On the Reform Agenda

Azerbaijan’s healthcare sector received a record allocation of AZN660 million in the 2013 state budget, a figure 11 times higher compared to 2003. Following the consolidation of the country’s medical institutions in 2011, the number of hospitals increased to 523 in 2012, including a large expansion of rural area services. There were 46.5 beds per 10,000 people at the beginning of 2012, down from 50.9 in 2011, but still well above the regional average. The number of doctors per 10,000 people also fell to 31.4 in 2012 from 36.8 in 2011. Moving forward, the authorities now face the challenge of increasing the number of medical graduates, which has fallen slightly over the last few years, as young Azerbaijanis look to the more profitable oil and gas and ICT segments for employment.

A nascent private healthcare sector, centered on Baku, offers the chance for gainful employment to medical graduates, yet its development, as well as that of the public sector, hinges on the emergence of a long-awaited mandatory health insurance law. The introduction of mandatory policies is intended to make services more affordable to the general public and reduce the prevalence of confusing surcharges added to certain health services.

REFORM

Following the reform-based consolidation of the number of hospitals from 756 in 2010 to 516 in 2011, the number is now steadily increasing as a result of fresh investment. It reached 523 in 2012. According to Dr. Ogtay Shiraliyev, Minister of Health, 76 medical institutions were built or renovated in 2012, with 40 in Baku and 36 in regional areas. Renovation and overhaul was also carried out at 24 medical institutions, 13 in Baku as well as 11 outside the capital, areas which have traditionally been serviced by village doctor clinics and small outpatient departments. Development in the regions has also led to the increased success of inoculation programs. According to Minister Shiraliyev, “the timely inoculation of children has played a key role in preventing the spread of infectious diseases.” Indeed, children in Azerbaijan, like their European counterparts, are inoculated against 10 potential diseases and the national inoculation plan currently reaches between 96% and 98% of the targeted population every year.

The government hasn’t shied away from investment in recent years, with 11 state programs having targeted specific areas since 2005 and AZN387.7 million having been spent over the last decade. A state program established in recent years targeting cancer patients has seen the morbidity rate drop from 62.1 to 59 per 100,000 people, while similar programs have also seen the morbidity rate among diabetics drop from 21.7 to 7.5 per 100,000 people despite a 3.6 fold rise in the number of registered diabetics since 2003. In 2012, also as part of ongoing state healthcare programs aimed at reform, AZN61 million was spent transferring healthcare and cultural facilities away from the State Oil Company of Azerbaijan Republic (SOCAR) to the Ministry of Health and Ministry of Culture and Tourism, respectively.

The drop in physician numbers from 33,100 in 2011 to 31,400 at the beginning of 2012, however, coupled with the country’s growing population, is a structural issue that will need addressing. The birth rate has increased from 13.9 to 17.4 per 1,000 people over the last 10 years, while the mortality rate has fallen from 6 to 5.3. This, coupled with declining medical graduate numbers, has also resulted in a drop in the number of doctors per 10,000 people from 36.8 in 2011 to 34.5 in 2012. While the number of graduates of higher educational institutions reduced slightly from 1,168 in 2010 to 1,101 in 2011, the number of graduates from specialized secondary educational institutions fell from 1,946 to 1,786 over the same period. As Azerbaijani educational institutions prioritize subjects supporting the country’s economic diversification drive, the drop in graduate numbers in the medical sector could be seen as a related phenomena. The development of the private sector could thus be crucial to maintaining a healthy workforce and competition in the sector, an issue that in part depends on the implementation of mandatory health insurance in the coming years.

A large part of Azerbaijan’s long-term healthcare development has been the Health Sector Reform Project (HSRP) run in coordination with the World Bank. The project, begun in 2006, is worth $86.75 million, $50 million of which was financed by the World Bank itself. The program focused on streamlining regulation, developing services in the regions, the promotion of health insurance, and medical education. The World Bank has since announced it is ready to approve HSRP-2 in 2013.

PRIVATE HEALTH CARE & INSURANCE

Although only a small percentage of Azerbaijan’s hospitals are in private hands, there are upward of 300 private clinics in the country, located mainly in Baku. In addition to boosting coverage, the private healthcare sector could also work to boost the demand for places on medical courses at universities. The country’s pharmacies and dental practices are already run privately.

Like the public sector, the private sector could receive a boost should the long-delayed introduction of mandatory health insurance occur. Having moved away from the blanket free coverage of the Soviet era as a result of reforms in 1994 and 1998, Azerbaijan has, over recent years, charged patients for an expanding list of medical services deemed non-essential. Calls for additional revenue streams to improve conditions for both patients and doctors in public medical institutions have led to demands for the introduction of mandatory health insurance.

Under such a system, basic services would remain free while further charges would be levied on patients’ mandatory health insurance policies. A law providing for medical insurance was introduced in 1999, and an agency was established and tasked with its application in 2007. It received AZN30 million in 2012. Still under discussion in parliament toward the end of 2012, solid movement on the issue is expected in the coming years following the bill’s submission to the Council of Ministers.