Economic Research Forum (ERF)

Healthcare reform in Turkey: achievements and challenges

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Healthcare reforms in Turkey have aimed to reduce the potentially heavy burden of ‘out-of-pocket’ payments on household resources and to provide health insurance for the poor. This column outlines the policies, their impact and some of the future challenges for policy-makers.

In a nutshell

Turkey’s reforms in the 2000s aimed to achieve efficient, productive and equitable organisation of the resources in the healthcare system.

Improvements in healthcare service delivery have made Turkey a unique example of universal coverage for quality health services.

Many challenges remain to ensure the financial sustainability of the healthcare system and to protect households against potentially catastrophic out-of-pocket health expenditure.

‘Out-of-pocket’ (OOP) payments on healthcare constitute a substantial portion of the household expenditure in many developing countries. These payments become catastrophic when a household is not able to pay and has to reduce other spending – including on food, clothing and education – to compensate for the OOP healthcare expenditure.

Reducing OOP and catastrophic health expenditure, especially among the poorest, was one of the main targets of healthcare reforms in Turkey made over the course of the 2000s. The country was facing significant challenges in its health sector, including large disparities between rural and urban areas and between the poorest and richest groups in terms of access to healthcare services and need for OOP expenditure.

Turkey’s Health Transformation Program was launched in 2003 with the objective of achieving efficient, productive and equitable organisation of the resources in the healthcare system. This was followed in 2008 with the establishment of universal health insurance aimed at reducing OOP expenditure, notably through the Green Card, a non-contributory health insurance scheme for the poor.

Under universal health insurance, OOP and catastrophic health expenditures for the poor who are enrolled in the Green Card programme have been significantly reduced. What’s more, the improvements that gradually took place in healthcare service delivery have made Turkey a unique example of universal coverage for quality health services. But many challenges remain.

One is that of informal payments. Many healthcare systems guarantee citizens access to a predefined package of services, either free or for a small fee. But, despite official policies, in some cases healthcare providers demand – or patients even offer – informal or illegal payments. This raises the cost of patients’ care, leading to higher OOP expenditure and discouraging some people from seeking care, with the potential result of deterioration in their health conditions.

One solution to this problem would be an increase in the salaries of healthcare providers. Since low salaries often motivate providers to demand or accept informal payments, strategies to address this problem may reduce the practice. Another effective solution could be the implementation of policies and rules that prohibit informal payments. This would be effective if the rules are enforced and consequences for non-compliance are followed.

Turkey’s ageing population and the consequent burden on healthcare infrastructure constitute another challenge for maintaining a sustainable healthcare system. The country’s population aged over 65 was 7.7% of the total in 2013. While maternal and child health have rightly been priorities for the Turkish health system in the past decade, economic growth and reductions in premature mortality will lead to a demographic and epidemiological shift at a much faster speed than in most OECD countries.

With this increase, cardiovascular and chronic diseases have become major public health challenges, increasing OOP expenditure. One response is the smoke-free legislation passed in 2007 and bans on tobacco promotion, advertising and sponsorship since 2009.

Another is a new family doctor system that began for primary healthcare in 2006. In this system, family doctors are responsible for the people enrolled in their lists and their salaries are based on the numbers registered with them. Family doctors are also responsible for guidance on healthy lifestyles, including smoking, sport, exercise and diet. Such information and education programmes should be promoted and expanded across the whole population. If effective, they should result in significant health improvements and reductions in OOP expenditure.

Another critical issue related to both OOP expenditure and the financial sustainability of the healthcare system is informal employment. It is estimated that in 2013, 22% of employed workers in Turkey belonged to the informal economy and almost 20% did not report income for tax. This results in less revenue available for health spending and it is likely to lead to increased OOP expenditure in the future. One solution is the reduction of informal employment, which would have multiple benefits across the whole of society.

Further reading

Giovanis, Eleftherios and Oznur Ozdamar (2017) ‘The Effects of Policy Reforms on Out-of-Pocket Health Expenditures: Evidence from Turkey’, ERF Policy Perspective No. 22

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  • Oznur Ozdamar
    Oznur Ozdamar
    Department of Economics, Izmir Bakircay University
  • Eleftherios Giovanis
    Eleftherios Giovanis
    Associate Professor of Economics, Department of International Trade and Business, Izmir Bakircay University

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