The World Bank is currently implementing the second project on reforming the health system in Azerbaijan. It was adopted in June on 2006 and is a logic continuation of the first project of the WB in the healthcare system. The new project, huge for the scale of actions to be taken and the cost, envisages the implementation of measures, ranging from financing the construction of new hospitals to and medical centers to improvement of services
The $50mln loan allocated for the project out of the IAD with an annual interest of 0.75% and for the term of 35-40 years, with 10-year grace period is the WB's biggest investments in country's social sector, which will give impetus to reforming the health sector in Azerbaijan which suffers from cut in state expenses. A project management team announced that the expenses for health will increased from the current $37.3 per person to $200 per person over the subsequent 120 years as a result of the implementation of a project on Reforms in Health Sector. In particular, over the nearest 5 years it is planned to increase the expenses to $100 per person, and later over 10 years to $200 per person.
Before approval of the second credit, which exceeds the cost of the project by 10 times, in 2005 the WB held next researches into this sector этой сферы. The results of researches showed that the health system of the country do not meet the major principle - availability of high quality medical service for many category of population and therefore, requires further reforming, and it actually requires more funds.
Absence of obligatory medical insurance drew attention of foreign experts. Thus, in April 2007 the Azerbaijani Finance Minister Samir Sharifov and the Health Minister Oktay Shiraliyev met with WB mission led by Enis Barishev to discuss the issues regarding the application of obligatory medical insurance, development of legislative and standards documents. The Health Ministry announced that they have developed and submitted to the Cabinet of Ministers all necessary documents on the application of medical insurance.
Reforms in the Azerbaijani health system could be commenced with the adoption of the law on Obligatory Medical Insurance (OMI) in 1999. The experts urge the necessity of approval of tremendous funds out of the public budget to apply OMI mechanism. WB experts played a considerable role in appearance of new law on Medical Insurance in the country. Particularly, the WB experts proposed the formation of the OMI Fund in the country. The State Fund of Social Security is prepared to undertake the responsibility of formation and management of the OMI Fund. It was proposed to decrease the remittances by legal persons from 22% to 20% to provide for flow of the saved capital (2%) to the establishment of the OMI Fund, expected to occur in 2008. It will enable to get rid of inefficiency of the earlier adopted law. In this case the amount of medical services is estimated to $200mln.
It will be relevant to note that while adopting a relevant law in 1999, the items defining the functioning and presence of specialized funds was excluded from the document. It caused a long delay in adoption of the law on medical Insurance, initiated by the Health Ministry. The establishment of such funds targets centralized accumulation of money, collected as an OMI premium, paid by employers and budget remittances on this insurance program. Further, insurance payments are carried out of these resources. The payments with the medical institutions are carried out by the Fund but not the insurers.
The absence of the OMI, which is spread worldwide, is regretful, but sometimes shameful, particularly, while notifying the foreigners working in Azerbaijan of that. The arrival of well-known British and US companies in the country within the framework of project on development of oil and gas fields caused demand for qualitative medical services. Heads of foreign companies injected the OMI for their employees and approve considerable funds for labor security and insurance. Further, some prestigious Azerbaijani companies also used the experience. The local companies realized that the fund spent on OMI of employees is an investment in future and base for stable development of business.
The OMI in Azerbaijan will promote the development of both insurance companies and medical institutions in the country.
Almost all insurance companies in Azerbaijan are involved in medical insurance, unfortunately some of them simply copy software programs and do not have appropriate infrastructure for their implementation. The companies that are involved in medical insurance should be aware of all nuances of the health system, experts of the International Insurance Company say. The insurance company should have as minimum 3-year long experience in this segment for successful development of insurance companies.
As to medical institutes, at present mainly the private clinics are involved in rendering medical insurance services. However, the application of OMI in Azerbaijan will also involve the state medical institutions. Thus, the Health Ministry states on its non-readiness on the application of OMI due to absence of technical basis for delivery of relevant services. Therefore, it is necessary to have sufficient number of medical institutions of medium class in Azerbaijan along with the advanced clinics.
According to the calculations by the Finance Ministry, based on the law on Obligatory Medical Insurance, effective since 1999, it is necessary to allot some $500-600mln out of the public budget. In this respect, the Ministry plans to change medical insurance system and it is expected to the fully improved in 5-10 years. At the initial stage, it is planned to apply it with respect to state employees. After the formation of a model on obligatory medical insurance it will be possible to expand gradually the category of people which will experience this kind of insurance.
In its turn the State Social Security of Fund thinks the establishment of social fund for obligatory medical insurance in Azerbaijan seems realistic within subsequent 2 years and offers its participation in the collection of funds for medical insurance, taking into consideration the experience in accumulation of remittances for obligatory social insurance. The studies by the State Fund testified that every year the country spends $400mln on medical service.
