Report No. 32354-ECA Review of Experience of Family Medicine in Europe and Central Asia (In Five Volumes) Volume II: Armenia Case Study May 2005 Human Development Sector Unit Europe and Central Asia Region Document of the World Bank REVIEWOF EXPERIENCEOF FAMILY MEDICINEINEUROPEAND CENTRALASIA ARMENIA CASE STUDY CONTENTS Acknowledgements ................................................................................................................................................. Executive Summary .............................................................................................................................................. ... 111 1. Objectives o f the study an ethodology............................................................. 1 1.1, The evaluation fi-amewo ............................................................ 1 1.2. PrimaryResearch.......... .................................................................................................................. 2 1.2.1. Qualitative research.............................. ..................................... 2 1.2.2. Physician Task Profile Survey ..................................................................................................... 3 1.3. Secondary Research.................................................................. ..................................... 4 1.3.1. Literature review ....................... enia.............................................................. ..................................................................... 2. The challenges faced bythe HealthSys 2.1. Background........................................................................................................ ......................... 5 2.2. Economic changes and increasing poverty .............................................................................................. 5 2.3. Declining HealthExpenditures ................................................................................................................ 6 2.4. Worsening health indicators.................................... .................................................................. 6 2.5. Excess infrastructure and human resources ............................................................................................. 8 2.6. Inefficient service provision.......................................................................... ..................................... 8 2.7. Low levels o f pay for healthpersonnel ......................................................... ..................................... 9 2.8. Access barriers and declining utilizationo f health services..................................................................... 9 3. Healthreforms and key legislative changes............................................. 3.1. Health Sector Strategy andKey Changes inLaws Relatedto the Health 3.2. Organizational changes............................................................................ 3.3. Healthsystem financing............................................................................. 3.4. State Guaranteed Basic Benefits Package.............................................................................................. 12 3.5. Resource allocation andprovider payment systems............................................................................... 3.6. Rationalization o f the hospital andPHC sector ..................................... ................... 13 16 4. Key Developments inPrimary HealthCare........................................................................................... 17 4.1. Development o f Family Medicine and PHC.......................................... 4.2. Development o f HumanResources inPrimary HealthCare.................. 4.2.1. Training o f family physicians andnurses .................................................................................. 17 4.2.2. Curriculum for Family Medicine Training....................................... ..................................... 18 4.2.3. Residency Program inFamily Medicine.......... .................................................. 18 4.2.4. Family Medicine Training Centers .................. .................................................. 19 4.2.5. Continuing Medical Education ........................ ...................................... 19 4.2.6. Evaluation of the FMTraining Programs .................................................................................. 19 4.3. Organization o fPrimaryHealthCare .................................................................................................... 20 4.3.1. Types o f PrimaryHealthCare Providers ......................................................................... 4.3.2. Professional Associations ................................................................................................ 4.3.3. Licensing o fDoctors...................................................................... ....................................... 21 4.3.4. Licensing o f PHC Training Facilities......................................................................................... 21 4.4. Financing o fPHC and Provider Payment Systems................................................................................ 21 4.5. Service Provision................................................................................................................................... 22 4.5.1. Basic Benefits Package... ................................................................ 4.5.2. Enhanced Gate keeping F on............................................................ 4.5.3. Refurbishment o f PHC Centers............................................................... 4.5.4. 4.6. World BankSupport to develop Family Medicine and PHC................................................................. Guidelines ............................................................................................... 23 5. Service Delivery: Task Profile Survey.......................... ........................................... 25 5.1. Numberofpatients enrolledwith the doctors ........................................................................................ 25 5.2. Contacts with patients ............................................................................................................................ 25 5.3. Appointment System for Consultations ................................................................................................. 25 5.4. Equipment UsedbyPHC Doctors and Family Physicians..................................................................... 25 5.5. Direct access to laboratory tests and X-Ray................... ................................................................... 26 5.6. Application o fmedical techniques................................. ................................................................... 27 5.6.1. Comparison byurban-rural status .............................................................................................. 27 5.6.2. Comparison by reform status ..................................................................................................... 28 5.7. Firstcontact management ofcommonly encountered conditions .......................................................... 29 5.7.1. Pediatric conditions: comparison by urban-rural status ............................................................. 29 5.7.2. Pediatric conditions: comparison byreform status .................................................................... 30 5.7.3. Common gynecological conditions: comparisonby urban-rural status ..................................... 31 5.7.4. Common gynecological conditions: comparisonby reform status ............................... 5.7.5. Common adult conditions: comparison by urban-rural status....................................... 5.7.6. Common adult conditions: comparison byreform status........................................................... 33 5.8. Healthpromotion and diseaseprevention.............................................................................................. 34 5.8.1. BloodPressure........................................................................................................................... 34 5.8.2. Cholesterol check..................................................... ........................................................... 34 5.8.3. Cervical Smear Testing............................................ ........................................................... 35 5.8.4. Health Education........................................................................................................................ 35 5.8.5. Immunization and Antenatal Care..................................................................................... 5.9. Chronic diseasemanagement........................................................................................................ 5.9.1. Comparisonby urban-rural status............................. ............................................................ 36 5.9.2. 5.10. Job satisfaction ....................................................................................................................................... Comparison byreform status ..................................................................................................... 37 5.10.1. Comparisonby urban-rural status .................................................................................. .38 38 6. Findings o fthe qualitative research ....................................................................................................... 39 6.1. PHC reforms and perceivedbenefits...................................................................................................... 39 6.2. Critical success factors........................................................................................................................... 39 6.3. 39 7. Concerns expressedby the key informants ............................................................................................ Key Achievements o f PHC Reforms ............................................................................................. 7.1. Organizational andregulatory changes.................................................................................................. 41 7.1.1. Business Planning at the PHC Level.......................................................................................... 41 7.2. Financing, resource allocation, andprovider payment systems ............................................................. 42 7.2.1. Reduced informal payments....................................................................................................... 42 7.2.2. Improved affordability and access ............. .................................... 42 7.3. Service Provision................................................... .......................................................................... 42 7.3.1. Expanded service delivery ......................................................................................................... 42 7.3.2. 42 Reduced referrals by family physicians to narrow specialists andhospitals .............................. Reduced self-referral to narrow specialists ................................................................................ 7.3.3. 43 7.3.4. Enhanced Quality o f Care .......................................................................................................... 43 7.3.5. Guidelines .................................................................................................................................. 43 7.3.6. Improveduser satisfaction......................................................................................................... 43 7.3.7. Satisfaction with work environment ....................... ............................................................ 44 7.3.8. Community Involvement ........................................................................................................... 44 7.4. 8. Resource Generation.............................................................................................................................. 44 Challenges That remain to be addressed................................................................................................ 45 8.1. Organization and Regulations ................................................................................................................ 45 8.1.1. Separation o fpurchasing andprovision with contracting ...................................... 45 8.1.2. Organizational Structure ............................................................................................................ 45 8.1.3. Uncertainregulatory environment and support.......................................................................... 45 8.1.4. Limited autonomy...................................................................................................................... 46 8.1.5. Poor infrastructure.......................... ............................................................................... 46 8.1.6. HumanResources inPHC.......................................................................................................... 46 8.1.7. Excesspaperwork ...................................................................................................................... 46 8.1.8. Monitoring and evaluation..................................................................................... 8.2. Service Provision ........................................................... ...................................... 8.2.1. Access ............................................ ................................................ 8.2.2. Fragmentationo f PHC Services ................................................................................................. 47 8.2.3. Fracturedgate keeping..................................... ..................... .................... 48 8.2.4. Integration, continuum of care, andreferral systems ................................................................. 48 8.2.5. Difficulties inPracticingFamily Medicine................................................................................ 48 8.2.6. Limitedcapacity for scaleup o ffamily medicine...................................................................... 48 8.2.7. 48 8.3. Resource Allocation and Provider Payment Systems ............................................................................ Limitedmanagement capacity at the PHC level ........................................................................ 49 8.3.1. Incentives................................................................................................................................... 49 8.3.2. Equityand allocative efficiency ............................................................................ 49 8.4. Communicating the reforms................................................................................................................... 50 8.4.1. Poor awaTeness........................................................................................................................... 50 9. 8.4.2. Lessons Learned............................................................... Opposition to reforms ................................................................................................................ 50 .................................. 51 9.1. Critical success factors for sustained development o f P H ................................. 9.2. Communication...................................................................................................................................... 51 9.3. Balancing short- and long-term goals .......................... .................................................... 51 9.4. Appropriate governance structures ................................................................................... 9.5. Responsiveness.................................................................................................... ..................... 51 9.6. Incentives.................................................... ...................................................................................... 51 9.7. Dissemination and cross learning........................................................................................................... Monitoring and Evaluation .................................................................................................. 9.8. 52 9.9. ..................................................................................................................... 52 10. Exit Strategy ............... 53 10.1. Appendix................................................................................................................................................ Annex 1:Methodology-Framework for analysis................................................................................. 53 10.2. 55 Annex 3: UnifiedFMTraining Curriculum........................................................................................... Annex 2: NivelTask Profile Instrument ................................................................................................ 10.3. 56 Armenia .................................... 10.4. Annex 4: The Procedur edicine Training, Monitoring, and Assessment inthe Republic of .................................................................... 57 11. References.............................................................................. ................................................. 60 Figures Figure 1. A framework for analyzing health systems ...................................................................... Figure 2. Plannedvs. Actual HealthExpenditure from StateBudget.............................................. Figure 3. Infant and matemal mortality .................................................................................................................. 7 Figure 4. Life expectancy at birth........................................................................................................................... 7 Figure 5. The number ofhospital beds andadmissionlevels .. ............................................................... 8 Figure 6. Occupancy Rate and Average Length o f Stay.......... ............................................................... 9 Figure 7. Sources as a Percentage o f Total Expenditure on Health ...................................................................... 12 Figure 8. Public Sector Expenditure by Category....................... ........................... 13 Figure 9. 14 Number o f hospital beds per 1,000 population...................................................................................... Public Sector Expenditure for hospital and PHC sectors....................................................................... Figure 10. 16 Figure 11. Frequency o f applying medical technique ............................................................................................. 27 Figure 12. Frequency o f applying medical techniques ........................................................................................... 28 Figure 13. Frequency o f applying medical techniques ........................................................................................... 29 Figure 14. Frequency o f managing commonpediatric conditions inurban and rural areas ................................... 30 Figure 15. Frequency o f managing commonpediatric conditions inareas at different stages o f reform ............... 30 Figure 16. Frequency o f managing common gynecological conditions.................................................................. 31 Figure 17. Frequency o f managing common gynecological conditions.................................................................. 32 Figure 18. 32 Frequency o f managing common adult conditions ................................................................................ Frequency o f managing common adult conditions ................................................................................ Figure 19. 33 Figure 20. Frequency o f managing common adult conditions................................................................................ Figure 21. Frequency o f managing common adult conditions............................................................ ......33 34 Figure 22. Management o f common chronic conditions: urban and rural comparison........................................... 31 Figure 23. Management o f common chronic conditions: comparisonby reform status......................................... 37 Figure 24. Management o f common chronic conditions: comparisonby reform status ......................................... 38 Tables Table 1: Sample characteristic by marz and FMtraining status ............................................................................ 4 Table 2: Distributionby geography and reform status .......................................................................................... 4 Table 3: Poverty indicators 1996-2001 ................................................................................................................. 5 Table 4: 8 Public Expenditure Indicators inthe Health Sector 2003-2015 ............................................................. Comparison o f Morbidity andMortality Rates for Socially Significant Diseases................................... Table 5: 11 Table 6: Equipment use inPHC centers inregions at different stage o f reforms ................................................ 26 Table 7: Equipment used inPHC centers inregions at different stages o freform........... .............................. 26 Table 8: Proportion o f PHC doctors with direct access to laboratory and x-ray services inurban and rural areas27 Table 9: Health Education Activities ................................................................................................................... 35 Table 10: Immunization. surveillance. antenatal. andpostnatal care..................................................................... 36 This volume is aproduct ofthe staff o fthe Intemational Bank for Reconstructionand Developmentlthe World Bank. The fmdings. interpretations. and conclusions expressed in this paper do not necessarily reflect the views o f the Executive Directors o fthe World Bank or the governments they represent. The World Bank does not guarantee the accuracy o f the data included in this work. The boundaries. colors. denominations. and other information shown on any map inthis work do not implyany judgment on the part o f The World Bank concerning the legal status o f any territory or the endorsement or acceptance o f such boundaries. ACKNOWLEDGMENTS This report reviews the experience of family medicine in Armenia. It is part of a study comprising five volumes that reviews the experience o f family medicine in four countries inthe Europe and Central Asia (ECA) Region-Armenia, Bosnia and Herzegovina, Kyrgyz Republic, and Moldova. The report reviews the experience, draws lessons, and establishes an evidence base for detailed analysis. The study presents best practices for policy dialogue and future investments by the Bank and other financial institutions. The detailed case studies compare these countries and draw common themes and issues. Comparisons are made with best-developed or existing models inthe Organization for Economic Cooperation and Development (OECD) and other ECA countries that have already undertaken family medicine reform. The study was financed by a Dutch Trust Fund. It was prepared by Rifat Atun (Imperial College London). The researchteam included Greta Ross, Samwel Hovhannasiyan, and Alisher Ibragimov. The Task Profile Instrument was designed by Wienke Boerma. The study was prepared under the leadershp of Betty Hanan. Susanna Hayrapetyan and Toomas Palu provided valuable comments. Annie Milanzi helpedto prepare the document for publication. 1 EXECUTIVESUMMARY INTRODUCTION 1. The study objective was to evaluate the family medicine and primary health care reforms in Armenia. 2. The study employed primary and secondary research, using both qualitative and quantitative methods of inquiry with proprietary framework of analysis and instruments to explore key changes in policies, regulations, organizational structures, financing, resource allocation, provider payment systems, service provision, and humanresources. The impact of family medicine (FM) reforms was analyzed. 3. The Republic of Armenia inherited a health system based on the Soviet Semashko Model, characterized by centralized and hierarchical organization as well as by a large provider network with a curative focus, dominatedby hospitals and featuring a poorly developed primary health care (PHC) level. The system was characterized by parallel sub-systems for line ministries and large organizations; a fragmented delivery model inPHC with a polyclinic system staffed by narrow specialists, which provided services separately for adults and children; and a large number of vertical programs delivered by narrow specialists. There were no trained specialist family physicians. 4. The health system suffered a number of shortcomings such as: excess human resources concentrated in cities; inequitable resource allocation based on historic activities and inputs, which favored large hospitals inurban centers at the expenseo f rural areas; line-item budgeting o fprovider units and salary-basedpayment systems that encouraged inefficiency and discouraged improved performance; care-delivery protocols that encouraged excessive referral to the secondary-care level; and limited user empowerment-the citizens were allocated to doctors and unable to exercise choice of providers. 5. Followingindependence, economic recession ledto a rapid decline inthe level o f public funding available for the health system, thus creating a substantial funding gap between the level of financing needed by the health system and the resources available. From 1995 onwards, the Government o f Armenia sought to introduce multifaceted health reforms centered on developing a strong PHC system to address the following: organizational complexity; excess infrastructure and human resources; allocative inefficiency and inequities in financing; inefficient service provision; limited incentives; and low pay levels for healthpersonnel. KEY ACHIEVEMENTS: ORGANIZATIONAL AND REGULATORYCHANGES 6. Starting in 1995, in collaboration with international agencies, the Government introduced key pieces of legislation to create an enabling environment and to establish platforms for systemic, comprehensive, and multifaceted health reforms to reduce inefficiencies, enhance equity and access (financial and geographic), and improve quality. 7. Despite a highly resource-constrained environment, Armenia has been able to introduce the FM- centered PHC reforms to parts of the country and to achieve structural changes with separation o f purchasing and provider functions. ... 111 8. Family medicine is recognized as a specialty inLaw. Inparts of the country, the tripartite system o f pediatric, women's, and adult clinics have been consolidated into unified PHC centers. Three FM training centers and many PHC centers inthe pilot marzeshave beenrefurbished and now provideunified services for men, women, and children. 9. New PHC provider organizations have been created with autonomy to manage budgets and contract with the StateHealth Agency, which was createdin 1997to assume a strategic purchasing role. 10. The scope and content of family medicine services have been articulated in law and defined in detail inthe State GuaranteedBasic BenefitsPackage. 11. The gate keeping function of PHC has been established with family physicians acting as the first point of contact for patients inreform areas. Inareas where the reforms have not been introduced, users are able to access narrow specialists, hence fragmenting the first contact and gate keeping hctions of PHC. FINANCING, RESOURCEALLOCATIONAND PROVIDER PAYMENT SYSTEMS 12. New provider payment methods have been successfully introduced in the pilot regions for PHC basedon a weighted per capita mechanism augmentedby fee-for-service payments. 13. Primary health care providers also receive payments from non-vulnerable populations inthe form of user fees for services outside the Basic Benefits Package(BBP) and fees for home visits andpayments for diagnostic tests. Inaddition, there are "unofficial fees" and in-kindpayments, but the extent o f these payments i s not quantified. Inthe areas where the World Bank-financed PHC Development Project was implemented and where the PHC services were provided by family physicians, the extent of informal payments has been shown to be less as compared with control regions. Project studies showed that the informal payments for medical examinations were less in project sites as compared with control areas. Followingthe introduction o f the BBP, the affordability of PHC services increased. SERVICE PROVISION 14. A State Guaranteed BBP has been introduced for the entire population and provides free PHC services for all citizens, regardless oftheir status. An expanded BBP exists for the vulnerable population. 15. Users now have the freedom to choosetheir family physicians. 16. There i s excellent coverage o f immunization. Basic PHC services are provided throughout most of the country, althoughaccess inrural areas remains a problem. 17. The task profile analysis shows clearly that inthe regions and PHC centers that have introduced the FMmodel, the scope and content of services have significantly expanded. There are increased health education, disease prevention, and promotion services; enhanced gate keeping; more frequent application o f medical techniques and procedures; and expanded management of key first contact and chronic conditions as compared with low reform areas where the FMmodel has not been introduced. Analysis of the referral data shows a decline inthe number of hospital referrals for key acute and chronic conditions typically managed in the PHC setting. These findings demonstrate that FM reforms are having the desired benefits of enhanced care management inthe PHC setting with reduced referrals to a hospital- with consequent improvement inefficiency and effectiveness. iv 18. Evidence-based guidelines for family physicians have been introduced for 127 common conditions encountered inPHC settings as well as 56 guidelines for FMnurses. This enhances the quality of PHC services delivered, reduce unnecessary interventions, and diminishreferrals to hospitals. RESOURCE GENERATION 19. There are now two routes to train as a family physician: (i) 11-monthretraining program for an doctors trained inthe Soviet system and currently working inPHC delivered by the SMU and supported by the Bank-financed Health Project. This was accredited by WONCA to be in accordance with internationally acceptable standards; and (ii) two-year FM residency program for medical graduates a who qualified recently. Inaddition, the Ministry plans to introduce a system o f continuous training for FMphysicians. 20. Itis estimatedthat around 350 family physicians have already graduatedfrom SMUandNIH. At present, a further 120 physicians are intraining at bothinstitutions. The objective of the Government i s to retrain around 160 family physicians each year to reach the target of around 1,200 family physicians in the next five years. Inaddition, 150 general nurses have been retrained as family nurses. The number of family physicians and nurses meets 23 percent o fthe numbers neededinArmenia. KEY CHALLENGES AND RECOMMENDATIONS 21. To date, introduction of Family Medicine and PHC reforms in the target regions has been successful. Platforms are inplace to accelerate the pace of reforms inthe second phase of development, particularly to: further broaden the role of family physicians and the scope of services they deliver; introducemore flexible contracts with incentives to improve performance, quality, and provide additional health promotion, preventionand extended PHC services by family physicians; increase remunerationfor family physicians and nurses; refine resource allocation mechanisms to reflect need and enhance equity; place more emphasis on evidence-based medicine; change reporting mechanisms in PHC that reinforce the old tripartite model and hnder unifiedservice provision. 22. Good progress has been made towards establishing minimum quality standards, and equitable levels of service have beenestablished for Armenian citizens; but urbanand rural differences persist, with poorer access andaccessibility inrural areas. 23. The presence at PHC centers of narrow specialists, who can be accessed directly by patients, i s a source o f inefficiency, hinderingthe first contact, gate keeping, and continuity functions of the PHC level. This is a key barrier to developing PHC. Ideally, all the PHC centers shouldbe converted to FMcenters staffed predominantly by family physicians, and the narrow specialists who work in these PHC centers should either be gradually transferred to hospitals or retrained as family physicians. However, politically this may not be possible to achieve. Hence, pragmatic and feasible options shouldbe explored. 24. Despite the State Guaranteed Basic Benefits Package, which has achieved improved coverage, major inequities inaccess to services and fundingexist. The next phase o f reforms should strengthen the focus on equity by changing resource allocation mechanisms to take into account poverty and health needs and substantially modify the current patterns, which favor urbanareas with hospitals. 25. Limited incentives and the poor salary levels of family physicians and nurses working at PHC levels are key problems that need addressing in the immediate term. PHC contracts, which have been successfully introduced in the reform regions, should be used as a tool to encourage innovation and V further improve equity, service quality, efficiency, and effectiveness. However, to achieve these objectives there needs to be a move from weighted per capita contracts to more sophisticated contracts, with explicit quality and performance criteria and commensurate incentives to reward family physicians who achieve these. However, such a shift will require significant analytical and execution capacity at S H A as well as more stability inhealthcare financing. 26. There i s a clear need for anM&E systemthat regularlycollects output andoutcome data from the PHC level. Inaddition, analytic capacity at M O H and SHA needs enhancing to regularly analyze data to generate timely information to inform decisions. 27. The achievements in Armenia are commendable. Although many problems remain, much has been achieved in a resource-constrained environment and platforms have been put in place to further develop PHC. However, much needs to be done to consolidate achievements and expand the reforms. Strong political support and technical assistance for the next phase of reforms i s critical to sustain what has been achieved. vi 1. OBJECTIVES OF THE STUDY AND METHODOLOGY 1. The objectives of the study are to review the experience of family medicine' in Europe and Central Asia (ECA), present best practices, and make recommendations for policy dialogue and future investments. 1.1. THEEVALUATIONFRAMEWORK 2. Kutzin suggests a three-step approach to evaluating health reforms, describing clearly: (i) key contextual factors driving reform, (ii) the reform itself and its objectives, and (iii) process by whch the the reform was (is being) implemented.' To this approach three further elements can be added: (i) describing clearly the changes introduced by the reforms, (ii) analyzing the impact of these changes on health system objectives and goals, and (iii) establishing whether the reforms have acheved the policy objectives set by the Government-or bythe agency leadingthe reforms. 3. The evaluation used a framework to analyze key changes in health system elements and intermediate goals inrelation to primary healthcare (PHC). This i s showninfigure 1.2 (See annex 1) Figure 1. A framework for analyzinghealth systems I I hI - ~ Organisational arrangements ~quity I 1 Health I I I I 4. This framework builds on that developed by Hsiao3 and identifies four levers, available to the policy makers and managers in health systems. Management and modification of these levers enables policy makers to achieve different intermediate objectives and goals. The "organisational arrangements" lever refers to the policy environment, stewardship function, and structural arrangements in relation to funding agencies, purchasers, providers, and market regulators. Financing and resource allocation levers The term "family medicine" is used here, but other terms such as "primary health care (PHC)" or "general practice" are used frequently and interchangeably. refer to resource collection, pooling, allocation, and the mechanisms and methods used for paying health service providers. The "provision" lever refers to the "content"-the services provided by the health sector rather than the structures within which this `content' is delivered. The intermediate goals identified inthe framework-equity, technical and allocative efficiency, effectiveness, and choice-are frequently cited by others as end-goals inthemselves. However, inthis framework efficiency, equity, effectiveness, and choice are taken as means to contributing to attainment of the healthsector's ultimate goals of health, financial riskprotection, anduser satisfaction. 5. This framework was used to analyze key changes in health system elements and intermediate goals. An important finding of the literature search and country visits was the lack o f systematically collected data at the PHC level. Therefore, primary research was undertaken to generate original data to complement secondary researchfindings. 1.2. PRIMARYRESEARCH 6. Primary research comprised two elements: Qualitative research and the Physician Task Profile Survey. 7. Qualitative research involved 27 key informant interviews: 16 policy makers and 11 persons involved inimplementation, including the Head of Health Care Provisionat the Ministryof Health; State Health Agency; National Institute of Health; Armenian Association of Family Physicians: Head of FM Department from the State Medical University; Headof Social Assistance at the Ministry o f Health; Head of State Hygienic and EpidemiologicalInspection at the Ministry of Health; Head of Yerevan Polyclinic No. 17 FMTraining Practice; Headof HealthDepartment inShirak marz; Director of GyumriFMCentre inShirak marz; family doctor of Agarak village FMCentre inAragatsotan marz; GP Trainer at P/C 17 and project management specialist with USAID Democracy and Social Reform Project; Director of School of HealthCare Management and Administration; American Universityo f Armenia; Vice President of Children's Health Care Association; Primary Health Care Programme Development Manager at MOHnniBProject; Senior HealthPolicy Advisor at USAID Social Transition Program; Team Leader for PADCO KJSAID FM programme; PADCOKJSAID FM training Program Director, and heads and practicingPHC physicians from marzeswhere surveys took place. 8. The interviews explored the perceptions o f key informants regarding the goals and objectives of the reforms, changes in structures and processes, critical success factors, barriers, and enablers that influenced the introduction and diffusion o f FM-centered PHC reforms, major achievements, and lessons learned. 9. A semi-structured questionnaire developed for the study for face-to-face in-depth interviews of keyinformants. The questionnaire was pilotedtheniteratively refinedinthe four countries studied. 10. Purposive sampling was used over two stage^.^ An initial set of key informants was interviewed for the first stage of the study using a semi-structured questionnaire. The data emerging from the initial set of interviews were analyzed to identify key emerging themes, which were explored further using a refined and shortenedtopic guide to allow in-depth exploration of some of the key themes emerging from the initial set of interview^.^ The second stage also employed "purposive sampling" with "snowballing" to capture a multi-level, multi-stakeholder sample of key informants, representing the key stakeholders involved inPHC reforms-in bothpolicy development and implementation-from urbanandrural areas. 2 11. To strengthen the validity in the qualitative methods implemented, data were triangulated by comparing the results of interviews from different groups o f stakeholderswiththe outcome of the analysis of official documents. 12. The analysis informed the detailed case study by capturing information on key structural and process changes, issues relatedto design and implementationof PHC reforms, the drivers and barriers to reform, the factors influencing the establishment of an enabling environment for change, and the lessons learned. 122 PhysiczanTaskPro$% Survey 13. We undertook a cross-sectional survey of family physicians to explore their "Task Profiles" using a validated instrument developed by the NIVEL Group in the Netherlands.6 The instrument,previously tested and validated in 32 European countries, i s available in several languages, including Russian and other Slavic languages. It enables collection of detailed data onthe preventative, promotive, and curative services provided by family physicians, their skills, knowledge base, attitudes, and workload-the last itemis captured by use of a seven-day workload diary. The instrument was obtained from the author Dr WGW Boerma and with his kindpermissionused inthe study. A summary ofthe instrumentis shown in Annex 2. 14. The survey of the Task Profiles o f Family Physicians aimed to identify the scope and availability of services and skills o f doctors working at the PHC level and to identify similarities and differences betweenFMspecialists andnon-specialist GPs. 15. The instrument was tested in the four study countries, and minor modifications were made to ensure contextual sensitivity. The instrument was coded and a data collection and entry program developed inMicrosoft Access. Data were transferred to SPSS @ for statistical analysis. 16. We used purposive sampling to provide a diverse sample. The PHC centers were selectedbased on geography and the relative stage of development of PHC care reforms. The survey took place in Yerevan and six marzes, including Shirak, Aragatsotan, Syunik, Armavir, Ararat, and Tavush. A total of 100 facilities and 212 physicians were surveyed: equally divided between facilities involved in FM reforms with FM specialist and those with no involvement. There were 103 family physicians and 109 PHC doctors (non family physicians) surveyed in48 FM facilities and 52 non FM facilities. There were 24 FM doctors who worked in advanced reform areas, 78 in intermediate reform areas, and one in low reform areas. Of the 109 PHC physicians who were not trained inFM, 108 worked in low reform areas and one inintermediate reform areas. One hundred of the doctors surveyed worked inurban and 112 in rural areas (tables 1and2). 3 Table 1: Sample characteristic by marz and FMtraining status Family Non Family Physicians Physicians Urban 45 55 Rural 58 54 Advanced 24 0 Intermediate 78 1 Low 1 108 1.3. SECONDARY RESEARCH 17. Secondary research consisted of a review o f international and in-country published literature to ascertain key legislative changes related to the reforms and to identify changes in financing, resource allocation, provider payment systems, organizational changes and regulation, and service provision. There were no available data to undertake analysis of cross-sectional and longitudinal data on referrals and admissions for conditions commonly managed inaPHC setting. 131 Lz'erature revzew 18. The literature review consisted of desk research o f published articles inpeer-reviewed journals, supplemented by documentary analysis of published reports, key legal instruments and policy documents from the four countries, World Bank Publications (including aide memoirs), Country HIT published by the EuropeanObservatory onHealth Systems Research, and other relevant studies.' 4 2. THE CHALLENGESFACEDBYTHE HEALTHSYSTEMIN ARMENIA 2.1. BACKGROUND 19. Armenia declared its independence from the Soviet Union in September 1991. This was accompanied by economic slowdown and emigration that resulted ina rapid fall inthe natural growth rate of the population, from 17.3 per 1000 in 1990 to 3.3 in 1999. According to the census of 2004, the population of the Republic o f Armenia i s 3.2 million, 1.1 million o f whom live in Yerevan and 2.1 million of whom live inmarzes. 20. Economic stagnation led to significant decline inthe GDP and a consequent reduction in health financing. In response, the Armenian Government sought to introduce health reforms to improve efficiency, contain costs, and generate additional revenue for the health system. Changes included separation of purchaser and provider hctions, creation of semi-autonomous "State Health Enterprises" responsible for their own finances, andthe introductionof out-of-pocket payments. 21. As with the other post-Soviet Republics, Armenia inherited a health system based on the Soviet Semashko Model, characterized by centralized planningand hierarchical administrative organization. A large provider network prevailed: dominated by hospitals and apoorly developed PHC level. Inaddition, parallel health systems for line ministries existed. The system was oriented to providing curative care with limitedhealthpromotionand disease prevention. 22. PHC level was fragmented by a tripartite system o f polyclinics for adults, women, and children, as well as a large number of vertical programs delivered by narrow specialists in the urban areas. The PHC level, without family physicians, failed to exercise any meaningful gate keeping function. 23. The human resources in the health sector were concentrated in cities. An inequitable resource allocation system based on historic activities and inputs favored large hospitals in urban centers at the expense of rural areas. Line-item budgeting and salary-based provider payment systems encouraged inefficiency and discouraged improved performance. Care delivery protocols at the PHC level encouragedexcessivereferralto the secondary-care level. 2.2. ECONOMICCHANGESAND INCREASINGPOVERTY 24. The socio-economic crisis that followed the decoupling from the Soviet system led to much poverty (table 3). Year 1996 1998 2001 2003 Percentageofpopulation that is poor (%) 54.7 55.1 50.9 32 Urban populationthat is poor (%) 58.8 58.3% 51.9 30.7 Ruralpopulationthat is poor ("A) 4% 50.8% 48.7 33.9 5 ~~ 2.3. DECLININGHEALTH EXPENDITURES 25. Interms of financing, the Armenian health system faced a dual problem: (i) declining health a sector expenditure from the public sector, and (ii)poor budget execution (figure 2). Figure 2. Plannedvs. Actual HealthExpenditurefrom StateBudget 3 .d m ::2 Y -c - 26. The declining fundingfor the health sector and chronic under-execution o f the state budget during the years 1997-2001 ledto an accumulationof AMD 12billionof arrears for work performedunder SHA contracts, mainly interms o f salaries and social taxes. Part of these arrears was paid in2001 and 2002. The situation significantly improved in2002. The public healthbudget increased by 60 percent between 2002 and 2004, in line with the MTEF projections. The health sector budgets for 2002 and 2003 were executed as planned: for instance, in2002, the state budget disbursed 16 billionAMD to the healthsector compared to a planned 16.3 billion AMD-more than at any time during the seven preceding years- achieving healthbudget executionof 98 percent.* 27. Declining health system funding has led to underfunding of providers, low salaries for health professionals, an inability to purchase adequate supplies (drugs, medical supplies, and diagnostic materials) or up-to-date equipment, and an inability to maintainthe existing infrastructure. 2.4. WORSENINGHEALTHINDICATORS 28. Worsening economic status and declining health expenditures have adversely affected the health of the population. Although recent and reliable statistics are unavailable, published official statistics show that population health indicators such as infant mortality and matemal mortality have not significantly improved (figure 3). 6 Figure 3. Infant and maternal mortality 70 0 1995 1996 1997 1998 1999 2000 2001 2002 I Infant mortality(chi1dren e 1 year) +Maternal mortality 29. Although the official statistics show that the average life expectancy has seemingly improved from 71.5 to 74.5 years (figure 4), the mortality and morbidity rates from key conditions, which account - for much of the disease burden, have, at best, remainedthe same or worsened (table 2). --Figure 4. Life expectancyat birth 75.5 74.8 75 *\ I ` $ 7 0 % 67.7 65 60 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 +Females -Total +Males 7 I Disease incidence 1 Mortality Source: Ministry of Health of the Republic of Armenia. MTEF2003-2005. 2.5. EXCESS INFRASTRUCTUREAND HUMANRESOURCES 30. As with other post-Soviet Republics, Armenia inherited an excess health infrastructure and human resources. The number of hospital beds in 1990 was nine per 1,000: a level far above the European average. Since then, this level has declined to 5.8, while the number of admissions (13.95 in 1999) declined in2002 to 5.8 per 100 population (figure 5). It i s envisaged that this excess capacity will be rationalized through mergers with support from the World Bank-financedHealth I1Project (Armenia Health Systems Optimization Project). Figure 5. The number of hospital beds and admissionlevels I 16 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Year 6 z aHospital beds per 1000 population +Admissions per 100 population 2.6. INEFFICIENT SERVICEPROVISION 31. While there is an excess capacity, it i s not adequately utilized. For instance, inthe period 1990to 1999, althoughthe average length of stay inhospitals per inpatient admission declined from 15.6 to 12.8 8 days (far above European averages of around 6-8 days), the occupancy rates have fallen from 65 to 33 percent (figure 6). Figure 6. Occupancy Rate and Average Length of Stay 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 - s-* Occupancyrate (%) +ALOS (days) 2.7. LOWLEVELSOFPAYFORHEALTHPERSONNEL 32. The salaries of the health professionals inboththe hospital and PHC sectors have remained very low, thus encouraging rent-seeking behavior and discouraging provision o f high-quality, user-centered care. 2.8. ACCESS BARRIERSAND DECLININGUTILIZATION OF HEALTHSERVICES 33. Inthe period 1990 to 2001, outpatient visits declined by a factor of five, while the number of hospital admissions diminished by almost 50 percent. While this decline has helped address over- utilization of health services, it has particularly adversely affected rural areas as compared with urban areas. Inparticular, the number of visits to ambulatory care, at 2.3 per person per year, i s far below the Europeanlevels, which range between six to eight visits per person per annum. 9 3. HEALTHREFORMSAND KEYLEGISLATIVE CHANGES 3.1. HEALTH SECTORSTRATEGYkTDKEY CHANGESINLAWS RELATEDTO THE HEALTH SECTOR 34. In 1995, the "Program for Development andReform ofthe Armenian Health System duringthe period 1996-2000" was adopted. The key objectives of this program, amongst others, were identifiedas: enhancing management capacity; decentralization; health system financing; strengthening PHC; and optimizing hospital care. 35. In1996,the GOAapprovedthe "Program for development andreformofthe healthcare systemin the Republic o f Armenia," with a special focus on financial reforms.' Inthe same year, the Medical Care Act (Law "On Medical aid and Medical services for the Population") was adopted by the National Assembly." This Law stipulated that the Public Budget was no longer the unique authorized financing source, and it legalized alternative financing mechanisms to augment those obtained from public sources. Consequently, health providers were allowed to mobilize funds from various sources, including local budgets, external aid, health insurance payments, and direct, private, out-of-pocket payments. Out-of- pocket payments were introduced in 1997 for the majority of health care services beyond the basic package applicableto all non-vulnerable and non-targeted groups of the population. 36. In1997,all the Statehealthcare establishments were granted the status of"state enterprises" and transformed into "state owned closed joined stock companies" in 2000. Inthe same period, polyclinics were given an autonomous status, were no longer subordinated to hospitals, and were defined as the primary care levelofthe healthsystem. 37. In 1998, the PHC Working Group drafted the provisions on "Family doctors" and "Family nurses." The "Family Doctors Provision Guidelines" were approved in 1999 and provisions adopted in 2000.l 38. In2000,the "Concept onthe Strategy ofPrivatizationofHealthCareFacilities" was approved by the government, paving the way for privatization of health care facilities. The "Strategy of health care system development in Armenia: 2000-2003," accepted by the government in 2000, identified the strategic goals and directions for health care development. This was followed in2001 by the "Concept Paper of Optimization in the Health System of the Republic of Armenia," which envisaged an orderly restructuringo fthe health system and downsizing of the hospital sector.12 39. In2003, the government adopted a decree outlining a new PHC Strategy by the Republic of Armenia, outlining the government's vision for developing PHC between 2003 and 2008.13 In its PHC Strategy Document for 2003 to 2008, the RoA Ministryo f Health"considers the development of the PHC sector as a basis for the reforms inthe health care system" and recognizes that the quality and effective functioning o f the primary health care system ensures accessibility, comprehensive coverage, sustainable continuity, equity, and coordination. The Strategy specifically aims to: consolidate the tripartite structure (for adults, children, andwomen into unifiedPHC centers; acceleratethe introductionof family medicine; create the necessary legal and regulatory frameworks regarding status and activities o f PHC specialists; improve provider payment systems; clearly define boundaries of primary, secondary, and tertiary levels through licensing; define medical specialties; improve information systems; enhance the ability o f PHC to implement prevention programs for chronic illnesses; optimize infrastructures within PHC; differentiate between the polyclinic and hospital-based specialized services; include urban polyclinics in the privatization process; delegate management o f medium and small polyclinics to local communities; 10 increase financing of PHC to at least 40 percent of health sector funding; introduce community nursing as a specialty. 40. Despite a lack of financial resources, the government appears to be committed to supporting the development o f the health care system. Inthe Armenian PRSP, the GOA has committed to substantially increase the accessibility and quality of health care services guaranteedby the state and to increasepublic funding from 1.4 percent of the GDP in 2003 to 2.5 in 2015, with an increased share of the budget devoted to PHC (table 5). Table 5: Public Expenditure Indicators inthe Health Sector 2003-2015 2003 2004 2006 2009 2012 2015 Total, billions AMD 24.9 35.5 52.7 73.3 101.1 % o fGDP 1.4% 1.5% 1.9% 2.1% 2.3% 2.5% % of total public exp. 6.5% 7.6% 9.2% 10.2% 10.9% 11.9% Share devoted to DUP 40% 45% 50% 3.2. ORGANIZATIONALCHANGES 41, Under the Soviet system there were 37 administrative districts, each with its own elected council, hospital, and polyclinic. Following independence, these districts were amalgamated into 11regions (10 marz and Yerevan), each with a director appointed by the President and a regional "government" that h d e d core health services for the local population. The MOH has retained responsibility for development o f health policy, budget setting for the publicly funded health system, health needs assessment, licensingand regulation of physicians and hospitals, licensing of pharmaceuticals, andhuman resource planning. The purchasing function, however, has been devolved to the State Health Agency (SHA) createdin1997 (see section onresource allocation andproviderpayment systems). 42. The provider network, which was accountable to the Ministry of Health (MOH), has been largely retained, but the hospitals have been given autonomous status and are increasingly responsible for their own budgets and management. Local government monitors health service provision, while the M O H retains regulatory functions and the network o f san-epid stations, which were renamed in 1997 as "`Centres of hygienic and anti-epidemic surveillance.'' The Ministryof Health policy i s to reduce reliance on secondary care with frequent and lengthy inpatient hospitalizations and to develop stronger PHC, which emphasisesdiseaseprevention andhealthpromotion. 43. Hospitals and polyclinic directors cannow independently manage their own financial resources, set prices for services that attract out-of-pocket payments, decide on the level and mix o f staff with the ability to set terms and conditions of service, and retain the surplus generated and invest this income as they see fit. They contract withthe SHA to provide services includedinthe basic package, but areunable to decide on the volume or the price o f these services. They can also negotiate and sign contracts with enterprises to provide health services. 11 3.3. HEALTH SYSTEMFINANCING 44. Health system financing is mixed, but public sector expenditure i s low by European and regional standards. The estimates of total health expenditure and private and public sector contributions vary. According to data from the WHO Health for All Database, between 1997 and 2001 health expenditure from private sources accounted for 60 to 65 percent of the total, and that from the public sector ranged from 30 to 40 percent (figure 7). Figure 7. Sources as a Percentage of Total Expenditure on Health 1997 1998 1999 2000 2001 Year 0 PribateHExp Extemal sources Public 45. The World Bank estimatesthe total health expenditures inthe same period to have been between 1.43 and 1.34 percent of GDP, while the health public expenditures relative to the State budget expenditures were, on average, 5.6 percent. The target for 2015 set inthe PRSP for health expenditure is 2.5 percent of GDP frompublic sources and 4.6-5.3 percent fromprivate sources. 46. Health Researchfor Action (HRFA), a consultancy firm from Belgium, estimates that 32 percent o f the health care expenditures are from the public budget; humanitarian aid and donors account for a further 21 percent; and the remaining 47 percent i s from out of pocket payments (both official co- payments andunder-the-table payment^).'^ 47. Duringthe years 1997-2001, there was chronic under-execution ofthe statebudget. This ledto a dramatic accumulation of expenditure arrears (AMD 17.3 billioninJanuary 2001), mainly for salaries and socialtaxes. Part of these arrears was paid in2001 and 2002, and other parts have been written-~ff.'~ 48. Since 2001, the situationregarding health system financing and execution of the State Budget has significantly improved. In the period 2002 to 2004, the public expenditure on health increased by 60 percent, inline with MTEFprojections. Further, the budgets for 2002 and (to a certain extent) 2003 have been executed 100percent.16 3.4. STATE GUARANTEED BASICBENEFITSPACKAGE 49. A Basic Benefits Package (BBP) was introduced in 1997 with the purpose of providing "free" medical care to the populationand defining public sector responsibility for health services. The BBP was 12 modified in 1999, taking into account budgetary constraints; and user fees for ambulatory care and emergency services were increased. 50. In 2001, the BBP Working Group defined the BBP as "the minimal package of the state- guaranteedfree medical care and services provided to the individuals, which should cover the health care of the social vulnerable groups, as well as include highly cost-efficient services for the whole population (for example, medical care o f children) and some expensive health care priority programs (for example, intensive care, p~ychiatry)."'~(See section onchanges inPHC). 3.5. RESOURCEALLOCATIONAND PROVIDER PAYMENT SYSTEMS 51. Traditionally, the amount of funds allocated to PHC have been low (below 20 percent of the total). However, inrecent years, the Government has increased funding o f the PHC level from the public budget at the expense of hospitals. Inthe period 2002 to 2004, public sector expenditure for PHC and polyclinic base ambulatory services increased from 27 to 28 percent of the total, while that for hospitals declinedfrom 57 to 48 percent (figures 8 and 9). Figure 8. Public Sector Expenditureby Category I 6 0 / 1 i- 02002 2003 m 2004 13 Figure 9. Public Sector Expenditure (in000 Drams) for hospital and PHC sectors 18000 J Y) 14000 0 8 I2000 0 z E IO000 E! 6000 w 4000 2000 0 1998 1999 2000 2001 2002 2003 Year Q Hospitals H Pnmaiy healthcareTotal Source: Ministryof Finance and Economy 52. However, for 2003, the figures for increases for PHC and relative decline o f hospital services are misleading as the PHC budget line includes a new budget item, "State Order for centralised procurement of drugs" inthe amount of AMD 3 billion. If the AMD 3 billion i s excluded from the PHC budget, the allocationto hospitals account for 62 percent o f the total, while the PHC allocation actually declines from 29 percent of the total in 2002 to 27.4 percent in 2003.'' In2003, the resource envelope for publicly funded health services was USD 9.0 per capita for the total BBP, of which USD 6.2 per capita was for hospital care andUSD2.8 per capita for primary care (both for polyclinic and ambulatory care)." 53. The State HealthAgency (SHA) was established in1997withthe intentionof developinga social insurance system and separating financing and provision.'' The SHA receives funds for the health sector from the Ministry of Finance. In turn, it contracts with health care providers, which in 1993 became semi-autonomous "State Health Enterprises" with the right to generate their own revenues inaddition to those received from the SHA. The local governments (mazes) have the responsibility for primary and secondary care services for their local population. The rural ambulatories are part of the marz primary healthcare network and subordinate to the marz polyclinics. 54. Ineffect, the integratedpublic healthsystembasedonthe SemashkoModelhas beenreplacedby a public-contract model, with the SHA acting as the purchaser from a network of semi-autonomous provider units providing a publicly funded "basic package" o f services and additional services not covered by this package, which must be paidfor out-of-pocket from private means. 55. The S H A has a Central Office in Yerevan with a branch in each of the 10 Marzes, plus one in Yerevan. The SHA retained independent status until July 2002, when it was incorporated into the MinistryofHealthstructure "as a StateHealthAgency withinthe structure ofthe M O Hwith a statusof a separate department."21 56. The creation o f the State Health Agency has led to the separation o f public purchasing and provider functions, previously undertaken by both under the MOH. The SHA contracts both public and private providers to deliver the BBP services within the annual budget limitations set by the Ministry o f Finance. The SHA guarantees that all the services inthe BBP for the vulnerable population are provided 14 free o f charge, as well as the services included inthe more limited package o f BBP services provided to the general population without official co-payment. Since 2004, a co-payment rate o f DRAM 10,000 per admissionfor emergency hospitalizations has been charged in21 hospitals inYerevan. 57. With the creation of S H A and autonomous providers and the introduction of contracts, the provider payment systems have changed from line-item budgetingto payment for volume o f services for hospitals and per capita plus fee-for-service for the PHC level. 58. The budget allocated to each hospital i s determined according to the number o f hospitalization cases, including the number of cases that fall under the "vulnerable population" category, and a projected increase inthe number of patients for the current year?2 The overall budget for hospitals i s first divided between the City of Yerevan and the rest ofthe country according to allocations inthe previous year. The element for Yerevan i s then divided between different hospitals according to allocations o f the previous year weighted by a coefficient that reflects changes inthe volumes o f services provided. The remaining budget element for the marzes i s divided by the total number of "vulnerable people" (VP) to obtain a per capita rate per VP and a budget allocated according to the number o f VPs served by the hospital in the marz concerned adjusted by the budget for the previous year. Vertical programs, such as that for tuberculosis (TB), enteric and infectious diseases, sexually transmitted diseases (STD), mental health and narcology services attract ring-fenced budgets paid to TB dispensaries, narcology centers, dermatovenereology dispensaries, and neuropsychiatry units based on the number o f beds and the actual average occupancy rate (AOR) o f the preceding year. 59. PHC providers are paid according to a mixed payment system based on a weighted per capita formula and fee-for-service. Enrollment o f individuals or households with family physicians i s not yet standard and widespread; hence payment i s not based on enrolment but rather on estimates of the population covered. However, as the population figures are not reliable, the estimates may vary considerably from the actual numbers of people covered. The per capita pay rates used for remunerating PHC providers are complex and weighted according to a number o f different parameters. There are up to 11 different capitationrates, which vary according to the age of the population and the type o f services provided. Per capita rates are different for adults and for children below the age o f 15. Additional per capita rates are used to remunerate for antenatal and postnatal care and for dispensary care. Services provided by family physicians and nurses inPHC attract a different level of per capita as compared with "Specialist Health Services" (SHC) provided by the narrow specialists inPHC. The PHC providers are paid a capitation fee on a monthly basis as a lump sum, and fee-for-service payment i s paid monthly in arrears according to the volume o f "specialist health services" provided by the narrow specialists and the laboratory and X-Ray services, which are reported to SHA. In addition, the PHC providers receive payments from nonwlnerable populations inthe form of user fees outside the BBP, fees for home visits, and payments for diagnostic tests. There are also "unofficial fees" and in-kindpayments, but the extent o f these payments i s not quantified. 60. The averagecapitation fee for PHC has increased substantially from 1,400 AMD in2003 to 2,400 AMD in2004. 61. Both hospitals and PHC units use the revenues generated from various sources to remunerate staff; meet operational costs; and for investment in equipment, supplies, and infrastructure development andmaintenance. 62. An analysis of income and expenditures for PHCunits undertaken by HealthResearch for Action has shownthat for Polyclinic Number 17 the income generatedby the State Orders represented 73 percent o f the total official income, or 85 percent of the direct operational income (excluding other income and 15 humanitarian aid). The official cost of the personnel (salaries + social taxes) represented almost 70 percent of the total reported expenditure^.^^ 3.6. RATIONALIZATIONOF THE HOSPITALAND PHCSECTOR 63. The hospital sector has been gradually downsized, with the number of beds per 1,000 population declining from 8.4 in 1992to 4.25 in2001 (figure 10). Figure 10. Number of hospital beds per 1,000 population 9, I a 4 1 1 I O + 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Year 64. In 1999, the GOA adopted the Strategy of Hospital System Optimization in the Republic of Armenia to downsize redundant capacity in the health system. In 2001, GOA Decree number 80 approved the Concept Paper of Health System Optimization inthe Republic of Armenia. Inthe first stage of optimization in2001, over 60,000 sq. meters of space were released for other uses, 104 organizations were liquidated or reorganized, about 4,100 hospital beds were closed, and over 2,000 staff positions in the country (excluding the City of Yerevan) were rati~nalized.~~ 65. In2003, a Presidential Decree approved by the government approved merger of a number of medical Closed Joint Stock Companies as part of the program of health care optimization in Yerevan City. Around 13 polyclinics inYerevan are mergingwith hospitals. 16 4. KEY DEVELOPMENTSINPRIMARYHEALTHCARE 4.1. DEVELOPMENTFAMILYMEDICINE PHC OF AND 66. Family medicine existed in Armenia prior to the 1915 October Revolution known as "zemsky vrach." Following entry of Armenia into the Soviet Union, this was abolished and replaced by "district doctors" and PHC based onpolyclinic services. Hence, many healthprofessionals do not consider family medicine as a "new" medical speciality. This may help explain some of the negative perceptions surrounding PHC reforms, which are considered by some as "going backward" rather than "going forward." 4.2. DEVELOPMENTHUMAN OF RESOURCESINPRIMARY HEALTH CARE 421 Traznzhgof famz$phyxzczans andnurxes 67. The Ministries of Health and Education are jointly responsible for undergraduate medical and nursingeducation. Postgraduatetraining is regulatedbythe MOH. 68. There are three public teaching institutions with family medicine departments: (i) State Yerevan Medical University (SMU)-the Faculty o f FM was founded in 1997 and the Chair of FM has been established with two full-time and 11 part-time teaching staff with responsibility for both UG and PG teaching in family medicine; (ii) National Institute of Health (NIH), established in 1992 through a The merger o f several research and continuing medical education institutes i s responsible for postgraduate training of doctors and nurses. The Chair of FM was created at the NIHin 1997; and (iii) Yerevan Basic Medical College (BMC) i s a nursingcollege dedicated to training o f family nurses. 69. Inaddition, there are five private medical institutes. Of these, three are licensed. Students who graduate from unlicensedinstitutes are not entitled to take State Examinations to register as doctors, and they are not allowed by law to work as doctors. However, students still apply to these institutes because of low fees anda hope that the law may change inthe future to allow them to practice as doctors. 70. graduates -- far surpassingthe number neededinArmenia -- and an oversupply o fnarrow specialists. The public and private medical institutes collectively produce a large number o f medical 71. In1994, the Government of Armenia specifieda new system ofpostgraduate medical education, defininglengthoftraining for eachmedical specialty, ranging from one to four years. 72. In1996, the Ministryof Healthapproved nursingandmidwifery education programs consisting of three-year basic training, coupledwith additional training for post-diploma education. 73. Training in family medicine began in 1993, when 12 physicians were trained as family doctors- although the laws at that time didnot permit them to practice as family physicians. This was followed by the training of 180 nurses and physicians in preventive care, child development, and clinical care in programs supported by UNICEF. Development o f PHC and family medicine accelerated in 1998 with the World Bank Health 1 Project, whch supported reconstruction/ refurbishment o f PHC facilities; training for family physicians and nurses, and improvement in PHC services through development o f clinical guidelines (see section onWB support to PHC). 17 74. A cohort of 25 physicians, including three family physicians, was trained as trainers inFMwith support fromUSAID. Inturn, these trainers have been involved inthe retraining of 15 physicians (5 from Lorimarz and 10 from Yerevan) inFM. 75. Members of the FM Departments from SMU and NIH have been trained in Estonia and St. Petersburg as trainers inFM. A further group of eight physicians selectedas clinical trainers at NMhas beentrained as family physicians, followed by further training inNorway. 422 CurrzcuIumfor Famz/ MedzczneTraznzng 76. In 1995, the Paediatric Faculty at Yerevan State Medical University was closed as part of the educational reforms, which aimed to create a general medical education program. The role of FM i s definedinLaw, which recognizes FMas a medical speciality. 77. A Unified Curriculum for Family Medicine+omprising 33 modules and developed in 2002 by the Armenian Association of Family Physicians with support from the USAID-hded Armenia Social Transition Project (implemented by Abt Associates)-was adopted in July 2003 by the Ministry of Health.25The UnifiedFMCurriculum has been fully adoptedby the NIH,but i s also utilizedby the SMU. The curriculum i s regularlyreviewedby the Armenian Association of Family Physicians. Inaddition to the Unified FM Curriculum and respective curricula at SMU and NM, there i s a clearly articulated "Procedure for training and assessment of FM" adopted by the Boards of Education Methodology inthe SMUandNM(Annexes 3 and4). 78. There are now two routes for training as a family physician: (i) an 11-month retraining program (delivered by the SMU and supported by the Bank-financed Health Project) for doctors trained in the Soviet system and currently working in PHC. This was accredited by WONCA as being up to internationally acceptable standards; and (ii) a two-year FM residency program for medical graduates who qualified recently. 79. To date, around 350 family physicians have graduated from SMUand NIH. At present, a further 120 physicians are in training at both institutions. The objective of the government i s to retrain around 160 family physicians each year to reach the target o f around 1,200 family physicians in the next five years. In addition, 150 general nurses have been retrained as family nurses. The number of family physicians and nurses meets 23 percent of the numbers needed inArmenia (the country needs a total of about 1,500 FMphysicians). 423 RedmcyProgram znFamzhMedzczhe 80. Eachyear around 15 FMresidents attached to SMUand NMare trained at Polyclinic 17. These residents are divided among the four FM Trainers based at Polyclinic No 17. The FM residents attend Polyclinic 17 ten days each month and spendthe rest of their time at their respective institutes for class- based training, clinical skills laboratory, and training in practical procedures. Each of the four FM Trainers at Polyclinic 17 have around 1,000 patients ontheir personal lists-not enough for the training of residents-hence, residents are also secondedfor one-month duration for teaching to FM centers inrural practices staffed by family physicians trained by SMUand NM. Currently, these rural family physicians are not remunerated for training residents, but it i s hoped that under the WB Health 2 Project, there will be payments to compensate for time spent. 81. The two-year training program, which comprises 30 percent theoretical and 70 percent practical training, i s currently being reviewed by the SMU and NIHwith a view to extending the duration of the training to three years. 424 Fam& MedzczneTraznzngCenters 82. Polyclinic Number 17 in Yerevan is the National FM Training Centre, which was refirbished with support from the World Bank Health IProject. It opened inOctober 2003, and i s used for in-service training of medical students and FMresidents. 83. By thejoint decree of the City Mayor and the Minister of Health, Polyclinic Number 17 became the clinical basis of the Yerevan State Medical University and National Institute o f Health Family Medicine Chairs. 84. Inaddition to Polyclinic Number 17, both NMand SMUutilize six other training centers (for example, those inVanadzor and Gyumri)as training bases for family medicine. 42.3 ContzkuzngMedicalEducation 85. There i s a system to retain "professional competence" based on the Soviet system, which required doctors to attend refresher courses once every five years to "raise qualifications" ("povishenya kvalifikatsyi") to achieve a higher "category" intheir respective fields. This system has been changed to a credit system, whereby every physician has to accumulate 175 credits points over five years. Of these 175 credits, 125 must be obtained from courses delivered by the NIH. 86. Continuing Medical Education (CME) i s necessaryfor graduates who have at least three years of postgraduate work experience. A CMEprogram specific for FDsi s beingdeveloped. Modules withinthe UnifiedFM Curriculum can be used for CME purposes. The NMoffers modules for CME suitable for family physicians. These CME programs, which must be paid for by the doctors, are unaffordable for most of them.26 426: Evaluationof theFMTrazhzhgPrograms 87. An analysis of the Family Medicine Training Programs implemented in Armenia between 1997 and 2003 was undertaken in 2003. The retraining programs-currently delivered at the State Medical University and at NM based on the Unified Family Medicine Curriculum, the two-year residency program, and the proposed three-year residency program in family medicine-were evaluated favorably in2003 and found to be up-to-date according to international standards. Ths evaluation identified the key strengths of these programs to be: a well-defined concept o f family medicine; a highly motivated team; a pool of health professionals who could be retrained in family medicine and who could work in PHC; well-established FM training centers in Yerevan and Gumri; appropriately designed curricula and programs to retrain PHC doctors as family physicians; FMunits within polyclinics inurban areas and as self-standing units in rural areas with ambulances; a number o f care guidelines evaluated by the family physicians and implemented to improve practice, and apparent plans for optimization of training and development of a sustainable PHC system. However, a number o f weaknesses and challenges were identified, including: a hospital and polyclinic-centric system that made introduction of FM difficult; a large number of unemployed professionals; a poorly paid workforce with a lack of incentives; and uncertainty regarding the future o f PHC.27 19 88, The same evaluation identified that the concepts of FMwere based on the Alma Ata Declaration and that the curricula were in line with the recommendations of the 48th World Health Assembly on the reorientation o f medical education and medical practice to achieve health for all. The evaluation recommended that inthe transition period of 2003-2008 the duration of the training program for family physician retraining should be kept at eleven months; the residency training should be delivered at the State Medical University, last a minimum o f three years, and, after 2008, be the only route to FM specialization; and the Unified Family Medicine Curriculum should be modified to include increased practical elements and shouldbe delivered inFMtraining centers.** 4.3. ORGANIZATION OF PRIMARY HEALTH CARE 43L Typesof PrharyHeakk CareProvzYers 89. Primary care in Armenia is fragmented and provided by a number of different health professionals, who can be accessed directly and include: a) family physicians, district therapists, and pediatricians providing PHC services in rural ambulatories or polyclinics in towns and cities; b) gynecologists and nurses who provide antenatal and postnatal care; c) a large number of narrow specialists who provide "specialist services" for chronic conditions; and d) dispensaries (specialised outpatient facilities) for tuberculosis, oncology, mental health, dermatovenereology, endocrinology, and narcology services. 90. Primary health care i s typically delivered through regional polyclinics or rural health posts/feldsher stations with one physician per 1,200-2000 population and one paediatricianto 700-800 children. There are 37 regional general polyclinics, most of which employ a PHC team that includes a general physician, an obstetriciadgynecologist, and a pediatrician, as well as nurses and midwives. These polyclinics typically offer: general ambulatory care for the adult and elderly populations; antenatal, obstetric, and perinatal services; pediatrics; basic investigations; minor surgery; rehabilitation; 24-hour emergency cover; home visits, and health education. Inaddition, larger urban areas, in particular Yerevan, have specialist polyclinics for children and women. In 1998, the polyclinics, which were previously attachedto regional hospitals, were granted autonomous status. 91. Around 500 medical posts, or feldsher stations (each village typically has one), offer a nurse-led service that includes basic care of children and adults, antenatal care, developmental checks for infants, prescribing, first aid, 24-hour emergency cover, home visits, immunization, and health education. Clusters of villages share PHC centers staffed by a general practitioner or a family physician; these centers offer a broader range of PHC services as compared with rural posts. The government's intention i s to gradually change the staffing mix inthe polyclinics and the healthposts by staffing these with family physicians andnurses. 92. The Family Physician Statement, published in 1999, established the speciality of Family Medicine. The diplomas o f retrained and trained family physicians and family nurses were recognized. The speciality was also recognized bythe State Health Agency. 93. Unlike polyclinics and hospitals, FM practices in cities and towns are not autonomous, but are instead managed by polyclinic or hospital directors. In contrast, the rural family medicine practices established under the World Bank-supported health reform project and a few other hamaynk-owned ambulatories are independent fromurbanpolyclinics. 20 94. The Armenian Association of Family Physicians was founded in 1999 and has beenvery actively involved in the development of FM and PHC, in particular playing an important advocacy role- establishing standards and working with the government to develop guidelines. 433 Lzcenszhgof Doctors 95. There i s currently no licensingof individual physicians. Licensing Laws existed until2001, when they were repealed under a General Law about licensing. Although the reintroduction of physician licensing i s currently under discussion, these discussions have yet to produce results. 434 Licenszngof PHCTraznzngFaczZZzes 96. Establishments that are involved in FM training are granted a "once for all time" license. The licensing i s based on meeting minimal criteria, such as demonstrating that all the staff have had FM- relatedtraining. At present, there are no plans to introduce re-licensingof FMtraining centers. 4.4. FINANCING PHCANDPROVIDERPAYMENTSYSTEMS OF 97. The State Health Agency contracts polyclinics to deliver PHC services. The contracts for free- standing rural ambulatories are agreed upon with the marz urban polyclinic. The polyclinics are paid accordingto a weighted per capita formula, which is calculated according to the following: the number of citizens who live in the catchment area covered by the polyclinic, age of the registered population, salaries of staff (which increase if the PHC physician has been retrained as a family physician), cost of drugs for vulnerable groups, location o f the facility (with rural facilities and those in mountainous areas attracting higher rates), and the case mix o f the population managed (where treating endocrinological, cardiological, or neurological cases attracts an additional fee). The weightedelement of the per capita fee accounts for around 30 percent of the total-not large enough to attract family physicians to rural or mountainous areas. 98. Inaddition to the per capita fees, the PHC facility can generate further revenues from out-of- pocket payments for services such as laboratory tests, ECGs, services that are not inthe basic package, or services inthe basic package that attract a co-payment. 99. Antenatal care and the services o f narrow specialists inpolyclinics are not included as part of the weighted capitationpayment and attract additional fees. 100. There i s a gradual shift of certain services from narrow specialists to family physicians with commensurate fees for service. The narrow specialists are no longer paid for these services. This financial lever creates incentives for narrow specialists to retrain as family physicians and has been an effective tool inincreasing the number of pediatricians applying to FMretrainingcourses. 101. In2003, the budget for PHC (for family medicine and narrow specialists inPHC) was 4 billion drams, equivalent to US$7 million and $2.2 per citizen per year, with a planned increase in 2004 to 7 billion drams (part of which was earmarked for screening of future military conscript^).^' The pay level of family doctors increasedfrom around 20,000 Drams in2002 to 60,000 Drams in2004. 21 4.5. SERVICE PROVISION 102. Government Decree Number 246, issued in2003, has defined entitlements to "State Guaranteed Free Medical Care and Services" for various population groups: (i) For the whole population, PHC services are provided by district internists, district pediatricians, and family physicians as well as by narrow specialists working inambulatory care and polyclinics for conditions of social importance (mental health, narcology, infectious diseases, oncology, tuberculosis, and sexually transmitted illnesses); (ii) Socially vulnerable groups that are entitled to a more comprehensive set o f services and full volume of medical care provided by district internists, district pediatricians, family physicians, and narrow specialists; and (iii) Each resident i s entitled to free choice o f PHC physician (district internist, district pediatrician, family physician) for themselves or for their ~hildren.~' 103. The BBPs for "vulnerable" and "non-vulnerable" populations differ. The BBP for the non- vulnerable or general population covers all family medicine services (PHC), including part of the cost of the home visits; antenatal and postnatal care (provided by the gynecologist or nurses); a large part of the dispensary outpatient care (tuberculosis, part of other infectious diseases, part of the oncology services, psychiatric care); and a selection of hospital services. Services outside the BBP attract out-of-pocket payments by patients. For the vulnerable population, the BBP includes all services at all levels, with the exclusion of some specific very costly or less essential services such as transplants, expensive dental services, and cosmetic surgery. It includes all services provided by family physicians, pediatricians, and district therapists at the PHC level and by dispensaries, narrow specialists (secondary and tertiary care), hospitals (secondary and tertiary care), and ambulance services.31 104. According to Article 19 o f the Government Decree on "Health care and services for population," PHC facilities are obliged to provide emergency medical care and services by their own resourcesto each person, regardless of basis o f payment for the servicesprovidedor residency status o f the user. The same decree defined several types of medical care services that are free at the point o f delivery for special populations groups: (i) Primary health care for socially vulnerable groups; (ii) services for children; PHC (iii) servicesforadults,includingobstetric/gynecologyservices;(iv)Narrowspecialistservices;(v) PHC Dental services; (vi) Laboratory and diagnostic examinations; (vii) Pharmaceuticals by PHC facility.32 105. With the reforms, the first contact function of the PHC has been enhanced with the requirement that patients wishing to see a narrow specialist have a referral from a PHC physician. However, despite this change, the oldpractice o f self-referralto narrow specialists, especially to those inhospital, prevails. 106. Norms have been developed by the MOH, specifying the minimum, optimum, and maximum numbersofpopulationthat canregister per family physician. 4x3 Refurbzshment ofPHC Centers 107. As part ofthe WB Project, around 76 PHC centers-most of which are inrural areas-have been renovated to a highstandardand appropriately equipped. 22 108. Clinical Guidelines inFamily Medicine and Nursinghave beendeveloped and distributedthrough the Armenian Association of Family Physicians. These comprise 13 volumes with 127 guidelines for family physicians and 5 volumes with 56 guidelines for family nurses.33 These guidelines were peer- reviewedby Tromso University inNorway prior to final approval. 4.6. WORLD BANKSUPPORT TO DEVELOPFAMILYMEDICINE AND PHC 109. In 1998, the World Bank provided International Development Association (IDA) financing of around US$ 9.5 million over five years to support health reforms aimed at developing PHC, improving health system financing, and introducingnew provider payment systems. 110. Between 1998 and 2003, the World Bank-supported Health IProject (World Bank Health Financing and PHC Development Project (HFPHCDP)) was instrumental in establishing critical platforms to develop FM-centeredPHC systems. Key achievements of the Project include: establishment o f FM cathedra in three universities; development of curricula for short-course retraining and residency programs to train family physicians and nurses; provision of support to training of family physicians and family nurses, whose training i s recognized in Law; renovation and equipping of 76 FM facilities, predominantly in rural areas but also including polyclinic number 17 in Yerevan; development and implementation of 127 evidence-basedcare guidelines for family physicians and 56 guidelines for nurses. Collectively, these interventions have helped to improve the quality o f services provided by doctors and nurses retrainedas family physicians and nurses. 111. By the end of phase one of the WB-supported Armenia HealthProject in September 2003, there were 81 "micro-units" o f Family Medicine established all over Armenia. Furthermore, a Family Medicine Practice Training Centre (Polyclinic N 17) was reconstructed and refurbished in Yerevan in addition to the peripheral training sites established in the marzes; the first of these is at the Family Medicine Health Centre at Gumri, and there are six more "micro-units" already inuse. 112. Two retraining courses for therapeutists (adult physicians) and pediatricians have been established at State Medical University (SMU) and the National Institute of Health (NM). Both o f these programs are 11 months in length (see section on training and annex 3). The curricula o f the training programs delivered by the SMU and NMhave minor differences in content. Inaddition, a UnifiedFM Curriculum (UFMC) has been approved by the M O H for a three-year residency program. 113. Inadditionto the retrainingprograms, ahigh-quality trainingprogramfor training oftrainers in family medicine was established in collaboration with the University o f Tartu, Estonia, and Tromso Medical University, Norway. 114. To date, 350 physicians and 130 general nurses were retrained as family physicians and family nurses inprograms delivered by the SMUandNM. A further 60 physicians were involved ina retraining program, which began inApril 2003, delivered at the new FMPractice Training Centre No. 17. 115, The World BankHealth Financingand PHC Development Project was evaluated in2003, usinga multimethods approach, which involved focus group discussions, in-depth interviews, householdsurveys, physician surveys, and review o f patient notes from ambulatory care facilities. The evaluation found that the Project had achieved its objectives and was well received by all the key stakeho1de1-s.~~Inparticular, the establishment of the SHA, the introduction o f new provider payment mechanisms, and the creation o f family medicine-centered PHC were singled out as key achievement^.^^ 23 116. The Health I1Project supported by the World Bank ("Armenia Health Systems Optimisation Project") will buildonthese achievementsby further scaling up the FM-centered PHC model so it reaches beyond the 15 percent of the population currently covered. This enlargement will occur through further development of the infrastructure for training and service provision in PHC, expanding training and retraining o f family physicians and nurses, and strengthening FM faculty and training practices. In addition, the Project will restructure the hospital sector and help improve the prevention and the management o f public health threats. Inparticular, the Project will target rationalization of the Yerevan hospital sector by merging healthfacilities. 117. In addition to the World Bank, USAID, through the Armenia Social Transition Project, is providing support to the development of PHC and Family Medicine. 24 5. SERVICEDELIVERY:TASK PROFILESURVEY 118. Facility survey explored the range of servicesprovidedand availability of equipment. 119. The analysis initially compared the task profiles o f doctors working in urban and rural PHC centers. The analysis was then repeatedcomparing doctors working inPHC centers inmarzes involved in the reforms and those that were not districts. 5.1. NUMBER PATIENTS ENROLLED WITH THE DOCTORS OF 120. On average, there were 900-1000 patients registeredper doctor surveyed, although some doctors had as many as 9,000 patients. Statistically, there was no difference between urban and rural doctors and those inadvanced and low reformareas. 5.2. CONTACTSWITH PATIENTS 121. On average, doctors saw nine to ten patients per day in PHC centers and undertook eight home visits per week. There was statistically no difference between the doctors working in rural and urban areas andthose working inadvanced and low reformareas. 122. The majority of doctors working in urban areas (94 percent) had access to a telephone, as compared with a rate o f only 1percent for rural doctors. However, this difference was not observed when comparingdoctors working inPHC centers inareas at different reform stages. 5.3. APPOINTMENTSYSTEM FOR CONSULTATIONS 123. Inthe majority of the PHC centers inthe urban and rural areas as well as the advanced and low reform areas, there was no appointment system for consultations. 5.4. EQUIPMENT USEDBY PHCDOCTORS AND FAMILYPHYSICIANS 124. For many of the commonly used pieces of diagnostic equipment, there was a statistically significant difference in the use by family doctors working in PHC centers situated in advancedhntermediate reform regions as compared with low reformregions (0). 25 Percent of doctors using equipment advanced intermediate low I I significance (g) 125. These differences were less marked for urbanand rural PHC centers, but, interestingly, doctors in rural PHC centers were more likely to use these pieces of equipment, presumably a reflection of the substitutionof family physicians by narrow specialists inurbancenters (table 7). Table 7: Equipment used inPHC centers inregions at different stages of reform I IPercent of doctors 1 I usingequipment urban I Rural significance (p) blood glucose test set 43 64 <0.01 ophthalmoscope 67 54 not-significant otoscope 65 63 not-significant peak flow meter 5 1 not-significant ECG 45 59 10.05 urine catheter 33 56 <0.01 suture set 3 33 <0.01 set for minor surgery 62 82 <0.01 defibrillator 32 62 <0.01 5.5. DIRECTACCESS TO LABORATORYTESTSAND X-RAY 126. Doctors working inurban areas were significantly more likely to have direct access to laboratory and x-ray services (table 8). 26 Table 8: Proportion of PHC doctors with direct access to laboratory and x-ray services inurban and rural areas Percent of doctors with direct access urban I x-ray I 93 1 127. However, for PHC doctors in advancedintermediate reform regions compared with low reform regions there was no statistically significant difference. 5.6. APPLICATION OF MEDICALTECHNIQUES 128. The doctors interviewed were presented with a list of 14 medical techniques and procedures commonly applied inPHC andthat the family physicians wouldbe expectedto perform. 361 Comparzsonbyurban-mralstatus 129. Most o f the medical techniques used inthe surveyed were only "occasionally" or "seldodnever" applied by the doctors surveyed. Rural physicians were more likely to apply medical techniques and procedures, as compared with PHC physicians from urban areas: presumably reflecting the skills substitution by narrow specialists. There was statistically significant difference for the following procedures: resection o f ingrown toenail; removal o f a sebaceous cyst; wound suturing; excision o f warts; removal of rusty spot from cornea; fundoscopy; applying a plaster cast; strapping an ankle; setting up an intravenous infusion (p