care when ill relative to the non-Kurdish speaking households. Results of the discrete choice models and the extensions used here can be employed to quantify the effect of various factors on the probability of seeking care when ill. Thus, those with Emekli Sandigi insurance are 25.2% more likely to seek care compared to those without insurance. Similarly, those with SSK, Bagkur and private insurance are 19.5%, 17.7% and 22.9% more likely to seek care relative to the uninsured. Green card holders are 15.8% more likely to seek care relative to the uninsured. The results underscore the importance of health insurance in the decision to seek care. 1° See the Techmcal Appendix for details. l Studies on household and mdividual demand and uilization of health care indicate that factors like age, gender, income, education, location and pnce of health care affect both the individual's decision to seek health care when ill as well as the choice of provider. Factors that increase utilization include convenmence or ease of physical access to health services, improvements in quality and household income. Some studies have distinguished between factors that influence the decision to report an illness and decision to seek care, and find that while the probability of reportmg an illness mcreases with income and education and decreases with faruly size, the probability of seeking treatment mcreases pnncipally with perception of quality, ease of access and income. 37 Three factors that have a negative effect on health care seeking behavior are female-headed households, household size and membership in an ethnic minority group, as reflected by the principal language spoken at home. The results show that female-headed households are 12.6% less likely to seek health care relative to male-headed households, and households where the primary language spoken is Kurdish are 7. 1% less likely to seek health care when ill. Finally, the probability of seeking care falls by 2. 1% as household size increases. The nested logit models also indicate patients' choices for providers.12 Individuals view the provider choices as closer substitutes for each other than for the no-treatment (or the self-care) alternative. The coefficients on income net of prices and the square of this term are significantly different from zero, and positive for the income variable and negative for the squared term, implying that the utility function is concave in income. Prices enter the model via the income terms, and the fact that the income terms are significant implies that prices are relevant to the choice of provider. However, since prices enter the model in a highly non-linear fashion through the income terms, it is hard to judge the magnitude of price effects by merely examining the coefficients. This is examined in detail in the next section, in which arc elasticities of prices and income are presented. The 1999 data set allows examination across three facility types: MOH facilities, SSK facilities and University health facilities. The results confirm what the earlier analysis showed: the insured are significantly more likely to seek health care compared to the uninsured. More interesting than this rather obvious finding is that patients with better knowledge about health conditions and treatment - more so than education per se - are significantly more likely to seek care and prefer MOH and SSK facilities relative to home care. The policy implications of this finding are obvious. The 1999 data set also highlights the difference between different provinces in terms of health seeking behavior. Patients from Corum are more likely to seek care compared to those in Eskisehir (the control province), while those from Malatya, Adiyaman, Bilecik and Van are more likely to not seek care (or self treat). The 2001 data allows examination across two provider types: physicians and nurses. Besides the usual positive and significant coefficients on insurance variables, the 2001 data indicates that patients who perceive their illness as being severe prefer visiting physicians relative to nurses and self-care. Price Elasticities In order to assess the direction and magnitude of the effect or price and income on demand for health care, arc price elasticities of demand for physician services are estimated for all income quintiles.13 Within the specified price range, the probability of an individual choosing an alternative is predicted for every individual, holding all characteristics constant at their mean values, except price and income. The percentage change in the probability of choosing an 12 The value of c in all of the models is between 0 and 1, indicating that the model is consistent with utility maximization. 13 Arc elasticities are obtamed by sample enumeration; also see Train (1986), Gertler and van der Gaag (1990) and Chawla and Ellis (2000), 38 alternative is divided by the percentage change in price to yield the arc price elasticity. In other words, an arc price elasticity of -1.0 implies that a 10% increase in price will result in a 10% reduction in demand, an arc price elasticity of -2.0 implies that a 10% increase in price will result in 20% reduction in demand, and so on.14 Table 3 describes the arc price elasticities for demand for physician services. The price elasticities along a demand curve are read moving down a column holding income constant; price elasticity across demand curves is read moving across a row, holding price constant. The results show that demand is very price inelastic, even at low-income levels. Price elasticities are higher for the lower quintiles relative to the rich, but tend to be generally very low. Demand for health care is particularly inelastic in the lower price ranges. Table 3: Arc Price Elasticities, Turky 2001 Price Range (million TL) Quintile 1 Quintile 2 Quintile3 Quintile4 Quintile5 30-60 -0.0024 -0.0017 -0.0012 -0.0007 -0.0005 60-90 -0.0049 -0.0033 -0.0023 -0.0013 -0.0009 90-120 -0.0074 -0.0050 -0.0036 -0.0020 -0.0013 120-150 -0.0100 -0.0068 -0.0048 -0.0027 -0.0017 150-180 -0.0126 -0.0086 -0.0060 -0.0035 -0.0021 180-210 -0.0152 -0.0104 -0.0073 -0.0042 -0.0025 210-240 -0.0179 -0.0122 -0.0086 -0.0050 -0.0029 240-270 -0.0207 -0.0141 -0.0099 -0.0057 -0.0032 270-300 -0.0235 -0.0160 -0.0113 -0.0065 -0.0036 The findings on price elasticity are not peculiar to Turkey, and small price effects have been found in many other settings. In rural Malaysia, for instance, Heller (1982) found that total annual medical visits were not significantly influenced by prices. Similarly, prices were not an important determinant of demand for medical care in a rural region of the Philippines (Akin et al, 1984) and in rural areas of Cote d'Ivoire (Gertler and van der Gaag, 1990). In a study that analyzes the determinants of demand for health care in urban Bolivia, Ii (1996) found that though demand for medical care is responsive to changes in prices, the price elasticities tend to be very low. 5. Conclusion The differences in the two surveys notwithstanding, very similar conclusions emerge from the analysis of the two data sets. First, the poor are less likely to be employed in the formal sector and are less likely to have health insurance compared to the rich, and for this reason are more 14 In the theoretical and emprcal framework employed in this analysis, the probability of seeking care is determined conditional on an event of illness. To this extent, therefore, the estimated pnce elasticities may be considered to be short-term elasticities that may differ form long-term elasticities if the probability of reporting an illness is responsive to pnces. Dow (1995) presents a case in which the short-term and long-term responses are not significant, and shows that there is m fact no sample selection bias in using a sample conditional on illness. Other researchers have also used such a framework (see, for instance, Gertler and van der Gaag, 1990, Lavy and Quigley, 1993, and Lavy and Germain, 1994). 39 likely to (i) not always seek care when ill; and (ii) spend more out-of-pocket when they do seek care. Second, female-headed households - typically poorer than the male-headed households - are more likely to not seek treatment when ill. Third, larger families, again typically poorer in per capita terms compared to smaller families, are less likely to seek care when ill compared to smaller households. Fourth, education by itself does not have a strong impact on health care seeking behavior; however, knowledge of health conditions and treatments does have a significant bearing on seeking care. Households more knowledgeable about health conditions and treatments are more likely to seek care compared to those who are less knowledgeable. Fifth, there is a very strong correlation between having health insurance and seeking treatment, irrespective of the kind of insurance. And finally, there are huge differences between regions and provinces in health care seeking behavior, with health services utilization rates in Eastern and Southeastern Anatolia regions markedly lower than elsewhere. The policy implications of these findings are obvious. Lack of health insurance leads to delayed diagnoses and treatment, which then results in higher expenditures afterwards and potentially life-threatening complications. As a recently concluded study in the US reports, prevention and early diagnosis have an enormous impact on mortality, quality of life and even costs.'5 The uninsured are more likely to ignore the more subtle illnesses and symptoms, like hypertension and high cholesterol, and are less likely to receive common screening tests and preventive interventions. Despite the Green Card program and other similar facilities to which the otherwise uninsured can potentially have access, in all likelihood the vast majority of the uninsured simply go without health care until an illness becomes severe and intolerable. The challenge for the policy makers lies in ensuring that people have access to health care early before they get very ill, and that they have access to a full range of basic services. This is by no means an easy task, but the implications are too serious to ignore, for besides the obvious medical outcomes, many less tangible but equally important benefits come with health insurance. These include financial security and stability, peace of mind, alleviation of pain and suffering, disabilities avoided or delayed, and gains in life expectancy. For many in Turkey, these benefits remain out of reach. '5 In a comprehensive study of the medical consequences of going without insurance, researchers commissioned by the US National Academy of Sciences found that 18,000 premature deaths occur each year due to lack of health msurance. As Mary Sue Coleman, President of the Iowa Health System and co-chair of the committee that authored the report notes, "the quality and length of life are distmctly different for the insured and uninsured populations." 40 Appendix 1 Fig. 1: Incidence of Illness and Treatment Seeking, 2001 TOTAL SAMPLE 15,304 (100%) ILL NOT ILL 1,584 13,720 (10.35%) (89.65%) '72.03%) (27.97%) 41 Table 1. Nested Multinomial Logit Model of Provider, 2001 Variable Coefflcient t-ratio Income 0.080 1.997 Income Squared -0.005 -2.554 Sigma 0.275 17.514 Physician Constant 3.176 2.983 Urban -0.467 -0.988 Female 0.136 0.383 Married 0.768 1.843 Language Spoken at Home (Kurdish) -0.334 -0.534 Individual's Education: Primary 0.001 0.002 Individual's Education: Secondary -0.240 -0.445 Individual's Education Higher -0.589 -0.467 Education of Household Head: Primary -0.210 -0.395 Education of Household Head: Secondary 0.504 0.683 Education of Household Head: Higher 1.704 1.334 Employed Head of Household -0.466 -1.167 Female Head of Household -0.984 -1.501 Insurance: Emekli Sandigi 1.973 3.830 Insurance: SSK 1.991 4.612 Insurance: Bagkur 2.445 3.733 Insurance: Private 5.967 1.539 Green Card 2.115 2.094 Severely Ill 1.435 3.261 Household Size -0.197 -1.858 42 Table 2: Nested Multinomial Logit Model of Provider, 1999 Variable Coefficient t-ratio Income 0.109 0.543 Income Squared -0.051 -0.697 Sigma 0.676 12.898 MOH Facility Constant 1.732 8.792 Age -0.004 -1.250 Female 0.046 0.414 Insured 0.783 8.158 Green Card 0.597 4.072 Head of Household -0.231 -1.528 Married -0.130 -1.134 Secondary -0.177 -1.470 Working -0.202 -1.308 Student -0.034 -0.247 Retired 0.242 0.886 Fair Knowledge of Health 0.251 2.057 Good Knowledge of Health 0.294 2.167 Corum 0.989 5.260 Malatya -0.418 -2.973 Bilecik -0.096 -0.642 Adiyaman -0.115 -0.796 Van -0.155 -0.963 SSK Facility Constant -1.095 -3.547 Age -0.007 -1.723 Female -0.074 -0.493 Insured 3.753 16.966 Green Card 0.825 2.124 Head of Household -0.120 -0.562 Married 0.131 0.868 Secondary -0.400 -2.596 Working -0.342 -1.609 Student -0.058 -0.333 Retired 0.224 0.727 Fair Knowledge of Health 0.335 1.964 Good Knowledge of Health 0.350 1.903 Corum 0.375 1.692 Malatya -0.741 -4.550 Bilecik -0.704 -4.111 Adiyaman -1.218 -6.186 Van -0.705 -3.160 43 Variable Coefflecennt |t-ratio University Facility Constant -2.147 -4.690 Age 0.009 1.451 Female -0.409 -1.663 Insured 2.173 8.634 Green Card 0.711 1.592 Head of Household -0.332 -0.988 Married 0.032 0.110 Secondary -0.042 -0.170 Working -0.031 -0.099 Student 0.088 0.283 Retired 0.407 0.969 Fair Knowledge of Health -0.012 -0.041 Good Knowledge of Health 0.012 0.036 Corum -0.128 0.043 Malatya -0.307 -1.211 Bilecik -1.442 -4.134 Adiyaman -1.201 -3.252 Van 0.677 2.332 Table 3: Determinants of Health Care Seeking Behavior, IProbit Estimates, 2001 Variable Coeficinent t-ratio Income 0.031 2.160 Urban -0.120 -1.220 Female 0.121 1.630 Married 0.020 0.260 Language Spoken at Home (Kurdish) -0.212 -1.780 Individual's Education: Primary -0.062 -0.710 Individual's Education: Secondary -0.072 -0.540 Individual's Education Higher -0.261 -1.270 Education of Household Head: Primary 0.020 0.250 Education of Household Head: Secondary -0.068 -0.650 Education of Household Head: Higher -0.152 -1.070 Employed Head of Household -0.099 -0.450 Female Head of Household -0.363 -2.890 Insurance: Emekli Sandigi 1.076 7.960 Insurance: SSK 0.671 7.570 Insurance: Bagkur 0.683 5.590 Insurance: Private 1.261 2.110 Green Card 0.618 3.670 Severely Ell 0.598 6.520 Household Size -0.062 -3.160 Constant 0.024 0.120 44 Appendix 2 Modeling the demand for health care Demand for health care can be defined as the quantity of a particular type of service that people are willing to obtain over a given period of time. More important than quantity of health-care, however, is the discrete phenomenon of "seeking care." In this specification, the values taken by the dependent variable are merely a coding for some qualitative outcome, where the mutually exclusive choices may be "seek treatment from provider]" and "seek treatment from provider k." The choice of provider would naturally be conditional on the decision to "seek treatment", which in turn would be conditional on being ill. Consumer decisions are based on maximizing utility, which depends on the individual's health status after consumption of the health good as well as on consumption of other goods. Estimation of demand thus takes the form of estimating these marginal and conditional probabilities. Formally, let the expected utility conditional on receiving care from providerj be defined ast6 UJ = U(Hj, C) (I) where Hj is the expected health status after receiving treatment from provider j and C, is the consumption net of the cost of receiving care from providerj. As Gertler, Locay and Sanderson have shown, income can influence the choice only if the conditional utility function allows for a non-constant marginal rate of substitution of health consumption.'7 Following Gertler and van der Gaag (1990) we use a functional form in which utility is linear in health and quadratic in consumption.'8 Specifically, we express the utility function for the "seeking care" alternatives as: U,j = aOHj + a] (Y, - P) + a2 (Yi - Pj)2 + EJ (2) where Y, is the income of individual i's household, and PJ is the expense incurred by individual i for receiving treatment from provider j. When no care is sought, (2) reduces to UO= aOHj + alY, + +a2 y2 + g0 (3) As Alderman and Gertler (1997) note, the parameters in the equations 2 and 3 are identified only when the values of expected health and consumption vary across the alternatives. The quality of health care providers is not introduced so far in the model. We do so by defining quality of providerj as the difference between expected health outcome from thejth provider and self-care, and express quality as Qj = Hj - Ho (4) I6 The framework adopted here closely follows the models developed in Gertler, Locay and Sanderson (1987), Gerfler and van der Gaag (1990), Lavy and Germain (1994) and Alderrnan and Gertler (1997), 17 This is also consistent with the notion of health being a normal good 18 Other functional forms that have been used are the translog indirect utility function (Gertler, Locay and Sanderson, 1987), and the Cobb-Douglas (Lavy and Gernnan, 1994). 45 Substituting into (2) yields U,1 = co(Qj + Ho) + aI(Y, - P) + a2 (Y, - P) + EJ (5) Normalizing quality of self-care to zero, the utility from the self-care alternative reduces to: Uo = aOHo + alYi + a2 y12 + 6o (6) Estimating (5) poses the problem that quality is not directly observable. We address this issue by letting quality of health care provider j depend on the characteristics of providerj as well as on the characteristics of those seeking treatment, insofar as their personal ability to implement the recommended treatment affects the quality of healthcare they obtain. Defined thus, quality is a function of such parameters as age, gender, education, marital status, and family size. Following Alderman and Gertler (1997), we define a reduced-form model of the utility from quality as: CxOQj = SoI + p Z+ pjz1 + rl] (7). where X is a vector of demographic variables, Zj is a vector of characteristics that do not enter the budget function, and Tj is a random disturbance term with mean zero and finite variance. Substituting (7) into (5) produces: U1 = V + i+ E (8) where V1 = alopoj + CLOf3jX1 + aoa2jZj + al(Y, - P,) + a2 (Y, - PY)2 (9) This model can be estimated if the stochastic distribution of the error term is known. For the purposes of this study we assume that the error terms take on a nested multinomial logit form. In this specification, the probability of not seeking care is defined as: Prob (no treatment) = exp (Vo)/{exp (Vo)+[Z1>o exp (Vj/O)]C) (10) and the probability of seeking care from providerj is defined as: (1 1) Prob (seeking care from provider j) = [1-Prob (no treatment)] [exp (Vt/a)] / Zj>o exp (V/cF) where (Y is a coefficient of dissimilarity between the "no treatment" and "seeking care from provider j" alternatives. As demonstrated by McFadden (1981), this coefficient must be between 0 and I for the model to be consistent with utility maximization. If a1000 beds 9 1% 11,811 8.8% NA 3 0% 253 0.2% Total 1184 134,955 100.0% Notes, Based on actual bed numbers. Ministry of Defense Hospitals exduded. Source: MOH, General Directorate of Curabve Servces, Web-Page The majority of small hospitals in Turkey are MOH run health center hospitals (saglik merkezi) and district hospitals. There are 141 health center hospitals, 99 of them with 10 or fewer beds and 42 with less than 30 beds. In addition there are 407 district hospitals at an average size of 65 beds. A majority of SSK hospitals fall into more efficient size categories. About two thirds of SSK hospitals have between one hundred and six hundred beds, although almost 30% also have below 50 beds. Forty three percent of University hospitals have more than six hundred beds. Hospital Utilization. The rate of hospital admission varies significantly across regions and is particularly low in Southeastern Anatolia (Table 15). Meaningful international comparisons are difficult to make because figures for Turkey exclude admissions to Ministry of Defense hospitals. The distribution of admissions across providers is in relatively close concordance with their respective shares of hospital beds (Table 18), with MOH hospitals accounting for over half of all hospital admissions, close to two thirds of all births and somewhat less than have of all surgeries. SSK hospitals account for about one. fifth of all beds but for one quarter of all admissions, surgeries and births, while university hospitals account for only thirteen percent of admissions but one fifth of all large surgeries. Foundation and private hospitals account for a disproportionate share of surgeries, particularly large ones, compared to their share of beds in the system. 67 Table 18: Distribution of Hospital Admissions, Surgeries and Births by Hospital Provider, 2000 % of % of % of surgeries % of large % of births beds admissions surgeries MOH Hospitals 51% 53% 43% 39% 63% SSK Hospitals 20% 24% 25% 24% 24% University Hospitals 18% 13% 18% 21% 4% Other public hospitals 1% 0.4% 1% 0.4% 0 1% Municipal Hospitals 1% 0.3% 0.4% 1% 0.1% Foundation Hospitals 1% 1% 2% 3% 0.3% Pnvate Hospitals 7% 8% 10% 12% 9% Minority and Foreign 1% 0 3% 0.4% 0.4% 0 3% Note. Data exclude beds and activities of Ministry of Defense Hospitals Source MOH, Yatakli Tedavi Kurumian Istatistik Ylligi, 2000 Hospital Occupancy. The country's average hospital occupancy rate has increased from 53% in the mid-1980s, to 57% in the mid-1990s and 60% in 2000, while the average length of stay has dropped somewhat from 6.7 days in 1985, to 6.4 days in 1995 and 5.9 days in 2000. There is wide variation in occupancy rates among hospitals as well as among provinces. Provincial occupancy rates range from a very low 20% in Tunceli to a respectable 82% in Karabuk. Surprisingly, there is essentially no correlation between the levels of provision as measured by the number of beds per capita and provincial occupancy rates. Many provinces with low provision of hospital beds also have very low occupancy rates (Table 19). Table 19: Provincial Distribution of Hospital Occupancy Rates, 2000 Occupancy Rate Number of % of provinces Provinces <40% 11 14% 40% - 50% 28 35% 51% - 60% 20 25% 61% - 70% 13 16% >70% 9 11% Notes See annex table xxxx for information by province Source. MOH, Yatakli Tedavi Kurumiari Istatistik Yilligi, 2000 Although there is marked variation in occupancy rates among hospitals with the same specialization, general hospitals tend to have a lower occupancy rate than specialized hospitals, with the exception of bone disease hospitals (Table 20). The occupancy rate of MOH district hospitals (generally hospitals with below 50 beds in a district center) and of MOH health center hospitals (saglik merkezi) is particularly low and they have very long bed turn over interval, indicating that there is little justification for these small and rarely used hospitals. Both health center hospitals and district hospitals generally lack equipment and staff, particularly specialist physicians. The latter are not willing to work in such small hospitals. Therefore, the services which district hospitals and health center hospitals provide are very limited. As a result, people do not make use of these hospitals and prefer larger, better-equipped and staffed hospitals in urban areas. Furthermore, health center hospitals generally do not have revolving funds and thus depend fully on MOH budgetary funds to finance their operation. In many cases the funds 68 available are insufficient to provide for adequate amounts of supplies and drugs in addition to covering basic utilities. The shortage in basic supplies thus further reduces the effectiveness with which such small hospitals can o erate. As a result, they stay largely empty, but continue to incur basic costs, such as utilities.F Table 20: Hospital Utilization and Efficiency by Hospital Type, 2000 % of bed occu- ALO throughpuV turnover deaths/ beds pancy rate days bed interval 1000 discharges General Hospital 84 5% 59% 5 7 37 4 0 18 9 Health Center Hospital 08% 12% 1 9 23 14 1 3 0 Chest Disease Hospitals 4 2% 74% 176 15 64 31 0 Matemity 55% 63% 2 8 82 17 4 9 Mental Disease Hospitals 2 7% 99% 37 5 10 0 5 14 0 Bone Disease Hospitals 0 6% 47% 16 9 10 19 0 0 7 Chest, Heart and Vascular Disease Centers 0 7% 84% 7 3 42 1 4 37 4 Physical Therapy and Rehabilitation Centers 10% 71% 21 5 12 9 0 0 9 Total 1000% 61% 59 38 38 174 Notes Number of beds is nunber of actual beds. Ministry of Defense beds exciuded Bed occupancy rates vary significantly across public providers. MOH hospitals post a significantly lower average rate than SSK and University hospitals. The latter have witnessed the most significant increase in bed occupancy rates over the past five years (from 61% in 1995 to 73% in 2000) despite the large increase in capacity. On the other hand, they have only recorded a minimal reduction in the average length of stay which remains significantly above that of most other hospitals, including foundation hospitals although the latter post higher surgery rates than university hospitals. Table 21: Hospital Utilization and Efficiency by Provider Type, 2000 surgeres/ large surgeries/ births/ ALO throughput/ bed occu- admissions admissions admissions days bed pancy rate MOH Hospitals 27% 11% 20% 5.5 39 59% SSK Hospitals 33% 15% 17% 5.7 44 70% University Hospitals 44% 23% 5% 9.3 29 73% Other public hospitals 46% 17% 3% 9 0 13 31% Municipal Hospitals 46% 28% 9% 19.8 12 67% Foundation Hospitals 61% 33% 5% 3.6 51 50% Private Hospitals 41% 22% 19% 2.4 40 26% Minority and Foreign 40% 20% 16% 10 7 16 46% Note Data exclude beds and activities of Ministiry of Defense Hospitals Source MOH, Yatakli Tedavi Kunmiamd Istalistik Yilligi, 2000 16 In a few cases, particularly in the Eastern part of the country, health center hospitals (saglik merkezi) have played an important role m providtng a safer birth environment, as they provide women from rural areas with a place to give birth under medical supervision This service, could, however, be provided m more limited capacity birth houses and does not justify operatmg generous buildings with 10 or more beds on a permanent basis. Even the health center hospital with the highest number of births per year does not have more than about five births per week, with an average length of stay of about 1 5 days per birth 69 Hospital Efficiency. Occupancy rates alone are not a good indicator of hospital workloads, as they normally increase with longer hospital stays. An additional measure to consider is the throughput per bed. Throughput per bed and the average length of hospital stay also vary significantly across hospital providers. Public hospitals compare unfavorably with foundation hospitals, while MOH and SSK hospitals are more or less on par with private hospitals with respect to throughputs per bed (Table 22). University hospitals have a significantly lower throughput per bed than MOH and SSK hospitals, which can at least partly be explained by a more complicated case mix. A look at other efficiency indicators, such as the output per physician or bed tumover intervals, indicate that SSK hospitals achieve somewhat higher efficiency scores than the rest of public providers. Municipal hospitals score poorly on all accounts. Table 22: Hospital Eff ciency by Povider Type, 2000 ALO Occupancy ihroughputt deaths turnovcr outpatients/ inpatients/ operatons/ beds/physician rate bed 1000 discharges internl physician physician physician MOH HospiIals 5 5 59% 39 14 9 3 9 2752 124 33 3 2 SSK Hospdtals 5 7 70% 44 17 0 2 5 4444 163 54 3 7 University Hospitals 9 3 73% 29 33 9 3 5 543 45 20 16 Municpal Hospitals 19 8 67% 12 110 10 2133 62 29 51 Foundatcn Hospitals 3 6 50% 51 12.9 3 5 1947 121 73 2 3 Prtvate Hospitals 24 26% 40 84 67 919 117 48 2 9 OtlerPulbicHospitals 90 31% 13 70 196 1932 54 25 42 Foreign and Minority Hospitals 10 7 46% 16 26 0 12 4 893 108 43 6 8 Note keer output raios per phyrsian for Uniesty hospttals are pant adiver by a rlatively high share of part-tme phWiclaras bn University Hospitals and tie fact that these are Institutions with a dual cefeoive of prodtng health care and health education Source MOH, Yataidi Tedavi Karunarl Istatxsbk YtUtgl, 2000 There is marked regional variation in terms of hospital efficiency. Southeastern Anatolia, which has by far the lowest hospital provision and the lowest hospital admission rate per capita, performs best on most efficiency scores, although it has a low occupancy rate. It also has a significantly lower length of stay than the rest of the country (Table 23). Table 23: Hospital Efficiency by Region, 2000 AtvO OUIPssay mdaughput deaat ir oltpaieneist lpalltt opmru.ns/ betpds/ptIl 4Dyn rei bed 1000disclnarrs c _ IornIt physician phystcian physician Marrara 6 4 62% 35 21 4 0 1,688 86 30 2 5 Agean 55 58% 39 18 40 2.091 97 33 25 Modterrane-an 53 64% 44 18 31 2,925 133 42 31 Central Anatoa 6 4 63% 36 16 3 7 1.727 83 32 2 3 BlackSea 55 56% 37 15 44 3,969 174 43 47 EastemAratoia 680 59% 38 17 41 2,552 135 32 38 SoutheastemnAnatdia 38 56% 54 13 30 3,714 181 35 34 Turkey 59 61% 38 17 38 2,175 104 34 28 t.N . srsi be a tda d 5 MOH. YoIliI ThdAi K-sn tWiIs YlgV, 2000 A look at hospital efficiency by hospital size confinrs that the large number of small hospitals lead to significant inefficiency and thus ineffective use of scarce resources (Table 24). As Tables 25 and 26 confirm, most efficiency indicators increase up until hospitals reach somewhere between four hundred and six hundred beds and then tend to decrease again. This seems to apply regardless of whether all hospital types are considered jointly or whether only General Hospitals 70 are considered. The information below further more indicates that SSK General Hospitals operate more efficiently than MOH General Hospitals Table 24: Hospital Efficiency by Hospital Size (all hospital types), 2000 bed ALO Occupancy outpatients/ upatients/ opersaons/ beds/physician throughpuh/ deais/ turnover no of rate physician physician physician bed 1000 discharges tnterval hospitals <30beds 26 174 2,969 75 28 28 27 3 57 293 30-50 beds 3.7 325 2.518 107 33 28 37 6 32 163 50-99 beds 4 7 351 3,249 145 38 3 8 38 7 28 266 100-199 beds 61 55 0 3.040 154 44 3 3 47 10 8 176 200-400 beds 75 617 2.917 131 38 37 36 15 5 99 400-600 97 734 2,212 113 38 29 40 20 4 43 600-1000 9 1 76 9 1,228 65 27 1 9 35 36 3 30 >1000 10 3 76 9 757 52 24 2 0 26 36 2 9 Note Includa all typs and provides of hospitals for which infonsation is available Source: MOH. Yalakis Tedaw Kieumian lstatlstk Y5191i, 2000 Table 25: Hospital Efficiency of MOH General Hospitals, 2000 bed Occupancy outpatients/ inpatients/ operations/ beds/physician throughput/ deaths/ turnover ALO rate physician physician physician bed 1000 discharges interval <30 beds 2 6 14 5,095 73 15 4.1 18 3 60 30-5Obeds 3 7 28 4,259 96 18 3 5 27 6 38 50-99 beds 3 9 35 4,339 150 33 4 2 36 6 37 100-199 beds 44 53 4,031 164 40 35 47 9 5 200-400 beds 5 3 59 4,250 195 48 4 6 42 13 4 400-600 60 70 3,141 150 43 34 45 21 3 600-1000 6 1 72 3,152 151 44 3 4 45 22 2 Notes Includes only MOH General Hospitals for which all informatton was available Source MOH, Yatakli Tedavi Kurumlan lstatistik Yilligl, 2000 Table 26: Hospital Efficiency of General SSK Hospitals, 2000 bed ALO Occupancy outpatsents/ inpatients/ operations/ beds/physician throughput/ deaths/ turnover rate physician physician physician bed 1000 discharges interval <50 beds 7 7 56 9 7,170 129 32 3 9 33 4 5 5 50-99 beds 4.7 44 9 6,727 133 41 3.9 34 7 6 3 100-199 beds 53 661 7,071 194 60 42 46 11 46 200400beds 6.0 70.7 7,034 213 66 4 7 45 12 3 1 400-600 60 680 6,636 215 65 49 44 15 3 1 600-1000 80 830 5,093 185 55 42 44 20 1 0 Notes Includes only SSK General Hospitals for which full information was available Source MOH, Yatakli Tedavi Kurumiari Istatistik Yiligi, 2000 More sophisticated analyses by Turkish researchers also confirm that the majority of general hospitals in Turkey are run inefficiently and are responsible for considerable waste of resources. Using a nonparametric method (Data Envelopment Analysis), these studies analyzed the efficiency with which general hospitals in Turkey used inputs such as hospital beds, doctors, 71 nurses, allied health staff and some times also revolving funds expenditures, to produce output such as the number of outpatient visits, number of in-patient admissions and the number of surgical operations. Taking the hospital as decision making unit, one study found that only 54 out of 573 general hospitals could be considered as operating efficiently and that inefficient hospitals on average used twice as many beds, thirty percent more generalists and almost fifty percent more specialists than efficient hospitals. Even with these excess inputs, however, the inefficient hospitals accounted for about 13,000 less outpatient visits, 1,000 less inpatients and 2,000 less surgical operations than their efficient counterparts.'7 Another study compared the efficiency with which provinces operate MOH general hospitals and found that 55% of provinces ran their hospitals inefficiently. According to this study, MOH general hospitals lacked 80,000 outpatient visits and over 4,600 discharged patients, while inefficient provinces collectively over-bedded by more than 6,700 beds and employed an excess of almost 1,100 doctors, over 5,000 nurses and over 8,100 allied health professionals to produce hospital based health care.18 The third and most recent study only looked at the efficiency of MOH's provincial hospitals and found that 58% were run inefficiently.'9 Although Turkey has a relatively modest number of hospital beds relative to its population, the overall impression provided by the above data is one of a hospital system which is not under pressure from unmet demand, but which needs to resort to significant restructuring to increase its efficiency. The large number of very small hospitals under MOH control is a major contributor to an inefficiently run hospital system. They cannot be run efficiently because they are too small to benefit from economies of scale and scope.20 Most of them have very low occupancy rates, because they suffer from a lack of manpower and outdated or ill-functioning equipment, which results in low quality of service and leads people to utilize larger facilities even if they are further away. Hospital Financing. MOH and University hospitals are financed from two sources, contribution from the budget and revolving funds. In addition, some hospitals, also receive some funding from local health foundations funded through donations from the local community. Revolving fumds receive their resources from service fees paid by the social insurance organizations (primarily Emekli Sandigi, Bagkur, Green Card System and civil servant system) and private patient payments. SSK hospitals have no revolving fimds, as only a very small share of the patients they treat are not SSK beneficiaries (non-SSK beneficiaries account for less than 1% of admissions to SSK hospitals and about 1% of outpatient visits). The resources of revolving fimds are collected and kept at the facility level. However, hospital managers do not have entirely free reign over revolving fund resources. Revolving fund budgets of MOH hospitals and their execution need to be approved by MOH's General Directorate of 17 Ersoy K., Kavuncbasi S., Ozcan Y. and J.M. Harris, "Technical Efficiencies of Turkish Hospitals: DEA Approach ", m Journal of Medical Systemns; Volume 21, number 2, April 1998, pp 67-74. 18 Sahin I. and Y.A. Ozcan, "Public Sector Hospital Efficiencyfor Provincial Markets in Turkey ", in Journal of Medical Systems; Vol. 24, No. 6, 2000, pp. 307-320. 19 Sahin 1. and H. Ozgen, "Saglik Bakanligi n1 Devlet Hastanelerinin Karsilastirmali Verimlilik Analzz " unpublished manuscript, Hacettepe University, Salglik Idaresi Yuksekokulu, 2000. 20 Econormies of scale allow for the additional bed day to become cheaper as the number of hospital beds increases, while economies of scope allow to save costs on service provision when several types of services are provided by inputs such as facilities, utilities, equipment or medical staff that are shared. 72 Curative Services. Revolving fund budgets of University hospitals require the approval by the President of the University, upon a proposal and recommendation made by the hospital management council. Up to fifty percent of quarterly revenues from MOH revolving funds can be used to pay salary improvements to health personnel, provided the hospital has no other outstanding bills. In reality a significantly smaller share generally goes to staff expenditures21. Revolving fund resources have grown of increasing importance for the financing of both MOH and University Hospitals. They now account for almost sixty percent of MOH hospital financing and almost seventy percent of University Hospital financing (Table 27). As of late 2001, 568 out of 744 MOH hospitals and all University hospitals had revolving funds. Table 27: Importance of Revolving Funds in Hospital Financing, 2000 Revolving Fund Budgetary Revolving Fund/ Expenditures Expenditures Total Expenditure MOH Hospitals 1995 18,902 21,140 47% 1996 35,116 38,598 48% 1997 64,211 80,157 44% 1998 141,120 160,057 47% 1999 301,172 274,057 52% 2000 580,010 427,068 58% University Hospitals 1995 15,916 10,839 59% 1996 30,033 17,103 64% 1997 78,119 42,241 65% 1998 141,983 68,071 68% 1999 221,352 100,954 69% 2000 329,009 144,759 69% Notes: Budetary Expenditures for MOH Hospitals are assumed to be those spent by General Directorate of curatve services, as more precise data is not available. Source: MOH, General Directorate of Curative Services and World Bank, Turkey PER, 2001 Table 28 shows that average expenditures per hospital, hospital bed and occupied bed day of MOH hospitals have grown at about ten per cent per year over the past five years in real terns. For university hospitals, on the other hand, these expenditures are at about the same level or a bit lower in real terms in 2000 than they were in 1995, although there have been significant year to year fluctuations. 21 For example, the Numune Hospital m Erzurum (provincial MOH hospital) spent only 25% of its revolving fund resources on salary improvements in 2001, whlle the University hospital in the same city spent 26% on salary improvements during the same year 73 Table 28: Evolution of Hospital Financing Real Revolving Real Total Real Total Real Total Exp./ Fund Expenditures/ Expenditures/ Expenditures/ Bed Day Hospital Hospital Hospital Bed in TL of 1995 MOH Hospitals 1995 42,191,964,286 37,847,415,066 406,548,195 2,015,823 1996 40,863,085,453 46,993,963,773 498,753,241 2,482,957 1997 37,277,704,024 49,760,001,374 529,015,017 2,598,333 1998 43,205,320,883 50,622,777,388 546,911,359 2,615,805 1999 62,972,795,738 66,586,197,140 715,582,265 3,477,026 2000 66,448,387,852 63,694,089,793 685,903,730 3,210,329 av. annual growth rate 95-00 9.5% 11 0% 11.0% 9.8% University Hospitals 1995 482,303,030,303 810,757,575,758 1,367,143,587 6,127.955 1996 478,291,101,125 750,665,246,317 1,387,038,519 5,662,984 1997 636,153,661,719 980.138,695.125 1,834,722,843 7,093,530 1998 582,491,797,077 861,756,209,850 1,569,326,128 6,149,861 1999 620,413,067,308 903,370,441,973 1,661,625,583 6,317,935 2000 509,748,305,602 734,029,875,318 1,293,281,935 4,874,347 av. annual growth rate '95-00 1.1% -2.0% -1.1% -4.5% Notes Total expenditures inculde revolving fund expenditures and budgetary expenditures Source MOH, General Directorate of Curative Services and World Bank, Turkey PER, 2001 Hospital Management. All public hospitals are headed by a chief head physician who is in charge of overall hospital operations and management. The chief physician is assisted by a head nurse and a hospital administrator who takes care of financial, technical and some personnel matters on a daily basis. All managerial staff at MOH hospitals is appointed by the Ministry of Health. Those at SSK hospitals are appointed by SSK's General Directorate for Health Services. The chief physician of a University hospital is appointed by the University President, in consultation with the dean of the University's medical school. Other University hospital management staff are appointed by the hospital's chief physician and confirmed by the University President. The key criteria for selection of the chief physician are generally his length of service and reputation as a doctor, rather than his managerial capacity. Chief physicians do not need to go through any specialized management training. As a result, many of them lack the management capacity required to effectively manage a modem hospital. Furthermore, they often continue to operate as physicians at the hospital or in private practice, thus decreasing the time and effort devoted to hospital management. Public hospitals in Turkey have limited financial and administrative autonomy. Managers have no power to hire of fire the staff working under their supervision. All health personnel for MOH and SSK hospitals are recruited and assigned to specific hospitals centrally (by MOH for MOH hospitals, by SSK's GD of Health Services for SSK hospitals), following requests put forth by the head physician. The latter bases his requests on norms rather than needs analysis, although he can prioritize his requests within given normns. As all doctors at University hospitals are at the same time on the staff of the University's medical faculty, they are appointed by the same route as professors to other University departments, without the say of the hospital's head physician. Health personnel are generally civil servants and cannot be fired if they do not perform their 74 work in satisfactory manner. Hospital managers thus have little if any recourse if heir staff do not perform up to standards, although the recently introduced MOH requirement to base revolving fund salary supplements on performance evaluations tries to correct for this shortcoming to some extent. All fees for services provided in public hospitals are set centrally by MOF for MOH and University hospitals and by SSK's General Directorate of Health Services for SSK facilities. University boards (but not university hospital managers) can, however, decide on a slight surcharge for services provided on a semi-private basis, meaning services provided in university facilities after 4pm or services provided by a specific doctor upon request during regular university hospital working hours. In principle, MOF set fees apply equally to all patients treated in MOH and University hospital during official hospital working hours. However, in the face of budget constraints, some of the public insurance companies (SSK, Emekli Sandigi) have resorted to negotiating discounts with specific suppliers (e.g. a specific University hospital), arguing that they should get a bulk discount in view of the large number of patients they provide. SSK fees only apply to non-SSK insured patients treated in SSK facilities (less than 1% of all hospital admissions and about 1% if SSK outpatients). SSK hospitals are not reimbursed on a fee for service basis for SSK beneficiaries treated in their facility. Rather, SSK funds are to cover a particular SSK facility's overall operation, regardless of the case load and case mix in a given hospital. The fees established by MOF and SSK are not high enough to cover the actual cost of services to which they apply. This is evidenced by the fact that MOH and University hospital staff salaries are paid from the general Government budget and that for most hospitals, revolving fund revenues are supplemented by additional budgetary sources from the MOH and University budget. Similarly, SSK hospital managers deem that the fees set for services provided by their hospitals to non-SSK beneficiaries are well below actual costs. Public hospital managers have only limited financial autonomy. For MOH hospitals, budgets must be approved by MOH's general directorate of curative services and by MOF's representative in MOH's budget department. Revolving fund budgets must be approved by MOH's directorate of curative services. Hospital managers have no authority to shift resources between expenditure categories; this applies to budgetary funds as well as revolving funds. Any reallocation requires an amendment of the budget and the necessary approvals from the central government. Personnel expenditures are paid directly from the central budget. Other expenditures financed from the budget follow the same approval procedure as those of any Ministry. They need to be approved by MOH's general directorate of curative services, the Minister of Health, the Ministry of Finance and the court of accounts, only then are the resources sent by MOF to the provincial MOF representative who will release them to the hospital management. MOH hospital managers do have somewhat more autonomy over expenditures financed from revolving funds. Within overall guidelines established by MOF and MOH for the operation of revolving funds, hospital managers can make their own revolving fund budget, which then needs to be approved by MOH's general directorate of curative services. Whether MOH hospital managers prepare their revolving fund budget single handedly or in consultation with hospital staff is up to them. In practice, managers of the better run hospitals which finance most if not all their expenditures (outside salaries) from revolving funds generally decide on the 75 resource allocation in consultation with the various hospital department heads. Once the budget for revolving funds has been approved by the central government, hospital managers can purchase supplies, drugs and small equipment22 within the approved allocations without further approval from MOH or MOF representatives. Hospital managers are, however, required to send a monthly financial status report of their revolving fund to MOH's General Directorate for Curative Services for review and approval. The latter is expected to assure that commitments and expenditures do not exceed revenues and that they remain within the approved amounts for each expenditure category. Budgets for University hospitals follow similar procedures as those of MOH hospitals, except that the necessary approvals need to come from the University president for revolving fund expenditures. Additional allocations from the University budget are made by the University president in consultation with the University's board and the dean of the medical faculty and are finally approved by YOK (Higher Education Council) within the framework of the approval of the University's overall budget. SSK hospital managers have very limited financial autonomy. All expenditures need to be approved by SSK's General Directorate of Health Services. Funds are generally only transferred to the SSK hospital for specific payments, although in some cases SSK's General Directorate of Health Services grants the hospital director the authority to execute individual purchases and make specific payments within a given allocation without further central approval (e.g. for the purchase of some supplies and drugs). Allocation of SSK funds for investment purposes, such as the purchase of new equipment or renovation of facilities, often depends on the personal relation of the hospital director with SSK's General Directorate of Health Services. Several SSK hospital managers interviewed during this review indicated that they would be significantly more successful in managing their hospital effectively and providing better services if their hospital had its own revolving fund, like MOH or University hospitals and if their facility received SSK funding on a fee for service basis rather than the current system where SSK facilities are essentially funded on an as needed basis. The budgeting process for general budget funds for public hospitals is such that hospital managers have no incentive to provide services in the most efficient manner. Hospitals are allocated a fixed amount per approved bed per day to cover supplies and basic equipment maintenance expenditures, while the budget for utilities is determined by estimated needs based on past consumption. Personnel expenditures are fixed based on the number of staff positions. The amount of services provided or the caseload and mix hardly enter the equation during the budgeting process. Those hospitals which rely largely on revolving funds to finance their operation (except salaries) and basic investments, have more of an incentive to maximize service provision and allocate resources effectively, as efficient resource allocation and use, combined 22 Equipment financed from revolving funds, which costs less than $ 10,000, can be purchased by hospitals directly without further MOH approval. Equipment costmg between $10,000 and $30,000 needs approval of MOH's general directorate of curative services and equipment costing over $30,000 needs the approval of a special commission in MOH even if financed from revolving fund resources 23 For the 2002 budget the allocation is TL 750,000 per bed/day of which 87% is to go towards materials and supplies, 5% towards equipment and 8% towards services. 76 with maximized service provision, increase the amount of revolving fund resources which they can allocate to improve staff compensation.24 Medical supplies and drugs are purchased individually by each MOH and University hospital's purchasing committee, usually based on three price quotations.25 While this practice helps to assure relatively speedy supply of drugs and supplies, it must also result in unnecessarily high expenses, particularly when purchases are made by small district hospitals. International experience has shown that purchase of drugs and supplies in bulk through competitive bidding can result in significant cost savings. Although drug prices are fixed in Turkey, suppliers do offer bulk discounts or provide a certain amount of items purchased for free. Therefore, bulk purchases through competitive bidding could be expected to also result in lower unit costs in Turkey. Furthermore, the current practice of purchasing locally with only three quotations can easily be subject to abuse. Purchases of drugs and supplies for SSK facilities are generally made through SSK's General Directorate of Health Services, although the latter can and sometimes does delegate this authority to individual hospital directors. SSK hospitals also receive some of their drug supplies from SSK's pharmaceutical company in Istanbul. Since SSK hospitals do not have any revolving funds and their budgetary allocations are irrespective of the amount of services provided, SSK hospital managers have even less incentives than MOH or University hospital managers to maximize service provision or rationalize expenditures. The degree of financial and administrative authority accorded to hospital managers has an important bearing on hospital efficiency. Obviously, hospital managers can only improve efficiency at the hospital level in those areas that are under their direct control. Similarly, they can only be held accountable for the performance of their facility, if they have the authority to allocate resources (including staff) as needed. These issues were already recognized in Turkey during the 1980s. The Basic Health law, adopted in 1987, provided the legal basis to turn public hospitals into autonomous units called health enterprises. It provided for those public hospitals that wished to opt out of the central control of the Ministry of Health to become independent economic units, although subject to a certain amount of control by MOH or the local administration. To encourage competition and efficiency, the law provided for different service contracts between health enterprises and health personnel, exempting payments from the Public Service Law. The law also stated that smaller units would be merged into economically viable units before being made autonomous. By providing the legal basis to render health institutions autonomous, the law thus aimed at setting the stage to improve efficiency and encourage competition between public health establishments. To this date, however, this aspect of the law has not been implemented, although creation of public health enterprises has been set as an objective repeatedly in the Government's five-year development plans. 24 Up to 50% of quarterly revolving fund revenues can be used to make supplementary payments to staff, provided other expenditures have been fully covered. 25 Public procurement rules require that purchases above a certain lirrut be made through competitive bidding In practice, however, hospitals keep the purchase almost always below this threshold, so that they can proceed with the purchase based on three quotations only. 77 The recently adopted laws on the restructuring of the social insurance organizations contain three important aspects with respect to improving management, efficiency and accountability in SSK's health services sector. 26 First, the laws set the legal basis to separate social insurance and health accounts within SSK. In parallel, they create a separate General Directorate for Health Services, which is expected to rationalize the operation and supervision of health service provision. Finally, the law provides the legal basis to turn SSK health care establishments into autonomous health enterprises, similar to what was intended for MOH hospitals under the Basic Health Law. As the SSK laws were only adopted in August 2000, not all necessary implementing regulations have been finalized yet and much of the implementation remains to be initiated. 5. Private Sector Hlealith Services: Dutpatieut Care Private outpatient services are provided in five different settings: (i) private physicians who work on a full time basis in private practice; (ii) public sector physicians who work part-time in private practice; (iii) private policlinics and medical centers; (iv) private services provided in public facilities, and (v) health services provided by so called occupational physicians engaged by private companies with 50 or more employees. Information on the number of private doctors and medical establishments is scant and of questionable reliability. MOH estimates that there are about 11,200 doctors (15%) who work on a private basis only, while somewhat below sixty percent of public sector doctors work part-time in private practice (Table 29). Dentists who work full time in private practice are significantly more common and essentially all dentists who work in public facilities also practice in private. The relatively higher share of dentists working full time in private practice is at least partly driven by the limited number of dentist positions in the public sector. Table 29: Private and Part-Time Private Physicians fully fully part- part- all vrivat all GPs 2,952 7% 24,122 56% Specialists 8,268 24% 20,218 59% Total 11,220 15% 44,340 57% Dentist 8.813 66% 4,608 100% Note: Above figures are estimates only and can only be considered as indicative Source: staff estimates, based on TTB StatOstical Yearbook 2000 and Tokat M. 'Turkiye Saglik Harcalamalan ve Finansmani 1998", MOH Health Project (2001) Doctors working on a merely private basis are heavily concentrated in the big cities, over half of all private doctors are in the Istanbul area, about one quarter are in and around Ankara and another twelve percent in the Agean region, primarily Izmir (Table 30). Private dentists are similarly concentrated in the three main cities. 26 Law KHK/617 and Law KHK/618, Official Gazette 24190, 4.10.2000 78 The vast majority of private sector doctors are at the same time employees of public health establishments. Since salaries of doctors in the public sector are low (ranging from about $400- $500 equivalent/month), engagement in private practice allows public sector doctors to substantially increase their earnings. Therefore, the possibility of private practice by public doctors helps the public sector keep the necessary number of doctors engaged despite low public sector wages.27 Table 30: Regional Distribution of Full Time Private Physicians, 1998 Privat Privat % of Privat % of GPs SDeciali doctor Dentisti dentist Marmar 1,57 4,34 53% 4,32 49% Agea 261 1,04 12% 1,34 15% Mediterrane 303 605 8% 835 9% Central 673 1,97 24% 1,36 16% Black 98 218 3% 573 7% Eastern 10 36 0% 163 2% Southeastern 37 50 1 % 205 2% Turke 2.95 8.26 100 8.81 100 Source: TTB Statistcal Yearbook, 2000 The combination of private and public practice raises serious moral hazard and ethical problems. Doctors have little incentive to provide adequate services at public facilities knowing that these compete for the same clients as they can treat in their private practice. A key reason why most doctors in private practice keep their public sector engagements reportedly is to assure an adequate number of private patients. At the same time, many patients who can afford to see a private doctor do so to subsequently enjoy advantages at public facilities. These include for exarnple treatment by a specific physician or obtaining prescriptions and referrals for diagnostic treatment paid for by public insurance without having to suffer the long waiting times at public facilities. SSK beneficiaries have the right to see a private physician if they are issued a slip which states that they cannot get an appointment at a SSK facility for three months. While the overall number of SSK outpatients treated by non-SSK doctors only amounts to 6% of all SSK covered outpatient services, this possibility seems to lead to frequent abuse in the case of dental care. Recognizing the moral hazard problem arising from the mix of private and public service provision by the same physicians, the Government's 8th development plan (2001-2005) stipulates that efforts should be undertaken to separate public and private service provision and encourage public sector physicians to work on a full time basis in the public sector only. Actual implementation of this stipulation would, however, require a significant adjustment of public sector physician's salaries. It is difficult to see how this could be realized in the current economic 27 A study carried out in 1998 showed that doctors working full time in the pnvate sector earned about $ 34,000 per year before taxes, those working part time $24,000 before taxes, while doctors working full time in the public sector earn naximum $5500/year after taxes See TOKAT, M., Turkiye Saglik Harcamalan ve Finansmani 1998, MOH, Health Project Coordmation Unit, 2001. 79 situation unless the entire health sector is significantly restructured to free up resources for this purpose. Private Practices. No reliable information on the number of private medical practices is available. Doctors operating in private practice can either operate as a private physician or as a limited company. The latter provides fiscal advantages. Doctors operating on a private basis outside a company must pay a "minimum standard of living tax" independent of their earnings as private physicians, while doctors operating under the umbrella of a limited company are taxed like any private sector company depending on their actual earnings. Therefore, many doctors operating in private practice have proceeded to establish a limited liability company, others have had to close down their private practice because they could not afford to pay the minimum standard of living tax. Anyone who is a Turkish citizen and has a Turkish medical degree can open a private practice by registering with the provincial chamber of the Turkish Medical Association (TTB) and obtaining a tax ID number from the Ministry of Finance. Doctors operating in private practice are subject to the Governing Statute of TTB. The latter is a public body with judicial authority established by law. A doctor wishing to practice in the private sector must become a member of the provincial chamber of TTB and seek TTB's approval if he wishes to take up additional employment outside public establishments. Provincial chambers of TTB have a disciplinary committee that has the power to penalize doctors who have failed to become members of TTB or otherwise not complied with their obligations, including adherence to the deontological code issued by TTB. Penalties include fines and temporary ban from practice. A doctor who has been subject to three temporary bans can be barred from practicing in the applicable province on a permanent basis. However, since the governing code of TTB does not focus on medical standards and there is no accreditation system for doctors in Turkey28, TTB's power over private doctors is essentially limited to ensuring that they become members of TTB and that they adhere to TTB's pricing and advertising policy (see paras 83-85). In most areas, TTB does not have the manpower and capacity to adequately supervise private doctors and usually only intervenes if it receives a complaint. The lack of supervision of private doctors provides substantial room for abuse such as medical technicians operating as doctors in private practice without adequate qualifications. This particularly seems to be a problem in the case of dentistry. Private Policlinics and Medical Centers. At least two doctors working together can open a private policlinic. Four doctors working together can open a medical center, provided that at least two of them have the same specialization and at least one of each specialist is a full time employee of the center. Doctors working in a private policlinic or medical center are not allowed to work in more than one private health establishment (with the exception of part time assignment as occupational health physician), but they may work on a part time basis in public facilities within the same health jurisdiction (either provincial health directorate or sub- provincial health group) and the majority do so. Doctors working in these establishments must be Turkish citizens or of Turkic origin. Assistant doctors working in public institutions are not allowed to work in private policlinics or medical centers. Policlinics and medical centers must be headed by a physician who is in charge of overall administration and management. 28 TTB is trying to develop an accreditation system, but since accreditation is not mandatory and doctors have to pay for it, very few actually go through the trouble of getting accredited. 80 There currently are about 1,500 private policlinics and a yet undetermined number of private medical centers in Turkey. These private establishments are largely concentrated in the three big cities, about half of them are in Istanbul, and another quarter is in Ankara29. The vast majority are privately owned and operated like a private company, although foundations (NGOs) also have the right to open policlinics. In the spring of 2000, MOH for the first time issued regulations governing private policlinics and medical centers.30 Until then these establishments were essentially unregulated. The new regulations put private policlinics and medical centers under the supervision of the provincial health directorates and give these the power to issue and revoke licenses. They also set out who can establish a policlinic or medical center, the minimum number of employees, minimum physical standards of the establishments, minimum equipment and detailed reporting requirements. They stipulate that policlinics and medical centers must be inspected by inspectors of the provincial medical directorate at least four times a year and that the latter can issue fines or revoke an establishment's license on a temporary or permanent basis if it does not comply with the regulations. Policlinics are supposed to follow relatively strict reporting requirements and the director should submit a timetable of doctors on duty to the provincial health authority on a monthly basis. He should also seek perrnission from the authorities when going on leave. In practice these requirements are rarely complied with. Because no standards of practice are set out and there is no official accreditation system for private doctors in Turkey, the regulations and proposed supervision focus mainly on physical standards of the establishments (e.g. m2 of examination rooms/hallways) and the format of record keeping, but they contribute little to assuring adequate service quality. In practice provincial health directorates do not have the manpower and capacity to carry out regular supervision as stipulated in the regulations, particularly in the big cities where most private outpatient clinics are located. While private establishments are inspected before being granted a license, there is little follow-up once the establishment is operating. Private Services in Public Facilities. Doctors working in MOH and university hospitals are allowed to see private out-patients in these facilities after 4pm. Social insurance beneficiaries making appointments with specific doctors in public facilities after 4pm pay an out-of-pocket surcharge, while basic treatment fees are covered by their insurance. Revenues from treatment of private patients in public hospitals are shared between the hospitals' revolving fund and the treating physician. SSK physicians cannot see private patients at SSK facilities except from a recently initiated pilot in a limited number of SSK facilities. While such arrangements help public hospitals and physicians increase their revenues, they again pose a significant moral hazard problem, as doctors have little incentives to adequately treat patients before 4pm. Occupational Doctors. Turkish law requires that all private enterprises with more than fifty workers employ a so-called occupational doctor. If the enterprise has less than 700 employees, 29 The MOH's unit on private health establishments is in the process of establishung a database with all private policlirucs, medical centers and laboratones with the aim of gainung a better overview of their importance and eventually also of their performance and compliance with applicable regulations. Until this database is complete, information on pnvate outpatient establishments is only available at the level of individual provincial health directorates. 30 Saglik Bakanligi Valiligne BIOOTSH015008 "Ozel Polikliniklerin Acilis Isleys ve Denetimi". 81 occupational doctors can be engaged on a part-time basis, otherwise they have to be full-time. Occupational doctors must be hired through the local charnber of TTB. Their primary responsibility is to ensure that occupational health risks at the work place are minimized, but in practice they usually are the first contact point for employees who need medical care. TTB currently has about 8,000 occupational doctors registered and runs training programs for them. Private Diagnostic and Laboratory Services. There is a growing number of private laboratory and diagnostics facilities, one third of which provide radiology and similar diagnostic services (Table 3 1). Import and operation of diagnostics equipment is ill regulated and little supervised. Reports of diagnostic equipment being operated by people without the necessary technical qualifications and training abound. Most facilities rely heavily on contracts with social insurance organizations and there is a significant tendency to over-prescribe high technology diagnostic examinations. Although illegal, some private diagnostics centers are known to give referring public sector physicians a commission. The import of diagnostic equipment, particularly second-hand, has boomed. Diagnostic equipment is in significant oversupply compared to needs.31 Table 31: Private Laboratory and Diagnostic Services, 1998 Ankar lstanbu Izmir Othe Tota IoATMLon Radiology 147 362 110 434 105' Nuclear 5 26 23 21 75 Phv.-inthPrnnv 35 124 28 147 334 Biochemist 68 319 52 276 715 Rst,qtprrin1nn%/ 110 234 93 372 80S Pathologq 26 62 9 99 196 TAt:I 391 1,12 315 1,34 3,18 %of 12% Source MOH, Statistical Yearbook 1999 Utilization of Private Health Services. No reliable data on the share of outpatient visits provided by private facilities is available, as private physicians are not required to report their activities other than for tax purposes. The health care utilization survey carried out in the early 1990s showed that about fourteen percent of the population uses a private physician as their first contact point. It furthermore showed that there is significant regional variation in the choice of private providers, with only six percent in Eastern Anatolia seeking private care, while twenty percent in the Marmara region and sixteen percent in Central Anatolia preferred private care. Provider preferences in urban and rural areas didn't differ much in terms of preference for private providers. Preference of private providers depended on people's insurance coverage. Almost one third of those without insurance visited private providers, forty percent of Bagkur beneficiaries, but only seventeen and ten percent of SSK and Emekli Sandigi respectively sought 3 One recent study found that if British standards were used, the number of existing computer tomography equipment in Turkey would be almost five times what is needed. See Soyer A. and Belek, I. "Yeni Dunya Duzem ve Ozellestrimeler icmde Turkiye'de Ozel Saglik Sektoru ve Sagllkta Ozellerstrime", TTB, Ankara, 1998. 82 private care. More recent data on provider preference is not available on a national basis, but given that about three quarters of all doctors operate at least part time in the private sector, a significant share of health services, particularly outpatient services, must be provided by the private sector. Fees for Private Medical Services. TTB sets floor prices for all outpatient medical services provided by the private sector, including laboratory and diagnostic services. Fees are set on a provincial basis and adjusted twice a year. TTB only sets a minimum price that is binding for all private service providers, above which private providers are free to charge as much as they want. The purpose of setting a floor rather than a ceiling price is to prevent unfair competition by private physicians, according to TTB and MOH. Undercutting of TTB set floor prices can bring about fines and even temporary suspension of a license, but in practice TTB's limited manpower prevents it from strictly enforcing this and it acts primarily upon receipt of complaints. The same prices apply to policlinics, medical centers and physicians in private practice. Many policlinics maintain that they should be allowed to charge lower fees as their cost structures are lower and they often serve a clientele that is less well off than that of private physicians. Therefore, many policlinics charge below TTB prices, with TTB turning a blind eye towards it. TTB's ability to enforce its prices with policlinics is further complicated by the fact that MOH's regulation on private policlinics and health centers is mute with respect to applicable prices and policlinics therefore often maintain that they fall under the jurisdiction of provincial health directorates (who do not set any prices) rather than that of TTB. TTB prices are substantially above prices which MOH and MOF set for social insurances' purchase of medical services from public providers. While TTB would like to see a unique price list, it maintains that prices set for the public sector are not high enough to cover all costs. TTB acknowledges that its way of setting fees is not based on a robust methodology and is currently considering collaboration with the American Physician's Association to revise and improve its methodology for price setting. Private health insurances and private employers who negotiate a provider contract with particular private sector providers for their employees generally use TTB's prices. Public Relations. TTB's regulations as well as MOH regulations on private policlinics and medical centers prohibit private service providers from any form of advertisement, be it written or through mass media. They also set out strict guidelines regarding signs which private medical establishments are to post outside their premises. The objective of these regulations is again to avoid competition among private medical providers. The prohibition to advertise also applies to private in-patient facilities. Non-Governmental Organizations. Apart from foundation hospitals, only a handful of NGOs are active in the health sector and their focus is primarily on family planning and/or maternal and child health issues. In addition, there are some associations which focus on a particular health condition such as diabetes or cancer. While these may provide limited health services, their main focus is on raising money to support further research and on providing support to their specific clientele. 83 6. Private Sector Hleafth Services: Inpatient Care Non-public hospitals are grouped into four categories in Turkey: private hospitals (i.e. hospitals owned by Turkish citizens and established as a corporation), foundation hospitals, hospitals owned by ethnic minorities and hospitals owned by foreigners. Together they only account for about eight percent of Turkey's hospital capacity. Private hospitals are the dominant group among non-public hospitals and account for 82% of non-public capacity. They have grown significantly during the 1990s, and their capacity almost doubled between 1995 and 2000. Foundation hospitals are significantly less dominant in terms of number and capacity (9% of non-public hospital capacity), although they have grown at a moderate rate over the 1990s. Foreigners and ethnic minorities are the only provider type that has continuously reduced its capacity over the past decade, as they have come under pressure from the rapidly growing private hospitals32. Private hospitals are heavily concentrated in the three largest cities - only one third of private hospital capacity is outside Ankara, Istanbul and Izmir. Istanbul alone accounts for half of all private hospitals. On the other hand, there are only three private hospitals in Eastern Anatolia and seven in Southeastern Anatolia. In recent years, a significant number of private specialty hospitals (e.g. ophthalmology, orthopedics, physical therapy or micro-surgery) have been opened, particularly in Istanbul. Until the mid-1990s the expansion of private hospitals was facilitated by subsidized directed Government credits. Table 32: Evolution of Private and Other Non-Government Number of Number of % of all Number ofNumber of % of all Number olNumber of % of all Hospitals beds hospital be Hospitals beds hospital bed Hospitals beds hospital be 1988 1995 2000 Private 93 3212 2.4% 141 5191 3.9% 234 10074 6.7% Foundation 9 653 0.9% 15 935 0.7% 18 1112 0.7% Foreign and Ethnic 13 1604 1.2% 10 1189 0.9% 9 976 0.6% Total 115 5469 4.5% 166 7315 5.4% 261 12162 8.1% Note* Number of beds Is actual beds, not approved Source MOH Yatakii Tedavi Kurumlart Istatistik The majority of private hospitals are small, with an average number of forty-three beds per hospital. Only eight percent of private hospitals have over one hundred beds and two thirds of private hospitals' have fifty or less beds. Foundation hospitals are only slightly bigger than private hospitals (average bed number 61). Similarly, hospitals owned by foreigners and ethnic minorities are small. All types of private hospitals operate with both full and part-time doctors. In addition, they have contracts with doctors who use their facilities to perform operations on their private patients. Private hospitals are obliged to let patients bring their physician of choice to perform any procedure if the patient so desires. 32 In some cases foreign or mmnority owned hospitals have been taken over by private Turkish investors and thus continue to operate, but for reporting purposes they have been shifted to the category of "private hospital" 84 Table 33: Concentration of Private Hospitals in Ankara, Istanbul, Number Number % of Drivate beds hosoital Ankar 11 794 7% Istanb 117 649 56% Izmir 11 622 5% Othe 95 375 32% Note Number of beds is approved beds rather than effective beds |Source MOH Yatakli Tedavi Kurumiar, Istatistik Ytiligi. 2000 Utilization. Private hospitals account for about seven percent of hospital capacity, eight percent of all hospital admissions, three percent of outpatient visits and ten percent of all operations (12% of large operations) carried out in Turkey. Foundation hospitals account for an additional one percent of admissions and outpatient visits, and two percent of operations. Minority and foreign owned hospitals have continuously declined in their importance and now account for less than one percent of admissions, outpatient visits and operations. The client pool of non-public hospitals is limited by the fact that beneficiaries of public health insurance (about 86% of the population) can not seek treatment at private facilities unless their insurance has a provider contract with a facility for specialized procedures which can not be readily carried out at public facilities (open heard surgery, MRIs, tomography, etc). Outside these contracts, patients seeking treatment in any hospital outside the public sector, must cover the bills on their own, unless they have private health insurance33 or work for a private company that has a provider contract with a particular private institution (e.g., some of the larger commercial banks). Although a majority of their patients are private patients, revenues from Govermnent contracts contribute an important share to income of a significant number of private hospitals.34 Private hospitals have a significantly lower average length of stay than public hospitals, although the share of operations and births in total admissions are comparable to those of MOH and SSK hospitals. Similarly, foundation hospitals have a much lower length of stay than public hospitals, although they have a higher share of operations (and particularly large operations) in total admissions than all public hospitals, including University hospitals. Private and foundation hospitals also have a significantly lower rate of deaths per admission than public hospitals,. though by some accounts this is partly due to their generally admitting less serious cases than university hospitals. Their throughput rate per bed is higher than in most public facilities, 33 Private health insurance is not wide spread in Turkey. Currently less than 1% of the population (about 600,000 Veople) is covered by private health msurance. 4 Some of the larger private hospitals in Ankara, for example, earn about 40% of their revenues from Government contracts, 30% from patients with private insurance and 30% from pnvate paying patients 85 Table 34: Utilization of Non-Public Hospitals, Private Hospitals Foundation Minonty & Total Non- Hospitals Foreign H. Public Hospitals % of beds (1) 7.5% 0.8% 0.7% 9% % of doctors 9.3% 1.4% 0.5% 11% % of in-patient admissions 8.0% 1.1% 0.3% 9% % of surgenes 10.3% 2.1% 0.4% 13% % of large surgenes 11.8% 2.1% 0.4% 14% % of births 8.9% 2.5% 0.4% 12% % of outpatient visits 3.0% 0.9% 0.1% 4% ALO days 2.4 3.6 10.7 be-occupancy rate 26% 50% 46% throughput bed 40 51 16 Note: (I) Data excludes beds and activities of Ministry of Defense Hospitals. Including beds of the latter, lowers the share of non-public sector beds to about eight percent Source MOH, Yatak/i Tedavi Kurumiari Istatistik Yillzgi, 2000 suggesting a relatively stronger workload. On the other hand, official statistics show that private hospitals have an extremely low average occupancy rate of 26%. One third of private hospitals have an annual bed occupancy rate of 15% or less, just over half of them have an occupancy rate between 15%-50% and only about 13% have an occupancy rate higher than fifty percent. A look at officially reported occupancy rates by hospital size, indicates that larger private hospitals (>100 beds) on average tend to have a higher occupancy rate than smaller ones. Overall, it is however, hard to see how the majority of private hospitals can stay financially viable with such low occupancy rates and the reliability of these statistics is somewhat questionable.35 Indeed, several of them, including some well established hospitals in Ankara, have recently encountered severe financial difficulty and not been able to meet loan obligations. Foundation hospitals have a better occupancy rate than private hospitals, but it is still only around a low 50 percent. Hospital Fees: Private hospitals are not free to set their own prices. Room fees, covering room and board, nursing care, simple laboratory work and routine monitoring by doctor if the doctor is a hospital employee, are set by a commission with representatives from the provincial health directorate, TTB, the local chamber of commerce, the municipality, and the chief doctor of a state hospital or a doctor from a nearby health center. Fees can only be adjusted once a year, unless inflation as measured by the wholesale price index has exceeded twenty percent and they have been in force for at least six months. For treatment fees, the floor prices set by TTB are applicable, but hospitals are free to charge higher prices. In practice, however, few hospitals charge above the TTB floor price for fear of losing patients. In addition, private health insurance companies generally go by TTB prices and so do private enterprises (e.g. banks) that negotiate provider contracts with private hospitals. Contracts between private hospitals and social insurance organizations, on the other hand, are based on fees significantly below those set by TTB and are determined by MOH and MOF. Prices of medicines and supplies used during 35 Given the extremely low occupancy rate of pnvate hospitals, the question of data reliability arises, by some accounts data for private hospitals are unreliable due to underreporting for tax purposes. A clearer picture of the situation would require a detailed survey of all private hospitals. 86 treatment in private hospitals are set by the Turkish Pharmacist Association (TEB) and hospitals are not allowed to add any surcharges. Private hospitals are obliged to reserve five percent of their beds for poor non-paying patients. The provincial health directorate, chief doctor of the general hospital or of health centers can decide which patients are to be admitted by private hospitals in beds reserved for non-paying patients. Taxation and Utility Payments. Private hospitals are subject to the same taxation as other private enterprises. This puts them at a significant disadvantage vis-a-vis public and foundation hospitals whose services are exempt from VAT and income taxes, which can go up to 46%. No import duties are charged on medical equipment imported by hospitals of any type. Private hospitals also need to pay utilities (gas, water, electricity) at industrial rates, where as public and foundation hospitals pay the lower private consumer rates. Legal Framework and Supervision. All non-public hospitals are subject to the law on private hospitals, which dates from 1933, and a MOH regulation last updated in 198336. Like in the regulation on private policlinics, the focus of the law and regulations applicable to private hospitals is on minimum physical standards, staffing and equipment. The law puts private hospitals under the jurisdiction of the MOH and assigns the responsibility of issuing licenses and supervision to local representatives of MOH (nowadays provincial health directorate). It spells out the procedures to be followed and information to be provided to seek a license, specifies the minimum qualifications and responsibilities of a hospital director and states under what circumstances the latter can be prosecuted.37 The more recent MOH regulation focuses on physical standards with which private hospitals must comply, spells out minimum staffing, equipment and pharmaceutical requirements, specifies who sets applicable fees, how payments can be collected, what documentation needs to be issued and kept and what the reporting requirements are. It also obliges private hospitals to have an emergency unit. Licenses for private hospitals are issued in the name of the owner rather than in the name of the institution. Therefore, the license needs to be renewed if hospital ownership changes. Private hospitals are not issued a single license covering all hospital activities, in addition to a general license, they also need to obtain separate licenses for specific departments which is a cumbersome and time consuming procedure. Inspection of hospital facilities prior to issuing a license is quite strict and carried out by the provincial health directorate. The focus is on compliance with physical and equipment standards set out in the regulations. Once a hospital is operational, however, there is limited follow-up. Inspections, to the extent that they take place, continue to focus on compliance with physical, equipment and staffing standards, with little or no attention paid to the quality of treatment provided. Given the absence of treatment standards this is not surprising. In view of the recent increase of private hospitals and provincial health directorate's limited capacity, MOH is 36 Law no. 2219, Hususi Hastaneler Kanunu, May 24, 1933. Ozel Hastaneler Tuzugu, no. 17924, October 1, 1983. 37 Minimum qualifications of a private hospital director as set out m the law are: medical degree, five years of practical expenence as a doctor, including two in a state hospital 87 currently considenng the establishment of an independent commission to supervise non-public hospitals. 7. Patient Rights and Liability Policy Patient rights are set out in a MOH regulation issued in 1998.38 The regulation focuses on a patient's right to freely chose the medical facility and personnel to treat him (within the applicable regulations of various social insurance schemes), the right to be fully informed about his condition, treatment options, proposed treatment and consequences of absence of treatment. It also spells out a patient's right to privacy and the doctor's associated obligations, the need to obtain the patient's full consent prior to any treatment unless his life is endangered and what recourse a patient has if he feels that his rights have been trespassed. The regulation is essentially mute on the extent of a medical professional's liability. The recourse open to a patient who feels that his patient rights have not been observed or that he has been subject to malpractice depends on whether the patient was treated in a public or a private facility. If the patient was treated in a public facility and feels that his patient rights have been infringed he can sue the health establishment in question. If a patient has suffered material, physical or psychological damage due to improper treatment by a doctor in a public facility, the patient needs to address his complaint and request for damage compensation to the public health establishment's management. If the latter does not agree with the patient or fails to respond to the patient's complaint, the patient can take the case to court within one year of the occurrence. However, he cannot take legal action against the doctor who treated him, only against the health establishment in question. If the court decides in the patient's favor, any compensation that may be awarded to the patient will have to be paid by the concerned public health facility. The establishment can then in turn decide to take action against the doctor in question. In reality this rarely happens. If the patient who has a complaint was treated in a private facility, he can take legal action directly against the doctor in question, rather than against the facility where he was treated. The regulation is mute on whether a patient can also take action against a private health facility (as opposed to a doctor) when he has been subject to malpractice or infringement on his patient rights. When taking action against a doctor of a private facility, the patient can chose to file a complaint with the Turkish Doctor's Association (TTB) which has the right to bar private doctors from practicing for up to six months. Alternatively, the patient can launch a complaint with the High Medical Council at the MOH and if his complaint is supported by the Council, he can take the case to court. A third option is to take the case to court directly. In the latter case the courts usually call upon the TTB or MOH's Higher Medical Council to take a position and the ruling then generally follows the advice of the body consulted. TTB estimates that there yearly are about 400 cases in which doctors are taken to court, but only about half of them end in the prosecution of a doctor. The main reason for this low rate of prosecution is that the lack of enforceable standards of practice makes it very difficult to prove malpractice. 38 Hasta Haklari Yonetmeligi, Official Gazette no. 23420, 1.8.1998. 88 8. Pharmaceutical Sector In sharp contrast with health services provision, which is dominated by the public sector, the pharmaceutical sector is almost exclusively in private hands. The production of pharmaceutical raw materials and medicines, the import, wholesale, storage and retail of drugs and medical supplies is all carried out by the private sector. The only exception is a pharmaceutical factory owned by SSK, which supplies SSK facilities with drugs. There currently are 125 pharmaceutical companies in Turkey, 76 of them produce medicines, 11 produce raw materials and 36 import pharmaceuticals. Of the 36 foreign owned companies, only eight are engaged in production, the rest focus on importing medicines and supplies. A large share of drugs is produced under license to foreign companies. Although there are 125 pharmaceutical companies, the production and supply of pharmaceuticals is relatively concentrated: the twenty largest companies have a market share of over 75%. At the retail level, there currently are almost 21,500 private pharmacies in Turkey. Retail pharmacies are, however, very unevenly distributed across the country. Half of the country's pharmacies are in and around the seven largest cities, which account for about 35% of the population. Pharmacies are relatively scarce in Eastern and to a somewhat lesser extent Southeastern Anatolia. In some provinces of Eastern Anatolia one pharnacy on average serves well over 10,000 people while there are only about 2,000 people per pharmacy in the three largest cities. Private doctors and policlinics are not allowed to dispense drugs unless closest pharmacy is more than ten kilometers away, in which case they can apply to the MOH to obtain a license to sell drugs to their patients. Pharmaceuticals Consumption. Drug consumption in Turkey has increased substantially during the 1990S.39 Table 36 shows the relative share of various treatment group drugs in overall drug consumption in Turkey. Antibiotics are by far the most frequently consumed drugs in Turkey and account for almost one fifth of total drug consumption. While this is not untypical for developing countries with a high prevalence of infectious diseases, hypertensives, cardiac and vascular drugs, psycho-pharmaceuticals and cancer drugs rather than antibiotics are generally among the most frequently used drugs in OECD countries. The high use of antibiotics in Turkey is also a reflection of the fact that Turkish doctors tend to over-prescribed this and other drugs. Ninety-five out of every hundred consultations results in prescription of some drugs. This compares to 56 prescriptions per one hundred drugs in Holland,73 in Italy and 85 in France.40 One review of prescriptions found that every third prescription written in Turkey is for antibiotics.41 Antibiotics are often prescribed without proper laboratory tests preceding the prescription, leading to prescription of antibiotics which may not be the most effective in treating a particular bacterial infection or even to the use of antibiotics in the absence of bacterial infections. Furthermore, antibiotics can be purchased without prescription at any pharmacy if the consumer is willing to pay for it out-of-pocket.. 39 Domestic production (measured by the number of bottles produced), increased by 36% between 1995-2000, while imports of finushed drugs grew more than threefold in dollar terms during the same time. 40 See Atay, 0. "Saglikta 1lacin Yern Ve Sorunlari", in Yeni Turkiye, No. 40, July-August 2001, pp. 1047-1056 41 See Atay, 0. Op.cit (2001) 89 The generous prescription of drugs in general and antibiotics in particular is partly a reflection of the ineffective primary care system and a tendency of overloaded doctors at secondary level outpatient facilities to substitute prescription for effective consultation. The generous prescription of drugs is further facilitated by the fact that for those covered by public health insurance, any drug prescribed by a public doctor is covered by insurance with only a minimal co-payment by the patient. It is estimated that about 85% of pharmaceuticals purchased in Turkey are paid for by the public sector through the social insurance schemes42. Table 35: Consumption of Drugs by Treatment Group (2000) % of total consumption Antibiotics 19.0% Analgetics 12.0% Antirheumatics 11.0% Cold and cough medicines 8.6% Vitamines, minerals and antianaemics 7.3% Dermatological drugs 5.3% Digestive drugs 5.3% Cardiac and vascular drugs 4.8% Hormones 4.3% Ear, nose, eye and throat drugs 4.2% Neuralgic drugs 3.2% Antispasmodics 1.7% Antiasthmatics 1.4% Antihistamines 1.3% Laxatives 1.0% Hypotensives and diuretics 1.0% Antidiabetics 1.0% Antiparasitics 0.8% Other drugs 6.7% Source: IES Licensing and Drug Pricing. The drug industry is supervised by MOH's General Directorate of Pharmacy and Pharmaceuticals Products, which approves drugs for use in Turkey and issues licenses for production facilities and individual drugs. It also fixes drug prices at all levels (factory gate, wholesale, retail). Factory gate prices are made up of three factors: (i) production costs, (ii) overheads and (iii) producer's profit. Production costs and overheads are based on actual costs incurred by the producer and the latter must document these costs to MOH based on set criteria. Producer profits are set as a percentage of the sum of production and overhead costs. Similarly, wholesale, storage and retail margins are set as a fixed percentage of factory gate or CIF prices. This system encourages use of expensive raw materials and provides pharnacists with an incentive to sell the most expensive drugs whenever the prescription allows for it. Enforcement of MOH set prices at the retail level is the responsibility of the Turkish Pharmacists' Association. Given that about 85% of drugs sold are paid for by the public sector, 42 Eczibasi, B. "Yenz Kirzlerden Korunmak cin Polhtik Mudahale Son Bulmali", in Yeni Turkiye, No. 40, July- August 2001, pp. 1001-1020. 90 control should also be exercised by insurance claims processors. MOH carries out drug quality controls through the analysis of samples taken from production facilities and retail outlets. Anyone with a pharmacology degree can open a retail pharmacy, upon application for a license to the provincial health directorate. The latter is obliged by law to issue a license within thirty days of the application, provided all necessary documents have been submitted and requirements have been fulfilled. Membership in the Turkish Pharmacists' Association is mandatory for anyone operating a pharmacy. Although by law only pharmacists are allowed to open and operate a pharmacy, MOH estimates that about one quarter of all pharmacies are in fact owned by none pharmacists who have opened them in the name of somebody else with a pharmacology degree. 9. Conclusion The public health care system suffers from significant inefficiencies, while access to timely and quality health care is becoming increasingly unequal. The primary health care system is substantially underfunded and ineffective. A majority of people circumvent public primary care facilities and either directly seek care at outpatient facilities of hospitals or, if they can afford it, from the private sector. The absence of an effective and enforceable referral system further contributes towards excessive use of secondary level outpatient care. As a result, hospital outpatient facilities have become increasingly overloaded with cases that could easily be treated at the primary care level. This has lead to ineffective use of resources, as care at hospital outpatient clinics tends to be more costly than at primary care facilities. The hospital sector continues to suffer from much inefficiency. Although some efficiency gains have been achieved during the 1990s, a large number of hospitals remain substantially underutilized. There are a large number of facilities that are too small to allow for efficient operation and effective provision of care. Many hospital managers lack the skills necessary to effectively carry out their job. In addition, hospital managers are not given any incentives to strive for efficiency improvements at the facilities that they manage. The absence of administrative and financial autonomy, coupled with a budgeting system that largely ignores the actual amount of services provided substantially prevents hospital managers from undertaking steps to achieve efficiency gains. Although this constraint has been recognized almost fifteen years ago and the legal basis was then set to turn public hospitals into autonomous units, nothing has been undertaken to move in this direction. The existence of multiple public providers, who operate with little or no coordination, has led to significant duplication of efforts and inefficient use of resources. In most cities there are at least two and some times even more hospitals by public providers, namely MOH and SSK. In many areas these are complemented by University and some times private hospitals. The lack of coordination among providers often results in investment in equipment that remains underused, as there is not sufficient demand in smaller cities for multiple providers that offer the same range of services. In the absence of choice, providers face little competition and have few incentives to improve the timeliness and quality of their services. As a result, an increasing share of the 91 population is opting for private health care. This in tum leads to growving inequities, as those who can not afford to do so are left with an ill performing public system. Although health service provision is dominated by the public sector, the private sector has an increasingly strong presence. While exact data are not available, it is estimated that up to three quarters of the country's doctors are involved in the provision of private health services at least on a part time basis. Non-public hospitals have grown significantly over the past decade, although they still only account for about eight percent of hospital bed capacity and nine percent of in-patient admissions. The growing importance of the private sector is driven by increased demand for what people perceive as higher quality and more timely services. The mix of private and public service provision by doctors employed in public health institutions raises serious moral hazard problems. Doctors have few incentives to provide quality services at public facilities if they know that these compete for the same clients as they could treat privately. The current system does not allow those who benefit from public health insurance under one of the social insurance or the green card schemes to freely chose between using public and private health services. With the exception of specialized services which can not be readily provided by public institutions and are thus contracted out to the private sector, private health services are only available to those who have the financial means to pay for them or who benefit from private insurance. There is, therefore, a danger that access to quality and timely health services will become increasingly inequitable. Recognizing the important role that non-public institutions could play in the provision of health services, the Government's Medium Term Development Plan calls for leaving operation and establishment of hospitals that require extensive investments to the private and foundation sectors. While this is a sensible strategy, it will only work if private hospitals are put on an equal footing with public hospitals with respect to taxation, utilities, prices and client basis. Regulation and supervision of private health services is largely focused on physical standards, with little if any attention paid to the quality of actual service provision. Because of the specialized nature of health services, clients cannot be expected to have the knowledge necessary to judge the quality of services provided. There is therefore a need to strengthen the supervision of the quality of health services provided and to institute an officially recognized and mandatory accreditation system for physicians. 92 CHAPTER 4: HUMAN RESOURCES IN HEALTH 1. Introduction Human resource management issues are often missing from the strategic management process in many government organizations, and in place of strategy, the procedures of personnel administration tend to dictate how these organizations deal with their people resources. This emphasis on procedures slows the development of human resource management as* a contributor to strategic planning and fosters a mindset that since bureaucratic responses get precedence over strategic staffing, discussions regarding human resource management are not realistic in a government organization. In effect, therefore, administration or precedence rather than strategy is often the engine that drives human resource management practices in such organizations.' More so than other organizations, govermment organizations are complex systems comprised of interdependent external and internal subcomponents that are linked to each other through incentive processes that retain them within the bounded organizational system. Understanding these organizations requires an appreciation of the organization's operating environment, the strategies used by the organization in dealing with its constituents and environment, the structural and systemic features within the organization, and the organization's values and behaviors. This chapter attempts to do so in the context of Turkey's health sector, and is organized as follows. Section 2 describes the legal basis governing employment of health personnel. Section 3 gives an overview of the numbers and types of health personnel in Turkey, followed in Section 4 by an account of the distribution of health personnel by agencies and provinces. Salaries of health personnel are discussed in Section 5. A brief account of productivity of health personnel is placed in Section 6, followed in Section 7 by a description of the medical education system in Turkey. Issues related to nurses and other health professionals are presented in Section 8. Section 9 concludes. 2. Health Personnel: The Legal Basis Health personnel working in the Ministry of Health (MOH), other public hospitals, University hospitals and Social Security Organization (SSK) hospitals are subject to Turkish Civil Servant Law Number 657. Health personnel of Municipal Hospitals, Foundation Hospitals, Private Hospitals, Foreign and Minority Hospitals and those who are self- employed are covered under Labor Law, Number 1475. Health personnel are classified as "Health Services and Assistant Health Services" personnel in the Turkish Civil Servant Law, Number 657, Article 36, Paragraph C. This category covers: a. Medical doctor (physician), dentist, pharmacist, veterinary doctor; b. Personnel who receive higher education and work in their fields of specialization: physiotherapist, medical technologist, nurse, midwife, health officer, social services For details, see Sheppeck and Militello (2000). "Strategic HR configurations and organizational performance", Human Resourcc Management, 39 1 93 expert, biologist, psychologist, dietician, health engineer, health physician, health administrator; and, c. Midwife, assistant nurse (physiotherapist technician, laboratory technician, pharmacist technician, dental anesthesia technician, x-ray technician, environmental health technician, community health technician and their assistants), health control officer, animal health officer, and the like. Health personnel who work in health agencies and institutions but do not practice their profession are not classified under "Health Services and Assistant Health Services" category. For example, a medical doctor working as an undersecretary within a Ministry of Health is considered to be a "General Administrative Services" personnel. The supply of health personnel in Turkey is regulated under the "Implementation of Medical Profession and Related Branches Law (Tababet ve Suabati San'atlannin Tarzi Icrasina Dair Kanun), Number 1219, published in 1928. This law regulates the profession and services provided by medical doctors, dentists, midwifes, circumcisionists and nurses. Law 1219 provided the basis under which the Regulation on Medical Specialists (Tababet Uzmanhk Tuzugu) was published on 5 April 1973. Article 3 of the Regulation describes the institutions, which are allowed to train specialists. Those institutions are medical faculties, faculties of dentistry, Gulhane Military Medical Faculty (GATA) and health institutions authorized by the MOH. The same regulation describes the conditions to becoming "assistant" and "specialist" for those who are graduate of a medical faculty, faculty of dentistry, faculty of sciences, faculty of veterinary and pharmaceutical faculty. Similarly, Rules and Regulations on Medical Specialists (Tababet Uzmanlik Yonetrneligi) were published on 22 May 1974. These rules and regulations lay down the rules for implementation for training assistants and specialists in the authorized institutions. All public and private health institutions, except for the Ministry of Defense, are covered under the Health Services Basic Law (Saglik Hizmetleri Temel Kanunu), Number 3359, dated 7 May 1987. This Law regulates the provision of a balanced distribution of health services and health personnel (including support personnel) throughout the country; the provision of qualified pre-service education in cooperation between the Ministry of Health and the Higher Education Council (YOK); and the provision of in-service training for the personnel working in the public and private institutions. Another law that has implications for health personnel is the Revolving Fund Law Number 209, for Health Institutions and Rehabilitation Centers under the Administration of Ministry of Health (Saglik Bakanligina bagli Saglik Kurumlari ile Rehabilitasyon Tesislerine verilecek Doner Sermaye hakkinda Kanun), published on January 4, 1961. This Law regulates the administration of the revolving funds established under the Ministry of Health institutions. Up to 50% of the revenues generated under the fund can be distributed to the personnel working under the fund administration, while the rest have to be utilized for procurement of equipment, renovation of health facilities and staff training. Activities carried out under the Revolving Fund Law are not subject to the General Accounting Law (Muhasebe-i Umumiye Kanunu) and Public Tender Law (Devlet Ihale Kanunu). However, the activities are subject to Ministry of Finance inspection and the approval of the Court of Accounts (Sayistay). 94 3. Health Personnel in Turkey: Present Status and Trends According to the MOH Health Statistics for the year 2000, there were a total of 81,988 physicians in Turkey in 1999 - equivalent to one physician for every 785 persons - consisting of 36,854 specialists and 45,134 general practitioners. This is a 62% increase in the number of physicians between 1990 and 1999, which translates to 48% increase in the number of specialists and 75% increase in the number of practitioners. With regard to the number of other health personnel in 1999, there are 14,226 dentists (one for every 4,522 persons), 22,065 pharmacists (one for every 2,916 persons), 43,032 health officers (one for every 1,495 persons), 70,270 nurses (one for every 916 persons) and 41,271 midwives (one for every 1,559 persons). These numbers do not compare unfavorably with upper middle income countries like Mexico (625 persons per physician) and Brazil (769 persons per physician), and are better than Thailand (2,500) and Tunisia (1428). The average for OECD countries as a whole is 370 persons per physician. There has been a huge increase in the number of health personnel between 1990 and 1999. The number of physicians went up by 62% during this period, with dentists, pharmacists, nurses, midwives, health officers and other health personnel also showing significant increases (Figure 1). Figure 1: Trends in Health Personnel Numbers (1990-1999) 70.000 . '. 60,000 -______ E 30 000 2000000 10,000 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 -4--Physicaan -U-Dentist i Pharmacist X - Health Officer Nurse +b Midwife Source MOH, HealJh Statistics, Research, Planning and Coordination Council, 2000 In Turkey, physicians trained in medical schools are called "general practitioners" and they mostly serve as primary care providers. Physicians in non-general practice are referred to as "specialists". Physicians must pass a two-step specialty exam to become a specialist. The first step of the exam is the foreign language proficiency test, which must be passed before taking the second exam. On average, specialty training takes 3-5 years and must be completed at the teaching hospitals. Empty positions for the specialty training at the teaching hospitals are announced each year in the application packet, and the applicants make selections according 95 to their specialty interest. A specialty thesis is required as the final step for becoming a certified specialist. The common medical specialties include anesthesiology, cardiology, dernatology, family medicine, internal medicine, neurology, obstetrics and gynecology, ophthalmology, pathology, pediatrics, psychiatry, radiology, and surgery. Figure 2: Trends in Specialist and Practitioner Numbers (1990. 1 999) 50,000 45,000 - _ ; - --, 40,000 _ .>---._..._ 35,000 - -i-- - - __ e 30,000 _ --- '- -- L_' ____ E25,000 -~ 20,000 -i_ 1 5,000 ._. 12,000 -O O 5,000 --- 0 , 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Years | -0-Specialist -C- Practitioner Source. MOH, Health Statistics, Research, Planning and Coordination Council, 2000 Separating and reclassifying the health personnel as general practitioners and specialists shows an increase of 80% and 52% respectively in these two categories during the period 1990-1999 (Figure 2). 4. Distribution of lHlealth Personnel Turkey's health sector is fragmented, with multiple public organizations providing health services at various levels in parallel to private providers. As has been described previously, key public providers in Turkey are the Ministry of Health (MOH), the Social Insurance Organization (SSK) and the Universities through their hospitals. Other public Ministries (Defense, Transport and Education) some state enterprises and municipalities also provide health services, but their capacity is quite limited. In addition, there are private and foundation hospitals. Table I shows the distribution of health personnel by each type pf institutional provider in Turkey in 1999. Table 1: Distribution of Health Personnel by Agencies in Turkey, 1999 Personnel Total Population Minister of Hea th SSK University Other Private Title Per Person Number % _ _ Org. Physician 81988 785 41385 50 8079 15428 5767 11329 Specialist 36854 1746 13474 37 4719 7495 2669 8497 Practitioner 45134 1425 27911 62 3360 7933 3098 2832 Dentist 14226 4522 2221 16 604 1040 766 9595 Pharmacist 22065 2916 956 4 921 671 511 19006 Health Officer 43032 1495 30425 71 3097 3197 2765 3548 Nurse 70270 916 40752 58 8797 11046 5655 4020 Midwife 41271 1559 38025 92 16731112 181 1280 Source MOH Health Statistics. Research, Planning and Coordination Council, 2000 96 The supply and distribution of health personnel across regions is very skewed. There is a concentration of curative health services institutions in the three big metropolitan cities of Istanbul, Ankara and Izmir, which constitute 26 per cent of the total population of Turkey and has 48.5 per cent of all general practitioners. Concurrently, the rural and less-developed parts of Turkey are grossly under-staffed. Results of this unequal distribution of health personnel, therefore, are much more visible in the less developed parts of Turkey. For instance, in the provinces of Mus and Van in Eastern Anatolia Region, the number of physicians per population is 14 times less as compared to Istanbul. Figure 3: Distribution of Physicians across Provinces 245,000,000 o 4r,000,000 ' r _ E 25,000,000 3 0,000,000- E15,000,000- 15,000,000- 0~~~ 0.~~ 0 2000 4000 6000 8000 10000 12000 14000 16000 18000 Number of Physicians Provincial income and the distribution of physicians appear to be very significantly and positively correlated, and over 90% of the dispersion in the distribution of physicians across provinces is explained by provincial income alone. As Figure 3 shows, the number of physicians per province rises with the gross income of the province. The scatter points farther away from the origin represent, from left to right, Izmir, Ankara and Istanbul. The distribution of health personnel as measured by the population to physician ratio also varies significantly across provinces, especially across rich and poor provinces of Turkey (Figure 4). The population to physician in the ten poorest provinces - Mus, Agri, Sirnak, Bitlis, Ardahan, Bingol, Van, Hakkari, Kars and Mardin - is, on average, 1,823 persons per doctor. Agri has the largest population to doctor ratio (2,609), while Van has the lowest (1,219) among the poorest 10 provinces. Similarly, the population to nurse ratio in these provinces is 1,471, while the population to midwife ratio is 2,138. In comparison, the population to physician ratio in the ten richest provinces - Kocaeli, Bolu, Yalova, Istanbul, Kirklareli, Izmir, Mugla, Ankara, Zonguldak and Edirne - is, on average, 413 persons per doctor, four times less than the poorest ten provinces. Ankara has the lowest population to doctor ratio (266), followed by Izmir (361) and Istanbul (430). Similarly, the population to nurse ratio in these provinces is 506, while the population to midwife ratio is 1,539, both significantly lower than the poorest ten provinces. As a result of lesser difference in the number of nurses across the two sets of provinces, the poorer provinces have more nurses per doctor (1.24) compared to the richest ten provinces (0.82). 97 Figure 4: Distribution of Health Personnel 2500 52000 - I. -- a 50 - -_-__l_--.L'3 _-. ° 1000 __ _ i 500 -- ?I. Physicians Nurses Midwives o Rchest Ten ProWnces o Poorest Ten Pro\ncesj Ankara, with 266 persons per doctor, and Izmir, with 360 persons per doctor, are above the OECD average of 370 patients per doctor. Istanbul, with 430 persons per doctor, and Edime, with 534 persons per doctor, are above the upper middle-income countries average ratio of 625 persons per doctor. Several factors explain the unequal distribution of health personnel in Turkey. Results of a survey of health personnel commissioned by the Ministry of Health during 1992-94 indicate that physicians' locational preferences are affected by factors such as: (i) availability of educational opportunities for children, (ii) presence of a social environment; (iii) opportunities to pursue cultural activities; (iv) opportunities for higher income; (v) benefits of urbanization; (vi) convenient transportation to big cities; (vii) climatic conditions; and (viii) proximity to the sea. 5. Salaries and Income of Health Personnmel Public sector salaries in Turkey at all levels of employment are set by the central government. There are no pay negotiations, and salary is determined unilaterally by the govermment. Pay increases are subject to budgetary constraints and predicted inflation rates for the year. The Budget Law determines pay increases for the first half of the fiscal year; increases for the second half of the year may be determined by the Cabinet as part of the powers vested in it by the Budget Law. Different pay scales apply to civil servants and to contractual employees. Pay scales for civil servants are based on grade entitlement while that of contractual employees take qualifications and job experience into account. Except for a few categories of contractual employees (such as artists), there is no bonus system. On those rare occasions that bonuses are paid, they are not dependent on individual performance. Seniority increases are automatic. Senior civil servants who perform well can be appointed to executive posts. The central government sets the overall annual pay bill by the taking into consideration: (i) previous year's pay bill volume; (ii) increase or decrease in staff numbers, (iii) macroeconomic aggregates, like share of GNP made up of compensation costs, predicted inflation rate and public deficit; (iv) pay increases based on salary coefficient during the 98 current year; and (v) indirect compensation costs such as medical expenses and certain allowances. The pay scales of civil servants are divided into 15 categories, and the scale category to which a public employee is attached is subject to the employee's educational qualifications. The scales are adjusted according to the government's payment policy outlined in the national budget. Civil servants usually stay at a scale category for three years. In addition to the salary levels set as above, civil servants are also entitled to additional compensation based on seniority, special service conditions and region of posting. The basic salaries of health personnel are more or less the same as the rest of government personnel, and overtime have also remained at the same levels (Figure 5). Figure 5: Salaries of Health Personnel and Civil Servants 350,000,000 300,000,000 250,000,000 -____ 200,000,000 - 150,000,000 100,0 00,000 50,000,000 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 m Average Net Salaries in the Health Sector S Average Net Salanes for all Civil Servants Real salaries in the health sector increased by 18% between 1996-97, and after a slight fall (1%) in the next year, increased by a further 9% between 1998-99. Most of these gains were returned in the years following the economic crisis of 1999, and real salaries fell by 10% between 1999-2000 and by a further 8% between 2000 and 2001 (Figure 6). In addition to the basic salary, incomes of health personnel from public sources may also include contributions from revolving funds, housing compensation, foreign language compensation, family support allowance, night duty payments, and other compensations. And finally, incomes of health personnel also include any earnings from their private practices. 99 Figure 6: Average Met Salaries in the Health Sector, 2001 prices 4,500,000 4,000,000 -- 3,500,000 - __ - -- ______ 3,000,000 - . - - 2,500,000 ----_ ---- ---_ _ -_--- 2,000,000 - . 1,500,000 -- . 1,0100,000-_ , 500,000 - - - 0 1996 1997 1998 1999 2000 2001 Figure 7 shows the relative composition of incomes from public sources. For most health personnel, total income from public sources, once compensations from revolving funds and night duties are added, becomes almost double of the net salaries of the health personnel. Figure 7: Composition of lncome of Health Personnel 1,600 1,400 - - - - ; _ ___ 1,200 r---l~' ---,------ -1,000 - -z 800 -_ - - . 600 1 - --.-I . 1 ---j 400 Specialists Doctors Dentists Pharmacists Nurses Health Officers |iO Salary El Revolving Fund 0 Night Duty Payment | A large number of public sector physicians also work part-time in private practice; in fact, under Law 1219, doctors working in MOH and university hospitals are allowed to see private out-patients in these facilities after 4pm (health personnel working at university facilities are allowed to work privately part time at university hospitals after midday. Social insurance beneficiaries making appointments with specific doctors in public facilities after 4pm pay an out-of-pocket surcharge, while basic treatment fees are covered by their insurance. Revenues from treatment of private patients in public hospitals are shared between the hospitals' revolving fund and the treating physician. SSK physicians cannot see private patients at SSK facilities except from a recently initiated pilot in a limited number of SSK facilities. While such arrangements help public hospitals and physicians increase their revenues, they again 100 pose a significant moral hazard problem, as doctors have little incentives to adequately treat patients before 4pm. Reliable statistics of dual job-holding are not available, though some recent studies (Tokat, 2001) estimate that about 60% of all public physicians (i.e., over 44,000 doctors) also have private practices. Further, essentially all dentists who work in public facilities also practice in private. Since salaries of doctors in the public sector are low, engagement in private practice allows public sector doctors to substantially increase their earnings. In effect, therefore, the possibility of private practice by public doctors helps the public sector keep the necessary number of doctors engaged despite low public sector wages. Tokat (2001) estimates that doctors working part-time in the public sector (and part-time in the private sector) earned 5 times more than those working full time in the public sector. 6. Productivity and Quality of Health Personnel Three measures of productivity of health personnel are used in this analysis: number of outpatients per physician and nurse, number of inpatients per physician and nurse and number of patient days per physician and nurse. These indicators, however, are not without problems. First, indexes like the number of patients per physician and number of patients per nurses does not adjust for quality, and it remains inconclusive whether fewer patients seen by a physician are an indicator of superior quality of care or of general sloth and shirking by the physician. Second, there are no official and published data regarding the number of outpatient services provided by private physicians at their solo practice offices, and to this extent the indicators remain partial. Third, physicians in public sector health facilities often also work in private health sector facilities and in their own offices, and to this extent productivity comparisons between physicians employed in public and private sectors can be misleading. And fourth, physicians and other health personnel work at different institutions that are not producing health services, such as the Ministry of Health headquarters, provincial health directorates, public health laboratories, health administration agencies of municipalities, and other governmental organizations. Physicians in these organizations perform administrative and bureaucratic duties rather than deliver health services. Figure 8 shows the number of annual outpatient visits per nurse and physician. Outpatient visits per physician increased from 1,414 in 1987 to a high of 1,847 in 1999 before declining slightly to 1,778 the following year. As far as the number of patients is concerned, however, the evidence indicates a decline over the years. As Figure 9 shows, the number of patient days per physician declined from 486 patient days in 1982 to 336 in 2000. A similar trend is observed for patient days per nurse. 101 Figure 8: Outpatient Visits Per Physician 1900 1800 _-- - * 1700 2D 0. 1600 0 ° 1500 - - -- E 1400 - - -- ' - ------- -- . - . - - i ., . 1 300. ; 1200 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Years Figure 9: Patient Days per Physician and Nurse 700 600 -e __ 500 D 400 - - -. *. 3 00 .- - -;- -- _ _ _ _ _ v _ _ 300 200 7 . . ' __* _ 100 t ,_ _ - , '___-_ 0 1980 1985 1990 1995 2000 Years - Patient Days per Physician --- Patient Days per Nurse 102 The pattern of hospital discharges per physician and nurse has been somewhat erratic. As Figure 10 shows, the number of inpatients per physician went up from 61 in 1982 to a high of 73 in 1987, only to fall to 55 in 1995. A similar trend is observed in the number of inpatients per nurse. Figure 10: Hospital Discharges per Physician and Nurse 85 - 0 80 -__ 75- 70 - ;s> .0 60 -" E 1980 1985 1990 1995 2000 Years | Inpatient per Physician .-* Inpatient per Nurse The first and perhaps the most important reason for the declining inpatient and patient days is the lack of rational resource planning and allocation, which result in input and output slacks. Another important cause of low productivity in health personnel is the tremendous increase in the number of physicians and nurses and unequal or unbalanced distribution of health personnel and health care facilities in Turkey. As Figure 11 shows, the ratio of pharmacists to physicians, nurses to physicians and nurse-midwives to physicians has fallen slightly in the last two decades, largely due to a higher rate of increase of physicians compared to other health workers. Productivity of health personnel is also affected by the administrative policies and practices, especially in public hospitals where there is a great need for professional management. Hospital and other health care managers rarely develop institutional vision, missions and strategic plans that guide actions. Managers base their resource allocation decision on past experiences rather than on scientific and quantitative models (demand forecasting, capacity size, facility layout, human resources planning, resource allocation etc). Another factor that affects productivity is motivation, the level of which among health personnel tends to be low. 103 Figure 11: Number of IHiealth Personnel per Physician (1980- 1.2 - :_' 0.8 --_-.--_ _ __ __ . 0. 0 0.6 . . 0.4 - - - 0.2 ---- ------- - ------ -- - - 0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 Year | Pharmacist d Nurse * Midwife 7. Medical Education Undergraduate medical education is provided at three levels in Turkey. These include: (i) Faculties; (ii) Higher Education Schools with 4-year Program (Dort Yillik Yuksekokul); and (iii) Higher Education Schools with 2-year Program (Iki Yilllk Yuksekokul). Post-graduate medical education (Master and Doctorate programs) is provided in Graduate Schools. In addition, there are Research Centers and Training Hospitals where Medical Interns carry out research and receive training, and Institutes where specific scientific research is conducted. There are 40 Faculties of Medicine, 14 Faculties of Dentistry, 8 Faculties of Pharmacy, one Faculty of Health Sciences and two Faculties of Health Education in Turkey. The Faculties of Medicine offer 6-year undergraduate medical education, which includes internship in the 6th year of education. The Faculties of Dentistry offer 5-year undergraduate education, whereas the remaining faculties offer 4-year undergraduate education. The Higher Education Schools offers 4-year training to undergraduates in the fields of physiotherapy, nursing, and health administration and health technology. The Higher Education Schools offer 2-year training to students in health services and health sciences. An amendment to the Council for Education Law (Number 2547) gave the right to the graduates of Vocational High Schools (Lycee), including Health Vocational High Schools graduates, to enroll to Higher Education Schools with 2-year Program without prior University Entrance Examination. Table 2 presents the distribution of health education facilities and the number of students at each facility. Among the faculties, medical faculties, by and large, attract most students, followed by dentistry and pharmacy. Similarly, among the 4-year Higher Education Schools, health services attract the most students, followed by nursing, health administration and health technology. 104 Medical education in Turkey takes six years. However, some of the medical schools require a one-year English preparation course and in some of the Turkish medical schools, the teaching language is English. In general, the theoretical training is concentrated during the first three years, and practical training in the following three years. The curriculum of medical education is decided by the Supreme Council of Higher Education, which determines the compulsory topics and the minimum duration for medical training. The individual schools of medicine are flexible in adding to these topics and in deciding the structure of coursework. Some medical schools follow the traditional method of teaching, which structures training in terms of distinct academic disciplines, e.g. anatomy, physiology, biochemistry, and pathology, with each discipline remaining relatively separate from the others. For example, consecutive lectures may be the anatomy of brain, the physiology of lungs and prevention of intestinal infections. In contrast, some medical schools have teaching systems that depend on a more integrated approach, in which the theoretical program is divided into subjects such as cardiovascular system, gastrointestinal system, infectious diseases, etc. In this system, consecutive courses are related to each other. For example, in the cardiovascular subject group training, consecutive lecture topics may be the heart anatomy, heart physiology, heart diseases, etc. There are several concems regarding the quality and effectiveness of pre-service medical education. Several suggestions have been made by the Ministiy of Health, Universities and by the Turkish Medical Association toward improving the quality of medical education in Turkey. First, the medical colleges should provide all new graduates with a set of general characteristics so that the new physicians can function as health officers, be knowledgeable about most common diseases and reasons for mortality, and should be able to treat diseases on an ambulatory basis. The new graduates should also have sufficient administrative skills to manage primary care centers and lead multidisciplinary and multisectoral projects, and should be able to communicate with the public and attract their interest to basic medical problems. Second, it is suggested that the prototype for the Turkish physician should be defined and medical students must be educated well enough to be able to conduct the primary care of the patients as general practitioners. And third, some argue that medical education should be based on integrated methods and public health problems, and while the new medical school graduates who are receiving Westem style medical education are able to use high technology, they are not familiar with public health problems. In its report to the Minister of Health, the Ad Hoc Committee on Efficiency in Health Services points out that there are no agreed principles upon which the medical faculties base their medical teaching, and criticizes the shortening of medical education duration to six years. The Ad Hoc Committee Report proposes the following measures to improve the quality of teaching in these institutes: (i) Strengthening foreign language teaching in order to follow intemational literature on medicine, (ii) Providing basic and clinical sciences in an integrated program, (iii) Providing the opportunity to the medical undergraduates to establish contacts with the patients as early as possible during their education, (iv) Simplifying basic medical and clinical teaching by introducing multidisciplinary planning and problem solving techniques, (v) Assessing basic medical knowledge by introducing national examinations, 105 (vi) Organizing practical training into small groups to enable student to acquire analytical and practical formation, (vii) Standardizing training hours and introducing case based curricula, (viii) Identifying practical skills for each education unit and introducing skill laboratories to assess skill level, (ix) Providing training to teaching staff on teaching techniques, (x) Introducing optional classes in addition to the core curricula, (xi) Introducing Cost-Benefit Analysis and Health Economics to the health education curricula, (xii) Equipping faculty libraries with adequate materials, (xiii) Introducing accreditation of medical faculties. Although the SPO's Ad Hoc Committee Report on Efficiency in Health Services proposed these recommendations in 1999, and similar recommendations were made earlier by the First National Congress on Medical Education in November 1998, these recommendations have not yet been realized. Based on the Rules and Regulations of the Ministry of Health, yearly in-service training programs are prepared by the In-Service Training Board, and MOH staff from hospitals, health centers, health posts etc. are provided with in-service training. Prior to 2001, each General Directorate of the Ministry was responsible for preparing their in-service training programs individually and providing training independent of each other. However, the Ministry unified the in-service training program, and introduced annual service training programs for the MOH central and provincial staff. Table 2: Institutions Providing Health Care Number of Undergraduate Students Teaching Staff Institutions New Studying Graduate Faculties Medicine 40 4,801 32,492 15,210 14,233 Dentistry 14 959 5,222 890 1,338 Pharmnacy 8 842 4,025 804 778 Health Sciences 1 116 382 57 17 Health Education 2 155 645 218 41 TOTAL 65 6,873 42,766 7,179 16,407 Higher Education Schools (4-year program) Health 70 4,598 15,819 1,152 685 Physical Therapy & 5 247 1,015 220 143 Rehabilitation Nursing 11 903 3,378 616 439 Health Admin 1 64 411 91 28 Health Technology 1 65 345 62 59 TOTAL 88 5,877 20,968 2,141 1,354 Two-Year Vocational Training Schools Health Services 140 13,760 19,090 13,029 1758 106 Number of Undergraduate Students Teaching Staff Institutions New Studying Graduate Health Sciences 2 64 161 35 28 TOTAL 42 3,824 9,251 3,064 786 Graduate Schools Health Sciences 34 1,053 Forensic Medicine 1 26 Child Health 48 Cardiology 57 TOTAL 35 1,184 Research Centers Transplantation 1 2 Health Sciences 1 2 Sports I 3 Family Planning I __ I Pediatrcs I 2 Athletic Health I I Performance Turgut Ozal Medical 1 5 Center TOTAL 7 16 Oncology 15 Hemodialysis 10 TOTAL 25 Training Hospitals Ankara 13 Istanbul 20 Izmir 6 Adana I _ Bursa I _ _ TOTAL 41 8. Nurses and Other Health Professionals Nurses constitute the largest group of health care professionals in Turkey, and are the major caregivers of sick and injured patients, serving their physical, mental, and emotional needs. In Turkey, nurses work in a variety of settings, including hospitals, private practice, ambulatory care centers, community, government and private agencies, clinics, and rehabilitation centers. Although the reduction in hospitalizations and lengths of hospital stay reduces the demand for nurses in many developed countries, the increase in patient severity, the development of alternative practice settings, advancements in technology, the enhanced nursing role, and changing population characteristics will keep the demand for nurses in Turkey high. Because hospitals now treat the sickest patients who cannot be adequately cared for in altemative settings, more nurses are needed per unit. The remarkable growth in altemative settings has 107 created additional opportunities for nursing employment in Turkey. Advancements in technology also increase the demand for nurses, because nurses are needed to monitor and regulate most equipment. The changing age structure of the population will likely affect the utilization of hospitals and long-term care facilities. Institutional growth will expand opportunities for employment in many countries but the Turkish health system has newly introduced the concept of nursing homes and home care in the private sector. The prevalence of chronic illnesses will also increase the need for nursing care. Nursing Education Turkey has three major categories of basic nursing education. The first category is that of the four-year high school based diploma programs that are accredited by the Turkish Ministry of Health (MOH) and run by the MOH. These schools combine high school and nursing education programs, and about 90% of the nurses in Turkey are graduates of these schools. The curriculum includes cultural, basic science, and nursing courses. On completion, graduates from these programs are employed as staff nurses. The second type of nursing education is based on the Bachelor of Science degree programs. Although the main purpose of these programs is to prepare candidates to become leaders in nursing practice, administration, education, and research, a significant number of these nurses select different positions such as academicians, teachers at vocational schools, etc. The third type of nursing education is a university-based associate degree program. Although frequently the same faculty teach in both the baccalaureate and associate degree programs, the latter are administered by the Division of Allied Health in universities and are usually headed by a non-nurse. Their aim is to prepare nurses at the staff level and ease the nursing shortage. Nurse-midwives are nurses with additional training from a nurse-midwifery program in areas such as matemal and fetal procedures, maternity and child nursing, and patient assessment. They manage gynecological and obstetric care and often serve as substitutes for obstetricians/gynecologists in rural areas and in some women's hospitals. The nursing curricula are organized in a manner similar to nursing curricula in the United States and are standardized by the Council of Higher Education for both baccalaureate and associate degree programs. In a study of 21 university based schools of nursing, Robertson et al. (1992) find that the strengths of the nursing education system includes the presence of university level education, growth in academic competence of nurse educators, increases in competent nurses, increases in university-educated nurses, and the emergence of a definition of nursing. They also report some weaknesses in the system, including the presence of too many educational levels, inappropriate roles of the Ministry of Health, declines in educational quality, lack of qualified faculty, lack of standards, gaps between education and practice, and uncontrolled increases in enrollments. They recommend the removal of the Ministry of Health from nursing education, reducing educational levels to just two, increasing baccalaureate programs, increasing autonomy in nursing education and practice, changing the nurse practice act, closing nursing schools below the university level, and removing the role of non-nurses in nursing education. Nursing education in Turkey has come a long way in the last several decades. The growth of university based schools of nursing and important curricular advances have served to upgrade the nursing profession despite cultural barriers. However, a continuation of the steadfast commitment on the part of nurse leaders is essential to raise the standards of nursing practice to keep pace with current and future medical advances around the world. Nurses in Turkey need to be supported in their efforts to effect changes in the nurse practice act to allow the 108 nursing profession to assume greater responsibility for the management of patient care. Furthermore, larger numbers of baccalaureate graduates must be encouraged to practice in clinical areas than is currently the norm. This change will result in narrowing the gap between education and practice. New graduates who join the nursing profession assume the critical duties of a nurse at a young age, with inadequate educational background and practical experience. As in-service training is not offered in every hospital, when these new graduates start working they have no choice but to apply therapeutic methods with which they are probably unfamiliar and with which they have had no experience in training period. It is because of this injustice to nurses and to patients that definitions of the functions of nurses, determination of the quality and standards of service to be offered, and subsequent proficiency examinations covering minimum criteria for practice are strongly urged. Dentists Dentists are the major providers of dental care in Turkey. All dentists must be graduates of an accredited school. Some of the specialty areas of dentistry are orthodontics, oral and maxillofacial surgery, pediatric dentistry, periodontics, prosthodontics, and endodontics. The growth of dental specialties is influenced by technological advances, including implant dentistry, laser-guided surgery, orthognathic surgery for the restoration of facial form and function, new metal combinations for use in prosthetic devices, and the development of new materials and instruments. Most dentists practice in private offices as solo or group practitioners but the majority still do not practice as a group. Due to the expanded capacity of dental schools during the last 15 years, there has been an increase in the number of new dentists entering the field. Dentistry is also among the most competitive professions in the Turkish health care industry. The demand for dentists will increase with an increase in populations likely to be associated with dental needs. Pharmacists The traditional role of pharmacists has been to dispense medicines prescribed by physicians and dentists, and to provide consultation on the proper selection and use of medicines. The practice requirements include graduation from an accredited pharmacy program and practical experience or completion of a supervised internship. Most pharmacists are generalists, dispensing drugs and advising providers, and the majority of them independently own pharmacies in Turkey. Allied Health Professionals Allied health professionals constitute a major proportion of the Turkish health care work force. Allied health professionals are divided into two broad categories: technicians and technologists. Formal requirements for allied health professionals depend on the postsecondary educational programs. Technicians receive high school based training or two years of postsecondary education, and are trained primarily to perform procedures. They are supervised by physicians to ensure that care plan evaluation occurs as part of the treatment process. Technologists receive more advanced training. They learn how to evaluate patients, diagnose problems, and develop treatment plans. They must also have the training to evaluate the appropriateness and the potential side effects of therapies. Education at the technologist or therapist level includes skill development in teaching procedures to technicians. Social workers help patients and families cope with the problems resulting from long-term illness, 109 injury, and rehabilitation. Examples of technical jobs include dietetic assistants, electroencephalogram technologists or technicians, and sanitarians. Health services administrators organize, coordinate, and manage the delivery of health care services and provide leadership, direction, and strategic planning in health services organizations. Health services administration is taught at the master's level and undergraduate level in a variety of settings, including schools of medicine, public health, public administration, business administration, and allied health sciences, and the programs lead to a number of different degrees. 9. Conclusion The health care industry is one of the largest employers in Turkey. Health workers include physicians, nurses, dentists, pharmacists, psychologists, health services administrators, therapists, lab and X-ray technicians, social workers, and other allied health workers. In Turkey, health professionals are also among the best educated in the labor force. Health workers in Turkey work in a variety of settings, including all types of hospitals, health centers, health posts, pharmaceutical companies, outpatient facilities, community health centers, clinics, physicians' offices, laboratories, professional health associations, schools of medicine and allied health professions, and research institutions. The majority of health professionals are employed by hospitals, followed by health centers and maternal health and family planning centers. In the last 15 years, Turkey has experienced a sharp increase in its physician labor force. Despite a sharp overall increase in the number of practicing physicians, there are an increasing number of areas that experience a short supply of primary care physicians. Physicians are more likely to concentrate in metropolitan areas such as Istanbul, Ankara and Izmir because these bigger cities offer more opportunities for income generation, professional interaction, access to modem healthcare facilities and medical technology, continuing education and professional development, higher standards of living, recreational facilities, and quality of education for their family members. Problems that have contributed to the difficulties in recruiting physicians to rural areas include long working hours, frequently being on call, inadequate financial rewards, professional isolation, and limited access to high technology. The expansion of the number and types of health workers in Turkey followed population trends, advances in medical research and medical technology, disease and illness trends, and changes in health care financing and delivery of services. Today, population growth creates a big demand for health services, and this in tum generates a demand for health services providers. Scientific research and technological development in the medical field have contributed to specialization in medicine and have accordingly created new and varied types of medical technician positions. The widespread availability of insurance from the public sector has contributed to the increase in medical care utilization, which has created a greater demand for health services providers in all types of settings. With disease population profiles in Turkey changing from acute to chronic, resulting in increasing emphasis on behavioral risk factors, there is a need for more health workers who are formally prepared to address these health risks, their consequences, and their prevention to contribute to the overall health status of the nation. 110 There is no specific Human Resources Management Program in the health sector in Turkey; indeed, there is no such program in the entire civil service. Even though the recruitment of health personnel (as in other civil servants) is based on seemingly-objective selection criterna, the appointment of the selected health personnel is carried out by the central administration of the Ministry of Health, and there is no deliberate process in place for the matching of the appointment with individual skills and comparative advantages. Other problems include inappropriate distribution of health workers, low ratios of non-physician health workers to physicians, inadequate basic training of the health workers for service, insufficient numbers of teachers and academicians in the professional schools, inadequate supply of training materials, low professional status of non-physician professionals, inadequate salaries, promotions unrelated to performance, lack of incentives for working in rural areas and underserved areas, centralized health worker recruitment, inadequate staffing norms based on population and bed numbers rather than workload, outdated legislation on the responsibilities and authority of health personnel, absence of sufficient job descriptions, and inadequate coordination and monitoring of in-service training programs. There are great gaps in the distribution of health personnel among the provinces and regions. One of the basic assumptions that Turkish health personnel policy underlined in the 1970s and 1980s was that a great increase in the supply of health personnel would both solve problems of health personnel shortage and optimize or balance the geographic distribution of health personnel. There is no longer a shortage of health personnel but shortage of health personnel in rural and inner city areas continues to persist. To develop policies to correct the maldistribution of health personnel, it is essential to know which geographic areas are underserved, the reasons for this problem and the types and amounts of resources necessary to address it. Possible policy actions include changes in the wage and salary system, tax incentives for private physicians accepting solo or group practice in rural areas, financial rewards and fringe benefits for those willing to serve in shortage areas, development and modernization in the capacity of health care organizations where health personnel work (e.g. telemedicine), provision of scientific assistance to the health personnel to enhance their professional knowledge and skills (e.g. distance education) and changes in the legal structure to motivate health workers In addition to the skewed geographic distribution of physicians, considerable imbalance exists between physicians in primary and specialty care in Turkey. The supply of primary care physicians dropped sharply after late 1 980s, though the decline has moderated considerably since then, and today nearly 50% percent of all patient care physicians are specialists. The major driving forces behind the increasing number of specialists are the development of medical technology and better financial prospects. Rapid advances in medical technology have continuously expanded the diagnostic and therapeutic options at the disposal of physician specialists. Today most of the publicly funded hospitals with over 150-200 beds try to offer medical services in all major specialty fields and, consequently, employ specialists in those fields. Knowledgeable patients have started to turn to physicians in urban areas who provide them with the most up-to-date, sophisticated treatment. Specialists not only earn higher incomes, they also have more predictable work hours and enjoy higher prestige among their colleagues and from the public at large. The imbalance between generalists and specialists has several undesirable consequences. Having too many specialists contributes to the high volume of intensive, expensive, and invasive medical services, and to rise in health care costs. Seeking care directly from specialists is often less effective than using primary care because the latter attempts to provide early intervention before complications develop. Higher levels of primary care professionals are associated with lower overall mortality and lower death rates due to diseases of the heart and cancer. Primary care physicians have been the major providers of care to the poor, and people living in underserved areas. The continual shortage of primary care physicians in medically underserved areas often exacerbates access to care, particularly for the underserved. There is thus a need to achieve a better balance in the distribution of primary care physicians and specialists. Medical schools need to develop students' competencies in skills, values, and attitudes relevant to the practice of primary care. Their curricula can be oriented toward issues of special concern to generalists such as outpatient experience, public health concepts, disease prevention, and cultural, ethnic, and population-specific knowledge. They must also provide students with opportunities to work with the poor and the uninsured, and make such opportunities available in rural and other underserved areas. The Turkish health system has started to receive growing support for the development and refinement of standardized clinical guidelines in clinical decision-making and improving quality of care. The Ministry of Health has developed approximately 70 clinical guidelines for standard diagnoses for those physicians who practice in primary care settings. These guidelines help to keep physicians aware of the costs of treatment and encourage the use of reasonable diagnostic techniques. Involving physicians in the development of standardized practice guidelines also reduces the gap between methodological research and the implementation of research findings in actual practice and lowers the cost of treatment, though information, especially information not tailored to specific practice environment, will not by itself change physician behavior and thereby improve the practice of health care or people's health. A number of attempts have been made to address this maldistribution. For example, in an effort to alleviate the shortage of physicians, new medical schools were opened in underserved areas after 1985. A combination of various policy options has also been initiated. These options include regulation of health care professions' increases in salaries for those who work in hospitals, targeted programs for underserved areas, and health professional schools. In order to address the shortage in less developed areas, compulsory service for physicians was introduced in the early 1980s. Compulsory service already in existed for Health Vocational High School graduates who had studied as boarding students on government scholarships. The compulsory service policy has created problems in service quality and the job satisfaction of health personnel, however. Newly graduated personnel were generally employed in primary level services; however, they usually worked in a region unfamiliar to them with insufficient supervision and support. Compulsory service coupled with rapid increases in student intake has resulted in a supply-driven employment strategy. For this reason, employment, especially of physicians, in the Ministry of Health has expanded rapidly, putting pressure on finances. Targeted programs for underserved areas include setting up task forces, and incentive programs to encourage health professionals to practice in rural and underserved areas. Specific training can be directed at practice management, cost- effective care, preventive care, and the coordination of community resources and services at the medical schools. The Southeastem Anatolia Project (which in Turkish is abbreviated GAP, for Guneydogu Anadolu Projesi) is one example of economic development activities that aim to increase the 112 number of health workers and improve the health status of the region people. The Southeastern Anatolia Project is a comprehensive regional development project which not only includes the building of dams, hydroelectric power plants and irrigation systems on the Euphrates and Tigris rivers, but also targets developments in communications, housing, industry, education, health and other services. The project has shown tremendous improvements in terms of the region's health inputs and the health status of people in the region Health services have become much more available for people and a lot of health professionals have started to come and work in the area. In the past, very few private physicians and other health professionals wanted to serve in the region due to its low economic development. Today, more people are willing to come and work in the region, not only in the health sector but in other sectors as well, though the GAP region's health indicators continue to remain somewhat lower than the national averages. 113 114 CHAPTER 5: ORGANIZATION OF THE HEALTH SECTOR 1. Introduction Incentives and motivation to run health systems efficiently and effectively and produce improvements in health status need to be seen in the contexts of both the organization producing health care as well as the individuals in the organization. Public funding requires public accountability, which, in turn, means transparency and the ability to assess value for expenditure. From an organizational development perspective, the form and structure of the organization should reflect its function, and the skill needs, staffing and salary levels, job descriptions, autonomy of decision-making and accountability should flow from this. At the individual level, especially as organizations move from specialist and single function approaches to team work, several factors contribute to organizational effectiveness through employment and professional satisfaction, including compensation levels, professional freedom, status in the organization, need for public acknowledgment, financial and employment certainty, personal growth, or professional satisfaction. This chapter is devoted to an understanding of the industrial organization of the existing institutions in the health care system in Turkey. In particular, the focus is on identifying and isolating the institutional characteristics that influence and shape the organization, including the organizational mission, work-culture and ethics, the structure of the inherent organizational motivations and incentives, and the strengths and shortcomings in the organizational framework. The rest of the chapter is organized as follows. Section 2 introduces the main players in the health care financing, delivery and management system in Turkey. Section 3 discusses organizational behavior and decision-making in the context of the health system in Turkey. Section 4 concludes. 2. Key players in the health system Ministry of Health The Ministry of Health is the main government body responsible for health sector policy making, implementation of national health strategies through programs and direct provision of health services, and is the major provider of primary and secondary health care, maternal health services, children's and family planning services. The Minister of Health is the highest authority in the Ministry, and is assisted by an Under-Secretary who reports directly to him. In turn, five Deputy Under-Secretaries report to the Under-Secretary. The MOH currently comprises seven general directorates: (i) Primary Health Care; (ii) Curative Services; (iii) Mother and Child and Family Planning; (iv) Pharmacy; (v) Health Education; (vi) Personnel and (vii) Borders and Maritime Health. The organization is essentially structured along vertical lines of responsibility reflected in the topic-based, functional divisions within each directorate also at the provincial level and, to a certain extent, in health centers and posts. 115 The MOH is organized along specific vertical programs, represented by the specific directorates as noted above, with specific departments dealing with tuberculosis, malaria, and cancer control, and particular service delivery functions in secondary and primary care under the Curative Services and Primary Health Care directorates). The MOH is absorbed in running day-to-day services and does not have the capacity to focus on policy making, priority setting for the sector or for leading public health functions such as epidemiological surveillance, quality monitoring and regulation, accreditation of institutions, licensing of professionals, insurance regulation and oversight. At the provincial level, provincial health directorates (81) are responsible for administering health services provided by the MOH. The provincial health directorates are accountable to provincial governors for administrative matters and to the MOH for technical matters. Directors of Ministry of Health hospitals report to the Director General of Curative Services, while Directors of Health Centers report to the Director General of Primary Health Care. Ministry of Labor In 1983, the two separate Ministries of Labor and Social Security combined to form one major government agency - the Ministry of Labor and Social Security (MLSS). The Ministry deals with employment related issues, occupational health and safety, labor inspection, foreign affairs issues as they relate to labor, responsibility for Turkish workers working overseas, and coordination with the European Union. The Ministry also carries out personnel, communications/public relations and research activities in relation to its main responsibilities. Two social security institutions, Sosyal Sigortalar Kurumu (SSK) and Bagkur, operate as semi- autonomous bodies within MLSS. While the Ministry operates in a centralized manner, it also oversees a provincial structure with 22 regional labor directorates, and Inspector Boards in 10 provinces. A number of affiliated organizations have relationships with MLSS, allowing for a wider coverage by the Ministry in the 81 provinces. Within the core functions of MLSS (not including SSK and Bagkur), there are 1700 staff, of which 1200 are based at the head office in Ankara. In addition, the Inspection Board has 600 staff. Sosyal Sigortalar Kurumu (SSK) As discussed in detail in the chapter on supply of health services, SSK is a social security organization for private sector employees and blue-collar public sector employees and operates within MLSS. SSK provides health insurance and a range of other social protection insurance covering industrial accidents, occupational diseases, sickness, maternity, invalidity, old age and survivors insurance. The organization was established in 1946 as the "Workers' Insurance Organization" and was restructured in 1965 following the passing of Social Security legislation, which is now the governing legislation for SSK. 116 While a single system is used to collect both retirement and health insurance premiums, health premiums and health expenditure are separately identified in SSK accounts. l SSK has two other sources of funding in addition to premiums: income from fees paid on behalf of non-members using SSK facilities (for example Bagkur members), and income obtained through co-payments. About 18 months ago the social security and health insurance functions of SSK were separated and distinct branches for each established. Bagkur Bagkur is the insurance scheme for the self-employed.2 It was established in 1971 under law 1479 essentially for self employed people, but the scope of coverage has since increased to also include unemployed people, housewives, local community elders, people of Turkish origin (and carrying a foreign passport) who live in Turkey, and the unemployed wives of Turkish nationals working abroad. In 1983, access to insurance through Bagkur was extended to self-employed agricultural workers (under Law 2926). In 1985-86, the scope of insurance was also extended to include health insurance. Since February 1999, health insurance has been extended to agricultural workers. Bagkur has offices in all 81 provinces. Of the 6,000 authorized positions, only 4,300 of these positions are filled. From an organizational perspective, Bagkur became a semi-autonomous part of the Ministry of Labor in 1983 when the two separate Ministries of Social Security and Labor were merged. This was part of a general approach by government to rationalize government agencies. Bagkur is financially and administratively autonomous, while still being part of the Ministry of Labor. The scope of Bagkur's service coverage includes medical examination of an insured person (and the person's beneficiaries), laboratory tests for diagnostic purposes, and associated in-patient and outpatient treatment. All contributors to Bagkur have the same entitlement to benefits covering all outpatient and in-patient diagnosis and treatment. Bagkur does not own health facilities, but contracts with other service providers. At present, contracts exist with 133 health facilities, including the Ministry of Health, local government, university hospitals, private hospitals, state-owned economic enterprises and NGOs such as the Red Crescent Society. The contracts are either for specific services such as dialysis, cardiovascular, or dental services, or for general medical services. Within the 133 contracts, Bagkur also has contractual arrangements for prescriptions with a range of relevant societies such as the physician sections of Chambers of Commerce, and trades and crafts organizations. The Bagkur scheme works on a reimbursement basis in which the fees are determined independently by the institution. In-patient care is fully covered by the scheme. For outpatient care, drug purchases require a 20 percent co-payment from active members and a 10 percent co- payment from retired members. Copayments are also required for some other goods and services, 'The insurance services operated through SSK include: accident and occupational diseases; medical; maternity medical and income replacement, disability, old age and death insurance. 2 The scheme covers the self-employed who were excluded from the Social Insurance Law. This includes crafts- people, artisans, small business owners, technical and professional people registered through a professional chamber or association and shareholders of companies other than co-operatives 117 such as corrective eyeglasses. Bagkur contracts annually with the Turkish Pharmacists Association, covering prices for core drugs and with opticians for standard glasses and frames. Bagkur operates reciprocal social security arrangements with a number of other countries. In 1995, this included Libya, France, Denmark, Sweden, Norway, Switzerland, Belgium, Holland, Germany, France and the Turkish Republic of Northern Cyprus. Emekli Sandigi Emekli Sandigi (ES), the Government Employees Retirement Fund, was established in 1950 under Act No 5434 to provide retirement and invalid pensions for white-collar employees and military personnel. Initial coverage has been extended to include local government council members, parliamentarians, military school students and selected categories of people from state organizations. ES does not collect specific health insurance premiums from either active civil servants or pensioners. The scheme is basically financed by state budget allocations. ES finances all health care needs of retired government employees, with only a 10 percent drug co-payment paid by users. Medical and health insurance is a significant part of Emekli Sandigi. Key functions of Emekli Sandigi include payments for superannuation, payments for disability and invalidity in the workplace or through war, refunding deductions and making lump sum and cumulative payments, payment of retirement and marriage bonuses, provision of medical coverage, that include 100% of hospital treatment costs and 90% of drug costs, corrective eyeglasses, hearing aids etc., payments at the time of death of the contributor to the surviving spouse and children and lump sum payment, payments for dependent and poor people over 65 (undertaken by ES on behalf of the Turkish Treasury), and limited payments under Act No. 3480 for war victims. The Turkish Medical Association The Turkish Medical Association was established in 1955 under legislation that prescribed the Association's two main functions (or articles) of working: promote and protect physicians' rights, and advice policy makers on public health issues. The Association has a national Governing Body and 52 provincial chambers. Association members in each province elect committee members of the provincial chambers. The national governing body, including the Association's President, is elected by the provincial chambers. The President is elected for a two-year term, with the potential for re-election. The current President has been in her job for the past six years. Those in the governing roles are all volunteers. Eight people based in a central office in Ankara staff the organization. Their focus is on issuing medical publications, reporting on medical advances, medical journals, a bi-weekly newspaper, accreditation programs for physicians, continuous medical training, GP training, supporting the membership etc. About 90% of all doctors registered in Turkey are members of the Association. 118 The Association is not profit-oriented. It obtains its revenues from membership dues and from its training courses, including those through its General Practitioner Institute that runs regular training courses to upgrade the skills of general practitioners. 3. Organizational Decision-Making A head physician assisted by a chief physician, a head nurse and a hospital director, heads public hospitals. The director is in charge of financial, technical and some personnel matters on a daily basis. All management staff at MOH hospitals is appointed by MOH. SSK's General Directorate for Health Services appoints management staff at SSK hospitals, while management at university hospitals are appointed by the Higher Education Council. The main criteria for selection of the head physician are generally length of service and reputation as a doctor, rather than managerial capacity. Many head physicians lack management skills. All health personnel are recruited and assigned to specific hospitals centrally. Hospitals generally have shared corporate services and a human resources section dealing with personnel and administrative issues that reports directly to the Director. There is no set format governing the organizational and management structure of private hospitals, though there are some specific requirements established by law that have to be met by the directors of the hospital. Of the many factors that contribute to effective organizational decision-making systems and structures and associated accountability, transparency and the ability to produce high quality results, four that are considered here are: (i) a clear vision and sense of direction understood and adopted by all staff of the organization and actively pursued by senior management; (ii) management autonomy with associated accountability, including the autonomy to hire and fire staff; (iii) financial control with associated accountability; and (iv) shared organizational beliefs or values. These are discussed in turn. Vision, Mission and Strategy Vision and mission statements capture the purpose of an organization and reflect the strategic direction of the organization. They form a package outlining the directions and plans of the organization and provide the framework for broad priority outcomes and specific priority outputs expected. These statements are reflected in the structure of the organization that is designed to achieve the outcomes and goals, which in turn contribute to the vision of the organization. Ideally, job descriptions for all staff should reflect the vision, goals, outcomes and outputs of the organization. In Turkey, the organizational mission and purpose for state and public hospitals, government ministries, state insurance companies and for the Turkish Medical Association are essentially established through legislation. Overall, legislation appears to be more prescriptive than enabling, and the focus of organizational thinking is more on service delivery and managing within the system rather than developing vision and mission statements, and strategic plans. Some organizations have taken steps to develop a direction (vision), and a strategy, which is at the same time both forward looking and responsive. One example of this is the annual goal setting session of the Turkish Medical Association, from which they develop work plans for the 119 upcoming year. These annual sessions have identified gaps in service support and skill development of members and have led to specific projects on occupational health training and training for general practice physicians through a training of trainers approach. The Turkish Medical Association has also been able to connect with external support, and works closely with the European Union. Managerial Autonomy Issues related to managerial autonomy are discussed separately in the context of the Ministry of Health, the provincial health services, and the social security institutions. Ministry of Health The Under-Secretary of Health is appointed by the Minister of Health and exercises budgetary and financial accountability through the Ministry of Finance. Within MOH, five deputy undersecretaries and seven Director-Generals report to the Under-Secretary. Departments fall into two categories: those with a technical health responsibility, e.g., primary health care, mother and child services and curative services and those responsible for support services such as personnel, information processing, press and public relations, legal, and administration and financial affairs. Each of the Director-Generals has a number of departmental heads reporting to them. For example, the Director-General of Primary Health Care has 9 departmental heads reporting to him with responsibility for areas such as mental health, health centers, food safety and environmental health. The central office of the Ministry of Health has responsibility for the provincial health directors. More specifically, the Director-General of Personnel has the ability to retain or delegate powers to the provincial directors. The recruitment process for all Ministry staff is managed through the Personnel Directorate. Recruitment of new graduate doctors and nurses (including midwives) is through an appointment system based on MOH identifying and advertising areas where positions are available. Graduates identify three top priority areas and the selection is based on attempting to match vacancies with graduate priority preferences. Appointments are for two years. This is a relatively new system introduced about three years ago to ensure a fairer more transparent system of appointment than had previously been in place. While it is clearly more transparent than a system that favored more personal connections, there are some downsides as well. For example, areas with the highest need for services and skilled staff either has difficulty obtaining staff or are not able to retain them for long. For provincial health directorates and health centers and MOH hospitals, there is also no management ability to select appropriate staff, a major ingredient for customizing the design of service delivery and fostering management autonomy. A head physician manages public hospitals with responsibility for overall hospital operations and management. In general, the chief physician is appointed on the basis of length of service and medical reputation rather than management skills. A chief physician, head nurse and hospital administrator with responsibility for financial, technical and some everyday personnel matters assist the head physician. MOH appoints all hospital management positions. 120 For University Hospitals, the Minister of Health, following an election-type process which shortlists preferred candidates, appoints the President of the hospital. Senior staffing of university hospitals is made by the President of the hospital and requires approval by the Higher Education Authority. Provincial Health Services A doctor heads MOH's provincial health centers. This role has limited managerial autonomy. MOH's primary care facilities do not have their own budget and, as noted above, head doctors cannot chose the staff working in their centers. Health centers are under the supervision of the provincial health directorate. The provincial health director is responsible for day-to-day planning and administration of all primary care activities in the province and must receive approval of health services activities from Ankara as well as from the provincial governor. Doctors for primary care facilities are recruited and assigned to their posts centrally by the Personnel General Director while other health center staff are assigned by MOH to a particular province and distributed to specific primary care facilities by the Provincial Health Directorate. Health center operating expenses are paid through the provincial government and supplies are provided to the centers through the provincial health directorate, based on their availability and past usage rather than actual caseloads. In some areas, district level Group Doctors have been created to act as administrative head of a group of heath centers, but their position is ill defined. Currently, decision-making within the Ministry is highly centralized, with decreasing management and financial autonomy the further a service is from the center. During the second half of 2001, however, attention has increasingly been given to investigating cross-functional teams for managing the public health system. This move to addressing a multi-skilled and cross functional approach is reflected in the establishment of a committee of Directors-General to review the appropriateness of the current structure of the Ministry of Health, and to develop options for a Ministry structure, which more accurately reflect the health needs of Turkey and reinforce inter-connections between areas of health care provision. This includes initiatives that strengthen the connections between primary health care and maternal and child health rather than focusing on those aspects, which build separate specialization reducing both effectiveness and efficiency. This development is clearly recognition that the present structure is not conducive to improving the performance of the sector and that certain level of institutional reform will be required to bring health outcomes more closely to that of similar economies. SSK. Bagkur, Emekli Sandigi The Minister of Labor and Social Security appoints senior managers of Emekli Sandigi, Bagkur and SSK. The Director-General of the Health Directorate of SSK appoints health personnel to SSK hospitals in much the same way as MOH does for MOH and public university hospitals. Positions in each of these organizations are considered to be civil servant positions. There is limited ability to monitor performance, and virtually no ability to fire staff. A head physician, who has the responsibility for overall hospital operations and management, manages SSK hospitals. A chief physician, head nurse and hospital administrator with 121 responsibility for financial, technical and some everyday personnel matters assist the head physician. In general, the head and chief physicians are appointed on the basis of length of service and medical reputation, not necessarily on established management skills. Appointments are made by the General Directorate of Health Services in the Ministry of Labor. Financial Autonomy The Ministry of Health operates within an annual budget, with accountability to the Ministry of Finance. As in the provinces and MOH hospitals, managers do not have any flexibility to shift resources between and across expenditure categories. If resources are under-spent in a particular category of expenditure, lengthy procedures must be followed to amend formally the MOH budget before additional expenditures can be authorized. One example of this occurred when international funding was allocated to the sector after the earthquake. Expenditures could not take place in the absence of amendments to MOH's budget, and it took several months to process and was only approved much after the emergency. Hospitals are funded through two main sources: from the Ministry of Health for personnel and part of maintenance costs and from the revolving funds for additional capital costs and supplementary personnel costs. MOH pays personnel and maintenance costs directly from the Ministry's budget. Revolving funds receive their resources from fees paid by social insurance agencies (such as Emekli Sandigi and Bagkur) and by private patients. SSK hospitals have no revolving funds because the large majority of their patients are SSK beneficiaries. While revolving funds are collected and kept in the facilities, MOH hospital managers are bound by guidelines from the Ministry of Health Directorate of Curative Services. Thus, as per the guidelines, a maximum of 50% of the funds can be used for topping up salaries, if the hospital has no other outstanding bills. The payment of salary supplements is expected to be based on performance evaluations. Within the broad guidelines, facilities collecting the revolving funds can use the receipts in different ways. As noted before, public hospital managers have virtually no financial autonomy. MOH hospital budgets are approved by provincial health directorates, the Ministry's General Directorate of Curative Services and the Ministry of Finance. University Hospitals have slightly more autonomy. The University board can place a small surcharge on services that are provided on a semi-private basis. The overall system is one of centralized decision-making with little management and financial autonomy. The 1987 Basic Health Law designed to encourage greater autonomy for hospitals has not made a significant difference and impact, though some isolated initiatives have been taken by some hospitals to improve efficiency, effectiveness and accountability when opportunities arise. Shared beliefs and values Organizations can usually be highly effective when key individual personal values are congruent with core organizational values, and when there is a congruence of values among the variety of groups that comprise an organization. Values are the area where individuals and an organization most strongly connect or collide. There is a stronger chance of congruence when training or education is held in common and where there is a shared core professional commitment, e.g., 122 with health (nurses, doctors and other health professionals), engineering, and teaching. Culture is a set of habits that organizations develop and repeat until they are seen as normal or appropriate behavior. These behaviors may be derived from a variety of sources such as legislation or the behavior of a charismatic leader, or a combination of several factors. Box: Initiatives taken by some hospitals to improve efficiency and effectiveness Ankara. Hacettepe and Gazi Hospitals: Following a 1994 memo from the Ministry of Health, Ankara, Hacettepe and Gazi Hospitals outsourced catering and cleaning services. This has produced greater clarity and transparency and significantly reduced costs. Unfortunately, full benefits of this measure cannot be realized, because of the inability of the hospitals to move money from one budget line item to another, and to use the savings for spending on other priority areas. Hacettepe Children's Hospital Nurses in Hacettepe Children's hospital identified three key inter-connected problems that affected their effectiveness: structure of services, salaries, and difficulty in attracting nurses to the midnight to 8.00 a.m. shifts. The hospital management agreed and supported the nurses in developing a team-based and consultative approach to addressing the problems. After full consultation with the nursing staff, a team of nurses recommended additional payments (on top of existing performance payments) for the midnight to 8.00 a.m. shifts, and the incorporation of patient feedback and assessment by senior staff on work quality for any additional payment. The management accepted the recommendations, which have been implemented with full support from nurses, and the problem shift has now become very popular. An assessment of shared beliefs and values in the context of the health system in Turkey has to be carried out at two levels: within the organization of each major player in the health system, and across the boundaries of these organizations. At the intra-organizational level, cultural behaviors that dominate are based on shared understanding and frustrations over legislative constraints, lack of delegated decision-making and financial autonomy, and the lack of ability to hire and fire staff. Whether it be the Ministry of Health or the Ministry of Labor and Social Security, hierarchical structures and the civil servant ethos dominates relationships and organizational behavior at all levels, including policy making at the senior levels and implementation at the field level. With the exception of minor differences on the margin, both Ministries are organized in much the sane way, with the same kind of constraints imposed by law, practice and convention. To be sure, within these organizations and at individual levels, there exist common values of wanting high quality services that make a real difference for each individual patient and their families exist. There also exist individual and collective cases of using positive opportunities when they are available, for example, in developing team approaches, and collaborative and collegial approaches to decision-making. However, these are not all-pervasive and do not mark or personify either of the two organizations. More interesting than the intra-organizational aspects are the inter-organizational ones, for herein lie the differences that make the fragmentation of the health system a problem. As has been 123 recorded elsewhere as well, the health care system in Turkey is highly fragmented, in terms of financing as well as delivery of health care. Healthcare is provided by multiple providers in the public and private sectors and, in both sectors, financed in a number of different ways. The co- existence of a variety of funding sources, budgetary and non-budgetary, has resulted in a multi- tier system of health care production, financing and delivery, that varies across several parameters, such as quality of health services, where and by whom health care is provided, and how much is paid for it and by whom. Outpatient care is provided by the Ministry of Health in health centers and posts, by SSK hospitals and clinics for its members, and by private providers, all at varying levels of quality and prices. Similarly, inpatient care is provided in Ministry of Health hospitals, free to Green Card holders and on the basis of established fee-schedules to others, in University hospitals at established fee-schedules, in SSK hospitals to its members and in private hospitals. The fragmentation of the health financing and delivery systems underscores the need for shared beliefs and values that dominate decision-making, policy formulation and implementation. It is in this context that it is necessary to examine the perceived roles and responsibilities of the Ministries of Health and Labor. Between them, the Ministries of Health and Labor control most financing and provision of health care in Turkey, and yet their activities are not coordinated across any parameter. Besides preventive care, of which MOH is the sole provider, their activities overlap across all other services. They have facilities in the same towns and cities, conduct the same kind of procedures - though quality may vary, their personnel enjoy the same civil servant status, and they are both core governmental ministries. Yet, there is very little discussion and dialogue between them and almost no planning or collaboration at any level. Both Ministries have over time developed innovative approaches in such areas as management, administration, and delivery of hospital services, and yet there is no sharing at all, no exchange of ideas, and no comparison of efforts and outcomes. At the same time, there is little or no competition between the two. Neither function on the principles of profit making, neither seeks each other's patients, and neither competes for the same scarce human resources - because the human resources are not scarce. If at all there is any competition, it is for the scarce budgetary resources, for both get budgetary support for their health-related activities in one way or the other - MOH more directly and obviously than the MOLSS. This obvious absence of shared beliefs and values between the two organizations adversely affects, directly or indirectly, all aspects of health care. On the financing side, the fragmented nature of public expenditures on health makes it difficult to ascertain spending across different functions by different agents, which makes monitoring and regulation very challenging. Moreover, the fragmented nature of the budget increases the administrative costs, because the different funding sources entail different accounting conventions for the same activity. Further, the fragmentation of the budget compromises the importance of budget numbers, releases of funds, commitment of funds, and adequacy of budget as a basis for accountability. As far as the patient is concerned, the current system of responsibilities does not encourage integrated care for the patient, who then typically responds with less than adequate utilization of preventive health care. As far as general governance is concerned, it is difficult in the present system to track the flow of funds and the decision-making processes, and ensure accountability and transparency at 124 all levels. The net overall result is inefficiency in the use of public resources, ineffectiveness of the production and delivery of health care and inadequate utilization of health services by the population. 4. Conclusion Management and administration in the public sector health care system in Turkey are characterized by an hierarchical organizational structure, with a single model for appointments and promotions within hospitals and other organizations. The legislation ensures permanent employment for all civil servants, and there is limited performance assessment and limited managerial and financial autonomy. Promotions tend to be seniority based, and there is limited formal acknowledgment of the management skills required in senior positions. The hierarchical system of administration in the government does not provide the appropriate incentives for organizations or for individuals, and at the same time, the accountability for results and outcomes is also limited. In the process, health outcomes and clinical quality of care receive minimal attention and emphasis. Despite the limited institutional autonomy, however, there have been several cases in which managers have used their discretion when allowed to. In general, these discretionary activities have taken place in simple ways and at the micro-organizational level. For example, a variety of team-based approaches are being tested on an informal basis in some public hospitals. The revolving fund for hospitals provides some opportunity for performance-based rewards for staff. Out-sourcing limited hospital services - food and cleaning services - appear to have contributed to improving efficiency and reducing costs. Computerization of data and processes (Bagkur) also appears to have provided an opportunity for greater efficiency. At the same time, because of the impact of computerization on the whole of the organization and the multiple skills required, it also appears to have provided opportunities for team development and the adoption of change management processes. Identifying the lessons leamed from successful and unsuccessful implementation of these approaches warrants greater attention. The importance of management being held to account for the areas over which they have responsibility cannot be stated too strongly. Financial autonomy for managers is critical, for even though managers may not always be able to influence the size of their budget, they need to have the autonomy and authority within the budget allocated in order to achieve the results expected. Otherwise, a great deal of management energy can be spent on attempting to influence relationships with those who hold various forms of financial power rather than manage health care issues and create teams that work to achieve the desired results. In the present system, hospital directors and most health services directors are doctors. This is both a structural and a human resources capability issue. It is chance rather than design if the doctor (or the chief administrator and chief nurse) has the management capability to lead and manage the organization. With essentially a single model of health organizational management in Turkey, the current style of the physician-director is dominant, whether this is authoritarian, participatory, charismatic or laissez-faire. Recruitment procedures that actively seek management skills as the predominant focus are clearly an important step. Associated with this is 125 planned and deliberate skill development in management for the senior levels of health decision- making (nurses, administrators and doctors). Management capability of senior staff is extremely important in providing leadership for achieving the specific vision or mission of an organization. While the macroeconomic and organizational environments influence many aspects of health provision, it is the people who do the work who determnine much of the quality and efficiency of a service. Few managers have the opportunity to start afresh; most senior managers taking over the leadership role of an organization need to work with the current staffing and resources and do not have the possibility to hire and fire. Nevertheless, some flexibility and management autonomy in staff selection, retention and replacement on the basis of skills needed and staff performance is essential. 126 CHAPTER 6: HEALTH CARE FINANCING 1. Introduction Health status is an integral component of a country's human capital, and it is widely recognized that health improvements have a large, positive impact on the cognitive achievement of children and on the labor productivity of adults. As a result, access to health services has emerged as one of the most important benefits of systems of social protection, especially so in the context of countries like Turkey that have faced huge fluctuations in incomes in recent years. Poor health compounds poverty and turns hardship into misery, a situation that is made even worse if health care services are unavailable, unaffordable, restricted, delayed or of low quality. The extent, urgency and the seriousness of the problem in Turkey is self-evident, given the disproportionately poor health outcomes despite considerable economic progress in recent decades. The recent economic crises and the resulting strain on the fiscal situation have only exacerbated the already grim situation in the health sector. Taking cognizance of the situation, the government's own evaluation of the health sector - as enunciated in the Eighth Five Year Plan document - notes several problems that the health system faces in the areas of financing, organization, manpower, and provision of services, and calls for a complete restructuring so as to improve access and equity and enhance the effectiveness of public spending. This chapter examines health sector financing in Turkey, with emphasis on efficiency and equity in the context of public expenditures on health. The rest of the chapter is organized as follows. The public domain of public expenditures is described in Section 2. Section 3 contains a description of the structure of health financing in Turkey. Public sources of health care spending are discussed in detail in Section 4, which contains separate subsections devoted to the Ministry of Health, the social security institutions and the Green card program. A description of health care coverage is placed in Section 5, followed in Section 6 by an examination of the impact of health financing on the delivery of health care. Issues related to efficiency and equity are explored in Sections 7 and 8 respectively. Section 9 explores the linkages between health policies and public expenditures. Section 10 concludes. 2. Defining the Domain of Public Expenditures Several fiscal transactions define the public budget in Turkey. The "consolidated budget" consists of agencies with the "general" and "annexed" budgets. There are 45 agencies with general budget and 65 agencies with annexed budget. The "central government" sub-sector consists of the ministries and the legislative and judicial organizations (which fall under the general budget classification) as well as 10 General Directorates, the Higher Education Council and 53 public universities (included under the annexed budget classification), three social security institutions (Sosyal Sigortalar Kurumu, or the SSK, Emekli Sandigi and Bagkur) and about 21 autonomous agencies supported by transfers from the central government budget (the general government balance does not cover non-budgetary sources and expenditures of autonomous agencies). As defined, "budgetary funds" are those that are included in the general budget, whereas "non-budgetary funds" are not. (As a conditionality of the IMF Stand-By program, 69 extra budgetary funds were closed in 2000 and 2001. There are 6 extra budgetary 127 funds left, of which one, the Price Stabilization Fund, is budgetary. This fund will be closed in three years). The "general government" sector is derived by consolidating the 81 provincial, 3,005 municipal and 35,000 village level government units with the central government. In addition, there exist over 1500 "revolving funds" and a large number of "foundations." In practice, the revolving funds function as off-budget sources of supplementary revenue for central government agencies, largely in the health and educational institutions, but also in the ministries of forestry affairs and agricultural and rural affairs, which have a large number of such funds. Given that user charges and fees are the basis for revolving fund receipts, and since the revolving funds are primarily used to supplement salaries or pay for operations and maintenance expenditure of central government agencies, the appropriate treatment of revolving fund revenues and expenditure is to include them in an estimation of central government revenue and expenditure as "own revenues" of the parent agency. Consolidated budget revenues and the revenues of the social security institutions (excluding transfers received from the budget) are two relatively easily estimated elements of general government revenue. Other elements of the composite (in particular local government and non- budgetary funds) present some practical difficulties in estimation and interpretation given the complexity of their revenue sources and lack of clarity regarding the treatment of tax items earmarked for non-budgetary funds under the consolidated budget revenue. Equally, the treatment of revolving fund revenue under the consolidated budget is unclear and some aspects of the Ministry of Finance's (MOF) consolidated revenue budget presentation suggest that some revolving fund revenues may be partially included under "other special revenues." This is in addition to those funds that are clawed back into the budget through monthly "contributions" and end-of-year transfer of unused balances. Earmarked taxes and special purpose excise taxes provide a significant share of the resources available to the 73 budgetary and non-budgetary funds. An Education, Health and Sports Fund is financed in part by an ad valorem excise of 15 percent on tobacco products and alcoholic drinks (including wine and beer) as well as specific excises on cellular phones, gun licenses, plane tickets etc. Other earmarked taxes include (i) a surcharge of 10 percent on corporate and individual income taxes for three funds: the two major non-budgetary funds (Defense Industry Support Fund and the Social Aid and Solidarity Fund, which receive 5 and 4 percentage points respectively) and the Apprenticeship Educational Improvement Fund (which receives the residual 1 percent); (ii) the "supplementary Value-Added Tax (VAT) on wines, beers and non- alcoholic drinks and 30 percent of all supplementary VAT collections on tobacco and alcoholic drinks, earmarked for the Housing Fund; (iii) an additional ad valorem excise tax of 10 percent levied on tobacco and alcoholic drinks (including wine and beer) and earmarked for the Defense Industry Support Fund; (iv) the Municipalities Fund, Local Authorities Fund and the Provincial Administration Funds, which receive earmarked shares of a composite of tax revenues, withholding taxes on t-bills, tax rebates, petroleum consumption tax, and the motor vehicle tax; and (vi) The Social Fund, a budgetary fund, whose revenue is the 2 percent excise on tobacco products and alcoholic drinks, X-ray films and playing cards earmarked for its use. 128 The general government sector has expanded rapidly in the last few years, with particularly sharp increases occurring in 1999, so that the sector constitutes about 59 percent of the GNP in 2001. While much of this increase is due to the growth of debt service (net interest payment in the general government sector is 22.6 percent of GNP in 2001, up from 16.8 percent in 2000 and 14.4 percent in 1999), there has been a significant growth in non-interest expenditure as well. The central government budget (consolidated budget plus non-budgetary funds, autonomous institutions and social security institutions) accounts for about 91-93 percent of general government expenditure over this period. Local govemments account for the residual 9-7 percent of total general government expenditures.' 3. Structure of Health Financing Turkey spent about 9,207,615 billion TL on health care in 2001. Of the total, 7,604,855 billion TL came from public sources, and the remaining 1,602,760 billion TL from private sources. Overall, public expenditures constitute 82.6 percent of total health expenditures in Turkey, while private expenditures on health constitute the remaining 17.4 percent. Annually, Turkey spends about 135 million TL (US$112) per person on health (2001). Table 1: Expenditures on Health Care, 1998 (selected countries) Total Public Per capita total Per capita public expenditure expenditure on expenditure on health expenditure on on health health (% of in international health (international (% of GDP) total health dollars dollars) expenditure) Chile 7.5 39.6 664 263 Greece 8.4 56.3 1220 687 Mexico 5.3 48.0 443 212 Malaysia 2.5 57.7 168 97 South Africa 8.7 43.6 530 231 Poland 6.4 65.4 535 350 Turkey 4.9 71.9 326 234 Lebanon 11.6 18 594 107 Thailand 3.9 61.4 197 121 Tunisia 5.3 41.3 310 128 Russia 5.6 70.7 317 225 Romania 3.8 56.9 238 135 Source WHR 001 i1n order to get a comprehensive picture of the flow of funds generally and in the health sector in particular, and to avoid duplication, consolidation of expenditures is carried out on a gross basis, in the sense that transfers to other public mstitutions such as non-budgetary funds, local governnents and social security institutions are deducted from the consolidated budget figures and appropnately attributed to the lower level agencies. 129 As Table 1 shows, Turkey spends less on health (in PPP terms) compared to countries at similar levels of per capita GNP. Public expenditures on health in Turkey do not compare unfavorably with public expenditures on health in other countries; overall, however, per capita expenditures on health in Turkey are on the lower side compared to other countries. 4. Public Expenditures on Hlealth Public expenditures on health consist of expenditures incurred by the Ministry of Health, General Directorate of Coastal Health Services, Universities, Social Solidarity Fund, other Ministries and agencies, local govermments, state enterprises, civil servants, and social security institutions: Sosyal Sigortalar Kurumu (SSK), Emekli Sandigi and Bagkur. Private expenditures on health consist of out-of-pocket treatment and pharmaceutical expenditures incurred by individuals and households, and by companies and individuals contributing to private insurance schemes. Because of the overlap between financing agents and providers of services - the MOH, for instance, finances health care and is also a provider of services - certain items appearing as health expenditures in one agent's accounts appear as revenue items in another agents account. MOH and university health facilities are allowed to impose user charges for their services on the basis of a schedule of prices agreed between the MOH and the Ministry of Finance (Table 2). The price list is prominently displayed in the health facilities and is published in the official gazettes. All monies thus received from user charges and charges for procedures go into the institution's revolving funds, which are based in facilities, and independent of the MOH or the universities that own the facilities. Table 2: Average Fees in Public and PrivateHjospitas (mllion TL, Jul 2001 University Hospital Private Hospital MOH Hospital SSK Hospital Normal rate evolvin (Bayindir Hospital) _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _______ F u n d rate Small Surgery 36 49.2 36 63 300 Big Surgery 360 432 360 630 6000 X-Ray (Liver) 8 8 8 14 36.5 Birth Operation (Normal) 20 20 20 35 1440 Colonoscopy 30 30 30 52.5 275 General Examination 2.75 3.3 2.75 4.8125 70 Bed Price (Second Class) 5 4.8 5 8.75 90 Bagkur and Emekli Sandigi are two public institutions that purchase health services on behalf of its beneficiaries from the MOH, SSK and university hospitals, and these expenditures are recorded as revenues for the MOH and university health facilities. In turn, revenues of MOH and university health facilities are matched by expenditures incurred in these facilities, and to this extent, simply adding up all public expenditures results in double-counting of certain items of expenditure. One way of getting round this problem is by making an assessment of the double- counted expenditures and subtracting from the final total. This, however, overestimates the 130 expenditures incurred by some of the spending agencies, since the double-counted expenditures are not necessarily adjusted at that level. To avoid this, an adjustment is made to the flow of funds at each stage of the transaction so that only the net figures by source are considered in the final summation. In other words, in listing the expenditures by source rather than by use, expenditures are classified by point of origin and the revolving funds are treated as intermediate revenue- expenditure centers. The only exception is out-of-pocket payments made by patients into the revolving funds of MOH and University health facilities, which are treated as expenditures by source. In keeping with the convention of treating the revolving fund receipts as public monies and in the interest of classifying all expenditures by source, the analysis that follows limit the revolving funds to out-of-pocket payments only. This is not to undermine the salience and importance of revolving funds, however, and accounting and welfare issues related to revolving funds are discussed in a separate section. Total public expenditures on health (at 2001 prices) increased at an average annual rate of 11 .1 percent between 1996 and 2001. Population grew at an average annual rate of 1.6 percent during this period, so that per capita health expenditures increased by 9.1 percent per annum during this period (Figure 1).2 Both total and per capita public spending on health increased in real terms between 1996 and 2000, but experienced a slight decline thereafter. Figure 1: Public Expenditures on Health, 1996-2002 (2001 prices) 10,000,000 _ 140 ~18,000,000 120 0 ~~~~~~~~~~~~~~~~~~100 U)6,000,000 -t r 4,000,000 -6 2,000,000 0 ~~~~~~~~~~~~~~~0 1996 1997 1998 1999 2000 2001 2002 Total Public Expenditures on Health - Per Capita Public Expenditures on Health Table 3 describes public expenditures on health by source for the period 1996-2002 at 2001 prices. Note that the share of the consolidated budget in total public expenditures on health fell from one-half to one-third between 1996 and 2002, with the largest decline being recorded by MOH expenditures, the share of which fell from one-third of total public expenditures to one- 2 In this and subsequent analysis, all expenditures figures till and including the year 2000 are actuals. Expenditures for 2001 are estimated expenditures and not necessarily reconciled Expenditure figures for 2002 reflect budgetary outlays. 131 fifth. At the same time, the share of social security institutions in total public expenditures increased from 37.9 percent to 53.4 percent during this period, reflecting the growing importance of health insurance in financing health expenditures in the country. The share of revolving funds, as classified under the "original source" definition, increased from 4.5 percent to 7.7 percent between 1996 and 2002, reflecting the relativelr minor but growing importance of patient expenditures on health incurred in public facilities. Table 3: Public Expenditures on Health, 1996-2002 (bin TL, 2001 prices) Institution 1996 1997 1998 1999 2000 2001 2002 Cons. Budget 2,292,347 2,802,336 2,933,116 3,290,082 2,922,020 2,852,006 2,462,724 Percent of total 50.3 49.' 45.1 44.9 38.0 37.5 33.1 Ministry of Health 1,505,532 1,829,271 1,851,948 2,095,367 1,685,452 1,580,346 1,434,002 Percent of total 33.0 32.3 28.5 28.6 21.9 20.8 19.3 Gen. Direct. of Coast Health 2,433 3,019 3,004 3,238 3,375 9,054 3,181 Percent of total 0.1 0.1 0.0 0.0 0.0 0.1 0.0 Universities 205,504 280,497 257,650 245,257i 278,003 230,501 257,184 Percent of tota 4.5 5.0 4.0 3. 3.6 3.0 3.5 Other Cons. Budget Agencies 2,610 9,464 7,352 5,981 5,932 3,803 5,348 Percent of total 0.1 0.2 0.1 0.1 0.1 0.1 0.1 Civil Service Health Exp. 576,269 680,085 813,162 940,240 949,259 1,028,302 763,008 Percent of total 12.6 12.0 12.5 12.8 12.3 13.5 10.3 Funds 265,159 179,853 151,598 89,571 216,230 233,367 225,954 Percent of total 5.8 3.2 2.3 1.2 2.8 3.1 3.0 Social Sec. Ins. 1,728,757 2,283,931 3,043,134 3,691,149 4,010,260 4,085,116 3,974,010 Percent of total 37.9 40.4 46.8 50.3 52.1 53.7 53.4 Revolving Funds 205,303 308,181 173,598 43,538 325,038 236,765 576,123 Percent of total 4.5 5.4 2.7 0.6 4.2 3.1 7.7 Ministry of Health 110,148 129,190 69,753 20,422 188,194 122,533 311,304 Percent of total 2.4 2.3 1.1 0.3 2.4 1.6 4.2 Universities 95,155 178,991 103,845 23,116 136,844 114,232 264,820 Percent of tota 2.11 3.2 1.6 0.3 1.8 1.5 3.6 Local Authorities 17,506 22,478 129,061 144,017 144,652 93,016 96,790 Percent of total 0.41 0. 2.0 2.0 1.9 1.2 1.3 State Economic Enterprises 52,116 60,559 69,443 77,062 81,324 104,525 103,134 Percent of total 1.1 1.1 1.1 1.1 1.1 1.4 1.4 Total 4,561,188 5,657,337 6,499,951 7,335,418 7,699,523 7,604,855 7,438,734 Percent of total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 3As indicated earlier, the receipts of the revolving funds are treated as public monies, irrespective of the source, because these resources are used for almost exactly the same purposes as budgetary allocations. For this reason, MOH and Umversity facilities report the revolving fund receipts quite like they report their budgetary receipts, from either the general budget or the consolidated budget. Computed in this manner, the share of MOH expenditures decreased from 39.6 percent of total public expenditures on health in 1996 to 29.6 percent m 2002, and the share of Umversities actually increased from 12.4 percent to 13.5 percent of total public expenditures on health dunng thls period. 132 Table 4 presents details of public expenditure for the 2001. Note that to avoid double counting, the figure of total public expenditures on health is arrived at by adding only a part of Emekli Sandigi and Bagkur expenditures on health, and part of expenditures on health by civil servants. Table 4: Public Ex enditures on Health, 2001 (current prices, billion TL) INSTITUTIONS PERSONNEL OTHER TOTAL INVESTMENT TRANSFER TOTAL SOURCES 1 MINISTRY OF HEALTH 2,307,449 2GENERAL BUDGET 1,165,117 65,424 1,230,541 84,805 15,000 1,330,346 MoF & SPO 3 Green Card* 250,000 250,000 4 REVOLVING FUNDS 253,653 382,947 636,600 141,268 67,641 845,509 MoH 5 Emekii Sandigi 208,319 6 BAG-KUR 107,568 7 Civil Servant Health Exp. 272,089 8 Green Card* 135,000 9 Other Public Ins.* 19,004 10 Out of Pocket 103,529 11 FUNDS (3418) 11,343 11,343 120,000 251 131,594 MoH 12 GEN. DIRECT. OF COAST HEALTH 1,400 290 1,690 7,280 84 9,054 MoF & SPO 13 UNIVERSITIES 960,601 141ANNEXED BUDGET 121,808 5,009 126,817 94,407 9,277 230,501 MoF & SPO 15 REVOLVING FUNDS 216,809 406,125 622,934 49,350 57,816 730,100 MoF & SPO 16 Emekli Sandigi 177,457 17 BAO-KUR 91,632 18 Civil Servant Health Exp. 231,779 19 Green Card* 115,000 20 Other Public Ins.' 16,189 21 Out of Pocket 98,043 22 SOCIAL SOLIDARITY FUND 101,773 SPO 23 OTHER CONS. BUDGET 3,803 24 GENERAL BUDGET 3,803 3,803 MoF & SPO 25 ANNEXED BUDGET MoF & SPO 26 CIVIL SERVANT HEALTH EXP. 1,028,302 27 181 Medical Treatment 503,868 503,868 503,868 28 182 Medicine Exp 524,434 524,434 524,434 29SOCIAL SECURITY INSTITUTIONS 4,085,116 3OSSK 1,911,900 57,000 1,968,900 SPO 31 Emekli Sandigi 1,120,216 SPO 32 6,300 734,440 3 BAGKUR 996,000 34 _ _ _ _ _ __796,800 SPO 35 SEE 100,000 4,525 104,525 SPO 36 LOCAL AUTHORITIES 93,076 93,076 SPO _TOTAL 2,283,221 871,138 5,670,127 661,814 150,069 7,604,855 Assumptions 1. For ES, 65 percent of expenditure are treated as health expenditures 2. For Bagkur, 80 percent of expenditure are treated as health expenditures 3. Other public institution means SEE and Local Authorities 4. Total Health Expenditure figures are calculated as follows: THE = 1+12+13+22+23+28+30+32+34+35+36 MOH = 2+4+1 1, Universities= 14+15, SSI = 30+32+34; CS= 28 133 4.1 Ministry of lHGeaRth Health expenditures by MOH as a percentage of GNP have, by and large, remained unchanged during 1996-2001 (Figure 2). Excluding the revolving funds of MOH facilities, health expenditures by MOH increased from 0.78 percent of GNP in 1996 to 1.03 percent in 1999, and then fell to 0.94 percent of GNP in 2001. In terms of the share of the total consolidated budget, MOH expenditures on health fell from 2.95 percent in 1996 to 2.87 percent in 1999, declining slightly thereafter to 2.19 percent in 2001. The share of MOH expenditures on health as a percentage of total public expenditures on health has fallen significantly over the years, from 33 percent in 1996 to 20.8 percent in 2001. Including the contributions of the revolving funds of MOH facilities, the share of health expenditures as a percentage of total public expenditures on health by MOH fell from 39.6 percent in 1996 to 28.6 percent in 2001. Figure 2: IXIIOH Heahth Expendituires, 19g6-2002 1.2 3.5 0.8 ~~~~~~~~~~~~~~~~~~~~2.5 2 ~0.6 -_: -_ 1.5 0.4 * 0.2 -0.5 0 0 Ii_ __0 1996 1997 1998 1999 2000 2001 2002 -- Share of GNP Share of Consolidated Budget Revolving Funds The presence of revolving funds and other special funds in the resource pool of MOH and universities merits special discussion, not only because of their salience but also because of the way in which they interact with the regular budgetary sources of financing. Off-budget options of receiving and spending public funds are attractive for a variety of reasons. All budgetary agencies and provincial and municipal administrations are subject to the provisions of the General Accounting Law, the Public Tender Law, the Travel Allowance Law and the Civil Servants Law. The General Accounting Law, more popularly known as Code 1050, lays down individual and office responsibilities (articles 11, 13-15, 22), rules related to "visa" requirements of Ministry of Finance (article 64), and procedures for advance payments and credits related to purchases (article 83). The rules of procurement are laid down in the Public Tender Law, more popularly known as Code 2886, and covers all issues related to procedures and preparation of bidding and evaluation, settling of a contract, general provisions related to purchase, and a variety of prohibitions. In addition to the Codes 1050 and 2886, expenditures under the 134 consolidated budget are also subject to Travel Allowance Law 6245, and Civil Servants Law 657. All these codes and laws are rather restrictive in that they provide very limited flexibility in procurement procedures, payment mechanisms, compensation levels, etc. Moreover, the consolidated budget allocates funds according to line items, leaving very little scope for any subsequent changes. Revolving Funds are not subject to any of the above restrictions. They have their own accounting regulations and procurement laws which are far less restrictive in the conditions they impose; in addition they allow for additional payments for personnel employed in these organizations. Procurement procedures of revolving funds attached to budgetary institutions and of special funds established under Code 3418 are determined by regulations issued by the Council of Ministers - number 18478 of 1984 (goveming special funds) and number 18479 of 1984 (governing revolving funds). The procurement procedures for revolving funds are simpler compared to consolidated budgetary institutions, largely because of the absence of the "visa" system that is required in the budgetary process. In general, as long as the principles of openness and fairness are not compromised, the revolving funds can follow procurement procedures in quite the same way as practiced in the private sector. Of the 727 hospitals owned and operated by the MOH, 536 hospitals, i.e., 73.7 percent of all hospitals, accounting for 96 percent of all hospital beds, have revolving funds (Table 5). Some hospitals have more than one revolving fund, so that there are 562 revolving funds in MOH facilities. Of these, 440 revolving funds are in state general hospitals, 23 in children hospitals, 46 in Women and Children hospitals and 53 in other facilities. In addition, there are 43 revolving funds that operate in university hospitals. Table 5: Distribution and Collections of Revolving Funds, 2001 MOH Facilities University Facilities Children & Total Collections Total Collections Region State Chest Women's Other RF (billion TL) RF (billion TL) Marmara 74 7 8 18 107 159,021 10 144187 Aegean 71 3 6 5 85 169,485 6 115163 Mediterranean 52 1 5 5 63 93,120 4 91796 South East 33 1 5 2 41 45,066 4 40954 Anatolia ._ East Anatolia 49 1 3 3 56 56,092 4 54328 Black Sea 84 6 8 12 110 104,667 3 33244 Central 77 4 11 8 100 218,059 12 250428 AnatoliaII I II I Total 440 23 46 53 562 845,509 43 730100 Welfare Implications of Revolving Funds While the revolving funds, foundations, etc. provide for an innovative way out of a budget- constrained high-inflation environment, they also set in motion perverse incentives, especially, allowing service providers to legally ask for extra paymnents and donations for health services, 135 with little or no control or monitoring of the practice. Since the willingness to pay for health services at the time of purchase is not necessarily commensurate with the ability to pay of the person demanding it - the patient is willing to make a high payment at the time of treatment even though her ability to pay may be constrained - such a system of mobilizing resources can have serious equity implications. Further, since health care providers are not necessarily the best judges of a patient's ability to pay, this system also has potentially serious adverse welfare consequences. Moreover, since providers in organizations with access to these non-budgetary sources of funding are compensated at two levels - a salary from their civil service employment and a compensation from the pool of funds that they collect by providing services on a fee-for- service basis - there is a potential problem of supply-side moral hazard resulting in over-supply of health services and increasing costs. In this environment, marked by a proliferation of revolving funds, a natural question to ask is to what extent the public finance management system in general - and the budgetary system in particular - effective in ensuring aggregate fiscal discipline and resource allocation based on strategic priorities. The answer is not very obvious. On the one hand, the 600 or so revolving funds that operate in health care are not particularly accountable for their use of resources and the achievement of their objectives, and even though they do produce annual reports or audited accounts of their activities, there remains an element of non-transparency in the use of public funds and a potential opportunity for misuse of funds. Revolving funds reduce the comprehensiveness of the budget and the effectiveness of budgetary controls, compromising the ability of the budgetary system to determine and transparently reflect allocations across and within sectors. On the other hand, the revolving funds allow the health facilities to raise the much-needed resources that, if channeled effectively, can be quality enhancing. Revolving funds are used to finance salary add-ons for public physicians, whose regular govermnent salaries tend to be quite low, and finance purchase of medical equipment, computers and medical supplies used in patient treatment. In the final analysis, tolerance - or even support - for this system of raising resources would depend on the impact it has on those seeking care and paying for it. Should the Revolving Funds be incorporated in the Budget? Incorporating the revolving funds in the budget would have two contradictory effects. On the one hand, it would subject all available funds to the laws and codes governing budget funds, with the attendant rigidities and low levels of innovation; on the other hand, incorporating all non-budgetary funds in the budget would eliminate the perverse practices that are present in the existing system. The final solution lies in the net result of the two conflicting outcomes, and it is difficult to conclusively favor either approach. What is clear, however, is that health service providers have to be adequately compensated, and unless an incentive-compatible system can be designed and enforced, the budgetary problems will not be resolved and the quality of health care not improve. 4.2 Social Security lEnstitutions SSK, Bagkur and Emekli Sandigi comprise Turkey's social security system, and cover more than 85 percent of the country's population. The share of health expenditures of the social security institutions in GNP has more than doubled between 1996 and 2001, increasing from 0.96 percent in 1996 to 2.2 percent in 2001 (Figure 3). The dependency ratio (i.e., the number of dependents 136 per premium paying active member) in 2000 was 4.41 for SSK, 3.54 for Bagkur and 3.51 for Emekli Sandigi. Figure 3: Health Expenditures by Social Security Institutions (% of GNP) 2.5 0.. 2 0 1.5 _-_ 0 .5 . - L.*x 0.0 1996 1997 1998 1999 2000 2001 2002 -Total - SSK Emekli Sandigi Bagkur Sosyal Sigortalar Kurumu (SSK) SSK is a social security institution for private sector employees and blue-collar public workers, and functions both as an insurer and a health care provider. SSK services are funded by premiums paid by employees and employers and budget transfers to compensate its fiscal deficit. While a single system is used to collect both retirement (pension) and health insurance premiums, health premiums and expenditures are separately identified in the SSK accounts. Members primarily use SSK services for health care, but are referred when needed to MOH, University and private health institutions. In general, SSK does not provide or pay for preventive services. There are two main branches of insurance within SSK: short-term and long-term branches. The short-term branches include cover employment injuries and occupational diseases, maternity, and sickness; long-term branches cover invalidity, old age, and death benefits (survivors). Each of these is discussed below. Short-term branches Employment injuries and occupational diseases Employment injury refers to an accident occurring in any circumstance or situation which causes - immediately or subsequently - a physical or mental disability to an insured person. Occupational disease refers to a case of temporarily or permanently sickness, or disability or mental trouble suffered by an insured person due to continuing factors characteristic of the conditions required to perform their work. There is no qualifying period with regard to the assistance concerning employment injuries and occupational diseases. Premium (contribution) 137 rate varies from 1.5 percent to 7 percent of eamings according to classification and degree of danger of the work place. Only the employer pays this premium. Matemity Maternity insurance covers cases of matemities of the insured women and the uninsured wife of the insured men. Maternity insurance benefits are also provided in cases of legal abortion and unviable births. In order to be entitled to matemity benefits, premiums - fixed at the rate of 1 percent of earnings, payable entirely by the employer - must have been paid up for at least 90 days for the insured women, and 120 days for the insured men, in the course of the year proceeding the birth. Sickness Sickness insurance covers all cases of sickness, with the exception of those within the coverage of the employment injuries and occupational health. In addition to the insured person, spouses, dependent children, persons drawing income against permanent incapacity for work, pensioners and their dependent spouses, children and parents are also covered, but under different conditions from sickness insurance. Sickness insurance contributions must have been paid up for at least 60 days have to be in the course of the last six month preceding the date on which the sickness manifested itself. Spouses and dependents are entitled to medical benefits provided the sickness insurance contributions are paid up for at least 120 days in the course of the year preceding the date on which the sickness manifested itself. Generally speaking, the sickness insurance premium rate is 11 percent of earnings, of which 55 percent is paid by the employer and 45 percent by the insured person. The premium rate for apprentices (as defined under Article 3-11-B of Code 506) is 4 percent of earning, shared equally by the employer and the insured person. Long-term branches Invalidity, old-age benefits and death benefits payable to survivors Premium rates for invalidity, old age and death benefits payable to survivors are 20 percent of earnings, of which 55 percent is paid for by the employer and 45 percent by the insured person. Premium rate is 22 percent for miners. The average total burden of SSK premiums, including employee and employer premiums as well as contributions to unemployment fund, is almost 41 percent. Employees contribute about 40 percent of the premium, while the employer contributes about 55 percent. The remaining 5 percent comes from the government budget. Three groups of people are covered by SSK. The first group, subject to Code 506, is eligible for three schemes: compulsory insurance, voluntary insurance and collective insurance. Persons employed by one or more employer under a service contract are considered to be "compulsorily insured." Persons registered under Code 506 can be "voluntarily insured" till such time as their employment contracts are finalized. And lastly, SSK may conclude agreement with employers or with societies, associations, trade unions and other organizations in order that person who are not insured under Code 506 may be covered by group insurance for one or more of the branches of insurance covering employment injuries, occupational diseases, sickness, maternity, invalidity, 138 old-age and death benefits, under general conditions to be approved by the Ministry of Labor and Social Security. The second group, subject to Codes 3308 and 506 (Article 3-II-B), covers apprentices. According to the principle of apprentice agreement, an apprentice is a person whose work skills and experience are developed in a job field. Defined thus, all apprentices are eligible for employment injuries, occupational diseases and sickness insurance as described under Code 506, and insurance premium as described in Code 1475 is payable at the rate of 4 percent of 50 percent of minimum wage, as applicable for the insured's age. The third group, subject to Code 2925, covers persons who do not come under the coverage of any social security law and do not take invalidity benefit, old-age pension, or permanent full incapacity income. Such persons voluntarily participate in the insurance schemes of SSK. With the exception of those voluntary active and collectively insured, all others, including dependants, insured with SSK are covered by the health insurance scheme of SSK. Social Security Institution of Craftsmen, Tradesman & Other Self Employed (Bagkur) There are two groups of persons who are required to be compulsorily covered by Bag-Kur. The first group is that of artisans, craftsmen, merchants, industrialist, other self-employed persons and village elders of quarters or villages who are responsible to govern are obliged to register with Bag-Kur under the provisions of Code 1479 as compulsory insurer. Insurees under Code 1479 are also eligible to benefits of long term insurance, including old age, invalidity, and survivors insurances, and of health insurance. The second group is that of agricultural sector employees not covered any social security organization and not working for an employer under a service contract, who are obliged to join Bag-Kur under Code 2926. Insurees under Code 2926 are also eligible to benefits of long term insurance, including old age, invalidity, and survivors insurances, and of health insurance. Both these groups are considered to be "compulsorily insured." Unemployed housewives and unemployed spouses of Turkish employees abroad, and foreign citizens residing in Turkey are also eligible to join Bag-Kur. They are considered to be ,'voluntarily insured." Bag-Kur also has two branches of insurance: short-term and long-term branches. The short-term branches covers health insurance, while the long-term branches provide invalidity, old age, and death benefits (payable to survivors). The premium rate for all branches is 40 percent of monthly earnings, half of which covers long-term insurance and half covers health insurance. Insurers under Code 1479 pay premiums monthly, while those under Code 2926 pay quarterly. All insurers and their dependents are covered by health insurance scheme of Bag-Kur. In order to be entitled to health insurance benefits, the insurees are required to pay health insurance premiums for at least 8 months, and have no record of default of health insurance and long-term insurance premiums. Dependents of those who qualify for insurance coverage under Bagkur but 139 who make use of health insurance facilities provided under other social security laws and special laws are not covered by health insurance scheme of Bagkur. All contributors have the same entitlement to health benefits, which cover all outpatient and inpatient diagnoses and treatment. Bagkur operates no health services of its own, but contracts with other public sector providers. The scheme works on reimbursement system where fees are determined independently by the institutions. Pension Fund (Emekli Sandigi) Emekli Sandigi (ES) covers active and retired civil servants. Health expenditures of active insurers and their dependents are financed by the budgets of their public institutions, while health expenditures of pensioners and their dependents are financed by Emekli Sandigi. There is no specific health insurance premium collected from either active civil servants or pensioners. As in the case of SSK and Bagkur, there is a transfer payment to Emekli Sandigi from the state budget to finance its deficits. All insurers (active civil servants and pensioners) and their dependents are covered by health insurance scheme of Emekli Sandigi. In general, dependents that make use of health benefits provided under special laws are not covered by health insurance scheme of Emekli Sandigi. 4.3 The Green Card PProgram The "Green Card" program was introduced as a mechanism to ensure targeted delivery of health services to the poor who have little or no capacity to pay for the services. Enacted under Law 3816 of 1992, it provides free health care services to its beneficiaries. The Green Card program is seen as a transitional solution until a general health insurance system is introduced. To qualify for a Green Card, an individual should be a Turkish citizen, not be covered by any social security system, and have a monthly income of less than one-third of the minimum wage (excluding taxes and social security premiums) as determined by Code 1475. The Green card program does not cover medical treatment expenditures of passive insured people like soldiers and students of higher education. On the other hand, those who are entitled to receive free health services under any other law can continue to make use of this facility even if they do not apply for the green card. According to Code 3816, the rights of these people are legally guaranteed. Those who cannot pay for health services and are not able to get a Green Card can have state- financed health care under Code 3294 (Law on Incentive to Social Aid and Solidarity Fund). Applications for Green Cards are finalized in the districts by the Councils of Provincial Administration. The Councils determine eligibility based on verification of applicant's incomes, and make recommendations to the provincial Governor who then issues the Green Card. At present, approximately 11.3 million citizens benefit from this scheme (Table 6). Istanbul has the lowest percentage of population covered by Green Card (5.5 percent), followed by Tekirdag (6.5 140 percent), Ankara (6.6 percent), Izmir (7.8 percent) and Canakkale (8.3 percent). Bingol has the highest percentage of population covered by Green Cards (48 percent), followed by Adiyaman (41 percent), Sinop (39.4 percent), (Siirt 937 percent) and Kirsehir (35.1 percent). Table 6: Population Covered by Green Cards, 1992-2001 Green Card Green Cards Total Population Years Applications Awarded Population Covered 1992 910,873 365,509 58,179,932 0.6 1993 2,971,722 2,211,341 59,052,631 3.7 1994 4,469,935 3,671,452 59,938,421 6.1 1995 5,977,439 4,996,728 60,837,497 8.2 1996 6,948,328 5,713,066 61,564,398 9.3 1997 8,246,854 6,666,978 62,865,574 10.6 1998 9,592,807 7,760,443 64,166,750 12.1 1999 10,944,955 8,721,629 65,505,088 13.3 2000 12,555,783 10,125,706 67,844,903 14.9 2001 14,213,305 11,346,250 69,272,291 16.4 The Green Card program is managed by the Ministry of Health. Medical treatment expenditures are determined by a regulation issued by the MOH, under which the provider institutions send an invoice detailing all charges to the MOH. These payments are cleared by the MOH within 15 days. The Green Card program is financed via general taxes, and health expenditures of green card holders are covered from the appropriation in the transfer item of the MOH budget. Appropriations granted by the Parliament cannot be exceeded in a fiscal year without prior authorization of Parliament, though a draft supplementary appropriation bill proposing additional financial commitments can be submitted to the Parliament indicating the requirement of additional resources and further borrowing. However, this appropriation has been exceeded without prior authorization of Parliament ever since the program was introduced, even though the Court of Accounts in Turkey (Sayistay) has declared this spending illegal. Since 1992 when the scheme was first initiated, a total of approximately 1.5 billion USD has been spent under the scheme (Table 7). End-of-year expenditures have continuously exceeded revenues under the Green Card program, and large deviations have been observed between initial appropriations and year-end expenditures over the past few years. This deviation seems to be mainly due to underestimations in initial appropriations. The level of appropriation is determined by the High Health Coordination Council under Article 9 of Law 3816, supposedly on the basis of number of holders of green card and estimated annual average health expenditure. However, this has not happened in practice, and even though the number of Green Card holders has gone up and treatment costs have increased, the appropriation for the year 2002 is less than that of 2001. 141 Table 7: Appropriations andExpenditures on the Green Card Program, 1992-2002 Appiro riation Expe diture Excess Ex pendituire Years [TL (billion) US$ TL (billion) US$ TL (billion) (US$ (milliion) (million) _ _ _ _ _ _ _ _ _) 1992 128 18.6 7 1.0 -121 -17.6 1993 762 69.4 668 60.8 -94 -8.6 1994 1,352 45.5 2,250 75.7 898 30.2 1995 3,718 81.3 5,992 131.1 2,274 49.8 1996 7,187 88.6 9,710 119.7 2,523 31.1 1997 18,999 125.5 22,973 151.7 3,974 26.2 1998 30,000 115.4 51,843 199.4 21,843 84.0 1999 36,970 88.5 108,162 259.0 71,192 170.5 2000 80,131 128.5 166,580 267.2 86,449 138.7 2001 105,000 85.2 250,000 202.8 145,000 117.6 2002 160,000 88.8 Total 444,247 935.3 618,185 1468.4 The Plan and Budget Comnmittee, during its deliberations on the Final Account Bill for 1995, adopted a principle not to approve complementary appropriations for excess expenditures that have no legal basis in the following years. Unfortunately, this positive intervention - unprecedented in the Parliament's history - proved ineffective. The Committee ignored its own decision during discussions on final account bills for the succeeding years, and legalized and legitimized the final account bill by providing complementary appropriations for these excess expenditures. 5. Population Coverage In the absence of reliable data, it is difficult to estimate exactly how much of the population is covered by health insurance or Green Card programs. The figures put out by the social security institutions have to be treated with caution, since they rely on estimates rather than on an actual headcount. Three major issues related to counting the insured are: (i) many persons are insured with more than one social security institution, and thus show up on multiple records; (ii) the number of "active" population indicates those registered under the program, not necessarily those whose status is current, in that they are regular in their contributions, a particularly serious problem for Bagkur; and (iii) the number of dependents is estimated, and not known with any certainty. Excluding military personnel, and subject to reliability of the data, it appears that the health insurance and Green Card programs between them cover the entire population of Turkey (Table 8). SSK is the single-largest insurer, covering 46.54 percent of the country's population. Bagkur covers a further 22.36 percent, followed by Emekli Sandigi (16.13 percent). The Green Card program provides coverage to 14.92 percent of the population. Coverage by private insurance funds is relatively insignificant (0.45 percent). 142 To the extent that this data is reliable, the dependency ratio - computed as the number of non- premium-paying per premium-paying member - is very high for SSK (4.55 non-premium- members per one premium paying member), followed by Emekli Sandigi (4.06) and Bagkur (3.6), for an overall dependency ratio average of 4.14. This has implications for the financial sustainability of the health insurance program, in that contributions of one person bear the health expenses for more than 5 persons. Including the Green card holders, less than 17 percent of those covered under the social security or Green Card programs support the entire non-budgetary public spending on health. Coverage by SSK is skewed toward urban and industrial provinces, with almost 50 percent of their beneficiaries coming from Istanbul, Izmir, Ankara and Bursa. SSK covers more than half of the population in twenty provinces, the highest of which is Zonguldak (98 percent population covered). On the other hand, SSK covers less than 10 percent of the population in 10 provinces, the lowest coverage in terms of numbers being in Ardahan (10,060) and in terms of share of population being in Agri (4.37 percent). Similarly, almost 40 percent of Bagkur's beneficiaries come from 9 provinces, including Istanbul, Ankara, Izmir, Konya, Antalya, Bursa, Icel, Hatay and Adana. The highest Bagkur coverage areas in terms of the share of population covered are Sivas and Amasya (both over 40 percent), while the lowest are Simak, Urfa and Van (all under 10 percent of the population). Adding up the population numbers reportedly insured by one or the other program shows that in 15 provinces the number of insured exceed the population, reaffirming the point made earlier of duplication in insurance records. The highest reported extra coverage is in Zonguldak, Sinop, Tekirdag, Denizli, Istanbul, Bursa, and Kocaeli. On the other hand, there are over 50 provinces with 10 percent or more of the population not covered under any insurance or Green Card program. Provinces with the highest proportion of the population not covered by any program include Sirnak (67 percent population not covered by any social security institution or by the Green Card program), Osmaniye (60 percent), Hakkari (52 percent), Urfa (52 percent), Agri (51 percent), Mus and Van (47 percent), Diyarbakir (45 percent), Igdir (43 percent), Ardahan (42 percent), Mardin, Maras and Kilis (41 percent). 143 Table 8: Population Coverage (Health Insurance & Green Card), 1999-2000 Percentage of Populatioun Population Covered Covered 1999 2000 1999 2000 ff. SSK 30,047,750 31,572,609 45.87 46.54 Active (1) 5,429,045 5,692,101 8.29 8.39 Passive (2) 3,148,826 3,339,327 4.81 4.92 Dependent (3) 21,469,879 22,541,181 32.78 33.22 Active/Passive (1/2) 1.72 1.70 Dependency Ratio ((2+3)/l) 4.53 4.55 11. Bagkur 14,024,920 15,171,559 21.41 22.36 Active (1) 3,064,609 3,298,694 4.68 4.86 Passive (2) 1,179,817 1,277,444 1.80 1.88 Dependent (3) 9,780,494 10,595,421 14.93 15.62 Active/Passive (1/2) 2.60 2.58 Dependency Ratio ((2+3)/i) 3.58 3.60 Il[l[. Emeklli Sandigi 10,635,818 10,945,821 16.24 16.13 Active (1) 2,118,000 2,163,698 3.23 3.19 Passive (2) 1,289,127 1,349,151 1.97 1.99 Dependent (3) 7,228,691 7,432,972 11.04 10.96 Active/Passive (1/2) 1.64 1.60 Dependency Ratio ((2+3)/i) 4.02 4.06 lV. Private Funds 332,870 306,766 0.51 0.45 Active (1) 78,861 118,485 0.12 0.17 Passive (2) 58,624 59,940 0.09 0.09 Dependent (3) 195,385 128,341 0.30 0.19 Active/Passive (1/2) 1.35 1.98 Dependency Ratio ((2+3)/l) 3.22 1.59 TOTAL (-V) 55,041,357 57,996,754 84.03 85.48 Active (1) 10,690,515 11,272,978 16.32 16.62 Passive (2) 5,676,394 6,025,862 8.67 8.88 Dependent (3) 38,674,448 40,697,914 59.04 59.99 Active/Passive (1/2) 1.88 1.87 Dependency Ratio ((2+3)/i) 4.15 4.14 G Green cards 8,721,629 10,125,706 13.31 14.92 GENERAL TOTAL (I-V) 63,762,986 68,122,460 97.34 100.41 144 6. Delivery of Services The co-existence of budgetary and non-budgetary sources of funding in the health sector has resulted in the emergence of a multi-tier system of health care in Turkey, defined by who provides health care, who pays for it and how much, and quality of care of that service. In effect, the funding pools of MOH and universities have a "hard" component and a "soft" component. The hard component comprises allocations made under the general budget and the annex budget, collectively referred to as the consolidated budget. The soft component results from the possibility of mobilizing additional funds using revolving funds, special funds, foundations, etc. Since the two components have very different implications for delivery of health services and for this reason, the fragmented nature of the public expenditures on health takes on special significance. Several different types and levels of health services delivery can be distinguished: Outpatient Care * MOH health centers and posts, providing free care for the Green Card holders, ostensibly at low levels of clinical quality; * SSK clinics and hospitals providing care free to its members, ostensibly at low levels of clinical quality and patient satisfaction * Private providers providing care at high costs to users, at high levels of patient satisfaction though not necessarily high levels of clinical quality. Inpatient Care: * MOH hospitals providing free care to Green Card holders, ostensibly at low levels of clinical quality * MOH hospitals providing care at established fee-schedules, ostensibly at low to medium levels of clinical quality * University hospitals providing care at established fee-schedules, at medium to high low levels of clinical quality * MOH and University hospitals providing care at rates higher than the established fee-schedules, at medium to high low levels of clinical quality and high levels of patient satisfaction. * SSK hospitals providing care free to its members, ostensibly at low levels of clinical quality and patient satisfaction * Private hospitals providing care at high costs to users, at high levels of patient satisfaction though not necessarily high levels of clinical quality Preventive Care: * MOH health centers and posts, providing free preventive care This multi-tier system allows quantity and quality of services to follow the ability to pay; however, the more appropriate notion of equity in health is that of utilization according to need, and this is not adequately addressed under the present system. 145 7. Public Expenditures on lHeaRth and Efficiency Health sector interventions include pure public goods (e.g., vector management, communicable disease control, preventive activities, etc.), pure private goods (e.g., medical treatment for non- communicable illness), and a host of health services in between. As a result, different activities within the sector have different claims to support from the public budget, and one efficiency concern is whether the relative emphasis on pure public goods and goods with large extemal effects on the one hand and private medical goods should be changed. Outside of the MoH, there are no allocations made to preventive activities from any other public spending source. Preventive activities as defined by the MOH for purposes of classifying expenditures includes all activities related to primary health care, cancer control, tuberculosis control, malaria control, maternal and child health, and the Rafiq Saydam Institute of Hygiene. This is not a very useful definition for the purposes of classifying public goods, since not all activities of primary health care be classified as public goods according to our defmition. Using the preventive health care figures would thus be an overestimation of the "public goods" aspects of health care. The MOH allocates about 37 percent of the general budget for preventive activities, more than two-thirds of which goes to primary care. Curative services account for around 44 percent of budget expenditures, while support services make up the balance. These ratios have remained more or less unchanged over the period 1996-2001. Figure 4: Functional Distribution of Public Expenditures on Health, 1996-2002 100% ' 80%- 60%- 40% _ _ 20% - J- _ _. 0%~~- _ _ 1 _ nt_ __________ .'1 1996 1997 1998 1999 2000 2001 2002 O SUPPORTIVE G PREVENTIVE OCURATIVE Outside of the MOH, there are no allocations made to preventive activities from any other public spending source. In terms of overall public spending on health, therefore, preventive activities account for only 6.3 percent, even if all primary health care spending is taken into account (Figure 4). Overall, public expenditures on preventive care as a share of total expenditures on health have dropped from 12.1 percent in 1996 to 6.3 percent in 2001, while public expenditures on curative care have increased from 79.6 percent in 1996 to 89.1 percent in 2001. Maternal and child health activities receive less than three-fourth of one percent of public spending. It is therefore discouraging to note that despite the increasing trend in total public expenditures on 146 health as a share of GNP in the last five years, there is no clear trend in MOH expenditure and allocations to preventive activities have, for most of the years under review, actually fallen relative to the previous year. The implication is that most of the increased spending has been on curative care programs outside the MOH budget. To be sure, the poor coverage for a country at the level of economic development of Turkey is a reflection of both the effectiveness of existing public expenditures and the volume of allocation made for this purpose. On both counts, public expenditures on health in Turkey need to pay much greater attention to preventive services. In terms of economic classification of expenditures, about two-thirds of all public expenditures on health are "current" expenditures, which include expenditures on salaries and wages and on supplies (Table 9). The share of salaries and wages in total public expenditure has fallen over the years, from 46.7 percent in 1996 to 41.4 percent in 2001, while the share of other current expenditure (supplies etc.) has remained more or less steady at around 27 percent for most of the period. The share of investments has varied a bit, from 9.7 percent in 1996 to 6.9 percent in 1999 to 8.7 percent in 2001. Table 9: Economic Composition of Total Public Expenditures on Health, 1996-2002 _________________ 1996 1997 1998 1999 2000 2001 2002 Current 75.2 75.4 72.5 71.7 68.0 67.9 67.0 Personne 46. 46.0 42.9 48.8 46.5 41.4 39.4 Other Curreni 28.5 29.4 29.5 23.0 21.4 26.6 27.6 Investment 9.7 10.8 8.6 6.9 10.5 8.7 9.5 Transfers 15.1 13.8 18.9 21.4 21.5 23.4 23.5 Total Exp. 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Salaries and wages accounted for 76 percent of total MOH expenditures on health, down from 80.6 percent in 1996 (Table 10). The share of expenditures on supplies increased from 13.5 percent in 1996 to 18.2 percent in 2001. Investments have increased only miarginally, from 4.3 percent in 1996 to 4.9 percent in 2001. Table 10: Economic Composition of MOHExpenditures on Health, 1996-2002 1996 1997 1998 1999 2000 2001 2002 Current 94.0 93.3 94.1 95.8 94.0 94.2 90.3 Personne, 80.6 78.8 77.5 77.8 74.6 76.0 77.9 Other Current 13.5 14.4 16.6 18.G 19.4 18.2 12.4 Investment 4.3 5.6 5.1 2.9 4.8 4.9 8.7 Transfer 1.7 1.1 0.8 1.3 1.2 0.9 1.0 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 147 Another measure of effectiveness of public expenditure, particularly in the high inflation environment of Turkey, is the timeliness with which investment expenditures are carried out in the public sector. Turkey's record in this aspect of public expenditures is rather dismal, with general lethargy in the pace of implementation of investment projects. The process of inclusion as an investment project is well defined. Public investment projects are generally subject to an elimination and choice procedure that usually follows three stages. In the first stage; public institutions prepare feasibility studies of projects and, on the basis of the feasibility reports, prepare a list of potential projects. The list of potential projects is presented to the related Ministry for prioritization and approval. In the second stage; the concerned Ministry finalizes the choice of projects, by taking sub-sector balances and sector growth targets into consideration. Political preferences become deterninant and effective especially at this stage. In the last stage, the investment project proposals are sent to the State Planning Office (SPO). The SPO analyses the projects against macroeconomic targets, social and economic criteria and sectoral balances, and prepares a list of selected projects, which then enter the investment program draft. There are 688 investment projects in the health sector that are in different stages of completion. The total value of these projects is 2,449,000 billion TL, of which only 785,000 billion TL has been spent to date (Table 11). It is estimated that at current rates of allocation, it would take over 6 years to finish the existing investment projects if no new projects are accepted during this period. Table 11: Health Sector Investment Projects and Balance (billion TL_L) Subsectors Projects Total Value of Estimated Balance Investment Projects Expenditures Extemal Total External Total Finance Finance Ministry Of Health 258 559,254 1,975,773 50,588 445,940 1,529,833 General Directorate of Coast Health 22 115,139 4,609 110,530 Refik Saydam Hifzis. Mrk. Bsk. 9 422 32,466 9,508 22,958 Universities 183 1,403,351 2,849,774 497,608 1,327,230 1,522,544 Ministry Of Education 5 1,450 450 1,000 Ministry of Labor and Social Sec. 1 200 200 GAP Bolge Kalkinma Idaresi 1 735 327 408 Gen. Dir. of T.C. Emekh Sandigi 4 81,800 75,300 6,500 Gen. Dir. of SSK 37 262,051 589,412 97,842 491,570 Gen. Dir. of TCDD 3 4,500 Gen. Dir. of Posta Isletmesi 2 1,100 Total 525 2,225,078 5,652,349 548,196 1,961,206 3,685,543 148 8. Considerations of Equity The average per capita income in Turkey in 2001 was 2667 million TL, but the variance across provinces and regions was significant, as captured by the standard deviation of 1003. Agri was the poorest province, with per capita income of 740 million TL in 2001; in comparison, Kocaeli was the richest province, with per capita income of over 6,500 million TL. Together with Agri, Mus, Bitlis, Sirnak and Van were the poorest five provinces; and together with Kocaeli, Izmir, Istanbul, Kirklareli, and Yalova were the richest five provinces. Marmara was the richest region, with less than 5 percent of the population below poverty line, while Southeast Anatolia was the poorest, with over 15 percent of the population below poverty line. One justification and rationale for public expenditures is that they contribute to improving the distribution of income, and many public subsidies are advocated on the grounds that they will reduce costs to the poor. Figure 5 depicts the relationship between regional average per capita public expenditures on health (plotted on the x-axis) and regional average per capita income (plotted on the y-axis) for 2001. If well targeted, the richer regions should receive lower public allocations for health care. However, the degree to which the allocation of public funds does this is suspect. An analysis of public spending on health and regional per capita incomes shows a positive correlation (p = 0.31) between the two, and - with the exception of Marmara region - the richer regions consistently spend more public money per person on health care compared with the poorer regions, and the pattern of allocation shows no particular connection with income. Figure 5: Annual Health Expenditures and Income, 2001 (million TL) 4500 *4000- E3500- 3 3000 2500- CL 2000 - 0 - N~ 0 20 40 60 80 100 120 140 Per Capita Public Expenditures on Health Overtime, however, real per capita public expenditures on health (2001 prices) have increased markedly in the poorer regions compared to the richer ones (Figure 6). The most significant increase was recorded in low-income region of Eastem Anatolia, which saw an increase of over 90 percent between 1996 and 1999, compared to the high-income Marmara region, which recorded an increase of only 27 percent during this period. 149 Figure 6: Regionag Per Capita Healith Expenditures, 1996-2002 140.00 - - 120.00 - 100.00 L 80.00 . SL <|> 60.00 - O * 40.00 ' .- u 20.00 - 0.00 - 1996 1997 1998 1999 2000 2001 2002 - Marmara -Agean Mediterranean - South East Anatolia - East Anatolia Blacksea - Central Anatolia Average Within the overall envelope of public expenditures on health care is the allocation for the Green Card system, a health coverage program designed explicitly for the uninsured poor that cannot afford to purchase health care from own resources. The extent to which it does so is also suspect. Figure 7 shows the percentage of population covered by green cards by region. If well targeted, the lower income regions should have a larger percentage of population covered by green cards. This, however, is not the case, and the two poorest regions - South East Anatolia and Eastern Anatolia, represented by the two points closest to the y-axis in the scatter plot below - have the lowest percentage of population that is covered by green cards. Figure 7: Population Covered by Green Card 25 0 .0- - .2 O 5 0- 0 500 1000 1500 2000 2500 3000 3500 4000 4500 Per Capita Income Programs like the Green Card rely on admninistrative decisions to reach the poor. People are placed on the lists of eligible recipients, and either these lists are not regularly updated or the scrutiny is less than perfect. For one reason or another, large eligible populations are left out and 150 many not eligible get included. Administrative decisions are either very costly or inaccurate, and other means of targeting program benefits to the poor need to be explored. The pattern and distribution of public spending on health has implications for the likelihood of seeking treatment when ill and for out-of-pocket spending on health. If public expenditures are targeted toward the poor, relatively fewer among the poor will face a resource constraint when taking a treatment decision. Available evidence indicates that this, in fact, is not the case. Results from a recent household survey carried out in 2001 show that while 36 percent of those ill and needing inpatient care do not seek care, the proportion of those ill, needing inpatient care but not seeking care is the highest among those in the lowest income quintile (46 percent) compared to the highest income quintile (18 percent). Similarly, among those ill, needing outpatient care and seeking the care, while the overall proportion of those ill but not seeking care was 28 percent, the difference between the highest quintile (23 percent) and the lowest quintile (32 percent) was not significant. On average, patients spent 178 million TL on one episode of hospitalization, and 53 million on one outpatient visit, enough together to impoverish families in the first three income deciles. 9. Public Expenditures and Health Policies Establishing an effective health service depends not only on appropriate and affordable technology, but also on a sustained political commitment to positive change, the availability of quality health facilities and adequate financing. There has been significant progress in providing these basic building blocks in Turkey during the past few decades.4 Ever since the establishment of the State Planning Organization in 1960, improvements inequity and access to health services have been targeted in successive five-year plans. Prior to 1980, the Government of Turkey sought to enhance access through the Integrated Health Service Scheme (IHSS), designed to cover rural areas and extend basic health care services to the whole population. The policy thrust was to achieve coverage though infrastructure development and establishment of hospitals and health centers all over the country. However, the big capital investment that this entailed left inadequate funds for equipment and vehicles, and with salaries consuming most of the operating budget, there was little left for drugs, supplies and fuel and the IHSS did not succeed in meeting its objectives.5 In 1987, the government enacted the Basic Law on Health Services (BLHS), and again emphasized equity and access. Attributing the limited success of IHSS to inadequate funds, the government used the BLHS to increase budgetary allocations to the health sector. The success of the BLHS was also limited, however, since besides marginal increases in budgetary allocations, the BLHS was not accompanied by any strategy for systemic reform in terms of financing, delivery and management of health services, and the challenges of equity and access to health services remained unmet. A much more comprehensive and system-wide health policy framework, complete with targets, principles, strategies and desired outcomes, was articulated in a document titled "The National 4See, for instance, the World Bank's Staff Appraisal Report of the Second Health Project, 1994 ' Ibid, 1994. 151 Health Policy" (NHP) and published by the Ministry of Health in 1993. Emphasizing the need to create an enabling environment for improving health through poverty reduction, better education and improved nutrition, this document lays down specific health targets and details the supporting strategies and building blocks to make the achievement of those targets possible. Whether or not this document reflects the official policy as adopted by the Govermnent of Turkey is unclear, and perhaps unimportant6; what is important is that it is the most detailed and comprehensive enunciation of priorities and strategies in the health sector in Turkey. The three main thrusts of this policy document are health targets (Table 12), service delivery reforms (Table 13) and requirements of support services (Table 14). The health targets underline concern for maternal and child health, burden of diseases and equity, and sets medium (7 years) and long-term (12 years) benchmarks. Concern with maternal and infant mortality is voiced though targets that call for 30-50 percent reduction in mortality rates, and communicable diseases - tuberculosis, measles etc. - cardiovascular diseases and cancer are recognized as major killers. The health services delivery section details the strategies for achieving full access and equity, and proposes general social insurance as the financing mechanism for this purpose. Supported by state allocations for the poor, the expressed notion behind the social insurance suggestion is that of entitlement and solidarity, in addition to the separation of provision and financing that the third-party payment system would entail. The policy document suggests reorganizing health delivery along the lines of family practitioners, and recommends capitation as the way of paying physicians for health services. Hospital autonomy and decentralization are recommended as the managerial and administrative reforms to support the overall social insurance framework and improve efficiency and effectiveness of delivery. Supporting legislation and health information systems are suggested as the necessary anchors for the overall health system. Table 12: National Health Policy: Targets for Health (selected indicators) Prea of concern Targe' ,.Xt nF^ Maternal and Child 1) Under 5 mortality rate: 50 per 1,000 2000 Health 2) Infant mortality reduced by 30 percent, to 29 per 1,000 2000 3) Effective contraceptive use at 79 percent 2000 4) Maternal mortality rate: to 67 per 100,000 Communicable 1) Eradication of measles, polio, diphtheria, neonatal tetanus 2005 Diseases 2) Tuberculosis transmission reduced to 1 per 100,000 2005 Cardiovascular 1) Under 65 mortality reduced by 15 percent 2005 Disease Cancer I) Under 65 mortality reduced by 15 percent 2005 Accidents 1) Mortality due to car, home, and occupational injuries reduced 2005 by 25 percent (saving 3000 lives) Inequality 1) Reach equal level of infrastructure among regions 2000 2) Reduce poor health indicators by 75 percent 2005 Source National Health Policy, Ministry of Health, 1993 6 There was no law passed to operationalize the policy, as would be required under the rules of government business in Turkey. 152 Besides the National Health Policy of 1993, the 8t Plan documhent also contains a policy statement for the health sector, but makes no explicit reference to the NHP. In an evaluation of the health sector, the 8th five year plan document notes several problems facing the health system and calls for a re-structunng of financing, administration and organization, manpower, provision of services, legislation and information management. The document observes that smce health services are provided by separate and independent institutions in the public and private sectors without any effective division of work and coordination among these institutions, investments and services overlap, resulting in inefficient use of resources. Public health institutions like the MOH and SSK provide and finance health services simultaneously, leading to problems in planning and implementation of services and ineffective operation of monitoring and control mechanisms. Planning and execution function within the same unit, as a result of which neither task is performed effectively. In general, the Plan document observes, the lack of coordination among institutions, organizational failures, irrational investments, and faults in the employment policy have resulted in ineffective utilization of existing resources. Table 13: National Health Polic : Health Services Delive Management 1) Establish decentralized health 2000 -transfer operational responsibilities to regional management system health administrators -establish professional health management through human resource development Primary Health 1) Establish strong primary health care 2000 -introduce General Practitioner/Family Physician Care system system -implement General Health Insurance -introduce capitation method of payment Hospitals 1) Establish autonomous secondary and 2000 -decentralize MOH hospitals tertiary hospital system -establish referral system of admissions 2) Provide high quality service at -mtroduce cost accounting systems appropnate cost -train staff based on developed countnes 3) Integrate hospitals with primary care -establish hospital information systems Human 1) Develop and implement national 2000 -prepare master human resources plan by 1994 Resources policy -establish 20 year plan based on current demographic, epidemiological, and health service utilization data -define jobs and responsibilities, decentralize staffing and promote establishment of professional organizations Pharmaceuticals 1) Develop monitonng system 2000 -establish unit for license and control of drugs, liberalize pnces, and develop prescnption control _______________ ~~~~~~~system Financing 1) Develop financing model 2000 -establish General Health Insurance System, with patient copayments 2) Allocate 5 percent of GNP for health -introduce capitation payment, equalize funds among regions and separate provision and payment -establish health information system Source: National Health Policy, Ministry of Health, 1993 153 Table 14: National Health Policy: Support tor Health Development Area o Concern Target 'age~ i ;agE,y D_ .. Structure 1) Develop scientific 2000 -establish National Health Academy, institutions to guide linked with MOH, whose duties are: research, ethics inter-sectoral cooperation, evaluate health policies, identify research areas, -improve education programs, act as controlling body for medically related products Information 1) Establish national health 1997 -establish units at regional, provincial, System information and district levels Legislation 1) Establish 'concept' of 2000 -establish health legislation dept. health legislation within National Health Academy 2) Educate citizens -increase dissemination of information Technology 1) Establish technology 2000 -identify technology needs evaluation system -develop quality assurance programs -establish record keeping -train personnel Physical 1) Ensure high quality 2000 -establish dept. of health architecture Planning health facilities -introduce needs based assessment -allow for planned growth Source National Health Policy, Ministry of Health, 1993 On specific health services related activities, the Plan document lists several areas of concern: (i) preventive health services such as mother-child care, family planning, vaccination, environmental health and basic health services comprising primary health care providing out- patient diagnosis and treatment services not given adequate priority; (ii) basic health services not developed sufficiently for meeting the needs of the country; (iii) effective patient referral system from primary health care to the reference hospitals not set up (iv) agencies providing in-patient treatment not managed efficiently and effectively; (v) institutions do not have administrative and financial autonomy; (vi) no sound job definitions of the health personnel; (vii) expenses not reflected in costs since cost accounting techniques are not used; (viii) legal arrangements on financing, service provision, personnel policies, administrative structure not in place; (ix) shortage of specialists persist in some medical branches; (x) about half of all physicians and over one-third of all beds are clustered in the three biggest cities; and (xi) medical faculty hospitals are providing general health services instead of performing their fundamental duties of education and scientific research. The Plan document lists several "policy" measures and "guiding principles" in order to address these areas of concern. Calling for an overall restructuring of the health system, the Plan stresses the need for improving coordination among the public institutions providing health services. On investments, the Plan document notes the need of comprehensive treatment of investment 154 planning, manpower and equipment supply, and declares that no new investments will take place where utilization of existing physical infrastructure is low. On organization and delivery of services, the Plan document notes that the health service units providing similar services will be transformed into a uniform institutional structure providing integrated health services, and a system of family general practitioners will be established and set up, initially in cities. Hospitals shall be given administrative and financial autonomy, a patient-referral system comprising all levels of services shall be set up and, within this framework, patients will be given the opportunity to choose physicians and hospitals. On the financing side, the Plan document states that provision and financing of health services will be separated, and the health sector shall be allocated more resources, with emphasis on more efficient utilization of existing resources through effective coordination and cooperation. Public resources shall be utilized primarily for preventive health services having high financing effectiveness. Through use of cost accounting techniques in hospitals, all the expenses shall be reflected on costs and pricing shall be made on the basis of real costs. In this way, public subsidies shall be abolished progressively in the hospitals operating in market conditions and offsetting their expenses by their income. A general health insurance system shall be set up in the long-term by ensuring unity in norms and standards among insurance agencies. Insurance premiums of those people who do not have solvency shall be partly or completely paid from public resources. Overall, the Ministry of Health shall be provided with a structure to protect public health and introduce standards and norms, whereas its role in providing direct in-patient treatment services shall be gradually diminished. Basic health services shall be strengthened by improving the manpower and infrastructure capability of units providing primary health care, and food production policies shall be formulated taking the nutritional problems into consideration, and production of salt having iodine, fluoridation of water, enrichment of bread or flour will be encouraged. Note that the policy measures suggested in the Plan document are very similar in spirit and intent to the National Health Policy discussed earlier, even though no explicit reference is made to this effect. However, in moving from the stated policy measures and guiding principles, the Plan document does not make any mention of how those reforms would be set in place. In fact, the Plan document does not even list out the health outcome targets, preferring instead to set physical targets for the sector, perhaps on the notion that by strengthening inputs like physical and human resources, the desired health outcomes would follow. In effect, therefore, the health policy is couched in terms of number of hospitals, number of health centers, number of physicians and nurses, and so on, without any reference to outcome targets like number of births attended by trained medical and paramedical personnel, extent of coverage by inoculation, etc. With whichever variant of the health policy - the objectives and policies suggested in the 1993 National Health Policy document of MOH, or the guiding principles of the 7' and 8th five-year plans - there is a disconnect between public expenditures on health and the stated or implicit objectives, in terms of both, the process and the outcomes. Mortality and burden of disease indicators show very little improvement over the years, and remain very far from their target rates. 155 The main reason for the disconnect between the stated policy objectives and direction of public expenditures is that in most cases, the stated policy simply has not been put into effect. Most provisions of the National Health Policy, as stated in the MOH document of 1993 and echoed in the 7th and 8th Plan documents, have never been implemented. Despite the rhetoric, there has been no concerted movement toward general health insurance, hospital autonomy, family practitioners, decentralization, health information system, etc. A policy can be articulated by making a strategic choice from a set of actions drawn from a menu of available options, and relate that to expected and desired payoffs that those actions would entail. However, to make a policy effective and operational, an appropriate environment has to be created, complete with the legal, executive and support structures, in which the play and interplay of actions can occur and lead to the desired payoffs. Budgets and public expenditures support the policies and the actions contained therein, but can do so only if the enabling environment is present. For instance, a law would have to be passed to put general health insurance to effect, following which budgetary allocations would have to be made to make effective the provisions of the law. Without the law the policy of general insurance is lame, and public expenditures cannot be expected to support the policy or strategic priorities of the government that are not otherwise operational. Most of the measures suggested in the National Health Policy document and in the Plan documents fall in this category of never really being implemented. While the uncertainties engendered by short-lived coalition governments may explain the lack of progress in structural reform of the sector in areas such as general health insurance, hospital autonomy, family practitioners, decentralization, health information system, etc., the neglect of opportunities to improve health outcomes through enhanced spending on preventive programs is more difficult to fathom. Even where the enabling environment is present or not critical to the application of the policy, there is a disconnect between public expenditures and policies as a result of the practice of historical budgeting, the disconnect in these instances being caused by ineffective budget management and unresponsive public financing. Increased allocations to maternal and child health programs, which requires no special laws, codes or rules to be made effective, could have arguably improved health status over the past five years. Yet, public expenditures on such programs have received low priority in budget allocation over the years. Annual sectoral and intra-sectoral allocations have been historically determined, almost as if there was no existing policy. In fact, it appears that the health policies have been determined by the budget rather than the budget being determined by the health policy. 156 10. Conclusions and Recommendations The health care system in Turkey is highly fragmented, both in terms of financing as well as delivery of services. The co-existence of a variety of funding sources, budgetary and non- budgetary, has resulted in a multi-tier system of health care production, financing and delivery, that varies across several parameters, such as quality of health services, where and by whom is health care provided, and how much is paid for it and by whom. Outpatient care is provided by the Ministry of Health in health centers and posts, by SSK hospitals and clinics for its members, and by private providers, all at varying levels of quality and prices. Similarly, inpatient care is provided in Ministry of Health hospitals, free to Green Card holders and on the basis of established fee-schedules to others, in University hospitals at established fee-schedules, in SSK hospitals to its members and in private hospitals. The fragmnentation of the health budget has several implications for the effective management of allocations within the health sector. First, it is difficult in the present system to ascertain spending across different functions by different agents, and to this extent monitoring and regulation become challenging. Second, different funding sources have different incentive implications affecting provider and consumer behavior differently, making it difficult to ensure efficiency and equity in public spending. Third, the fragmented nature of the budget increases the administrative costs because the different funding-sources entail different accounting conventions for the same activity. Finally, the fragmentation of the budget compromises the importance of budget numbers, releases of funds, commitment of funds, and adequacy of budget as a basis for accountability. Streamlining and consolidating the resource allocation, utilization and management system is therefore necessary to bring transparency in the health system and improve the effectiveness of public spending in health.7 The review of the health sector in general and public expenditures in particular highlights the need for a comprehensive health policy supported by the necessary planning steps for effective implementation. Despite considerable progress that the country has made on several economic fronts, the health of the people is at levels considerably below what the country can afford and provide. The National Health Policy of 1993 makes a good start by making mention of many of the issues that require attention: lifestyles, environment, supporting infrastructure, and health financing and delivery systems, but translating the policy objectives into policy measures requires concerted efforts, both in terms of political commitment, managerial acumen and administrative ability. The 8th Plan document incorporates many of the NHP recommendations in principle, but falls short of putting forward an implementation plan targeted toward achieving the objectives of the NHP. Making an effective policy requires not only a coherent and affordable statement of objectives and actions, it also needs legal and institutional support to set up the policy initiatives and budgetary allocations to finance the policy measures. Even if one of these steps is missing or incomplete, the entire policy realization process can be compromised. There is an urgent need for the Government of Turkey to ensure that all the components of the policy-plan-implementation 7See the 2001 Turkey PEIR report for more details 157 chain are in place and that they provide the necessary synergy and dynamism to meet the policy targets. As far as prioritizing and targeting public expenditures on health, economic theory provides some guidance using public goods, merit goods and redistribution arguments. On this basis, preventive health activities, health education, health protection for the vulnerable, and health coverage for the poor, children and the elderly deserve priority in targeting and allocation of public funds in Turkey. In conjunction with health policy targets, this would mean significantly higher MOH budgetary allocations for preventive activities like mother and childcare, as well as increased health coverage for the poor and the vulnerable. The present level of allocation of funds is not sufficient to extend preventive services to the whole population; this is especially true for maternal and child health care, which gets less than 2 percent of the MOH budget. There is, therefore, a strong case for increasing government allocations for preventive activities and for increased health coverage for the poor and vulnerable, even if it implies reductions elsewhere. The effectiveness of public expenditures can be increased rather simply by spending more where the poor live - and increased MOH allocations for Eastern and South Eastern Anatolia, justified on grounds of both public goods argument as well as on the grounds of poverty alleviation, will improve targeting and effectiveness of public funds. 158 CHAPTER 7: CONSUMPTION AND PRODUCTION OF PHARMLACEUTICAL PRODUCTS 1. Introduction Expenditure on pharmaceutical products constitutes a significant proportion of total expenditures on health in Turkey. It is estimated that the expenditure on pharmnaceutical products of SSK, Emekli Sandigi and Bagkur combined in 2001 was about 1,981,672 billion TL, equivalent to about 48.5% of total expenditure on health by these three institutions. Expenditure on pharmaceutical products accounts for between 55 and 60 percent of total expenditures on health incurred by Bagkur and Emekli Sandigi, and between 33 and 38 percent for SSK during the period 1998 to 2002. Civil servants spent a further 579,370 billion TL on pharmaceutical products, equivalent to 52% of total expenditures on health. The trend of expenditures on pharmaceutical products as a proportion of total expenditures on health has not undergone any significant change in the last few years (Figure 1). Exact figures on pharmaceutical expenditures are not available for other consumers and for out-of-pocket payments on pharmaceutical products for the uninsured. Figure 1: Expenditure on Pharmaceutical Products by Social Security Institutions 70 - _60- 50 -r 40 0 . o --P 1998 1999 2000 2001 2002 I= Total - Bagkur - Emekli Sandigi SSK - Civil Servants The proportion of expenditure on pharmaceutical products relative to total spending on health could be high for several reasons. Most simply, consumption of pharmaceutical products may actually not be very high in absolute terms, but be high relative to overall expenditure on health. Moreover, pharmaceutical consumption may not be high but the pattern of consumption be skewed toward expensive drugs. Aggressive marketing policies and clinical protocols may contribute to this as well. Further, as opposed to the production of most health services in Turkey, pharmaceutical products have a large import component and to this extent the prices are influenced by exchange rate fluctuations and international prices. Each of these factors needs to be examined. 159 The rest of this chapter is organized as follows. Patterns of pharmaceutical consumption are analyzed in Section 2 and production trends and patterns are evaluated in Section 3. Section 4 contains a discussion on pricing. Section 5 concludes. 2. Consumption of pharmaceutical products Patients insured with SSK, Emekli Sandigi and Bagkur are required to pay 20% of the market price of drugs consumed, the balance being covered by the insurance. The copayment rate is 10% for retired persons. SSK hospitals procure their requirement of drugs for their patients through their own drugstores who, in turn, procure directly from producers. Contracts with producers are negotiated each year. In the event that the drugs are not available in the SSK stores, patients obtain the medicines from private drug stores with which SSK has contracts, and pay the applicable copayment only. The drug store bills SSK for the balance. Emekli Sandigi does not have direct procurement procedures. Patients insured with Emekli Sandigi purchase their requirements of drugs from the over 15,700 private drug stores with whom Emekli Sandigi has contracts, and make the copayment at the rate applicable to them. The drug stores bill Emekli Sandigi for the balance. Bagkur follows the same practice as Emekli Sandigi. Civil servants obtain medicines directly from drug stores, and claim reimbursement- from their parent departments. In general, the value of pharmaceutical products consumed in Turkey is low relative to other countries in Europe, both in terms of the total volume of expenditure on drugs as well as in terms of per capita expenditure on drugs (Table 1). The value of pharmaceutical consumption has increased between 1998 and 1999 (per capita consumption is estimated to be $42 in 2000), but the level reached is still significantly below the value of pharmaceutical consumption in other countries in Europe. Table 1: Per capita and Total Consumption f Pharmaceutical Products Country Per Capita Consumption (US$) Total Consumption (ex-factory pnces, $ rmllion) 1998 1999 1998 1999 France 285 287 16,744 17029 Belgium 252 269 2,547 2,756 Switzerland 250 270 1,822 1,938 Gernany 225 227 18,511 18,597 UTK 211 213 12,388 12,680 Austria 205 220 1,659 1,776 Portugal 203 212 2,009 2,128 Italy 189 196 10,821 11,266 Denmark 184 163 977 867 Norway 171 197 754 880 Spain 167 177 6,598 7,069 Ireland 158 171 586 651 Netherlands 144 159 2,268 2,525 Greece 134 144 1,424 1,524 Turkey 35 38 2,220 2,519 Source IMS Health Turkey 160 Table 2 lists the consumption of medicines in Turkey by therapeutic classes. The highest consumption is that of antibiotics, followed by analgesics and anti-migraine preparations, and anti-rheumatic drugs and muscle relaxants. Table 2: Consumption Of Medicines By Therapeutic Classes, Turkey Therapeutic Class 1999 2000 Antibiotics 20.4 19.0 Analgesics and Anti-Migraine Preparations 13.2 12.0 Anti-Rheumatic System Muscle Relaxants 10.2 11.0 Cough and Cold preparations 8.9 8.6 Vitamins, Minerals and Anti-Anemics 7.2 7.3 Dermatological 5.2 5.3 Stomatological, Antacids and Anti-Emetics 5.0 5.3 Cardiovascular System Preparation 4.4 4.8 Hormones and Gynecological Preparations 4.0 4.3 Otology and Eye-Ear Preparations 4.1 4.2 Tranquilizers, Hypnotics and other CNS 2.9 3.2 Antispasmodics 1.7 1.7 Systemic Antihistamines 1.4 1.3 Anti-Asthmatics 1.3 1.4 Anti-Hypertensives and Diuretics 1.0 1.0 Laxatives 1.0 1.0 Anti-Parasitics 0.8 0.8 Anti-Diabetics 0.9 1.0 Others 6.3 6.8 Source. IMS Health Turkey Table 3 shows consumption patterns across therapeutical classes. Consumption patterns in Turkey are somewhat different compared to the world averages; in particular, the share of systemic anti-infectiveness in the pharmaceutical basket in Turkey (26.2%) is very high compared with the world average (9.9%). Table 3: Top 5 Therapeutical Classes In The World (by value) THERAPEUTICAL CLASSES AVERAGE SHARE IN THE SHARE IN TURKEY WORLD (%) (%) Cardiovascular 19.3 11.9 Central Nervous System 15.8 9.5 Alimentary T & Metabolics 15.3 12.8 Systemic Anti-infectiveness 9.9 26.2 Respiratory System 9.3 7.8 Source IMSIlealth Turkey 161 3. Production in Pharmaceutical Sector A total of 125 firms operated in the pharmaceutical sector in 2000 (down from 134 firms in 1999), producing 2,658 products (down from 3,100 products in 1999). As Table 4 shows, compared to many other countries in Europe, relatively few pharmaceutical products are produced in Turkey. Table 4: Pharmaceutical Products Manufactured in Turkey and Selected Countries 1999 2000 Number of Number of Number of Number of Countries Products Presentations Products Presentations Germany 9,438 31,050 9,684 31,782 Belgium 4,830 5,736 5,337 6,349 France 3,640 7,500 4,050 7,925 Switzerland 8,000 25,000 8,000 25,000 Italy 4,158 8,668 5,278 9,025 Portugal 4,370 12,031 4,370 12,031 Pakistan 9,000 15,000 9,000 15,000 Thailand 8,835 16,715 8,835 16,175 Turkey 3,100 8,839 2,658 4,635 Source: Scrip Marketletter Chiffres-Cles (AGIM). IEIS Turkey, 2000 Two sets of data on production of pharmaceutical products in Turkey are available. One is produced and published each year by the Pharmaceutical Manufacturers' Association (PMA-IEIS), while another is based on a survey of 64 private firms between 1995-98, carried out by the Special Ad-Hoc Committee on Pharmaceutical Industry of 8th Five- Year Development Plan.' As Table 5 shows, the production figures from two sources, however, do not match and are not consistent with each other, though both show an upward trend over th eyears in terms of number of units produced. Table 5: Production f Pharmaceutical Products (different sources) Years Number of Units Produced IEIS Ad-hoc Committee 1995 810,669,000 975,146,000 1996 840,999,132 1,028,920,000 1997 885,341,459 1,092,988,000 1998 922,912,131 1,136,607,000 1999 1,005,420,472 2000 1,094,000,000 Source IEIS and Ad-hoc Committee Report The figures presented above from the two sources cover only the private sector production. Production in the public sector is concentrated in the SSK Factory and in the Ministry of National Defense Military Factory. Pharmaceutical and medical products as well as equipment are produced in the SSK Factory for use by SSK hospital patients, but 'Note that 4 firms did not respond to the survey 162 most are not produced in the form of units (boxes) and do not have a prospectus. The Military Factory produces 49 kinds of pharmaceutical products, besides bandages and dressing materials, principally for use of the military personnel. Most of these pharmaceutical products also are not produced in the form of units and do not have a prospectus. The production figures of the Military Factory are not published. Data on production of raw materials data is drawn from IEIS, published annually. Data on raw material production has also gathered in a survey carried out by the Sub- Committee on Raw Materials in the Pharmaceutical Industry, covering 11 firms - all but one of which are private - though three private firms did not fill out the questionnaire. The production figures from this source appear to be generally underestimated, and in many instances are more than ten times lower than the IEIS data. Table 6 presents the IEIS data. Table 6: Production of Raw Materials in the Pharmaceutical Indus Years Production (Tons) Percentage Change 1995 12,646 _ 1996 11,083 -12.36 1997 8,860 -20.06 1998 7,076 -20.14 1999 5,552 -21.54 2000 4,980 -10.30 Source IEIS This trend suggests a substitution in favor of imported raw materials, and by 1998, over 82 percent of raw materials required in pharmaceutical production was being imported while only 18 percent was being domestically produced. As Table 7 shows, the import bill of the active raw materials was around 153,181 billion TL in 1998. Table 7: Value of Imported and Domestically Produced Raw Material, 1998 Inputs Quantity (kg) Value (billion TL) Domestic Imported Domestic Imported Active Materials 1,579,072 12,231,702 25,537 153,181 Auxiliary Materials 5,406,378 52,206,380 3,847 9,608 Packing materials - 14,158 6,920 Source Special Ad Hoc Committee Report (2001) The survey carried out by the Sub-Committee shows that the production of raw materials also has a low local content, with more than half of the unit production costs of raw materials coming from the imported raw materials. This further increases the. total import bill. Following liberalization in the import regime in 1993, price controls in imports were removed and additional domestic taxes on customs duty were abolished. These measures made imports attractive, more so because of the existence of price controls in the domestic market. Moreover, export credits were not extended, which adversely affected incentives to export. Expectedly, therefore, the ratio of exports to imports fell from 163 12.9% in 1995 to 9.3% in 2000 (Table 8). At the same time, there was a shift in the structure of exports and imports, and whereas raw materials accounted for 78% and finished products 22% of all imports in 1995, by the year 2000 the share of raw material fell to 55% while that of the finished product doubled to 45%. Table 8: Exports and ports in The Pharmaceutical indust __ _ EXPORTS ($ ~IMORTS (5), RATIIO OF EXPORTS TO __MPORTS Years Raw Finished Total (1) Raw Finished Total (2) 1/2 Materials Products Materials Prodmcts (%) 1995 47,701,704 46,662,237 94,363,941 565,785,587 163,780,000 729,565,587 12.9 1996 56,278,804 48,777,895 105,056,699 650,000,000 225,000,000 875,000,000 12.0 1997 38,754,528 58,891,348 97,645,876 667,728,360 314,225,111 981,953,471 9.9 1998 60,679,171 68,027,235 128,706,406 769,378,609 411,213,585 1,180,592,194 10.9 1999 66,942,382 61,516,940 128,459,322 784,631,891 552,347,188 1,336,979,079 9.6 2000 69,000,000 71,000,000 140,000,000 828,000,000 683,000,000 1,511,000,000 9.3 Source: Special Ad Hoc Committee Report (2001) 4. Prices and Pricing Procedures Drug prices are set by the Ministry of Health under Law 1262 (Law of Pharmaceuticals), and are based on the producing firm's cost-based price proposal and prices of existing equivalents at domestic market. The supplying firms submit a price proposal, which is then evaluated by the Ministry based on comparison with import prices and the prices of its existing equivalents at domestic market. The Ministry is required to finalize the applications for each product within 10 working days, but this legal condition is usually not met in practice. The Ministry bunches several applications together, and grants approval collectively, a procedure not approved by the pharmaceutical firms. As a result of the control that the MOH exercises, price increases in pharmaceuticals, on average, have usually been very close to general inflation levels (Figure XXX). For instance, in the period January 2001 to January 2002, the rate of change in the Consumer Price Index for medical and pharmaceutical products increased by 84.6 percent compared to the 73.2 percent increase in the overall Consumer Price Index for urban settlements. 164 Figure 2: Yearly Average Percentage Change in CPI and Pharmaceutical Prices, 1994-2001 160 140 l20 1994 199 196 197 198 199 200 201 20 80 o.60 __ 20 -__ 20 1994 1995 1996 1997 1998 1999 2000 2001 2002 -4- Consumer Price Index ---- Pharmaceutical Prices Source SIS, various years;figuresfor 2002for urban settlements only At the same time, however, there has been a subtle change in the distribution of drugs according to price categories, with a larger proportion of drugs moving into the higher price range. As Figure 3 shows, between the years 2000 and 2001, the proportion of drugs priced at half million TL or less decreased slightly from 34% to 30%, the proportion of drugs priced at 2 million TL or more increased from 34% to 47%. Depending on use, therefore, expenditure on pharmaceutical products is likely to increase, particularly among consumers insensitive to prices. Indeed, expenditures on pharmaceutical products by the social security institutions have increased over the years, and this is surely one of the contributing factors. Figure 3: Distribution of Drugs According to Price Categories 40~~~~~~~~~~~~~~~~~~~~~~~~~~~A 30 - ~i 0-500,000 500,001- 1,000,001- 2,000,001- 5,000,000 and 1,000,000 2,000,000 5,000,000 up TL 02000 02001 165 5. Conclusion Turkey spends a disproportionately high amount on drugs and pharmaceutical products. Indeed, the high percentage of pharmaceutical expenditures in terms of overall health expenditures is as much a reflection of low overall expenditures on health as it is of high expenditures on drugs. The latter observation is reinforced by two aspects of spending on pharmaceuticals. First, on the demand side, a very large proportion of the population is almost totally insensitive to pharmaceutical prices. Those insured with any of the social security institutions or belonging to the category of civil servants pay only one-fifth of the drug price, while those retired pay only one-tenth. It can be argued that since the present levels of drug consumption are low as it is, further reduction in consumption would not be advisable. While this is true generally speaking, if only the insured population and the civil servants are considered, however, the consumption of pharmaceutical products is actually not low by international standards, and there is in fact a strong case and scope of cost containment by curbing indiscriminate use of medicines. This cost containment will have to come from the supply side, since the existing copayment rates appear to be at the appropriate level. Another aspect of spending on pharmaceutical products is related to the supply-side of the equation. With the introduction of new drugs in the market, accompanied by aggressive marketing policies of the pharmaceutical companies, the distribution of drugs according to prices has moved toward higher price medicines, so much so that there has been an increase of almost 50% in the number of drugs costing 5 million or more, after adjusting for inflation, between 2000 and 2001. Thus, while the overall pharmaceutical price index has not moved out of line relative to the general consumer price index, more medicines cost more, which translates to higher expenditures especially among the insured. Of the several supply-side cost containment measures that deserve examination, the one that is likely to yield almost immediate results is the use of generics, where available. In fact, the insurance support for medicines should be restricted to generics only where available, and the patient should pay out-of-pocket if the preference for brand names is strong. Of course, if generic drugs are not available, the existing system of support should continue. Aggressive marketing policies of the pharmaceutical companies undoubtedly pose a big challenge to effective supply-side cost-containment measures. Anecdotes abound of the unholy nexus between suppliers of pharmaceutical products and providers of health care, and even if only a few of them are factually correct, bringing down expenditures on pharmaceutical products will be an uphill battle. 166 CHAPTER 8: ECONOMIC CRISIS AND THE HEALTH SECTOR 1. Introduction Volatile growth, persistent high inflation, high real interest rates and continuing vulnerability to economic crisis have marked Turkey's economic performance over the past decade. Even though GNP grew at a surprisingly robust 5 percent between 1990-98, and per capita GNP growth rate averaged 3.2 percent per annum during this period, the economy almost always remained at risk of slipping into a recession. Despite frequent warnings, however, it was only toward the end of 1998 that the expansionary fiscal policies and rapid increases in public debt caught up with the existing inflationary pressures to significantly slow down the economy and drive growth rates into negative territories. Unable to turn around rapidly enough - and triggered by massive capital outflows - Turkey faced two serious economic crises in rapid succession, in November 2000 and again in February 2001. By the end of 2001, the currency had depreciated by more than 100 percent, consumer price inflation rate was about 68 percent, and the economy had contracted by more than 8 percent. At the same time, private consumption and fixed investment expenditure collapsed owing to the uncertain policy outlook, low consumer and businiess confidence, a deep reduction in the availability of bank credit combined with high real interest rates, fiscal tightening, and higher import costs in the aftermath of the devaluation. Whereas the economic crises delivered a severe blow to all sectors of the Turkish economy, adversely affecting agriculture, industry and tertiary services alike, the poverty and social impacts of the crises have been particularly marked, with high unemployment rates, rising prices and negative growth rates reducing household incomes and exposing more people to the risk of poverty. Across-the-board cuts have undoubtedly affected consumption and utilization of health services as well, even though real and visible effects on mortality and morbidity might not be readily apparent. Turkey's situation is not unique in this respect: international experience shows that economic crisis has affected health outcomes and utilization in many countries. In Mexico, for example, as Cutler et al (2000) show, mortality rates were 5 to 7 percent higher in crisis years compared to other periods. Similarly, infant mortality rates were higher during crisis years in Latin America and the Caribbean (Musgrove, 1987). In a recent paper, Yang et al (2001) show that health care consumption among Korean households was adversely affected by economic crisis. An economic crisis can affect utilization of health services and health outcomes in several different ways. Following the conceptual framework developed by Musgrove (1987), the effects of an economic crisis can be classified and evaluated in terms of "direct" and "indirect" effects. The direct effects consist of supply-side changes - following reduced government spending on health in the aftermath of an economic crisis - and demand-side changes - following increase in prices of health services (or the "price effect") and reduced household incomes (or the "income effect") as a result of the economic crisis. The indirect effects of an economic crisis on health services utilization 167 and health outcomes stem from such factors as reduction in insurance premium revenues and the impact of currency devaluation on medical prices, and also adversely affect both supply and demand for health services. Layoffs in the formal sector reduce the potential pool of insured, reducing health insurance premium collections and transferring the burden of financing health services for the newly unemployed on to the already cash- strapped public options. At the same time, since prices of a large proportion of medical goods and pharmaceuticals are set in international markets, devaluation of the local currency can significantly increase the domestic prices of these goods and services for the end-user. For all these reasons, an economic crisis drives the health care market to new equilibrium levels lower than pre-crisis levels, in which utilization of health services is lower and prices are higher than before the crisis. Expectedly, since the poor have a lower tolerance for adverse shifts in prices and incomes, and because those with marginal incomes even in the pre-crisis times are more likely to be pushed into poverty following economic downturn, the adverse impacts of an economic crisis are likely to be felt more by the poor, the elderly, the handicapped and by those otherwise vulnerable compared to the better-off. This chapter analyses both the direct and indirect effects of economic crises on health services utilization, and is organized as follows. Section 2 contains an account of the macroeconomic condition of the economy and the events leading up to the present crisis. The impact of the economic crisis on the supply of health services is discussed in Section 3, followed in Section 4 by a discussion of the impact of the crisis on demand for health services. The linkages between the crisis and health insurance are explored in Section 5 and the chapter concludes in Section 6. 2. Background: T1he Dynamics of Macroeconomic linnstability Macroeconomic instability and high and persistent inflation have been the defining characteristics of the Turkish economy over the past ten years or so. Even though the economy grew at an average rate of about 5% during 1990-98, the period experienced extreme volatility and growth rates were never sustained for more than three or four years in a row (Figure 1). At the same time, annual inflation averaged 44 percent through the 1980s and 76 percent in the 1990s, despite the several disinflation programs that have been attempted in recent years. Economic assessments by the World Bank and the IMF point to fiscal pressures as undermining attempts to achieve macroeconomic stability. Fiscal expansion caused by huge payouts in the form of agricultural subsidies and social security obligations, fiscal commitments to state enterprises, and financial sector bailouts, and quasi-fiscal expenditures (such as the "duty losses" of state banks undertaking loss making activities at the behest of government), have compromised efforts to stabilize prices. The resulting fiscal deficits have been financed with external and domestic borrowings at different times, contributing to exchange rate instability. Reflecting the high uncertainty, real interest rates have also tended to be very high, provoking a disproportionate share of investment in residential construction as well as stunting the development of the financial sector. 168 Figure 1: GNP Growth Rates, 1990-2001 5.0 94' ~ 50. -5.0 Unsustainable fiscal policies have typically driven periods of macroeconomic instability in Turkey. The financial crisis in 1994, for instance, came just after the public sector borrowing requirement (PSBR) had been consistently over 10 percent of GNP in the preceding three-year period of 1991-1993. This pattern of high levels of PSBR was to be repeated again when following a year of severe recession in 1994, the economy went through an export-led boom period of high growth between 1995 and 1997, as a result of which the volume of exported goods and services grew by 16 percent each year on average in 1994-97. In addition, the 1996 customs union with the EU provided a strong boost to business confidence and investment. Fiscal adjustments undertaken in the wake of the 1994 crisis reduced the PSBR in the following year, but following sharp increases in public sector wages, a widening social security deficit, generous hikes in agricultural support prices, and transfers to prop up the financially weak state banks, the fiscal position weakened again in 1996-97. With limited access to external financing, the government was forced to increase its reliance on monetization and domestic financing, which fueled inflation and rapid accumulation of domestic debt. Inflation soared to levels above 100% by early 1998, forcing the government to launch yet another stabilization program. However, fiscal policy became expansionary yet again in the second half of 1998 and first half of 1999, when early elections were called and economic activity was slow. The expansion was expenditure driven, with an increase in public sector wages in 1999 - from 7.2 percent of GNP to 8.4 percent - being a major contributor. Reflecting the growing interest payments on high cost debt and increasing inflation, the public sector borrowing requirement started to grow again, reaching a record high of 24.7 percent of GNP in 1999. The cost of fiscal expansion was a rapid- increase in public debt. With the elimination of the public sector primary surplus, the stabilization program lost credibility. Having shrugged off the turmoil in Asia, the economy proved vulnerable to the emerging-market 169 crisis that followed the Russian default in 1998. The second half of 1998 was particularly difficult, with massive capital outflows, rising real interest, and declining economy. Despite somewhat lower inflation, nominal interest rates remained high through much of 1999, reflecting the market's belief that the mix of loose fiscal and tight monetary policies could not be sustained. As a result, the real interest burden of the public sector jumped from 5.4 percent of GNP to 10.9 percent of GNP. This combined with the deterioration of the primary balance of the public sector from 0.8 percent to -2.7 percent of GNP to drive up the operational deficit (i.e., the primary deficit plus real interest payments) of the public sector by 9 percentage points, from 4.6 percent to 13.6 percent of GNP. Public sector debts rose from 44.5 percent of GNP to 58 percent of GNP. Two major earthquakes in August and November 1999 made the fiscal problems and economic outlook even worse, and the economy contracted by 6.4 percent during 1999. The operational deficit is useful in tracking the evolution of debt stocks over time. Real interest payments are simply nominal interest payments corrected to take into account capital gains that can accrue on nominal debt in inflationary environments. The operational balance, in a significant deficit position in every year since 1995, was on a rapidly deteriorating path in 1999. Relatively loose fiscal policy following the Russian crisis - coupled with tight monetary policy to keep inflation in check - led to very high ex-post real interest rates and significant real interest payments for the govermment. This, in turn, led to the rapid accumulation of debt in 1999 (Table 1). Table 1: Net debt of the consolidted public secto (% of GP) 1993 1994 1995 1996 1997 1998 1999 Domestic debt 9.4 14.1 12.2 20.5 20.4 24.2 40.9 External debt 25.7 30.6 29.1 26.0 22.5 20.3 20.1 Total debt 35.1 44.7 41.3 46.5 42.9 44.5 61.0 Source: Treasury, IMF and World Bank Faced with this sharply deteriorating situation, the governnent undertook to launch a major disinflation program designed to achieve a sharp fiscal adjustment, but this time underpinned by (a) an exchange rate commitment, and (b) major structural reforms and privatization intended to sustain the adjustment. Though the initial results were encouraging, signs of problems soon appeared. Throughout the year, inflation outpaced the rate of crawl under the peg. Although inflation fell to a 15-year low of 39 percent by the end of 2000, this exceeded the 24.4 percent target leading to real exchange rate appreciation of about 14 percent. Under the quasi-currency board rules, the Central Bank refrained from sterilizing the capital inflows, which were driving down interest rates to exceptionally low levels well below the targeted path. The current account deficit began to widen rapidly (Table 2). The government did not respond quickly to the widening macro imbalances and clear signs that the economy was overheating. 170 Table 2: Debts in relation to 1999 Stand-By Targets (perce nt of GDP) 2000 2001 target debt deviation target debt Deviation Domestic debt 44.8 39.1 -5.7 45.6 56.5 10.9 External debt 16.5 18.3 1.8 14.5 36.8 22.3 Total debt 61.3 57.4 -3.9 60.2 93.3 33.1 Source Treasury, IMF, April 2002 The government was slow in announcing additional fiscal measures when the primary surplus was exceeding the program target, and was not expeditious in resolving the problem private banks or restructuring the state-owned banks. Not unsurprisingly, therefore, structural problems in the banking sector were to play a key role in the imminent economic turbulences, and the first round of financial turmoil in November 2000 was brought about by the withdrawal of credit lines to Demir Bank, a key primary dealer of government securities. The November 2000 crisis demonstrated both the vulnerability of the Turkish banking sector to exchange and interest rate risks as well as the mismatch between the maturity of assets and liabilities which had built up as a result of past macroeconomic distortions and inadequate banking supervision and enforcement. It also highlighted the importance of growing macroeconomic risks, as a relatively isolated incident quickly escalated to a systemic problem. As confidence fell, foreign portfolio investors withdrew funds, banking sector liquidity tightened, and short-term interest rates shot up to over 1,000 percent. Large liquidity injections from the Central Bank did not calm the markets, and the banking sector - including the state-owned banks which faced steep increases in the costs of financing their chronic liquidity needs - came under severe stress. Overall, the balance of risk shifted abruptly from overheating and external imbalance to recession and financial sector crisis. The government responded with an effort to strengthen its reform program, but this effort fell short and, in late February 2001, Turkey was hit by a full-fledged economic crisis. This set off a new wave of turbulence in the financial sector as investors liquidated their Turkish Lira positions and fled to US dollars in expectation of a government crisis. By February 21, 2001, overnight rates had reached levels over 2,000 percent, with minimal transaction volumes. The next day the government announced the flotation of the Lira, effectively abandoning the original disinflation program. By the end of 2001, the currency had depreciated by more than 100 percent, consumer price inflation rate was about 68 percent, the economy had contracted by more than 8 percent, and all macroeconomic indicators had worsened (Table 3). 171 Table 3: Macroeconomic Balances, in percent of cQNP 1996 1997 1998 1999 2000 2001 GNP 100 100 100 100 100 100 Foreign deficit 4.8 3.8 1.1 2.5 6.5 0.7 Total resources 104.8 103.8 101 102.5 106.5 100.7 Total investment 24.6 25.1 23.8 23.6 24.6 16.4 Fixed capital formation 25.1 26.3 24.4 22.1 22.6 18.4 Public 5.1 5.9 6.1 6.2 6.9 5.7 Private 20 20.4 18.3 15.9 15.6 12.7 Change in stocks -0.5 -1.2 -0.6 1.6 2.1 -2.0 Total consumption 80.2 78.7 77.3 78.9 81.9 84.3 Public disposable income 8.1 11.5 9.4 6.3 7.2 3.6 Consolidated disposable income 2.3 4.8 4.0 2.3 2.8* -2.5 Public consumption 9.8 10.7 11 13.2 12.4 12.5 Public savings -1.7 0.8 -1.6 -6.9 -5.2 -8.9 Public investment 5.3 6.3 6.6 6.2 7 5.1 Public savings-investment gap -7.0 -5.5 -8.2 -13.1 -12.1 -14.0 Private disposable income 91.9 88.5 90.6 93.7 92.8 96.4 Private consumption 70.4 68 66.3 65.6 69.5 66.6 Private savings 21.5 20.5 24.3 28 23.3 24.6 Private investment 19.3 18.8 17.1 17.4 17.7 11.4 Private savings-investment 2.2 1.7 7.2 10.6 5.7 13.2 Private savings ratio 23.4 23.2 26.8 29.9 25.1 25.5 Total domestic savings 19.8 21.3 22.7 21.1 18.1 15.7 Source SPO, SIS. * adjusting with earthquake expenditures, this ratio becomes 2.0 percent of GNP. In response to the crisis, the Government of Turkey adopted a new economic program for 2002-2004, with substantive additional financing from IMF and the World Bank. The key structural and social elements of this new economic program are a strong focus on public sector reform, building a sound banking sector and liberalization of markets for private sector-led growth, as well as special emphasis on strengthening social assistance to help people adversely affected by the economic crisis. Although additional financing of about US$19 billion have already allowed the lira to regain some of its losses and interest rates to fall, economic recovery is expected to be relatively weak in view of such factors as modest wage growth and low levels of employment, damaged investor confidence, outstanding problems related to banking and corporate debt, political uncertainty, tight fiscal policy, and sluggish external demand for Turkish exports and goods, and a growth rate of around 2 percent only is expected in 2002. The 2002 year-end CPI forecast is at 35 percent. The government intends to support a viable debt position by maintaining the public sector primary surplus in 2002 at 6.5 percent of GNP by implementing supportive measures to enhance revenues and rationalize expenditures. The current account is still expected to move from a surplus of about US$2 billion in 2001 to a deficit of similar magnitude in 2002. The capital account deficit is projected at US$3 billion in 2002, 172 compared with US$13 billion in 2001, reflecting mainly the expected improvement in portfolio and banking sector flows as a result of a gradual restoration of confidence. Provided interest rates converge to program levels and the primary surplus remains strong, Turkey's public debt would be sustainable in the medium term, i.e., it would shift to a declining trend relative to GNP. This should lead to modest improvements in external indebtedness indicators as well as financial sector performance (Table 4). Table 4: Projection of key indicators 2000 2001 2002 2003 Growth rates Real GDP 7.4 -7,4 2.0 4.4 Private consumption 6.2 -9.0 2.3 2.6 Public consumption 7.1 -8.6 1.0 1.0 Investment 16.9 -31.7 3.5 6.6 Current account balance/GNP -4.9 2.3 -1.2 -1 Exports of goods (fob)(US$ bn) 31.7 35.3 35.8 40.3 Imports of goods (fob) (US$ bn) 54.0 39.7 44.6 52.4 Consolidatedpublic sector, % of NP Primary balance 2.3 5.9 6.5 6.5 Net interest payments 21.9 23.5 17.6 15.6 PSBR 19.6 17.6 11.1 9.1 Net debt of public sector 57.4 93.3 77.2 69.7 External 18.3 36.8 35.1 30.6 Domestic 39.1 56.5 46.2 42.7 Memo items CPI (average) 54.9 54.4 46,4 43.0 CPI (end-of-period) 39.0 68.0 35.0 20.0 Average ex-ante real interest rate -9.5 31.1 30.8 27.5 External debt (year-end; US$ bn) 117.8 116.0 121.8 123.5 GNP (US$ bn) 201.3 146.5 184.7 194.8 Source: IMF, SPO, SIS and EIU Country Report, January 2002 Assuming that there is recovery in EU and global demand from the middle of 2002, and that the government's continued commitment to an JMF-backed reform program restores some degree of business and consumer confidence, the real GDP growth in Turkey is expected to accelerate to a more respectable rate of 4.0 to 4.5 percent in 2003. Budget revenue is projected at 25.4 percent of GNP and non-interest budget expenditure at 19.7 percent for 2002. If similar trends in revenues and non-interest expenditures continue, similar magnitudes of primary surplus can be expected for 2003 as well. The ability to sustain a fiscal adjustment in the coming years in Turkey will depend to a large extent on the ability to get higher efficiency from public expenditures and to define and allocate resources to current and emerging policy priorities. The focus will therefore be on the ability of the government to identify its spending priorities and for the public expenditure management system to deliver such results. 173 3. Economic Crisis and Supply of Health Services There is limited evidence of a reduction in the scope or size of supply of health services, either in the public or the private sector, in the sense that only a few private health facilities closed down following the crisis. At the same time, there is no evidence that the available resources, at least in the public sector, were reallocated in any way so as to improve efficiency and effectiveness in their use. Thus, any contraction in public spending on health would necessarily result in fewer resources available per service, and in the absence of improved practices, would result in adversely affecting quality of health care services. Following this hypothesis, this section examines public spending on health in Turkey and draws inferences related to quality of services provided. Increase in primary surplus negatively affects the consolidated public sector disposable income (Figure 2). The government's commitment to increase the primary surplus target of the budget from 4.6 percent to 5.6 percent as a share of GNP - aiming at 6.5 percent primary surplus of the public sector - requires strict measures on expenditures as well as revenues. Since the tax base is narrow, most of the savings come from savings in expenditures in the short run. This affects the real level of non-interest expenditures, and there is likely to be no exception for health expenditures in this environment. Figure 2: Primary surplus and budgetary disposable income (share of GNP) 6.0 4.5 ---- 0.0 - _ - -1.5 - ___ -3.0 - , -*----- ----. - -4 .5 u _ _ _ . _ _ _ _ +,_ -|--Bud. Disp. Inc. ---* -Primary Surp. MoH Exp. Public expenditures on health consist of expenditures incurred by the Ministry of Health, General Directorate of Coastal Health Services, Universities, Social Solidarity Fund, other Ministries and agencies, local governments, state enterprises, civil servants, and social security institutions: Sosyal Sigortalar Kurumu (SSK), Emekli Sandigi and Bagkur. An examination of the data shows that total public expenditures on health increased by 11.4 percent between 1998 and 1999, and by 4.7 percent between 1999 and 2000, only to 174 fall by 1.24 percent between 2000 and 2001 (Figure 3).' In real terms, annual per capita public expenditures on health increased from 103 million TL in 1998 to 118 million TL in 2000, only to fall by 2.5 percent to 115 million TL following the economic crisis in 2001. Figure 3: Public Expenditures on Health, 1998-2001 (billion TL) 5,000,000 8,000,000 4,000,000 7,500,000 3,000,000 7,000,000 2,000,000 6,500,000 1,000,000 6,000,000 5,500,000 1998 1999 2000 2001 J_Cons. Budget n Social Sec. Ins. t Total-| The overall trends in public expenditures on health mask the different patterns of spending among the various constituents of public expenditures. As Figure 3 shows, consolidated budget expenditures on health fell by over 15 percent between 1999 and 2001, while health expenditures by social security institutions went up by 9.6 percent during this period. Private expenditures on health consist of out-of-pocket treatment and pharmaceutical expenditures incurred by individuals and households, and by companies and individuals contributing to private insurance schemes. In the absence of reliable data on private health expenditures, it is difficult to make meaningful comparisons between the pre- and post-crisis periods. 4. Economic Crisis and Demand for Health Services Price effect User charges for health services provided in facilities belonging to MOH and universities are set on the basis of a schedule of prices agreed between the MOH and the Ministry of Finance, and are not subject to market conditions. To this extent, therefore, the economic crisis has had no effect on prices in facilities operated by the MOH and by the 1 In real terms (2001 prices) public expenditures on health increased from 7,335 tnlhon TL in 1999 to 7,699 trillion TL in 2000 and fell to 7,605 tnllion TL in 2001. 175 universities. The other major public sector provider of health services is SSK, which also provides health services free of charge at point of service, principally to those insured with SSK and Bagkur. Similarly, facilities run by coast guards, state enterprises and local authorities provided health services free of charge to those entitled to use them. In effect, therefore, the price effect of the economic crisis insofar as publicly provided health services are concerned has been negligible. The prices of medicines are also set by the MOH, under Law 1262, and are based on the producing firm's cost-based price proposal and prices of existing equivalents at domestic market. As a result of the control that the MOH exercises, price increases in pharmaceuticals, on average, have usually been very close to general inflation levels. For instance, in the period January 2001 to January 2002, the rate of change in the Consumer Price Index for medical and pharmaceutical products increased by 84.6 percent compared to the 73.2 percent increase in the overall Consumer Price Index for urban settlements. In general, therefore, the effect of the economic crisis on pharmaceutical prices has been insignificant. Income effect The economic crises of 2000 and 2001 completely wiped out all the income gains of the previous five years (Figure 4). In real terms (2001 prices), annual per capita income fell from 2,965 million TL in 2000 to 2,615 million TL in 2001. Figure 4: AnnuaR Per Capita llncome (million TIL, 20011 prices) 3300 - I-~ ~ ~~~- 3000-__. ...._ _, ____ 2 2700 - - .---*- 2400. 2100 - , C E . 1996 1997 1998 1999 2000 2001 The impact of the economic crisis on poverty is less clear, though. In 1994, 2.5 percent of the Turkish population consumed less than $1 per person per day in purchasing power parity (PPP) terms, while in 2001, 1.8 percent consumed under this threshold and 3.1 percent had income below this standard. The consumption-based figures of 2.5 and 1.8 176 are statistically indistinguishable, and it is not possible to state that PPP poverty was better or worse in 2001. Food poverty, on the other hand, appears to have sharply worsened: in 1994, 7.3 percent of the (total) population consumed less than a food poverty line (based on survey unit values), but in 2001, 17.5 percent of the (urban) population consumed less than an urban food line. Inequality was high in 1994 and remained unchanged in 2001. The income Gini coefficient was 45 in 1994 and 45.5 in 2001; similarly, the consumption Gini was 41 in 1994 and 40 in 2001.2 An examnination of the trend in income distribution by quintile groups shows that the change in real incomes is most dramnatic for the poorest group, whose incomes fell by 32 percent in contrast to the richest group, whose incomes fell by 26 percent. Everyone is worse off after the economic crises of 2000 and 2001, but the poorer are affected harder and the poorest the hardest. Utilization of health services Considering that the price effect of the economic crisis has been negligible, the income effect probably explains most of the changes in utilization of health services. Data on utilization is obtained from surveys carried out in 1999 and 2001. As described in the chapter analyzing demand for health services, the 1999 survey was commissioned by the Ministry of Health and carried out by Makro Research, and was conducted in six provinces, representing five different regions; Adiyaman (Southeastern Anatolia Region), Bilecik (Marmara Region), Commrn (The Black Sea Region), Eskisehir (The Central Anatolia Region), Malatya (Eastern Anatolia Region), and Van (Eastern Anatolia Region). There were no provinces from the Aegean Region or Mediterranean Region in the sample. A total of 400 households were interviewed in each province in which the survey was conducted.3 The 2001 survey was carried by the World Bank, and is nationally representative. Using a multi-stage stratified cluster sampling technique, the survey includes 62 provinces, of which 7 are in Mediterranean, 8 in Aegean, 10 in Marmnara, 7 in Southeast, 8 in East, 11 in Central and 12 in the Black Sea region. A total of 4,000 households were interviewed. Note that the 1999 and 2001 surveys are not comparable, for besides the relatively small size of the 1999 survey, it is not nationally representative while the 2001 survey is. Since there is no other recent survey, however, the results of the 1999 and 2001 surveys are used to obtain a qualitative feel of directional changes in this period.4 2 Poverty cornpansons between 1994 and 2001 are subject to more than the usual concerns about data comparability, since the survey samples and methodology differed sharply between these two. For example, the food poverty line of 2001 is based on CPI prices, not on survey unit values as in 1994. 3 The Sampling-with-Probabilities-Proportionate-to-Size method was used to select distncts, sub-districts and villages withm each province surveyed. Simple random sampling method, which employed a list of homes provided by the appropnate local authority, was then used to select households within the district or village 4 Quantitative comparisons, where made, are subject to the caveat that the two surveys can, strictly speaking, not be compared. 177 In 1999, of those reporting illnesses, 82 percent sought some forrn of medical treatment for the reported illness. Sick individuals with higher incomes were more likely to seek treatment compared to sick individuals with lower incomes, and this trend was consistent across all income quintiles. Among the poorest 20 percent, only 73 percent sought care, which is significantly different from the 87 percent of individuals in the top two quintiles. Following the economic crises in 2001, however, the percentage of those seeking some form of medical treatment when ill dropped to 72 percent. Sick individuals with higher incomes remain more likely to seek treatment compared to sick individuals with lower incomes. Among the poorest 20 percent, only 68 percent seek care, which is significantly different from the 77 percent of individuals in the top two quintiles (Figure 5). Figure 5: Percent Population Seekinjg Treatment When llG, 1 999w2OO1 100.00% 80.00% 7 ' 60.00% - X _ 40.00% - 20.00C ~ - 4 0.010 % __ __ _ __ Quintile 1 Quintile 2 Quintile 3 Quintile 4 Quintile 5 101999 E02001] Overall, the propensity to seek care fell irrespective of type of insurance. The largest drop was observed among those with no insurance, in which category the percentage of persons seeking care when ill fell from 72% in 1999 to 55% in 2001. Average out-of-pocket expenditures on health care are lower among those with insurance as compared to those without any insurance, since even though the insured may consume more health care compared to the uninsured, each medical visit costs significantly less for the insured in terms of copayments. Since the employed are significantly more likely to be insured compared to the unemployed, it follows that out-of-pocket expenditures on health are likely to be higher among the poor relative to the better off. Consistent with the decline in health care seeking behavior, out-of-pocket expenditures on health also fell for almost all income groups, with the lowest two quintiles witnessing 37 percent and 45 percent reduction in health care spending compared to those in the richest quintile whose health care expenditures went up by 25% (at 2001 prices). 178 5. Economic Crisis and Health Insurance Social insurance programs in Turkey are tied to an individual having a job in the formal sector. With the exception of Bagkur - a social insurance plan for the self-employed - the whole social security system is linked to holding a formal job. In such a system, there is a distinct risk that those without a connection to the formal market will be excluded from social security benefits, and there is really no other system in place that comprehensively targets the vulnerable groups. Total employment in Turkey was 20.6 million in 2000, of which 35% were employed in agriculture, 18% in industry, 6.5% in construction and the remaining 40.5% in the services sector. According to the Household Labor Force Survey (HLFS) of year 2000, the number of unemployed people was estimated to be 1.45 million, or 6.6% of the total workforce, and a further 7% were underemployed. Figure 6: Unemployment and Underemployment, 2000- 2001 (by quarter) 10.00 i, 9800 U) 50~ 5 00 A- . _._ 4.00 C- CN C:) C C' o o 0 0 0 0 0) 0 o' 0o 01 0 04 0N 01 0 -4unemployment -0* Underemployment The results of the HLFS for the first quarter of 2001 confirm the widely anticipated increase in unemployment following the two waves of economic crises (Figure 6). Between the last quarter of 2000 and the first quarter of 2001, almost half a million people lost their jobs, equivalent to an increase of 32.4 percent in the number of jobless people. By the fourth quarter of 2001, the number of unemployed persons had increased to 2 million 335 thousand, an increase of 70.9 percent (969,000 persons) when compared to the results of the same quarter of previous year. The unemployment rate was estimated to be 10.6 percent for the country as a whole, with a further 6.1 percent being under- employed. More strikingly, 27 percent of educated young people were unemployed. The addition of over a million persons in the category of the unemployed places a huge strain on the social security system. As far as the health sector is concerned, this translates into reduced health insurance premium collections and a greater burden for the 179 state welfare system to finance health care for the unemployed. In particular, persons losing employment in the formal sector would also be losing their health coverage as provided under SSK. In turn, the newly unemployed and under-employed, both with reduced incomes, would be unlikely to participate fully in the Bagkur program as well. The combined result of all this would be a greater pressure on the Green Card program on the one hand and reduced utilization of health services on the other. Figure 7: Bagikur Healt7h Expenditures 1,000,000- 100 900,000 - 800,000 X 8f 700,000 - 60 - 600,000- -40 o 500,000 - i - 400,000 -20 f 300,000 - -0 200,0000 F 2 100,000 0 -40 1996 1997 1998 1999 2000 2001 2002 =J Bagkur Health Expenditures -0- Annual Percent Change An examination of the relevant data confirms these presumptions. The collection to assessment ratio for Bagkur for 2001 was only 37.4 percent for agricultural sector employees (under code 2926) and 63.2 percent for others (under code 1479). Health expenditures by Bagkur fell by about 20 percent between 2000 and 2001 (Figure 7) and over 3.2 million new green card applications in the years 2000 and 2001 (Figure 8). 180 Figure 8: New Green Card Applications, 1998-2001 1,800,000- - .2 1,600,000 1,200,000 A E 1,000,000 LT. 800,000 1998 1999 2000 2001 6. Conclusion The current economic crisis has had an impact on almost all sectors of the Turkish economy and has adversely affected everyday life for most citizens in the country. The impact of the crisis on health outcomes is not readily apparent or measurable at this point of time, but there is little doubt that the economic turbulence of the last eighteen months or so has adversely affected utilization of health services and possibly the quality of publicly provided health services. In addition, the increasing unemployment and underemployment following the crisis has had a negative impact on the health insurance system and has put an additional strain on the already cash-strapped public finance and delivery system. One major concern in situations as this is that the crisis affects the poor more than the rich, and among the poor also it is the poorest who get hit the hardest. When utilization falls, one concern is whether it is the consumption of necessary health services by the poor that have decreased. In the absence of disaggregated utilization data by quintiles by type of service, it is difficult to ascertain the equity effects of the crisis; however, there are many indications that the crisis has left more people vulnerable to general under- consumption. Using household data from 1994, a simulation was undertaken in March 2001 to assess the impact of the crisis on welfare distribution. This simulation suggested five patterns of likely increased poverty as a result of the most recent financial crisis of 2001: (i) families with many children - widows with many children are particularly vulnerable - extended families with many children, as well as single-parent families, seem to be most affected in terms of high rates and high increases in food poverty; (ii) an increase in unemployment disproportionately affect families with many children; (iii) those with moderate levels of education seem more likely to become vulnerable - but still above the poverty line - while the least educated are the most likely to become food poor; (iv) the urban population seems more at risk of slipping into food poverty as they have no access to small food plots to complement meager cash incomes; and (v) families with 181 reduced income have responded to the crisis by reducing consumptions, shifting to lower cost and quality food, postponing purchases of durables, and more worryingly, proposing to keep children back from school due to the out-of-pocket expenses such as uniform, shoes, books and stationery. In all cases involving families with many children, single mothers, families with unemployed members, and the urban underemployed, utilization of health services is likely to be deferred till it becomes absolutely essential, increasing vulnerability to illnesses in the short-run and adversely affecting health outcomes in the long run. As Yang et al (2001) note, periods of economic crisis also provide opportunities for positive change, both by exposing the fault lines in the existing system as well as by presenting innovative options for addressing the problems. The economic crisis of Turkey and its impact on health services utilization points to the need of back-up insurance coverage for the unemployed, for at least some time period after cessation of the employment. In addition, the existing vacuum in coverage of the non-formal sector employees, the underemployed, the marginally poor and others who are unable to make insurance premium contributions needs to be covered in some suitable manner. 182 References Cutler, DM, Knaul F, Lozano R, Mendez 0, Zurita B. 2000. Financial crisis, health outcomes, and aging: Mexico in the 1980s and 1990s. NBER Working Paper No. W7746. National Bureau of Economic Research. Yang, BM, Prescott, N, Bae EY. The Impact of Economic Crisis on Health-Care Consumption in Korea, Health Policy and Planning, Oxford University Press, 2001. Yemtsov, R. Living Standards and Economic Vulnerability in Turkey between 1987 and 1994. World Bank Discussion Paper No. 253, January 2001. Musgrove, P. The Economic Crisis and Its Impact on Health and Health Care in Latin America and the Caribbean. International Journal of Health Service; 17: 424, 1994. 183 184 CHAPTER 9: MEETING THE MILLENNIUM GOALS FOR HEALTH 1. Introduction The consensus and commitment among many countries and the intemational community to the achievement of the Millennium Development Goals (MDGs) implicitly recognizes the substantial positive repercussions the attainment of these goals would have on reduction of poverty and welfare gains for millions of households. As in other areas of human development, progress in meeting the health-related goals will also contribute to poverty reduction. Poverty and health are intimately related, and poverty is both a cause and consequence of ill health (World Bank, 2001). The relationship is fairly straightforward and obvious: poor health and nutritional conditions compromise a household's ability to generate a sufficient livelihood, triggering a process of impoverishment; conversely, being impoverished causes ill health as household members are improperly nourished and/or are unable to access health services to treat illnesses. At the macro level, infectious diseases like malaria and AIDS can take off a few points in the GDP growth rate;' at a micro level, serious illnesses can make the difference between poverty and living well for individual families. Despite considerable progress in the recent past, meeting the health-related MDGs for 2015 will continue to pose a challenge for Turkey. For example, maternal mortality rates are high - whichever data source is believed to be the most accurate - and it will be very difficult to achieve a reduction of 75 percent in these rates. Less than two-thirds of all mothers receive antenatal care, and less than one-third receive the full dose of tetanus toxoid injections. On average, a physician attends only 2 out of 5 childbirths. Under-five mortality rates are also high, but the steady improvement in the last decade holds promise for attainment of MDG targets in this regard. As far as HIV/AIDS is concemed, the number of reported cases of HIV infections is low, but data quality and surveillance methodology is not very reliable. Income inequality and inequity in health status and utilization constitute a formidable barrier to the attainment of the health-related MDGs in Turkey. Whatever are the reasons - demand-side restrictions emanating from income, cultural and opportunity barriers, or supply-side problems caused by uneven distribution of facilities and personnel - the vicious circle of poverty and ill health would need to be broken before any rapid and sustained progress can be achieved in the MDG indicators. Using data from the Turkey Country Report on Socio-Economic Differences in Health, Nutrition and Population, December 2001, Demographic and Health Survey (DHS), 1993 and Demographic and Health Survey (DHS), 1998 (for adolescent reproductive health), this chapter presents disaggregated health status and health services utilization data for reproductive health services, by asset or wealth quintiles. Although the data is old - almost all utilization numbers presented here are drawn from the 1993 DHS - the pattems remain valid even today. Millennium Development Goals (MDG) that have direct implications for health form the basis of the discussion contained in this chapter. Box 1 contains the associated targets and indicators. 1WHO, Macroeconomics and Health Investing in HealthforDevelopment. 2001, Geneva: WHO. 185 lBox 1: Millennium Development Goals for Reproductive and Child Health Goal 1: Eradicate extreme poverty and hunger Target 2: Halve, between 1990 and 2015, the proportion of people who suffer from hunger. llndicators: (i) Prevalence of underweight children (under five years of age) Goal 4: Reduce Child Mortality Target 5: Reduce by two-thirds, between 1990 and 2015, the undelr-five mortality rate Indicators: (i) Under-five mortality rate (ii) Infant Mortality Rate (iii) Proportion of 1 year olds immunized against measles Goal 5: llmprove Maternal Health Target 6: Reduce maternal mortality ratio by three quanrters betweem 1990-2015 Indicators: (i) Maternal Mortality Ratio; (ii) Proportion of births attended by skilled health personnel. Goal 7: Combat 11111 V/AIDS, Malaria and Other Diseases Target 7: Have halted by 2015, and begun to reverse, the spread of HIV/AIDS lIndicators: (i) HIV Prevalence arnong 15-24 year old pregnant women; (ii) Contraceptive Prevalence Rate. The rest of the chapter is organized as follows. Section 2 presents data on indicators and use of reproductive health services in Turkey. Issues related to child health are presented in Section 3. Section 4 focuses on issues related to reproductive health among adolescent women. The chapter concludes in Section 5 with a discussion on strategies for reaching the poor. 2. Status and use of reproductive health services The differences in the proportion of clients using health services between the poor and the rich in Turkey are large for all services, but are the greatest for the use of safe motherhood services (Figure 1). The inter-quintile disparity ratios between the poorest (reference) and richest quintiles are 2 or more, which suggests that the rich utilize safe motherhood services at least twice as much as the poor. The biggest difference is in antenatal care (inter-quintile disparity ratio of 2.8), followed by deliveries attended by skilled medical personnel (2.3), contraceptive prevalence rate, or CPR (2.2) and immunization (2.0). Thus, the high averages of the use of child and safe motherhood health services (> 60%, except CPR) mask the low levels of utilization by the poor. 186 Figure 1: Use of Selected Health Services in Turkey: Poor-Rich Differences 3.0 2 5 00 1.5 0 1 0.5 -..L 2 3 4 Qulntiles (1=Poorest (reference, 5=Rlchest) -4Full Immunization (Avg. 64.2%) + Antenatal Care (Avg 62 5%) _ Attended Delivery (Avg. 76%) *-- Use of Modem Contraception in Females (Avg 34.5%) Fertility The Total Fertility Rate (births per woman) for Turkish women is about 2.5 and decreases across quintiles (Figure 2). Women from the poorest household have two-and-a-half times more births per woman (inter-quintile disparity ratio of 2.5), indicative of socio-cultural differences, differences in awareness of family planning and differences in access to modem contraceptive methods. Figure 2: Fertility and Use of Modern Contraception 4 - ~~~~~~~~~~~~~~~~~~50 IZ - 1 . ~ ~2 3 4 5 Quintiles (1: poorest, 5: richest) -|- Total Fertity Rate - Use of Modern Contraception 187 Family Planning The use of modem contraception for Turkish women is low (average is 34.5%) and increases across quintiles. The inter-quintile disparity ratio (rich-poor ratio) is 2.1, which suggests that the richest women are more than twice as likely to use modem contraception than women in the poorest quintile. Antenatal Care Inequity in the use of antenatal care between each successive quintile is large even though the average for antenatal care use is 62.5 percent (Figure 3). More women in all quintiles report visiting a doctor for antenatal care (average 47.1 percent) compared to a nurse or trained midwife (15.4 percent). Women from the richest quintile are four times more likely to visit a doctor and 2.6 times less likely to visit a nurse for antenatal care compared to women in the poorest quintile. Figure 3: AntenatiG Carre Vafisits 100 90 T ;; : ~ 80 . >70 . v.-__ _ E 40 _ 0 .20 *- 5 --_ 10 1 2 3 4 5 Quintiles (1 =Poorest, 5=Rlchest) -|-- to a Medically Trained Person --to a Doctor z to a Nurse or Trained Midwfe Inequity in the number of visits for antenatal care is also high (Figure 4). Women from the richest households are almost 3 times more likely to have at least one antenatal visit and about 3.6 times more likely to have two or more antenatal visits relative to women from the poorest households. On average, 62.5 percent women report at least one antenatal visit, while 54.4 percent report at least two visits. 188 Figure 4: Number of Antenatal Visits 2 100 , 480 60 1 2 3 4 5 Quintiles (1=poorest, 5=richest) -4--1+ Visits -U-2+ Visits Delivery Care Inequity is large for skilled attendance at delivery (Figure 5). Only 11.6% of the poorest women have had deliveries attended to by a doctor compared with 72.3% of the richest women, indicative of a more than 6-fold increase across quintiles. Attendance by a nurse or trained midwife is less inequitable than the attendance by a doctor, even though levels decrease across quintiles. Overall, women in the poorest quintiles are more likely to have a nurse or midwife attend their deliveries, while women in the richest quintiles are more likely to have trained doctors attend their deliveries. The presence of a skilled attendant considerably influences the levels of infant mortality, as is also brought out by the high Infant Mortality Rates (IIMR) among those with low levels of skilled attendance at birth. As Figure 6 shows, the inter-quintile disparity ratio of IMR decreases across quintiles as the inter-quintile disparity ratio for skilled attendance at delivery increases across quintiles. 1[MR inequality almost mirrors the inequality in skilled attendance, suggesting that the poorer women not only face higher mortality and morbidity risks, their infants are also at higher risk compared with infants born to wealthier women. The majority of women (average 55.9 percent) deliver in a public facility, followed by deliveries at home (40 percent). As Figure 7 shows, about 72 percent of the poorest women deliver at home compared to only 8.2 percent of women in the wealthiest quintiles. The use of public facilities for deliveries increases with income, while only very few women in the richest quintile prefer private facilities. 189 Figure 5: Skilled Attendance at Deliveiry 120.0 . 100.0 - _ 00 f c 80.0 -- '-- ~~~---- - --- --- < -- .. . - 6 00 , -. - - - - - - - - - -- - _ _ _ 600 c 40.0 20. ------ 0.0 1 2 3 4 5 Quinbles (1 =Poorest, 5=Richest) -cZO- by a Medically Trained Person -C-- by a Doctor 6 by a Nurse Midwfe Figure 6: Skilled Attendance at iDelivery and Wnant lMortality Rates: Rich-Poor Ratios 25 2 _ 0 0 0 55 - Quintiles (1 =Poorest, 5=Richest) -C-O- IMR -0-- Skilled Attendance at Delivery 190 Figure 7: Place of Delivery S 80 X _i_j_ 60 a 40 8 oE 30 '_ -20 " tL00 1 2 3 4 5 Quintiles (1=Poorest, 5=Richest) -|-+In a Public Facility ---- In a Private Facility A At Home 3. Mortality and morbidity among children Child Mortality Infant Mortality Rate (IMR) is very high in the lower quintiles and progressively decreases across quintiles (Figure 8). The inter-quintile disparity ratio for IMR is 8.4, indicative of great inequity in child mortality in Turkey. Similarly, the Under 5 Mortality Rate (U5MR) for the poorest quintile is about 125 deaths per thousand births, dropping dramatically to about 27 deaths per thousand births in the wealthiest quintile, a ratio of about 7.3:1. Figure 8: Deaths per thousand births 120 ' _ _ _ __ _ _ 100 _ 2 -. - 60 -,S . ; 4 40 __ 4_ _ ' 20 1 2 3 4 5 Quintiles (1: poorest; 5: richest) - Under 12 months Under five years 191 Immunization Coverage Huge inequities exist in immunization coverage, with children from poor households twice as likely as the children from the richest household not to receive the full complement of immunizations (Figure 9). Figure 9: Dmmuniza1tion Coverage 1000 1.4 90 0 ~ 12 34 X~~~~~~~~~~~~unie (oo _poet 5=rlche_st)= E 40 0 ; 1 2 0 0 _ 00 '' ' 1 '2 '3 ' 4 '5 Quintiles (1=poorest, 5=richest) -Measles --DPT3 L All - None Childhood Diseases Childhood diarrhea affects on an average 25% of children, and the poorer are only slightly worse off than the rich. ORT appears to be commonly used by the rich and the poor alike (inter-quintile disparity ratio is 1.3), while inequity in medical treatment of childhood diarrhea is slightly higher (inter-quintile disparity ratio is 1.8). On average, less than 40% of children had suffered from an acute respiratory infection (ARI) in the preceding two weeks, but poorer children were more than two times likely to have been ill compared to children in the wealthiest quintile. Treatment rates vary considerably across quintiles. About 25% of children in the poorest quintile are brought to a health facility and of those only 22% are seen in a public facility. In comparison, 56% of children in the 4th quintile are brought to a health facility for an ARI episode and of these 36.7% are taken to a public facility. 192 4. Inequalities in Adolescent Health Status and Health Services Utilization Figure 10 shows that by 2005, Turkey will see a temporary "bulge" in the working-age population relative to older and younger dependants. This "demographic bonus" offers an opportunity to build human capital and spur long-term development, if investments are made in education, job creation and health services, including reproductive health care. It also offers an opportunity to break the cycle of poverty if investments are targeted in the poorer quintiles. Current evidence points to a fairly low health status for poor adolescents and relatively low utilization of health services compared to adolescents from wealthier households. Figure 10: Age-Sex Population Pyramid (2005) 65-89 , 4504 4000 , 3000 2000 1000 0 t000 2000 3000 4000 Early marriage and childbearing About 1 in 3 women marry at an early age in Turkey. Women in the poorer quintiles are more than twice as likely to marry early compared to their peers in the wealthier quintiles (Figure 11). Almost 20 percent of young women have had a child by age 18 and this is more than three times likely to happen to young women in the poorest quintile compared to young women in the richest quintile. In general, the fertility rates for adolescent women decrease across wealth quintiles for both years. The age specific fertility rates for the poorest young women have increased greatly from 1993 to 1998, and less so for the wealthier young women. Poor adolescent women are increasingly giving birth between the ages of 15-19, while young women in the wealthier quintiles appear to be benefiting from famnily planning information and services. 193 Figure 91: Eairy Marriage anrd ChHd bearing 45 40 - _ - _ E - __ 30 __. *.~~_ __ _ 25 . * 20 - - 10. 5- 0 1 2 3 4 5 Quintiles (1 =poorest, 5=richest) ---| Women age 20-24 married by age 18 --- Women aged 20-24 who have had a child by age 18 Use of Modern Contraceptives Young women in the wealthiest quintiles are about 7 times more likely to use modem contraceptives than young women in the poorest quintiles (Figure 12). Majority of young women in the poorer quintiles appear to obtain contraceptives from a public source while the majority of women in the upper two quintiles tend to obtain their contraception from private sources. Figure 12: Use of Modern onC rscep1Vion in ADdOescent Fernales (aiged 15-19 years) 450 400 , _ _ _ _ r35 0 E aso -- . _ _ . _ 0 L 1500 _ - - - -- __ _ _______ ,,__ 00 1 2 3 4 5 Quintiles (1=poorest, 5=richest) 194 Antenatal Services The average use of antenatal services among young women is high (63.8%). However, women in the poorest quintile are twice as likely not to use these services. Skilled medical personnel attend the majority of births to young mothers (average 80.6 percent). However, women in the wealthiest quintile are twice as likely than women in the poorest quintiles to have such delivery assistance. Iron supplementation is provided to almost 75% of the young women. However, young women in the wealthiest quintile are almost 3 times more likely than their peers in the poorest quintile to receive this supplementation (Figure 13). Figure 13: Utilization of Maternal Health Services Among Adolescent Women -- Antenatal care uptlization 9 In ! -~ I ..X1 ,' 60 ________________ -3--~~~~~~~~ Delivery Assistance Institutional Delivery 0 i 40 X Iron-supplementation 1 2 3 4 5 Quintiles (1=poorest, 5=rlchest) 5. Discussion: Strategies for reaching the poor A common conclusion that emerges from this analysis is that there is a strong association between income status on the one hand and health status and utilization of services on the other. A consistent observation across almost all indicators is that the poor have worse health status relative to the rich and are less likely to use health services. These results are not unexpected; however, the extent of disparities is glaring. Without a doubt, significant improvements will have to be brought about in ways that health services are delivered and targeted among the poor if Turkey is to achieve its MDG targets. The presentations of the previous sections suggest that when inequality in health indicators is as high as it is in Turkey, health objectives and targets can be reached more aggressively and more effectively if the poor are targeted first. Turkey will thus have to invest considerably in reaching health services to the poorest sections of society in order to reduce the high levels of maternal mortality and morbidity and child mortality. Before prescribing any remedial measures for Turkey, it is useful to recap what are generally understood as constituting barriers for poor women, their families and the communities in reaching and benefiting from basic services in maternal-newborn health. The most significant of these barriers are: 195 o Low status of girls and women: Women's access to resources such as land, credit and education limits their engagement in productive work and ability to seek health care. Low status of women denies them the power to make decisions that affect their lives and is a big barrier to improving maternal health outcomes among the poor. Socio-economic dependency makes poor women more vulnerable to physical and sexual abuse, to unwanted pregnancy and sexually transmitted diseases including HIV/AIDS. o Community factors: Cultural norms and practices may negatively impact on maternal health. The perceptions of health and risks during pregnancy, birth and postpartum/newborn period strongly influence both health-seeking behavior and appreciation of the quality of the available services. Birth is often seen as a routine event, and planning for birth may be inadequate. o Affordability: Formal and informal user fees in many settings strongly influence the uptake of maternal-newborn health services. This is particularly the case for delivery and other pregnancy related emergencies. The unpredictability of total costs for pregnancy and the possible complications deter the poor from seeking skilled attendance o Quality of Care: Poor quality of care and deficient services are the most common reasons that women and their families give for not using available health services. Poor quality of care is a result of a shortage of trained staff especially in rural areas (skilled attendants are concentrated in urban areas), low motivation and support of overworked staff, lack of essential drugs equipment and supplies. Poor women are often receive the worst treatment and wait long hours because they have no voice and no alternatives. Generally speaking, strategies to improve access to basic Maternal and Child Health services for poor women include: o Strengthen Outreach Services and Community Based Approaches: Sensitize communities on safe motherhood and develop alternative outreach strategies that take the MCH services to the poor women in their homes through community based skilled birth attendants, mobile teams for prenatal and EPI, community-based delivery (CBD) of contraceptives, maternity waiting homes and rural midwifery programs. o lrlmprove Education for Girls and Women: Provide knowledge and education about maternal health to women and their families to promote better health-seeking behaviors, and improve access to education for girls of poor families in order to delay early child bearing and improve women's empowerment. o Increase public sector subsidies to poor and disadvamtaged areas: Poorer areas will need more financial and human resources to improve accessibility and improve quality of services. For Turkey, this will include the urban poor, minority ethnic groups and hard to reach geographical areas. o Develop Effective 'Poor-Friendly' Referral Systems: Sensitize communities and private sector on their roles. Improve road infrastructure in rural, poor areas. Strengthen partnerships between traditional birth attendants and skilled formnal providers; build 196 linkages with other reproductive health, nutrition, gender and adolescent health interventions * Improve Performance and Availability of Both Essential and Emergency Obstetric Care services (EOC) for the Poor: Strengthen policies and capacity building, training of providers for improved quality of care and improve logistics. * Promote Affordable Maternal Health Services. Promote community-financing schemes. Promote private services for those who can afford it and assure public funds are used to finance transportation and care for the poor. * Provide Adolescent Sexual and Reproductive Health Information and Services: Provide information and services for different age groups and for both in-school and out- of-school programs; improve girls participation; and broaden them to include recreation and livelihood activities * Strengthen Monitoring and Evaluation: Identify appropriate indicators and tools that will provide information on the poor; e.g. differentiated process indicators (availability of EOC services, deliveries by skilled attendants by income group) maternal audits at health facility and community level, and Reproductive Age Survey (RAMOS) where vital registration is good. Conduct benefit-incidence analysis. Top-Down and Bottom-Up Strategies MDGs may be met by implementing two kinds of strategies: * A top-down strategy, i.e., targeting policy and program efforts to the richer quintiles first and progressively to the poorer quintiles. * A bottom-up strategy, i.e., targeting policy and program efforts to the poorer quintiles first and then progressively upward to the richer quintiles. Given the high inter-quintile disparities in Turkey, raising the population averages across all MDG indicators can be more aggressively achieved using the bottom-up strategy, i.e., by targeting the poor first. Table 1 presents a stylized example highlighting the difference in achievement levels using the two approaches on the assumption that in either case all households are covered in the two income quintile groups targeted. Thus, in the bottom-up approach, 100 percent of the target population is covered in the lowest two quintiles, while status quo is maintained in other quintile groups. Similarly, in the top-down approach, 100 percent of the target population is covered in the top two quintiles, and status quo is maintained elsewhere. In both cases, status quo is maintained for the third quintile group. 197 Table 1: Top-Down and Bottom-Up Strategies Antenatal Care Visits (%) Proportion of Births Contraceptive Prevalence attended by skilled Rate (%) personnel (%) Level Level Level Level Level Level Current using using Cu-rTent using using Current using using Quintile Level Top- Bottom- Level Top- Bottom- Level Top- Bottom- Down Up Down Up Down Up Strategy Strategy Strategy Strategy Strategy Strategy 1 32.9 32.9 100 43.4 43.4 100 21.0 21.0 100 2 52.2 52.2 100 71.0 71.0 100 29.4 29.4 100 3 66.6 66.6 66.6 84.3 84.3 84.3 33.1 33.1 33.1 4 83.9 100 83.9 95.5 100 95.5 38.5 100 38.5 5 92.2 100 92.2 98.9 100 98.9 45.5 100 45.5 PAvelratge 62.5 66.6 88.7 76.0 77.0 95.7 34.5 60.7 60.3 Source Table constructed from data in Turkey Socio-Economic Differences in Health, Nutrition and Population Report May 2000. The stylized example presented above shows that significant gains could be achieved in the population averages using the bottom-up approach. In the case of antenatal care visits, the bottom-up strategy results in increasing the population average to 88.7 percent compared to the level of 66.6 percent reached using the top-down strategy. Skilled personnel could record similar gains in birth attendance, where 95.7 percent of the population can potentially be covered if the bottom-up approach is employed. Where inequities are not so high and the average is low, as in the contraceptive prevalence rate, both approaches yield a similar increase. A bottom-up strategy will also ensure a more equitable distribution of reproductive health services across socio-economic strata. In the stylized example presented above, the concentration index - which provides a means of quantifying the degree of inequality across income groups - improves when either strategy is adopted, but improves substantially when the bottom-up strategy is employed. For antenatal visits, the concentration index at current levels is -0.15. Using the top-down strategy the distribution becomes more equitable and the concentration index improves to -0.05, but with the bottom-up strategy the concentration index moves into the positive zone and takes on the value of 0.025. Similarly, for skilled attendance at birth, the concentration index at current levels is -0.06, improves marginally to -0.05 with the top-down strategy and substantially to positive 0.16 with the bottom-up strategy. The implications and prescriptions following the above analysis are clear: in order to achieve the Millennium Development Goals for health, Turkey must re-design the delivery of health services so as to reach the poor much more aggressively than the present trends and practices suggest. 198 References World Bank 2000. Turkey: Socio-Economic Differences in Health, Nutrition and Population Report. Washington DC. World Bank 2001. Poverty Reduction and the Health Sector. The Health, Nutrition and Population Network's Chapter in the World Bank's Poverty Reduction Strategy Sourcebook. Washington, DC WHO 2001. Macroeconomics and Health: Investing in Health for Development. Geneva: WHO. 199