Overview of Turkey’s economics
Coming from an impressive economic growth of 11% in 2011, Tukey’s economic growth has slowed down and levelled off around 3% in recent years. According to GDP, Turkey currently has the 17th largest economy in the world, ranking alongside nations such as the Netherlands and Indonesia. Based on GDP/capita, it ranks 76th worldwide.
It has a population of 80.72 m in 2017, comparable to Germany ‘s and Thailand’s populations.
Despite an evident deceleration of economic performance, it has strong regulatory guidelines and is implementing an effective healthcare strategy to continue enhancing its healthcare market and provisions. It is building new hospitals, expanding primary healthcare, and seeks to harmonize regulatory frameworks to suit global markets. These factors do offer interesting medtech opportunities for external suppliers and manufacturers. However, there are some concerns around the sustainability of financing in both the public and private sectors.
What are Turkey’s healthcare challenges?
Immense healthcare improvements were achieved in the cross-sectoral reforms of the Health Transformation Program (2003-2013); i.e. implementing universal healthcare, extending primary care to cover 95% of the population, the introduction of digital healthcare management systems, preferential local procurement to strengthen the national industry, financing efficiency, etc.
However, there remain many challenges in Turkey that weaken the provisions, quality, access, organization and funding of healthcare services. The most noted challenges are:
- The current model of centralized healthcare as delegated by the MOH, limits the accountability, innovations and financial sustainability of public healthcare providers. This is particularly important for public hospitals and in light of the differences in demographics and healthcare demands throughout Turkey. The centralized structure impedes ground-level budget management.
- A lack of recording and reporting quality indicators impedes the introduction of a service remuneration model that rewards qualitative care over the quantity of patients being treated.
- The current remuneration scheme also does not encourage medical teams and institutionalized multi-disciplinary approaches to be formed, in order to optimize a care trajectory.
- Addressing the rise of non-communicable diseases.
- Strengthening the primary care system, which currently lacks infrastructural capacity, a referral system, and sufficient adequately trained professionals.
- The substantial number of refugees adopted into Turkish society has led to shortages of beds and care providers in certain areas.
- Reportedly, there is a significant outstanding debt to medtech suppliers, owed by MOH and university hospital in recent years, totaling close to €1.75 bn in 2017. This affects smaller (supplier) companies much more heavily than large companies, since they do not have the financial reserves to absorb the outstanding payments. A solution offered in May 2018, consists of the Ministry of Finance providing loans to indebted institutions, applying specific discount guidelines and re-payment plans.
- In the private sector, the high inflation rate, defaults on foreign loans and Turkey’s general economic slowdown, is causing serious financial problems for private hospitals and clinics, especially for the smaller-scale facilities that do not have the financial means to carry them through these rougher and less profitable patches. Several private hospitals closed in 2017 due to financing problems, and larger institutes have made noticeable employee cuts.
- Corruption and bribery in healthcare remain common.
The Ministry of Health (MOH) in Turkey is the main provider of healthcare services, covering the majority of costs and managing the majority of healthcare providers. In 2015, the government created a network of regional Health Authorities and municipal administrations, that implement the national directives and reforms throughout the country. The MOH also works strategically with the private sector to improve access to healthcare and boost specialized care for the most pressing demands, in fields such as oncology and cardiology.
Through the Social Security Institution (SSI) the central government is the single purchaser of healthcare services from both public and private sector providers, in a universal healthcare system.
Turkish Medicine and Medical Devices Agency (TiTCK) is the medtech and pharma regulatory body, in charge of improving human health by designing and applying regulatory guidelines for pharma and medtech products.
The total healthcare expenditures are paid by:
- 77% – Public funds
- The Turkish healthcare budget is funded by the SSI (employer & employee contributions) and national and regional income taxes.
- 23% – Private funds
- 82% are Out-of-Pocket payments, equal to 19% of the total HC cost.
- 9% of private funding stems from private insurance plans.
Health expenditure is spread out over the provider sectors as follows:
- 64% – Public providers
- 5% – Private providers
- 5% – University hospitals
Trends, developments and concerns related to Financing
- The impact of supplier-induced demand is causing some concern in Turkey. Ever since the introduction of a performance-based payment system for health professionals in public facilities, a link has been created between the number of interventions, the income of the facility and the health professional. It is believed that this mechanism has led to the increasing numbers of healthcare interventions and the rising expenditure in recent years.
- Coming reforms are expected to reward quality of care over quantity.
- DRG financing methods have been implemented, but adherence to the system and a thorough understanding of it have great room for improvement.
- The private payer group is growing steadily, with a rise of 12% in private spending from 2011 to 2018.
- Recent financial strains on hospitals in the public and private sector have resulted in closures and employee cuts in the private sector, and delays on manufacturer payments in the public realm.
To learn more about Turkey’s healthcare landscape, please check out the latest Turkey Report on TforG-IQVIA’s MyTools platform.
About Laura Weynants
Performs primary and secondary market research to create country reports at TforG. Interviews KOLs and medical sector professionals to build on TforG’s healthcare market expertise and competence networks. Complementing five years of sustainability policy and CSR communication, she now focuses on grasping key medical market trends, structures and opportunities in medical sectors worldwide. Coming from an international background of living in Germany, Spain, USA, UK and Belgium, she has gained a keen insight in international organizations and language skills to perform first hand investigations. She graduated from Sussex University Brighton, UK with a BA English Literature and Sociology and achieved a Master Degree in Sustainability and Corporate Social Responsibility in EOI Business School in Madrid, Spain.