1. 25.07.20071 Privatization of Health Sector in Turkey Filiz Tepecik

2. 25.07.20072 Since 1980s developing countries have been forced to make changes in many areas by Washington Consensus. Developing countries, sometimes willingly sometimes reluctantly, have to give up on their Keynesian economic policies.

3. 25.07.20073 Washington Consensus, in some sectors, such as the health sector, the education sector, is suggested that public investments should be increased. But, these investments have some limitations because of Consensus’ other articles. So, increasing investments in health sector has to be thought together with the limitation of government role on market.

4. 25.07.20074 1980’s witnesed to increase the cost of the health sector all countries. But reasons of the cost is different developing countries than developed ones.

5. 25.07.20075 PROVISION OF SERVICES SOURSES OF FUNDS Public State Budget through Hospitals of Ministry of Health Hospitals of Ministry of Health Ministry of Health Hospitals of SSK (Social Insurance Organization) Hospitals of SSK (Social Insurance Organization) Higher Educational Council University Hospitals University Hospitals Ministry of Defence Hospitals of Municipalities Hospitals of Municipalities Other Public Sector Sources State Economic Enterprise State Economic Enterprise Compulsory Insurance Hospitals of Ministry of Defence Hospitals of Ministry of DefenceSSK Other Ministries Other Ministries Bağkur (Insurance Scheme for self -employment Private Emekli Sandığı (Goverment Employees Retirement Fund) Turkish and International Hospital Turkish and International Hospital Private Insurance Funds Private Physicians Private Physicians Out-of Pockets Payments (User Charges) Private Laboratories Private Laboratories Private Pharmacists Private Pharmacists Philanthropic Source: Health Sector Master Plan Study, Price Waterhouse/Ankara, State Planning Organization, 1990 Table1: Provision and Financing of Health Services

6. 25.07.20076 CRACTERISTICS OF HEALTH SECTOR (1)  MULTI-HEADED STRUCTURE  SSK (Social Insurance Organisation): SSK is a social security organisation for private sector and blue-collar public sector workers, and functions both as an insurer and as a health care provider. Members mainly use SSK services but are referred when needed to MoH, University and private health institutions.  Bag-Kur (The Social Insurance Agency of Merchants, Artisans and the Self- Employed) Bag-Kur is the insurance scheme for the self-employed. All contributors have the same entitlement to benefits covering all outpatient and inpatient diagnosis and treatment. Bag-Kur operates no health facilities of its own, but contracts with other public service providers.  Emekli Sandığı (Government Employees Retirement Fund (GERF) GERF, primarily a pension fund for retired civil servants, also provides other benefits including health insurance. There is no specific health insurance premium collected from either active civil servants or pensioners. The scheme is financed by general budget allocations.  Green card The Green Card system was established in 1992 and is directly funded by the Government. Poor people earning less than a minimum level of income which is defined by the law, are provided a special card giving free access to outpatient and inpatient care at the state and some university hospitals, and covering their inpatient medical drug expenses but excluding the cost of outpatient drugs.

7. 25.07.20077 CRACTERISTICS OF HEALTH SECTOR (2)  Low Income level  Low premimum  Lack of data  Low goverment power - coalitions-

8. 25.07.20078 ‘ Transformation program in health’  general health insurance,  family medicine,  data network system,  the provision and finance of service separates,  Decresing the cost of healt services

9. 25.07.20079 EXPENDITURE OF FUNDS SOURCE OF FUNDS Public(%)Private(%)Total(%) State Budget 69.0660.50.8669.542.63 Insurance Funds31.0304.57.7635.521.77 User Charges5.0453.091.3858.035.60 Total10510058.0100163.0100 Source: Health Financing Policy Options Study For Türkiye, Health Insurance Commission of Australia, PCU, MoH, 1995 Table 2. Aggregate sources of funding for health services and expenditure, 1993 (In 1994 Prices, Trillion TL)

10. 25.07.200710 Source: http://www.ssk.gov.tr/sskdownloads/anasayfa/istatistik/subat_2007.xls Active – passive Balance for SSK

11. 25.07.200711

12. 25.07.200712 Tuba Agartan says that In some low-income countries,…,health sector reform has been driven by wider macro economic policy and the implementation of structural adjustment programs which require control of public expenditure and changes in public and private sector institutional structures. The economic strategy, adopted in 1980’s, which ‘aimed at decreasing both the scale of public sector activity as well as the degree of state intervention in the operation of the market’ represent the direct and indirect influence of the international fiscal community, World Bank and IMF.

13. 25.07.200713 3. IMPLEMENTATION AND MAJOR CRITIQUES In transformation program, government has aimed to take little steps one at a time. By doing this, it has prevented big reactions. However, this led repeated discussions on every little steps. Sometimes, harsh discussion may lead to a situation where major components of the reform are never implemented or related laws are overturned by the Constitutional Court. Sometimes, the goverment does not leave much room for the critics to formulate and publicize their opinions about the reform and their alternative proposals. For instance, one of these steps was a Protocol which dated 07.01.03. It was signed among the MoH, Ministry of Labor and Social Security, and the Ministry of Finance that made it possible for the beneficiaries of Bag-Kur, Emekli Sandigi, and active public employees and green card holders to be able to receive treatment at any SSK institution; and for the SSK beneficiaries to be able to benefit from MoH hospitals. The following step will have been all beneficiaries will be able to any hospital (private or public). Final aim constituted the establishment of the ‘service partnership in health care institutions’, and hence the general health insurance. The most opponent of the reform program, the Turkish Medical Association (TTB) responded immediately, denouncing the protocol for transforming SSK into an institution which would be solely responsible for financing of health systems. With the protocol, SSK simply buy services instead of providing them itself. The association also claimed that this method of buying services from MoH hospitals or private institutions would increase the costs for SSK three-folds.

14. 25.07.200714 But at the same time, the change was also fostered by the idea that welfare services were to reach European levels and all of the people should benefit from it. Turkey wants to become a member of the European Union. This object functions as a crucial incentive for the government to implement its reform package. They may be right about escalation of the cost. As it is mentioned on one of OECD’s studies ‘“public provision of care” appears associated with lower overall spending on health care’. The cost is very important since transformation started because health was a burden to public budget. Although the association and other opponents declared that they would not like to have new regulations which cause an increase in the cost, their suggested system is totally based on government budget and all services are free. In other words, very costly new regulation. Another critique is that the system protects those who have income but leaves those who don’t to the market forces. At this point, government stated that outpatient treatment was going to be free. This means another cost item. “Health is totally left to market forces or health become goods” is an other critique. Most of the time, these critics were discredited by the government for being too much ‘ideologically-oriented’.

15. 25.07.200715 CONCLUSION Health sector in Turkey hasn’t improved a lot since 1960s. To solve this problem has become the object of all political parties in power since 1980s. But, two things were obstacles for them. Political limitation: Till 2000, coalition governments could not produce an effective solution and even they produced a solution, they could not carry out effectively. Financial limitation: Problems of health were not possible to produce solution with tax revenue. Because of this, political authorities have become depended on the external forces.

16. 25.07.200716 The problems of health sector are obvious. But the chosen path for the solution is by sign coming from outside. One of the guides is from Washington based institution (IMF, World Bank etc.) because there are payment balance problems in Turkey. The other guide is EU and their demands just because of the attempts to enter EU. The third guide of course is Turkish people. As long as political authority is able to get an agreement between these three guides, it will be successful.

17. 25.07.200717 Personally, I hope some parts of this transformation are not stuck between these jigsaw puzzle policies. The attempts of establishing database and free first step examination are some of them. Database is very important: Who treats whom for which illness with what method and how much? This database can be the answer to many further critiques. However, to form database is very costly. If this transformation program is aborted, is not it another cost item?