Economic Update

Turkey: Healthy progress

Eastern Europe | 23 Feb 2012

Major changes are under way in the Turkish health care system in both the private and public sectors. While higher rates of hospital accreditation and a focus on attracting foreign customers is increasing the quality of care in the private sector, more Turkish citizens and permanent residents will be enrolled in the state system, following the institution of a universal health insurance policy.

Economic growth has led to a wider range of health care options for Turks, with 94.3% of locals benefitting from some form of health insurance in 2010, according to World Bank statistics. Health expenditure as a percentage of GDP was 6.7% in 2009, up from 4.8% in 1999.

Of total health care expenditure in 2009, public spending made up 75.2%, up from 61.1% in 1999. This can be largely attributed to the government’s Health Transformation Plan, which was instituted in 2003 to rework the financing of the public health system.

Private insurance policies and hospitals are also becoming more popular and are seen as alternatives to state-run health institutions. The increasing rate of accreditation of medical facilities in the country is greatly improving the standards of care, and many local institutions are affiliated with reputable health centres abroad – benefits which are not lost on foreign customers.

Foreigners often come to receive high-quality care for lower costs than in North America or Europe – an encouraging trend for the country’s budding medical tourism industry. According to the Ministery of Health, in 2010 more than 100,000 international patients entered Turkey for medical care each year.

The board also indicated in 2010 that if Turkey were to offer foreigners a reduction in the value-added tax for medical care, the number of foreign patients could increase to more than 1m annually.

“The international accreditation process has motivated players throughout the sector to improve their services, as foreign patients bring prestige, strong marketing and high profits,” Ruşen Yıldırım, the chairman of the Foreign Economic Relations Board (Dış Ekonomik İlişkiler Kurulu, DEIK) and the Health Tourism Business Council, told OBG.

As private services are growing in scope and variety, major changes are also taking place in the public health sector with the introduction of the General Health Insurance (Genel Sağlık Sigortası, GSS) programme. The GSS, which has been in effect since January 1 in accordance with Turkish Law No. 5510, dictates that all Turkish citizens must register with the Social Security Administration and begin paying health premiums.

The amount of the premiums will be based on an individual’s or family’s wage. For families with total earnings above the minimum wage, the premium will be TL212.76 ($122) per month for the entire family; for those earning below the minimum wage, the premiums vary at lower rates.

Under the law, a “family” includes the policyholder and his or her spouse, in addition to any children below the age of 18 living in the household. Children attending educational institutions can be covered up to the age of 25.

The GSS is part of a larger set of reforms that have changed the structure of the social security system in recent years. Social security was formerly composed of three organisations: the Social Insurance Institution (Sosyal Sigortalar Kurumu, SSK), which covered private-sector workers and blue-collar, public-sector workers; the Pension Fund for Civil Servants (Emekli Sandığı), which covered retired civil servants; and the Social Security Institution for the Self-Employed (Bağkur), which covered small business owners, self-employed agriculture workers and others making money independently.

In 2007, the programmes were merged under the Social Security Institution (Sosyal Güvenlik Kurumu, SGK). As before, those who work in either the private or public sector will be insured through the SGK; both employers and employees in this sector are responsible for making social security payments, which vary in amount based on the term of employment and the risk categories of the job. The self-employed are also required to register with the SGK and pay into their accounts each month.

Another major change to the system is the requirement for foreigners to register with the SGK. According to the law, all foreigners who have been official residents of Turkey for more than a year must sign up with the universal health care plan. As with Turkish employees, foreigners who are legally employed will make social security contributions out of their monthly salary.

Unemployed foreign residents must pay a flat rate of TL212.76 ($122) per month. British citizens, however, are permitted to opt out of the plan upon presentation of proof of their own National Health Service coverage.

Between increasing foreign investment and interest in the medical sector and a potential increase in public funds resulting from the mandatory insurance policy, Turkey’s health sector looks set to continue on a path of expansion.

“The health sector is seeing very rapid growth, albeit from a rather low base,” said Yıldırım. “However, with a 6.7% share of GDP and only one-third the level of doctor’s visits of the average in other Organisation for Economic Cooperation and Development countries, there is significant room to keep growing.”

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