Healthcare reform is like a bitter pill. It is easy to prescribe but difficult to swallow, especially when the patient is the healthcare system itself. It makes it harder when the prescribing physician is the Minister of Health himself, who has to balance between what he wants to do as a doctor and what he must do as an administrator.
"This is like mission impossible. We have to take a realistic approach. Healthcare needs a lot of money, and our financial resources are very limited. I wish I had a magic formula," says Minister of Health Dr. Gagik Stamboltsian, a Yerevan Medical Institute and Yale-trained plastic surgeon.
"But at the same time I'm convinced that we need both affordable and quality medical services, affordable for the public and the government as well," he said.
His mission is not only to streamline a dilapidated 70-year-old centralized Soviet system which relied exclusively on government funding, but also to introduce changes that would enhance its quality and safeguard the basic health needs of the society.
"The old system had created the illusion that medical care was free, where in fact, the culture of paying for doctors under the table was more of the norm than the exception. It was called gifts.
"People had no right to choose a doctor or a hospital despite the great number of providers, except maybe when they dipped into their pockets," Stamboltsian said.
But times have changed. Armenia is no longer a communist country, and hospitals and doctors can no longer survive on the meager resources available through government subsidies.
Inadequate financing has forced nearly all hospitals to stop providing medicine or serving food for their patients. Government-financed healthcare is in disarray, and its future uncertain.
"Like everything else, cost is a key factor. Someone has to pay. We need a pragmatic and yet humane approach to this problem. Money should not be the central issue, but at the same time we can no longer ignore the facts of life," Stamboltsian said in a recent interview.
As of July this year, the government adopted a limited "for pay" system under which patients will be asked to meet some of the costs of their treatment.
The objective is not only to alleviate some of the financial burdens of the government, but to also allow the hospitals to be more independent and provide better service to their patients.
But to make the measure more palatable, certain categories of illnesses, medical conditions, and age groups were exempted from the new structure.
These include prenatal care, child birth, treatment of children up to the age of seven, emergency care, infectious diseases like tuberculosis, AIDs and sexually transmitted diseases, and treatment for all forms of cancer, including radiation and chemotherapy.
Also excluded from the "for pay" structure are old age pensioners, and those who are considered to be living below the poverty line.
"We know that this is not an ideal solution to the problem because the system has many loopholes. For one thing, it does not seem to help improve the level of care, and for another, we have no way of being sure who is below the poverty line and who is not. A lot of people have hidden incomes which they do not declare," Stamboltsian said.
At the moment, all hospitals are still government owned or at least financed and all medical personnel are still on the government payroll—but only on paper.
Funding however is limited, and in the best of cases, payments from the government to doctors and hospitals are almost always late.
According to available statistics, Armenia has more than 100 hospitals and medical facilities and 14,000 healthcare providers, including doctors, nurses and medical technicians.
The average "official" salary of a doctor is between 5,000 and 6,000 drams per month, which, based on the current exchange rate, translates from 10 to 12 U.S. dollars. Nurses are paid much less.
"This kind of pay scale can only create one thing: corruption. We need to change this, and one way out of the problem is to establish a more balanced and reasonable pay structure...not just for the medical people, but also for the recipients," Stamboltsian said.
Among the changes now under discussion and review are the entire management system, its structure, financing and training of medical personnel.
Serious thought is being given to the introduction of various forms of health insurance, be that private, state, or at the enterprise level where each factory or even professional group would underwrite the cost of treating its own members based on an internal subscription formula.
This, officials hope, would eliminate the confusion created by the "for pay" system which has opened the way for doctors to set their own rates.
"We need a separation of roles. The Ministry of Health should not be the sole entity in charge of carrying the entire financial burden of the system. We need to diversify...privatization is a serious option," Stamboltsian said.
While not ignoring the basic needs of the population, the Ministry of Health wants to concentrate more on policy matters such as decentralization of the healthcare system, streamlining of personnel, licensing, education standards, monitoring the quality of health care along with providing for the basic health needs of the population.
"We are not saying we have no financial responsibilities, but rather stressing the need for a more pragmatic and practical approach to improve the standards in general.
"As doctors, we know that early detection is a major part of the cure, and this means preventive healthcare, annual checkups and regular testing. We need to train more family doctors who would act as a first line of defense against soaring costs," Stamboltsian said.
Help will soon be on its way with the imminent implementation of the World Bank-financed pilot program aimed at establishing 70 primary healthcare centers across Armenia, each staffed by a pediatrician, family doctor, two nurses and a midwife.
With a start-up cost of an estimated 6.5 million dollars, the centers will act as the first line of defense in the efforts to promote better healthcare for the population.
"Fewer people would need hospitalization, or sometimes even surgery, if they are treated in these outpatient facilities which will be free to the public. Early detection is essential to the overall cost-cutting process," Stamboltsian said.
As preparations for the pilot program continue, at least one Yerevan hospital has started its own insurance plan to patients who need surgery.
The TAYM Insurance Company is owned by Dr. Hamlet Tahmazian, director of Yerevan's Mikaelian Surgical Institute. It costs a flat rate of 150 U.S. dollars for three years during which all surgical procedures are fully covered, including hospitalization.
"We already have thousands of subscribers. Our rules are simple. We give all applicants a full physical examination to screen out pre-existing conditions such as cancer.
"Once the application is accepted and the policy is issued, we are responsible for any surgery the policy holder might need for three years," Dr. Tahmazian said.
Started in March 1997, policy holders are treated in a separate 60-bed wing rented from the Mikaelian Institute.
"We have our own doctors who are paid about 100 U.S. dollars a month. Our nurses make 50 dollars. Our doctors also treat other patients outside the unit — but they are not allowed to charge anything to the patients who have this insurance policy," Tahmazian said.
"The more insurance policies we sell, the better service we can provide. Let's not forget that people don't have surgery every day, but for 150 dollars they can have peace of mind for three years," he said.
Private insurance, the trend toward primary care, better education and a sensible fee structure are gradually replacing the old system.
"The problems are numerous, but change is inevitable. The pill may be bitter, but we have to move forward with compassion," Stamboltsian said.
