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Albania
Health Care Systems in Transition
Written by Besim Nuri
Edited by Ellie Tragakes
Health Care Systems in Transition
2002
The European Observatory on Health Care Systems is a partnership between the World Health Organization Regional Office for Europe, the Government of Greece, the Government of Norway, the Government of Spain, the European Investment Bank, the Open Society Institute, the World Bank, the London School of Economics and Political Science, and the London School of Hygiene & Tropical Medicine.
Albania
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Keywords
DELIVERY OF HEALTH CARE EVALUATION STUDIES FINANCING, HEALTH HEALTH CARE REFORM HEALTH SYSTEM PLANS – organization and administration ALBANIA
© European Observatory on Health Care Systems, 2002
This document may be freely reviewed or abstracted, but not for commercial purposes. For rights of reproduction, in part or in whole, application should be made to the Secretariat of the European Observatory on Health Care Systems, WHO Regional Office for Europe, Scherfigsvej 8, DK-2100 Copenhagen Ø, Denmark. The European Observatory on Health Care Systems welcomes such applications.
The designations employed and the presentation of the material in this document do not imply the expression of any opinion whatsoever on the part of the European Observatory on Health Care Systems or its participating organizations concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. The names of countries or areas used in this document are those which were obtained at the time the original language edition of the document was prepared.
The views expressed in this document are those of the contributors and do not necessarily represent the decisions or the stated policy of the European Observatory on Health Care Systems or its participating organizations.
European Observatory on Health Care Systems: WHO Regional Office for Europe Government of Greece Government of Norway Government of Spain European Investment Bank Open Society Institute World Bank London School of Economics and Political Science London School of Hygiene & Tropical Medicine
EUR/02/5037245 (ALB) 2002 ISSN 1020-9077 Vol. 4 No. 6
Suggested citation: Nuri, B. In: Tragakes, E., ed. Heath care systems in transition: Albania. Copenhagen, European Observatory on Health Care Systems, 2002: 4(6).
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Foreword ............................................................................................. v
Acknowledgements .......................................................................... vii
List of abbreviations ......................................................................... ix
Introduction and historical background ......................................... 1 Introductory overview .................................................................... 1 Historical background .................................................................. 10
Organizational structure and management .................................. 15 Organizational structure of the health care system ...................... 15 Planning, regulation and management ......................................... 22 Decentralization of the health care system .................................. 25
Health care financing and expenditure ......................................... 27 Main system of financing and coverage ...................................... 27 Health care benefits and rationing ............................................... 30 Complementary sources of financing .......................................... 31 Health care expenditure ............................................................... 34
Health care delivery system ............................................................ 41 Primary health care and public health services ............................ 41 Secondary care ............................................................................. 47 Tertiary care ................................................................................. 54 Social care .................................................................................... 55 Human resources and training ..................................................... 56 Pharmaceuticals and health care technology assessment ............. 62
Financial resource allocation .......................................................... 65 Third-party budget setting and resource allocation ..................... 65 Payment of hospitals and institutions ........................................... 65 Payment of physicians ................................................................. 67
Health care reforms ......................................................................... 69 Aims and objectives ..................................................................... 69 Content of reform and legislation ................................................ 72 Reform implementation ............................................................... 76
Conclusions ....................................................................................... 81
References ......................................................................................... 83
Bibliography ..................................................................................... 87
Contents
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Health Care Systems in Transition
Foreword
The Health Care Systems in Transition (HiT) profiles are country-based reports that provide an analytical description of a health care system and of reform initiatives in progress or under development. The HiTs
are a key element of the work of the European Observatory on Health Care Systems.
HiTs seek to provide relevant comparative information to support policy- makers and analysts in the development of health care systems in Europe. The HiT profiles are building blocks that can be used:
• to learn in detail about different approaches to the organization, financing and delivery of health services;
• to describe the process, content and implementation of health care reform programmes;
• to highlight challenges and areas that require more in-depth analysis; and
• to provide a tool for the dissemination of information on health care systems and the exchange of experiences of reform strategies between policy-makers and analysts in different countries.
The HiT profiles are produced by country experts in collaboration with the Observatory’s research directors and staff. In order to facilitate comparisons between countries, the profiles are based on a template, which is revised periodically. The template provides the detailed guidelines and specific questions, definitions and examples needed to compile a HiT. This guidance is intended to be flexible to allow authors to take account of their national context.
Compiling the HiT profiles poses a number of methodological problems. In many countries, there is relatively little information available on the health care system and the impact of reforms. Due to the lack of a uniform data source,
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quantitative data on health services are based on a number of different sources, including the WHO Regional Office for Europe health for all database, Or- ganisation for Economic Cooperation and Development (OECD) Health Data and data from the World Bank. Data collection methods and definitions sometimes vary, but typically are consistent within each separate series.
The HiT profiles provide a source of descriptive information on health care systems. They can be used to inform policy-makers about experiences in other countries that may be relevant to their own national situation. They can also be used to inform comparative analysis of health care systems. This series is an ongoing initiative: material is updated at regular intervals. Comments and suggestions for the further development and improvement of the HiT profiles are most welcome and can be sent to observatory@who.dk. HiTs and HiT sum- maries are available on the Observatory’s website at www.observatory.dk. A glossary of terms used in the HiTs can be found at www.euro.who.int/ observatory/Glossary/Toppage.
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Acknowledgements
The HiT profile on Albania was written by Besim Nuri (University of Montreal). Ellie Tragakes (European Observatory on Health Care Systems) served as editor, and Josep Figueras as research director.
The Observatory would like to thank the following people from Albanian ministries and institutes for their assistance: Silva Bino (Institute of Public Health (IPH)), Margarita Caci (Institute of Statistics (INSTAT)), Nurije Caushi (Ministry of Health), Eli Gjika (Ministry of Health), Saimir Kadiu (Ministry of Health and World Bank), Manuela Murthi (IPH) and Vigan Saliasi (Health Insurance Institute (HII)).
The Observatory gratefully acknowledges Antonio Duran (Tecnicas de Salud), Akiko Maeda (World Bank) and Iris Semini (Joint United Nations Programme on HIV/AIDS (UNAIDS)) for reviewing this HiT. We are also grateful to the Albanian Ministry of Health for its support.
The current series of Health Care Systems in Transition profiles has been prepared by the research directors and staff of the European Observatory on Health Care Systems.
The European Observatory on Health Care Systems is a partnership between the WHO Regional Office for Europe, the Governments of Greece, Norway and Spain, the European Investment Bank, the Open Society Institute, the World Bank, the London School of Economics and Political Science, and the London School of Hygiene & Tropical Medicine. The Observatory team working on the HiT profiles is led by Josep Figueras, Head of the Secretariat, and research directors Martin McKee, Elias Mossialos and Richard Saltman. Technical coordination is by Suszy Lessof.
Administrative support for preparing the HiT on Albania has been undertaken by a team comprising Myriam Andersen and Uta Lorenz. Design, production
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and copy-editing were managed by Jeffrey V. Lazarus, with the support of Shirley and Johannes Frederiksen (layout) and Misha Hoekstra (copy-editing). Special thanks are extended to the WHO Regional Office for Europe for use of its health for all database, from which data on health services were extracted; to the OECD for the data on health services in western Europe, and to the World Bank for the data on health expenditure in central and eastern European countries. Thanks are also due to national statistical offices that have provided national data.
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CEE Central and eastern Europe
CCEE Countries of central and eastern Europe
DFID United Kingdom Department for International Development
GP General practitioner
HII Health Insurance Institute
INSTAT Albanian Institute of Statistics
IOM International Organization for Migration
IPH Institute of Public Health
MCH Maternal and child health
MoF Ministry of Finance
NGO Nongovernmental organization
NIS Newly independent states
PHC Primary health care
SII Social Insurance Institute
TRHA Tirana Regional Health Authority
UNDP United National Development Program
WHO World Health Organization
List of abbreviations
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Introduction and
historical background
Introductory overview
A lbania is located in south-eastern Europe on the Balkan peninsula,
bordered by the Federal Republic of Yugoslavia in the north, the former
Yugoslav Republic of Macedonia in the east and Greece in the south.
To the west are the Adriatic and Ionian seas. The country covers an area of
28 750 km2 and is primarily mountainous, apart from its flat coastline.
Albania’s population is younger than that of other European countries. A
third of its 3.1 million inhabitants is under the age of 15, and 40% is younger
than 18. The population grew by 1.2% per year in the period 1980–1999, with
a fertility rate in 1999 of 2.4 children per woman of childbearing age (1,2).
The country experienced even higher population growth in earlier decades,
encouraged by the pronatalist policy of the Communist regime.
A high proportion of Albania’s population lives in rural areas, amounting
to 58% in 2001 (3) 1. However, since restrictions on freedom of movement
were lifted in the 1990s, there has been a level of internal migration from rural
to urban areas that is unprecedented in Albania. In 1979, only 33.5% of the
population was urban. This figure rose to 35.5% in 1989, and in 2001 it reached
42.1%. Due to this influx, the population in the district of Tirana has increased
1 In Albania, the information systems at all levels face enormous problems in collecting and processing
data. The Institute of Statistics (INSTAT) acknowledges in its Demographic yearbook 1990–1999, that
“during 1992–1999, the information on the total number of demographic events as well as on their structure
by sex, age groups, place of residence, etc., is not complete” (4). In addition, the absence of a population
census during these years makes the Albanian population figure just an estimate, one that may in fact be
highly inaccurate. External and internal migration, as well as other important demographic phenomena,
have not been taken carefully into account. Therefore, many indicators may be distorted. The preliminary
results of the 2001 census show a decrease in the Albanian population, from the INSTAT estimate of 3.4
million people to 3.08 million people (3).
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Fig. 1. Map of Albania2
2 The maps presented in this document do not imply the expression of any opinion whatsoever on the part
of the Secretariat of the European Observatory on Health Care Systems or its partners concerning the legal
status of any country, territory, city or area or of its authorities or concerning the delimitations of its
frontiers or boundaries.
Valbone
Vermosh
Koplik
Pukë Kukës
Peshkopi
Maqellarë
Rrëshen
Krujë
Shijak
Kavajë
Peqin Cërrik
Elbasan
Maliq Korçe Bilisht
Ersekë
Çorovodë
Përmet
Memaliaj
Vlorë
Dhërmi
Gjirokastër
Konispol
Sarandë
Tepelenë
Delvinë
Selenicë
Durrës
Lushnjë
Fier
Burrel
Bulquizë
Librazhd
Gramsh Pogradec
Kuçovë
Patos
Ballsh
Berat
Lezhë
Laç
Krumë
Shkodër (Scutari)
Tropojë Bajram Curri
Tiranë (Tirana)
TROPOJË
SHKODËR PUKË
KUKËS
DIBRA
MIRDITË
LAÇ
KRUJË
MAT
BULQIZË
TIRANË
PEQIN
ELBASAN
LIBRAZHD
GRAMSH POGRADEC
DEVOLLKORÇESKRAPAR
KUÇOVË
BERAT
TEPELENË
PËRMET
GJIROKASTËR
VLORË
SARANDË
DELVINË
FIER
LUSHNJË
KOLONJË
MALLA- KASTER
KAVAJË
LEZHË
HAS
MALSI E MADHE
D U
RR ËS
Drinit Bay
Rodonit Bay
Lalëzit Bay
Durrësit Bay
Karavastasë Bay
Vlorës Bay
Lake Ulzës
Lake Ohrid
Lake Prespa
Little Lake
Prespa
Lake Fierzës
Drin i Zi
Bu në
M at
Erzen
Shkumbin
D ev
ol l
Se
man
Osum
Vjosë
Vjosë
D rino
ADRIATIC SEA
Lake Scutari
GREECE
GREECE
FORMER YUGOSLAV REPUBLIC OF
MACEDONIA
FEDERAL REPUBLIC OF YUGOSLAVIA
Sazan
Kepi i Rodonit
Bishi i Pallës
Kala e Turrës
Kepi i Treporteve
Karaburun
Kérkyra (Corfu)
Map No. 3769 Rev. 3 UNITED NATIONS April 1997
Department of Public Information Cartographic Section
The boundaries and names shown on this map do not imply official endorsement or acceptance by the United Nations.
A L B A N I A
Town, village
Main road
Secondary road
Railroad
Airport
District capital
National capital
District boundary
International boundary
0
0
40 km
10 20 mi
20 3010
ALBANIA
21° 20° 19°
42°
41°
40°
19° 20° 21°
40°
41°
43°
Source: United Nations Cartographic Section.
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Health Care Systems in Transition
rapidly to more than 500 000, which has put considerable strain on its
infrastructure and health services (3).
Many people have also left the country – over 750 000 between 1990 and
1999 (5). It appears that this emigration process has not slowed yet, and
Albanians are still leaving, both legally and illegally. Thus, according to
the last census, the population of Albania decreased slightly in the period
1989–2001 (3). Bearing in mind the country’s high fertility and population
growth rates, this development can only be explained by extensive emigration.
Another major population shift occurred in early 1999 when more than 700 000
people fled Kosovo (or Kosova), and over 400 000 of them sought refuge in
Albania.
About 97% of the Albanian population is ethnic Albanian and 1.9% Greek,
while other groups are represented in small numbers. A unified form of the
Albanian language has been used since the early 1970s. Islam is the religion of
70% of the population, while 20% are Orthodox Christian and 10% Roman
Catholic (6). These figures reflect “the religion of origin”, since religion has
not been an important identifying element in Albanian society. However, with
the return of religious freedom, many mosques and churches that were closed
in 1967 have now reopened.
Table 1. Demographic indicators
1994 1995 1996 1997 1998 1999 2000 2001
Population (millions)a 3.202 3.248 3.283 3.324 3.354 3.373 3.401 3.087b
Percentage under age 15a 33.4 33.0 33.0 32.9 32.6 32.4 32.2 –
Live births per 1000a 22.5 22.1 20.8 18.5 17.9 17.1 – –
Deaths per 1000a 5.73 5.56 5.36 5.49 5.44 4.96 – –
Ratio of births to deathsa 4.02 3.99 3.88 3.38 3.29 3.46 – –
Sources: a INSTAT, 2000; b INSTAT, Population census, 2001.
The ancestors of the Albanians, the Illyrians, preserved their own language
and culture despite the establishment of Greek colonies in the 7th century BC
and subsequent centuries of Roman rule. Illyria became part of the Byzantine
Empire in the division of 395 AD. Migrating Slavic and Germanic groups
invaded the region throughout the 5th and 6th centuries. Various neighbours
contested control of the region, and in 1344 the country was annexed by Serbia,
which in turn was occupied by the Turks in 1389. A national Albanian hero,
Skenderbeg, led the resistance opposing the Ottomans. In 1479, Albania was
finally incorporated into the Ottoman Empire, in which it remained a very
poor rural province for several centuries.
Albania achieved independence from the Ottoman Empire in 1912. Kosovo
(nearly half of Albania) was transferred to Serbia at the 1913 peace conference.
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Albania was overrun by successive armies in the First World War and became
a kingdom only in 1928, under King Zog I. Italy occupied the country during
the Second World War, and King Zog fled to the United Kingdom. The Albanian
Communist Party, founded by Enver Hoxha, led the resistance against first the
Italians and then the Germans.
A provisional government was formed in 1944. In January 1946, the People’s
Republic of Albania was proclaimed, and the Communist Party was renamed
the Labour Party. Hoxha became president and remained in power until his
death in 1985. Albania initially followed Soviet-style economic policies, but
in 1961 it broke off diplomatic relations with the Soviet Union and aligned
itself with China until 1978. It remained a Communist state from 1944 until
1991, pursuing a policy of independence while negotiating a series of foreign
loans from first Yugoslavia, then the Soviet Union and finally China. Albania’s
isolation from the rest of the world and lack of export earnings contributed to
its slow development and sustained poverty.
In the early 1990s, after Communism collapsed in eastern Europe and the
Albanian population staged demonstrations, the government agreed to allow
opposition parties. The governing Labour Party (later renamed the Socialist
Party), led by Ramiz Alia, won re-election in March 1991 after promising the
privatization of state land. The Democratic Party, led by Sali Berisha, won the
election in March 1992. The parliament then elected Berisha President for a
five-year term from April 1992 to March 1997.
March 1997 saw the collapse of several pyramid savings schemes, in which
perhaps two thirds of the population had invested money, with an estimated
loss of US $1000 million (7). People blamed the government for complicity in
the schemes, and widespread violence followed. It was particularly bad in the
south of the country, and many communes and municipalities ceased to function.
The country’s economic growth rate of the previous four years was reversed;
inflation and unemployment rose and economic recovery was interrupted.
In the wake of this scandal, the recently re-elected Berisha was forced to
call new parliamentary elections in June 1997. He resigned the presidency
when the Socialist Party won, and his successor named Fatos Nano prime
minister. In September 1998, the assassination of the deputy head of the
Democratic Party provoked demonstrations, and clashes ensued between the
followers of Sali Berisha, now the opposition leader, and the government. The
prime minister’s offices were ransacked. The rioters had access to guns and
other weapons looted from government armament stores the previous year.
Nano resigned and a new prime minister, Pandeli Majko, was appointed in late
September 1998.
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The elections of June 2001 were carried out peacefully, and despite the
turmoil of the previous four years, the Socialist Party again won the majority
of votes. Ilir Meta became the new prime minister. However, the Democratic
Party, headed by Berisha, did not recognize the legitimacy of these elections
and refused to send its elected deputies to the parliament for some time. Internal
tensions in the Socialist Party forced a reconfiguration of the government, and
Fatos Nano became prime minister again in July 2002. The agreement be-
tween the Democratic and Socialist parties in June 2002, known as the Berisha–
Nano agreement, was a major political achievement for Albania, and it led to
the parliament’s peaceful election of Alfred Moisiu as president in June 2002.
The 1976 constitution of Albania was abolished in 1991 and replaced
with interim constitutional provisions. A new constitution was adopted on
28 November 1998, following majority approval in a referendum held on
22 November. Under the new constitution, executive power rests with the
president, who has a 5-year mandate. The president appoints the prime minister
and the Council of Ministers, which has 22 ministers under the present
government. The parliament is a unicameral legislature of 140 members, of
whom 100 are elected directly and 40 come from party lists. The first such
parliament was elected in July 2001 and includes a number of political parties.
Since 1993, Albania has been divided into 12 administrative areas called
prefectures, each with a centrally appointed administration. The district had
been the key administrative division in Albania for the previous 50 years. During
Communist rule, Albania was divided into 26 districts, with administration
under the control of the communist party. In 1992, the number of districts was
increased to 36. In 1993, districts were further divided into rural areas
(communes) with elected local authorities, and into municipalities with elected
councils. Also in 1993, the concept and practice of prefectures was introduced,
with an average of three districts forming one prefecture, each administration
being centrally appointed.
Each district has at least one municipality and a number of communes. For
example, the Tirana district covers 1 urban municipality, 3 semi-urban munici-
palities and 15 rural communes, each of them with locally elected authorities.
There are 315 communes and 42 municipalities in the country. Although in
theory they all have tax-raising powers, in practice local governments receive
almost all their annual revenue from the central government.
The economy and population health
Albania is one of the poorest countries in Europe. The presence of an extensive
informal economy causes serious difficulties in calculating gross domestic
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product (GDP) and gross national product (GNP). According to the most reliable
estimates GNP per capita was US $930 in 1999 (1). GDP per capita, adjusted
for purchasing power parity (PPP), was estimated at US $2892 in 1999 (1).
While the economy is slowly recovering after the financial crisis and the tragic
events of 1997–1999, per capita GDP remains low for the region, as revealed
by a comparison with the 1999 figures for the former Yugoslav Republic of
Macedonia (US $PPP 4590) and Bulgaria (US $PPP 5070) (1). Agriculture
and forestry are the main sources of employment and income in Albania, but
in recent years, the construction, transport and service sectors have been
growing. Money sent home by emigrants forms another important part of the
economy, reaching about US $500 million in 1999, or approximately a fifth of
the GDP (5).
After the collapse of the centrally planned economy in 1991–1992, the
country began a transition to a more open economy. The economy grew strongly
between 1993 and 1996 as the government managed to control inflation and
embarked on widespread privatization. However, the riots in 1997 and again in
1998 were major setbacks to political and economic stability. The wars in
Bosnia, Kosovo and the former Yugoslav Republic of Macedonia also had a
negative effect on Albania’s economy during the 1990s, as did United Nations
sanctions against Yugoslavia and Greek sanctions against its Macedonian
neighbour. GDP fell again in 1997 after four years of growth (see Table 2).
Government expenditure as a percentage of GDP also dropped dramatically,
from 62% in 1990 to 26% in 1999, with consequent constraints on government
services (8). The political stability of recent years, however, has allowed some
economic growth and recovery.
Registered unemployment fell in 1994 and 1995 as the economy improved,
but since then, real unemployment has risen substantially. The registered
unemployment rate increased from 12.3% in 1996 to 18.3% in 1999 (5), but
these figures underestimate true unemployment.
Despite widespread poverty during the Communist regime, poverty was
not officially acknowledged until the 1990s. According to surveys and official
statistics, 29.6% of Albanians are poor, with half of this group in the category
of extreme poverty. In addition, one in three families has shelter-related
problems; 14% of the children under age 5 are undernourished; illiteracy has
increased (only 88% of the population under age 15 can read and write); and
75% of the families who are poor also suffer from acute social problems (9).
In 2001, the Albanian government developed a medium-term programme
in collaboration with a number of international partners, including the World
Bank, the International Monetary Fund (IMF), UNICEF and UNDP. Growth
and poverty reduction strategy 2001–2004 addresses the acute problems arising
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in the course of development, with a particular focus on poverty reduction
through sustainable economic growth (9).
With its high birth rate falling, Albania is in the midst of a demographic
transition. It has high rates of infant and maternal mortality. The prevalence of
infectious diseases continues to be high, while that of chronic illnesses, such
as cardiovascular disease (the leading cause of death), is rising (10).
However, the Albanian population enjoys a reasonably long life expectancy,
which seems paradoxical when one takes into consideration the country’s low
incomes, very limited health services and frequent outbreaks of infectious
diseases. During the period 1990–1995, life expectancy was 68.5 years for
men and 74.3 for women (4). This figure was only slightly below the average
for western Europe, and above the average for CEE. However, these figures
are declining, with one year of life expectancy lost in the period 1990–1995.
Albania illustrates the link between healthier lifestyles and better health, not
only by comparison to other countries, but also within the country itself, with
better health indicators in the south than the north, a pattern that reflects dietary
variation (11). The population has good nutrition with a traditional diet high in
fruit and vegetables. The country also reports comparatively low levels of
alcohol and tobacco use, though they are said to be rising. Cigarette smuggling
in Albania has increased, which makes it difficult to estimate cigarette
consumption accurately.
According to figures published by the Ministry of Health, infant mortality
dropped to 17.5 deaths per 1000 live births in 1999 (12). However, these figures
are not convincing when one considers the economic situation of the country
and the accessibility and quality of its health services. According to UNICEF
calculations, which were made using QFIVE (a United Nations computer
program for estimating child mortality), infant mortality in Albania was 28 per
Table 2. Macroeconomic indicators
1991 1992 1993 1994 1995 1996 1997 1998 1999
Real GDP growth rate
(% change) –27.7a –7.2a 9.6a 9.4a 8.9a 8.2a –15.0a 8.0b 8.0b
Annual inflation rate (%)a 35 226 85 22 8 13 32 20 2
GNP per capita (US $)c – – 340 380 – – 750 810 870
GNP per capita (US $PPP)c – – – – – – – – 2 892
Government expenditure
as % of GDP 61.9a 43.9a 40.2a 36.3a 34.3a 28.1d 24d 23d 25.8d
Registered unemployment rate 9.0a 27.0a 22.0a 18.0a 12.9e 12.3e 14.9e 17.7e 18.3e
Sources: a United Nations Children’s Fund (UNICEF) Innocenti Research Centre (IRC),
TransMONEE database 2000, 2000; b World Bank, Country assistance strategy, 2000; c World
Bank, World development report(s); d Albanian Ministry of Finance (MoF), 2000; e United
Nations Development Program (UNDP), Albania 2000, 2000.
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1000 live births in the year 2000 (13). The infant mortality rate remains one of
the highest in the region and in Europe (see Table 5).
According to INSTAT, in 1999, 40% of infant deaths occurred in the early
neonatal period, suggesting that maternity services offer poor quality of care
for newborn babies. An important cause of infant deaths is respiratory infections,
accounting for 27% of cases. In some rural areas, the infant mortality rate is
twice as high as in urban areas. The mortality rate for children under five is
reported to be 33 per 1000 live births for the year 2000 (13). Statistics on life
expectancy and infant mortality were manipulated during the Communist
regime, making it very difficult to make comparisons with pre-1991 data.
A number of vaccine-preventable diseases are still common in Albania. In
1999, there were 797 cases of measles (14) and about 700 new cases of
tuberculosis (12). Mortality rates for infectious, parasitic and respiratory
diseases are high for infants and young people. There was a severe cholera
epidemic in 1994 and a poliomyelitis outbreak in 1996. There are also high
rates of pulmonary tuberculosis and hepatitis as well as epizootic diseases,
which reflect in part unhygienic living conditions and poor sterilization proce-
dures. The morbidity picture is not very clear, however, since statistics are
collected mainly from hospital admissions.
Table 3. Health indicators
1990 1995 1996 1997 1998 1999 2000
Female life expectancy at birth (years)b 75.4 74.3 – – – – –
Male life expectancy at birth (years)b 69.3 68.5 – – – – –
Infant mortality rate
(per 1000 live births)a 33.2a 34a 25.8a 22.5a 20.5a 17.5a 28c
Under 5 mortality rate
(per 1000 under 5)a 49.7 37 30.6 – – – 33c
Maternal mortality
(per 100 000 live births)b 28.0 28.5 24.8 27.5 21.6 17.5b –
Abortions (per 100 live births)b – 44.2 47.6 35.8 31.5 34.4 –
Source: a UNICEF IRC, 2000; b INSTAT, Demographic indicators, 2000; c UNICEF – Albania,
2000.
Maternal mortality, at over 21 per 100 000 live births in 1998, is still high
in comparison to western Europe, but it has improved since the early 1990s
due to the introduction of a new reproductive health (RH) policy. Compared to
other Balkan countries, Albanian maternal mortality remains higher than in
Bulgaria and the former Yugoslav Republic of Macedonia, but lower than in
Romania and Turkey (Table 5). Poor prenatal care may account for some of
this high rate, as may deaths from abortions. Abortion was illegal before 1992,
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and rates increased dramatically during the period 1992–1997 with over 40
abortions for every 100 live births. However, in recent years the abortion rate
has decreased, which could be explained two ways: (i) family planning services
have become accessible to more women, and/or (ii) private clinics, which are
growing in number, do not report all abortions. Yet despite the lower rate in
recent years, health services still do not offer all women family planning that
includes alternative methods of birth control.
Table 4. Major causes of death
Deaths per 100 000
1994 1995 1996 1997 1998 1999
Cancers 56.6 66.9 75.7 69.4 73.4 76.0
Nervous system and sense organ diseases 19.7 15.0 15.4 11.6 13.4 8.8
Circulatory system diseases 171.5 206.8 224.4 202.3 222.1 205.0
Respiratory system diseases 62.2 61.9 55.2 40.8 38.8 31.0
Digestive system diseases 15.7 16.6 14.6 11.4 11.2 10.0
Genito-urinary system diseases 6.5 9.9 8.0 8.0 7.8 7.4
Senility and ill-defined conditions 66.3 44.2 44.5 36.1 42.7 40.0
Accidents and injuries 32.5 44.0 44.0 82.7 58.0 51.0
Source: INSTAT.
The death rate in Albania is about 5 per 1000, and this indicator appears not
to have changed significantly during the last ten years. There are, however,
changes in the structure of the mortality causes. According to INSTAT, the
mortality data for 1999 show that 45% of all deaths in Albania were caused by
circulatory system diseases, 16.6% by cancer and 11% by accidents and injuries.
These three groups of diseases cause three quarters of all deaths. Deaths from
cardio-circulatory diseases increased from 36.6% in 1994 to 45% in 1999, and
a similar increase held true for cancer. Moreover, the share of accidents and
injuries increased dramatically, having almost doubled their share of the mor-
tality structure, causing 11.8% of all deaths in 1998, compared to 6.9% in
1994 (15,16).
Table 5 places Albania in a regional perspective by summarizing some
economic and health indicators for five Balkan countries. It demonstrates that
health expenditure and average income are not the only determinants of health.
Albania is decidedly the poorest country in the region, but some of its health
indicators are better than those of its wealthier neighbours: life expectancy in
Albania is greater than in Bulgaria, Romania and Turkey, while its crude death
rate is the lowest of the group. However, its infant mortality rate remains one
of the highest in the region, exceeded only by Turkey’s.
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Historical background
Before the Second World War, Albania had few doctors, most of whom had
trained abroad, and a small number of private hospitals and institutions run by
religious groups. In 1932, for instance, there were 111 medical doctors,
39 dentists, 85 pharmacists and 24 midwives in the country (17). Most of the
population did not have access to health care facilities, which were mainly
based in urban areas. Access improved after 1945 when a health care system
was developed based on the Soviet “Semashko” model. The first medical school
opened in Tirana in 1959. Many medical experts also trained in the Soviet
Union and other eastern European countries.
Despite the country’s break with the Soviet Union in later years, many
aspects of health care policy and planning in Albania continued to follow the
Semashko model. Sanitary-epidemiology centres were set up in each of the
26 districts. During the 1960s, an extensive primary health care (PHC) system
was developed, providing every village with at least a midwife responsible for
antenatal care and immunizations. However, in the 1970s the emphasis switched
to hospital care. Hospitals were constructed in every district to provide basic
inpatient care, with polyclinics for specialist outpatient care.
By the 1980s, the Ministry of Health provided and regulated all health
services in every district. District administrators received instructions from
Albania 930 3 240 72 5 24 31 4.0
Bulgaria 1 410 5 070 71 14 14 23 4.7
Romania 1 470 5 970 69 12 20 60 4.1
The former Yugoslav Republic
of Macedonia 1 660 4 590 73 8 15 17 6.5
Turkey 2 900 6 440 69 6 36 55 5.8
Sources: World Bank, World development indicators, 2001.
G D
P p
e r
c a p it a
(U S
$ ) 1
9 9 9
G N
P p
e r
c a p it a
(U S
$ P
P P
) 1 9 9 9
L if e e
x p e c ta
n c y
a t
b ir th
( y e a rs
) 1 9 9 9
C ru
d e d
e a th
s r
a te
s (
p e r
1 0 0 0 p
o p u la
ti o n ) 1
9 9 9
In fa
n t
m o rt
a li ty
(p e r
1 0 0 0 l iv
e b
ir th
s )
M a te
rn a l
m o rt
a li ty
(p e r
1 0 0 0
0 0 l iv
e
b ir th
s )
1 9 9 5 a
d ju
s te
d
T o ta
l h e a lt h e
x p e n d it u re
(% o
f G
D P
) 1 9 9 0 – 1 9 9 8
(m o s t re
c e n t y e a r
a v a ia
b le
)
Table 5. Economic and health indicators for five Balkan countries
11
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Health Care Systems in Transition
the district executive committee of the Labour Party, and had very limited
power in terms of budget utilization and personnel management. Health services
were organized in programmes controlled from the centre and administered at
the district level by separate directorates responsible for medical care. They
included directorates for hospitals, for specialized outpatient polyclinics and
PHC centres, for hygiene and epidemiology, for dentistry and for pharma-
ceuticals. The Ministry of Health itself ran the clinical hospitals providing
tertiary care.
The Ministry of Health also appointed the directors of health care institutions,
primarily doctors who simply implemented the instructions of their superiors.
They had little discretion to improve services, for instance through reallocating
staff. The Ministry of Health could not control their day-to-day activities,
however, except to fire them if they broke the rules. The system had no
management training, no procedural guidelines, no performance indicators or
incentives, and little research and development. The Ministry of Health and
the Communist regime regarded some health indicators as extremely important.
For example, realizing that infant mortality is considered a good indicator of a
country’s socioeconomic conditions, the Communist authorities made its
reduction a priority. However, in the early 1990s, this indicator was still high
in comparison to the rest of Europe, indicating widespread poverty, malnutrition
and poor health services.
There was some duplication of medical care, with the same kinds of
specialists working in hospitals, health centres and occupational health services.
The military had their own health care facilities, including a specialized hospital
in Tirana, and there were health centres for employees in some industries.
However, the parallel health care systems typical of some Communist countries
did not exist in Albania to the same degree.
The quality of services was poor, there was little continuing medical
education, and hospitals were kept overstaffed by keeping salaries low. The
level of medical technology was also very low and the equipment outdated
because capital investment in the health care system had dropped in the 1980s.
Thus, at the beginning of the 1990s, the average age of medical equipment in
Albania was 25 years (18). The continuing high rates of infant mortality and
the outbreaks of infectious diseases in the 1980s highlighted the inability of
the system to respond effectively to health care problems.
The effect of civil conflict and crisis on the health system
Since the collapse of the Communist regime, government services, including
health care, have suffered several additional setbacks. During the political
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changes in 1991 and 1992 and the violence that accompanied it, almost a quarter
of the city health centres and two thirds of the village health posts were destroyed
(19).
Along with the destruction of some district hospitals, health centres and
public health departments, the violence in early 1997 also involved widespread
looting of drugs and equipment. Most hospitals were reduced to providing
emergency care only, and about 30% of the country’s medical staff abandoned
their posts, with higher rates in the south. Immunization programmes were
seriously disrupted by the breakdown of refrigeration and vaccine transport.
Disease surveillance, water purification and human waste disposal were also
interrupted (7). In addition, the financial crisis left some hospitals unable to
pay their employees’ salaries for as long as two months.
The civil unrest revealed ongoing administrative and communicational weak-
nesses in the health system’s ability to respond to crisis. It is unclear whether
the attacks upon health services were just part of the population’s generalized
anger towards the government, or whether they also indicated serious dissatis-
faction with the health sector. Although it had not resumed full functioning,
Albania’s health care system was just beginning to recover when factional
fighting broke out in late 1998.
Meanwhile, the situation in the neighbouring Serbian province of Kosovo,
which had long been volatile, came to a head. War broke out in 1998 when
ethnic Albanians, who made up 90% of the province’s 1.8 million inhabitants,
sought independence from Serbian rule. NATO intervened in March 1999 to
force the withdrawal of Serbian forces and to secure the safety of internally
displaced ethnic Albanians within Kosovo. It failed to accomplish the latter.
By late April 1999, over 700 000 ethnic Albanians had fled from Kosovo to the
neighbouring countries of Montenegro, the former Yugoslav Republic of
Macedonia, and Albania, which struggled to cope with the massive humanitarian
disaster. In late June 1999, after Yugoslavia agreed to a peace plan put forward
by the Group of 8 (G8) and backed by the United Nations, the refugees began
to return to Kosovo.
The health system of Albania faced enormous challenges during the Kosovo
crisis. First, many refugees arrived exhausted, undernourished and ill. For
example, during April 1999, about 4000 refugees were admitted to hospitals,
about half of them children aged 5 and under. Second, public hospitals were
used as shelters, with refugees occupying about 30% of the country’s hospital
beds at the height of the crisis. Third, field hospitals were set up by NATO and
relief organizations. The five NATO hospitals were used not only by military
personnel and refugees but also by native Albanians. The result was a shift in
the utilization of hospital services within the country (20).
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The Albanian health system successfully coped with the Kosovo refugee
crisis through an extraordinary effort and the significant support of international
humanitarian agencies. However, the crisis caused further damage to its already
weak infrastructure, absorbed resources and imposed delays on an already
difficult reform process. On the other hand, the crisis brought many new health
care donors into Albania. By June 2000, health care crisis relief amounted to
approximately US $160 million (21).
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15
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Health Care Systems in Transition
Organizational structure and
management
Organizational structure of the health care system
T he basic structure of public administration in Albania has continued
largely unchanged in the 1990s since the advent of multiparty democracy,
as has the structure of the health sector. However, two public
administration reforms have affected health services. First, after the 12 regional
prefectures were created in 1993, some administrative authority has shifted to
them from the centre. Each prefecture comprises an average of three districts,
and each district is responsible for administering district hospitals and
polyclinics, specialist hospitals (such as tuberculosis hospitals) and PHC centres.
The second reform was aimed at strengthening the role of local government.
The 1993 law On Local Government regulated the election of local authorities
and their responsibilities, functioning and relationships to the national
government. In the area of health care, the law also shifted some responsibility
for PHC to rural areas.
The government has not yet finalized a comprehensive health sector strategy,
despite encouragement from various international organizations, primarily
WHO. However, it has recently published some key strategy proposals in
Albanian health system reform – a position paper on policy and strategies for
Albanian health system reform (22), as well as in Medium-term expenditure
framework: 2001–2003 (8).
One of the proposals is to change the role of the Ministry of Health from a
management body to a policy-making body, one that is able to:
1. formulate health policies and strategies
2. prepare guidelines for accreditation and quality control
3. regulate private sector activities
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European Observatory on Health Care Systems
4. lead intersectoral work and coordinate donor activities
5. develop a strong centre in tandem with the carefully planned decentralization
of local planning and management functions.
With assistance from the United Kingdom Department for International
Development (DFID) and the World Bank, a regional health authority was set
up and has begun operating in the Tirana Prefecture.
Another proposal is to redraw the institutional map of the public health
care sector through an organizational and functional reshaping of its central
institutions. Such restructuring would require strengthening their capacities in
order to make them able to assume new functions and responsibilities. The
institutions would acquire more autonomy in the control of their resources.
Secondary care services would be restructured through the introduction of
regional hospitals, which would offer specialized services according to local
population needs. The government recognizes that strengthened hospital
management capacity is a fundamental condition for the success of the proposed
measures.
Finally, the strategy documents also prioritize human resource development.
The government is committed to developing a system of integrated health
services, with an emphasis on primary care provided by general practitioners
(GPs) and community nurses, and on further training and retraining for hospital
staff. It also regards the introduction of professional managers as essential.
Ministry of Finance (MoF)
The MoF allocates money to the other ministries, including the Ministry of
Health, and provides local governments with earmarked funds. It also transfers
to the HII the basic service and essential drug subsidies available to some of
the more unprotected and vulnerable segments of society, including retired
people, children and students.
Ministry of Health
The Ministry of Health remains the major funder and provider of health care
services in Albania. The ministry has been reorganized, and it continues to
assume the lead role in most areas of health care. It “owns” most health services,
with the partial exception of primary care.
The Ministry of Health devotes most of its efforts to health care
administration, rather than policy and planning. Many health care institutions
(especially in tertiary care) are under the direct administrative control of the
Ministry of Health and its small and overworked staff, which makes it difficult
for these organizations, and for the administrative districts, to make quick
17
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Health Care Systems in Transition
Fig. 2. Organizational chart of the health care system
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European Observatory on Health Care Systems
decisions. The need to administer foreign aid has added to this burden. In
addition, the growing private sector is inadequately regulated.
It was with these difficulties in mind that the Ministry of Health initiated a
careful restructuring process, in order to shift gradually into more of a national
policy-making and planning role. As an important step, it created a new Policy
and Planning Department in November 2000 with a twofold objective.
• To develop Ministry of Health capacity for making and planning health
policy. The department will start developing a short- and a medium-term
plan to strengthen the ongoing process of restructuring and rehabilitating
the health care system. The goal is to develop a more effective system that
is better attuned to the needs of Albanian citizens.
• To develop rapidly the Ministry of Health capacity for making better use of
donor interventions in accordance with the short- and medium-term
strategies. In addition, the Ministry of Health needs to become better at
handling the daily issues involved in administering the aid of donor agencies
and nongovernmental organizations (NGOs) according to agreed plans, so
as to make optimal use of their input in addressing the most pressing needs
of the Albanian health care system.
The Policy and Planning Department has begun to carry out some of its
scheduled activities, but it lacks the management tools and experience to
undertake major planning activities. It should be noted that it is a small unit
that can facilitate the planning process, but large planning efforts need to be
undertaken by the main stakeholders in the system (hospital managers, PHC
managers, etc.).
District directorates and the Tirana Regional Health Authority
(TRHA)
Health directorates used to be organized around separate vertically integrated
services, such as maternal and child health (MCH), but they have been replaced
with a hospital directorate and a PHC directorate. The directorates are
administered primarily through the Ministry of Health district bureaucracy.
Following a government decree of July 2000, a new model was introduced in
the Tirana Prefecture (which includes two districts) with the assistance of DFID
and the World Bank. Primary care services and public health programmes have
been integrated under the TRHA, a single organization that is responsible for
their planning and management. A regional health board has been set up and is
responsible for endorsing proposed regional policies, plans and budgets. It is
hoped this model will pave the way for the Ministry of Health to delegate more
authority and power to regional bodies.
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Health Care Systems in Transition
However, the implementation of this model faces many challenges and
difficulties. Despite the Ministry of Health’s initial support, at least in principle,
for the idea of devolving some of its powers to the TRHA, in practice it still
shows signs of resistance and hesitation. The staff of the TRHA has not been
adequately trained and cannot perform required tasks. Another major problem
is that the respective roles of the TRHA and the HII in financing PHC are not
clearly understood. While there is always a natural tension between payer and
provider, the management system and business procedures have not been
articulated in detail. Such shortcomings in implementation have contributed to
the tension and resistance. The overpoliticized environment in Albania makes
it very difficult for stakeholders to reach a consensus. It is hoped that the
problems will be worked out in the course of implementation.
Another concern with respect to the TRHA involves its public health
functions; that is, activities other than the provision of health care. The health
authority has inherited the Public Health Department from the old Tirana
Directorate, and there does not seem to be an adequate strategy in place for
modernizing its functions. There also should be better information flow between
the health authority and the IPH (see below), as well as consensus on standards
for public health programmes.
The Institute of Public Health (IPH)
Under the Ministry of Health, the IPH is responsible for health protection
(particularly the prevention and control of infectious diseases and the national
vaccination programme), environmental health and the monitoring of drinking-
water and air quality. It works mainly through the district public health services.
Monitoring of food quality is a responsibility that the Ministry of Agriculture
and the Ministry of Health share.
In 2000, the IPH merged with the former National Directorate of Health
Education and Promotion, and it now coordinates the directorate’s former
functions.
The Ministry of Environmental Protection, created in September 2001,
currently performs the function of environmental protection, which was
previously performed by the National Environment Agency.
Health Insurance Institute (HII)
Another major health system change was the introduction of social health
insurance in 1995. The HII is a national statutory fund, which in 1996 was
granted autonomy as a quasi-governmental body accountable to the parliament.
Coverage is being extended cautiously in a series of planned stages. Individual
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European Observatory on Health Care Systems
contributions to the national fund are, in principle, compulsory, and nearly
70% of the population was covered by 1997. Until recently, the HII was
financially responsible for only the salaries of PHC doctors and essential
pharmaceuticals.
In 2000, the HII initiated two pilot initiatives:
• funding all PHC expenditures in the Tirana Prefecture, including salaries of
not only doctors but also nurses and other personnel, as well as the recurrent
costs for these services;
• funding the Durres Regional Hospital.
These pilot initiatives are part of the government’s strategy to extend health
insurance coverage. Despite some resistance, the HII is on its way to becoming
the primary purchaser of health care services in Albania.
Local governments
The local government authorities of all 315 rural communes now own their
PHC facilities and are thus partly responsible for PHC. The MoF gives them
grants earmarked for equipping, maintaining, operating and upgrading PHC
centres and posts, as well as for paying some staff salaries. In urban areas,
Ministry of Health district offices still own and administer such services.
Private sector
Private health services reappeared in Albania in the beginning of the 1990s,
following the collapse of the Communist regime. New legislation and the reform
of the health sector paved the way for the development of various types of
private services and facilities. Today the private sector provides the following
important health services.
• Drug distribution. Most of the drug distribution system in Albania is private.
A dozen wholesale companies import most of the drugs, biological products
and diagnostic equipment in the country. A network of about 750 private
pharmacies and pharmaceutical agencies ensure a good distribution of drugs
all around the country, including rural areas. The establishment of the health
insurance scheme and the subsidizing of essential drugs have strengthened
the development of the private drug distribution network.
• Dentistry services. Dental care is private, with the exception of emergency
dental services and services provided in school to children up to age 18.
Both of these public services are free.
• Medical care. Private medical care has been developing rapidly, despite the
country’s difficult economic situation. Most private services are provided
21
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Health Care Systems in Transition
in diagnostic centres and specialized outpatient clinics and located in large
urban areas, particularly Tirana. Albanian legislation does not allow doctors
employed in the public sector to practice medicine privately, except for
professors from the Faculty of Medicine at the University of Tirana.
However, the rapid expansion of the private sector makes it more likely that
some public doctors are moonlighting.
There are no private hospitals or inpatient facilities yet in Albania.
Most private sector facilities are well equipped and organized. Some of
these health services are financed and organized by foreign NGOs, private
agencies or religious bodies such as the Roman Catholic Church or the Christian
Orthodox Church. However, there are no mechanisms in place to monitor the
quality of services offered by private facilities. In addition, there is no exchange
of information between private and public facilities.
Voluntary organizations
Nongovernmental organizations (NGOs) are a new phenomenon in Albanian
society, one that has developed in the last ten years. Under the Communist
regime, such organizations were not allowed, and all activities were under the
strict control of the Labour Party. During the crises of 1991–1992, 1997 and
1999, the many foreign NGOs active in the country encouraged and supported
the development of Albanian civil society. Albanians participated in
humanitarian activities through their local NGOs during the most difficult
situations, especially during the Kosovo refugee crisis of 1999, when local
NGOs succeeded in mobilizing more quickly than governmental bodies and
the United Nations High Commissioner for Refugees (UNHCR) (5).
There are many active NGOs and professional associations in the Albanian
health sector. Some of them are very large and well organized, such as the
Albanian Red Cross, an organization that has branches and volunteers in every
district of the country. Others are more modest and operate in limited geographic
areas. Most NGO financing originates from foreign bilateral and multilateral
agencies. Many of the health sector NGOs are members of a large umbrella
organization set up for the purpose of information exchange and coordination.
The health professions are served by professional associations such as the
Order of Physicians, the Nurses’ Association, the Dentists’ Association, the
Family Doctor Association, etc. These organizations focus mainly on the
protection of their members’ rights and professional development, but they
lack the experience and resources to allow them to structure their activities
better.
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Planning, regulation and management
Planning
The formulation and development of policies and plans in the Albanian health
sector have been affected by two important factors. First, several consecutive
crises (financial, social, political and regional) have had a significant impact
on health services, forcing the Ministry of Health to adopt a more reactive
approach in order to cope with the dramatic events of recent years. Second, the
weak technical capacities of the Ministry of Health leadership team have made
it extremely difficult to formulate policies and plans for the health care sector.
Despite these difficulties, the policy-making and planning process has slowly
advanced, helped along by a substantial amount of external assistance and
driven mainly by bi- and multilateral agencies.
In 1993, the Ministry of Health produced A new policy for the health care
sector in Albania. In 1996, in cooperation with WHO, it produced a draft
document setting out medium-term policy objectives. The financial crisis and
change of government in 1997 interrupted the planning process. However, the
Ministry of Health did produce some subsector plans with the support of
international experts. The plans included a PHC policy, which was developed
with help from the European Union (EU) Phare programme (1997) (23); plans
for the development of Vlora and Shkodra regional hospitals (1997); a strategy
for the Tirana regional health system, produced with the assistance of the World
Bank (1997); and a master plan for the development of the Tirana University
Hospital Centre, prepared with the help of the Assistance Publique des Hôpitaux
de Paris (1997) (24). There was a widespread recognition of the need to integrate
these and other plans under the framework of a national policy and plan for the
health sector.
In September 1999, the Ministry of Health, assisted by WHO, produced a
document presenting its short- and medium-term policy principles and
objectives, entitled Albanian health system reform: a position paper on policy
and strategies for Albanian health system reform (22). The document formed a
sound basis for further discussion on reform, but it was not a plan of action. A
more comprehensive strategy was later formulated by Ministry of Health and
WHO technical experts (25), but the government has not yet approved it.
The establishment of the Department of Policy and Planning in 2000 was
an important step in strengthening the planning capacities of the Ministry of
Health. There were several arguments in favour of the new department.
23
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Health Care Systems in Transition
• As part of the decentralization process that has begun in the country, the
role of the Ministry of Health should shift in the direction of policy-making,
planning, regulation and coordination.
• By developing a national policy and a comprehensive strategic plan for the
health sector, the Ministry of Health will be better able to justify increased
spending on health care to both the government and the donor community.
The resulting policy and plan will also enable the Ministry of Health to
invest budget and donor funds more effectively.
• A department devoted to health policy and planning could help establish a
participatory consultation process, as well as promote greater transparency
in setting priorities and allocating resources among different health
subsectors and geographical areas.
• There is little continuity within the Ministry of Health, and its institutional
memory has disappeared with changes in personnel. Each new government
replaces its senior and even middle-level managers, and much documen-
tation disappears with the replaced staff. The Ministry of Health has not
been able to set up a system for preserving its “technical memory”.
• The planning capacities of the Ministry of Health are weak, since day-to-
day administration must take priority.
It is hoped that the new planning department can help in these areas. Yet a
new structure does not necessarily mean new functions. Planning is a complex
and chiefly political process, and it will take time for the new department to
take over and perform successfully in the difficult environment and bureaucratic
culture of the Ministry of Health.
Furthermore, the government and donors continue to invest in the health
care sector without an adequate rationalization plan for its delivery system.
The World Bank has proposed assisting the government to create a com-
prehensive regional master plan for the health care delivery system in Tirana, a
plan that would cover all the health services under the TRHA as well as their
relations to the hospital system. The current Ministry of Health leadership has
shown enthusiastic support for this type of planning exercise, which will require
facility mapping, facility medical and engineering surveys, consensus on service
standards, needs analyses (staffing, facilities and equipment) and estimates of
the investments and recurrent costs needed to implement the plan.
Regulation
The need for health care regulation in Albania has been growing, due to the
decentralization of public health care administration and the recent increase in
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European Observatory on Health Care Systems
private services. At present, regulation takes place through the bureaucratic
system and is not separate from management. Few independent regulatory
bodies have been established. The absence of a clear regulatory framework
contributes to a number of problems.
• There is a lack of sufficient information on private providers and their
services. The Ministry of Health’s ability to collect and process information
is limited. It does not register private providers every year, nor does it have
a decent database on them.
• The Ministry of Health has difficulty elaborating standards and enforcing
them. Enforcement imposes high administrative costs, and the government
has limited resources. Recently, the Ministry of Health has made some effort
to regulate private providers, requiring them to be licensed or close down.
A pharmaceutical inspectorate has also been created to enforce observance
of standards among drug dispensers, most of whom operate in the private
sector.
• Decentralization has not been accompanied by a clear definition of respon-
sibilities. Various government entities often lack the political will to discharge
their duties, and sometimes do not even understand the rules and regulations.
Such factors can create and maintain a high level of tension among different
stakeholders in the health care system. Thus, there is tension between the
Ministry of Health and the HII, between Ministry of Health district offices
and local governments, between the HII and the TRHA, etc. Furthermore,
central legislative bodies sometimes pass contradictory regulatory acts due
to divergent interests, thus creating more confusion.
A considerable amount of work needs to be done on standards of care,
quality assurance and consumer protection. Efforts to develop standards for
hospital accreditation, which could be used to rationalize the distribution of
hospitals, have progressed little. Some district hospitals have not been upgraded
to regional hospitals because of a conflict of interest between districts. The
hospital map of the country has yet to be drawn, and the accreditation process
has stalled.
The Albanian Order of Physicians, established in 1993, has assumed
responsibility for professional standards and for the registration of doctors.
There are few performance incentives in the health care system, however, and
professional self-regulation is weak. The General Medical Council of the United
Kingdom (GMC) is offering the order assistance.
Professional self-regulation for nurses is even less developed, and the Nurses
Association was established only recently.
25
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Health Care Systems in Transition
Management
Management functions require urgent attention, and Albania does not have
any professional management consultants. Managerial performance is judged
more by political commitment than by effectiveness. Most funding is determined
centrally by comprehensive budgets that are allocated at the start of each
financial year. District administrators and health care managers have little
flexibility and limited technical capacity to manage effectively. There is also
an urgent need to establish management information systems, which would
provide useful and accurate programme and budgeting information.
Other stakeholder groups, such as professional associations, unions and
consumer groups, play little role in planning or regulation. Health service
providers are still not accountable to their patients, despite the policy objective
of the Ministry of Health to “put the patient at the centre of the system”.
Decentralization of the health care system
The health care system in Albania remains highly centralized and hierarchical,
despite some decentralization. Some administrative responsibility (but no
political or policy responsibility) has devolved to the 36 districts, though they
remain accountable to the Ministry of Health.
Responsibility for running and maintaining rural PHC facilities has largely
devolved to the local governments. Rural PHC doctors primarily use these
facilities but receive their salaries, based on capitation fees, from the Health
Insurance Fund.
So far, most of the privatization has been carried out with dental practices
and pharmacies. Hospitals, polyclinics, health centres and health posts remain
publicly owned. Private medical practice and private insurance were legalized
in 1992, and the private health sector is continually expanding, particularly
through the increasing number of specialized outpatient clinics.
The recently formed HII is a new health sector entity. Eventually, the institute
is intended to assume a larger health-funding role.
Though the decentralization initiatives noted here are now being imple-
mented, no decision has been made about the extent or form of future
decentralization. The Ministry of Health apparently intends to test different
models before proceeding with a larger decentralization programme at the
national level. In addition, other central bodies (such as the Ministry of Finance,
Ministry of Local Governments, Ministry of Justice, etc.) are also involved in
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the decentralization process, and their opinions on health sector decentralization
will not necessarily agree with those of the Ministry of Health.
The pilot initiative in Tirana (for more details see the section District direc-
torates and the Tirana Regional Health Authority under Organizational structure
of the health care system) has demonstrated the challenges and difficulties of
the decentralization process. On the one hand, the Tirana Regional Health
Authority prefers to keep all health resources of the Tirana region under its
direct management and control. The preferred model here is that of delegation
of authority and responsibilities from a central body to a regional one. The
alternative model is that offered by the Health Insurance Institute, as a direct
purchaser of primary and secondary outpatient services from the public and
private providers, in the region of Tirana. Many stakeholders are involved in
this process, including the Ministry of Health, the MoF, the TRHA, the World
Bank and DFID (through their consultant HLSP). It is not clear which model
will prevail.
A second pilot initiative is that of the Durres regional hospital, which recently
became a semi-autonomous entity funded directly by the HII. The results of
these pilots will likely guide the next steps of the health system decentralization
process.
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Health care financing and expenditure
Main system of financing and coverage
F inancing levels for Albanian health care remain very low and, for the
last decade, the sector emphasis has been on how to do more with less.
A key problem facing the government after the transition to multiparty
democracy in 1992 was finding the financial resources to maintain essential
health services, given the very small government budget.
There is little information on the scale of funding before 1990. In Communist
ideology, health care was considered a nonproductive sector and thus a low
priority. In 1987, health expenditure in Albania was estimated to be 3.0% of
GDP, compared to a CEE average of 2.8% and an EU average of 7.3% (26).
Albanian health services are funded through a mix of taxation and statutory
insurance. The bulk of funding still comes from the state budget, but the tax
base is problematic due to low incomes, the large informal economy and
problems with tax collection. In 1999, health care was financed as follows:
about 59% from the state budget, 29% from household payments, 4% from
employer health insurance contributions and 8% from foreign donors (see
Table 6). The HII received more than 17% of all health funds, with 8.5% coming
from the state budget, 4.3% from employers and 4.4% from individual
contributions.
While the state remains the major source of health care financing, its
contribution shrank from around 84% in 1990 to less than 60% in 1999 as
other funding, especially out-of-pocket payments, increased.
The MoF allocates money to the Health Insurance Fund, mainly to cover
unwaged groups, and to the Ministry of Health. The MoF also allocates
earmarked funds to local governments, mainly for primary care, including
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recurrent funds for some staff salaries, and capital funds to upgrade and maintain
health centres and health posts. This local support amounted to 4% of the state
health budget in the year 2000 (8), a figure that shows how underfinanced the
basic health services in rural communities are. Inefficient use of these meagre
funds by local authorities exacerbates the poor quality of preventive and curative
services in rural Albania. In principle, local government can also raise revenue
for health care, but the amount thus raised remains very small.
The Health Insurance Institute (HII)
The HII, established in 1995, is a national statutory body. It was established to
secure an additional source of health care financing, offer a broader range of
health care services, control administrative costs and ensure equity. A single
payer system, rather than a multiple payer one, was deemed better able to
cover the country’s small population, act as a strong regulator and keep
administrative costs low. The HII was created as an autonomous body, and in
1996 it was made accountable only to the parliament.
The HII remains by design a limited scheme, introduced in stages. Premiums
have been kept low, with different rates for different income groups, and pur-
chase a restricted package of health services and pharmaceuticals.
HII enrolment varies among different population groups. Most of the
unwaged, including children, women who work at home and the elderly, are
automatically covered by the state budget. Of the active workforce (70% of the
population), about 40% was covered in 1999. Although farmers represent almost
one quarter of the country’s population, they are the group with the lowest
enrolment – about 4% in 1999 (27). One reason is that farmers cannot afford
Table 6. Sources of financing and expenditure, 1999
Revenues (millions of leks) % of total
State budget to Ministry of Health 7 300 47.5
State payment to HII 1 299 8.5
State payment to local governments 405 2.7
State subtotal 9 004 58.7
Pharmacy drugs 2 000 13.0
Service provider fees (including under the table) 1 016 6.8
Household contributions to HII 656 4.4
Dentistry 600 4.0
User fees (“secondary revenues”) 120 0.8
Household subtotal 4 392 29.0
External financing 1 240 8.0
Employer contributions to HII 655 4.3
Total 15 291 100.0
Sources: MoF; HII; KPMG Consulting, 2001.
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both health insurance and social insurance contributions. Another is that the
rural population is often poorly informed about the benefits offered by enrolment
in the health insurance scheme. In a survey about the scheme, 72% of the rural
residents asked had very little or no information at all about its benefits (28).
Finally, contribution incentives are weak: the scheme covers very limited
services, and enrolment does not appear to confer any advantage. For though
benefits are legally limited to those who make insurance contributions or have
them covered by the state, in practice the distinction is not upheld, and doctors
treat all patients without discrimination.
Insurance contributions are collected by the district offices of the Social
Insurance Institute (SII). Contribution rates are set according to income rather
than health risks. At present they amount to 3.5% of wages, split equally between
employers and employees. Employee contributions, which are 1.7% of their
net salary, are collected by employers as payroll deductions. The self-employed
contribute between 3% and 7% of their incomes, depending on whether they
live in rural or urban areas. Lower rates have been set for private farmers. As
mentioned above, the state pays the contributions for the dependent population,
which now account for nearly half of HII revenues (Table 7).
Table 7. HII revenues and expenditures
1996 1997 1998 1999 2000
Revenues
Employee/employer contributions 30% 29.3% 26% 26.5% 26.2%
Self-employed/miscellaneous contributions 28% 25% 27.5% 23.6% 27%
Farmer contributions 8% 0.7% 0.5% 0.9% 0.8%
State contribution 34% 45% 46% 49% 46%
Total percentage 100% 100% 100% 100% 100%
Total (millions of leks) 1 475 1 755 2 321 2 654 2 826
Expenditures
Drug reimbursements 68% 74% 75% 75% 70%
Payments to GPs 25.5% 21% 18% 18% 22%
Administrative expenses/investments 6.5% 5% 7% 6% 7%
Public information/publicity 1% 1%
Total percentage 100% 100% 100% 100% 100%
Total (millions of leks) 1 270 1 623 2378 2 592 2 436
Source: HII.
The HII has achieved a budget surplus nearly every year since its inception
in 1995. The surplus goes into a reserve fund, which was able to cover the
1997 deficit caused by the civil emergency.
Coverage has been introduced in stages. In the first stage, which began in
1995, only PHC physicians’ salaries and essential pharmaceuticals were
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covered. By 1997, coverage included GP services, and subsidies for the 278
products on the essential drugs list. During the first half of 2001, the list of
subsidized drugs was extended to 308 (29). In the Tirana Prefecture at the
beginning of 2001, the HII also extended its coverage to all outpatient care
services, including specialized outpatient care, specialist doctor payments, nurse
and midwife wages and operating costs. The main party entering into contract
with the HII is the TRHA. The contract clearly specifies a separate budget for
each polyclinic and health centre under the TRHA. If successful, the model
will be replicated in the rest of the country.
The HII has also started to be involved in financing secondary hospital
services. In 2001, the insurance fund began funding the Durres regional hospital.
It is not clear what kind of payment mechanism will be chosen for this
arrangement. In order to estimate the real costs at this early stage of the
experiment, the HII is giving the hospital block grants, based on its historical
budgets, and collecting information on hospital expenditure by category. It is
hoped that the contractual arrangements between the HII as purchaser and the
Durres hospital as provider of services will be defined soon. The HII greatly
needs technical assistance in this area.
In 2000, the HII spent 70% of its budget on drugs, 22% on general
practitioner salaries and 8% on administrative costs and public campaigns
(Table 7).
The HII has encountered inevitable implementation problems. Prices,
reimbursement rates and premiums all need to be adjusted. Service providers
do not differentiate between insured and uninsured patients. Administrative
and funding arrangements between HII and SII funds remain hazy. However,
the HII has elaborated a strategy to address some of these problems and prepare
itself for further organizational development. The strategy proposes to increase
individual contributions, modify the contribution collection system and
introduce more sophisticated mechanisms to improve drug reimbursement. It
also proposes increasing the incomes of GPs working in the PHC sector in
order to boost PHC development (30).
Health care benefits and rationing
Under the Communist regime, all citizens were entitled to free health care,
with small co-payments for drugs. Drugs were sold in public pharmacies at
subsidized prices, and were free in public pharmacies for cancer and tubercu-
losis patients and children under the age of one. The health care system was
unable to provide a comprehensive range of services to the entire population,
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however, and did not provide services such as some expensive surgeries, or
high-technology diagnostics and treatment.
Eligibility for health care is now based on both citizenship and payment of
insurance contributions. Access to free primary care and pharmaceuticals is
restricted, in theory, to patients (and their dependants) who have paid their
insurance contributions. However, some population groups, such as farmers,
cannot afford insurance. The latest report on poverty in Albania indicates that
almost 15% of the population lives in conditions of extreme poverty (9). The
state is considered responsible for low-income groups, and in practice, therefore,
people are not refused medical services. Inpatient services at public facilities
are by law offered free of charge to the entire population, although the quality
of care is often low. This free care includes long-term treatment for conditions
such as tuberculosis and cancer. During their first year, children are automati-
cally insured by the state and receive free essential drugs. There are also co-
payments for abortions.
All dental care has been privatized, except for emergency dental care and
patients under the age of 18.
Access to health care services remains restricted by the country’s inability
to afford a full range of services and to replace facilities and services damaged
during civil unrest. There is another major barrier to access in the many rural
areas where doctors and nurses have left medical facilities due to economic
and social factors.
Complementary sources of financing
To make up the shortfall in the state health care budget, extrabudgetary sources
of finance have been sought from both patients and outside sources. The two
main additional sources are consumer payments and foreign aid.
Out-of-pocket payments
Official out-of-pocket payments account for an increasing proportion of health
care revenue, but the full extent of such payments is unknown. It is likely,
however, that they prevent low-income people from obtaining services and
pharmaceuticals. According to some estimates, out-of-pocket sources, excluding
health insurance contributions, constituted 24.6% of total health expenditures
in 1999 (see Table 6).
Patient co-payments are set at a low level and are not intended to be a major
source of revenue. They apply principally to outpatient services and
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pharmaceuticals, though not to inpatient care. Albanians have always paid part
of their drug costs in pharmacies. The shift to a free market economy and the
privatization of pharmacies resulted in price rises, but the increases have been
largely mitigated by the health insurance subsidies for essential drugs. Pharma-
ceuticals on the essential list are fully or partly reimbursed, while other drugs,
most dental care and some other services are paid for out-of-pocket.
Table 8. Household expenditures for health care services, 1999
Category % of total
User fees ( “secondary revenues”) 2.7
Pharmacy drugs 45.5
Dentistry 13.7
Service provider fees (including under the table) 23.2
HII contributions 14.9
Total 100.0
Source: KPMG Consulting, 2001.
A 2000 study estimated household expenditures for the previous year to be
4 400 million leks, or 29% of total health care financing (Tables 6 and Table 8).
User fees are legal payments made to health facilities, half of the fees going to
the facilities and the rest going to the state budget, where it is reallocated to
other health services. Payments to providers go directly to providers’ pockets,
mainly illegally in the form of under-the-table payments. Such payments are
illegal because publicly employed doctors are not allowed to provide private
services, with the exception of professors in the Faculty of Medicine at the
University of Tirana. The figure on under-the-table payments is most probably
an underestimate, taking into account benchmark comparisons with other
countries (31). Health insurance premiums are individual contributions to the
health insurance system. The tables include also an estimate of user payments
for drugs in pharmacies and dental services in the privatized dentistry system.
Under-the-table payments to doctors and other health professionals are said
to be widespread in Albania, but the magnitude of these payments is unknown
(10). Such payments are common in CEE, including neighbouring countries
such as Bulgaria and Romania. According to a World Bank report, Investing in
health, under-the-table payments were estimated to be 25% of the total health
revenue in Romania and about 20% in Hungary during the early 1990s (31). A
survey conducted in Albania in 2000 concluded that under-the-table payments
are most common in state hospitals (28). Everyone there from the cleaner to
the surgeon is regarded as being involved in the practice. Among respondents,
87% admitted to having tipped a public hospital doctor and 86% a nurse. The
survey concludes that the prevailing belief among the general public is that
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such payment is necessary in order to get proper treatment, and in some cases,
to get any treatment at all. More than a quarter of the respondents stated that a
doctor implied they would not be treated if they did not pay. The majority said
that they paid without being asked (28). The survey reveals something about
the economic and moral crisis that Albanian society is going through and raises
some important questions on equity of access to health services.
Voluntary health insurance
Private insurance and private medical practice have both been legal in Albania
since 1992. Due to the country’s current economic and political condition,
however, private insurers have not sought to enter the health insurance market.
The Insurance Institute (INSIG) is the only private firm writing health policies,
which it offers for limited periods to Albanians travelling abroad.
External sources of funding
External aid accounts for a considerable proportion of Albanian health care
funding. During 1992 and 1993, it amounted to over one third of the country’s
public health financing. The real value of foreign aid doubled in 1996, but
since domestic spending on health also increased during this period, the foreign
aid share of the total declined to about 26% (19).
Donors mobilized sizeable funds for the health sector during the Kosovo
crisis. However, by the end of August 1999, the overwhelming majority of the
refugees had returned to Kosovo, which was now under the protection of NATO
troops. Most of the funds available for health care in Albania had to be spent
quickly. The World Bank Office in Tirana estimated in June 2000 that the total
funds for health projects under way or in preparation was about US $160 million,
a record for the last ten years of donor activity and a direct effect of the refugee
crisis (21). According to estimates, external assistance to the health sector in
Albania amounted to 8% of the country’s total health financing in 1999
(Table 6).
External aid to Albania comes from foreign governments and NGOs. The
main contributors have been the World Bank, the European Community
Humanitarian Office (ECHO), the governments of Germany, Italy, France,
Switzerland and Japan, the United States Agency for International Development
(USAID), the governments of the United Kingdom and Greece, the Roman
Catholic Church, the Organization of Petroleum Exporting Countries Fund for
International Development (the OPEC Fund), UNICEF, the United Nations
Population Fund (UNFPA) and WHO.
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Health care expenditure
There are few statistics on health care expenditure spending in Albania before
1992. Statistics since then also vary according to the source, or are simply
unavailable, since the Ministry of Health has been unable to produce a systematic
and reliable time series. Health expenditure figures from a given year are also
often revised in subsequent years.
Table 9. Health care expenditures expressed as % of GDP
Public sector health expenditures (% of GDP)
1994 1995 1996 1997 1998 1999 2000
– – 2.29% 2.06% 1.93% 1.96% 2.08%
Source: MoF, 2000.
Total health expenditures (% of GDP)
1994 1995 1996 1997 1998 1999 2000
2.8% 2.9% 3.0% 2.7% 2.6% 2.8% 3.0%
Source: Ministry of Health estimates based on MoF data.
Health care expenditure has to be considered within the context of the
country’s struggling economy, and its low and fluctuating GDP. Public spending
on health care has been very low in recent years and has shown a decreasing
tendency in spite of its increasing share of the public budget in recent years
(see Table 10).3 Fig. 3, based on information from WHO/EURO’s health for all
data, shows the health spending to have peaked at nearly 5% in 1991 only to
fall dramatically in subsequent years. Fig. 4, showing the same indicator for
all the countries of the WHO European Region, assigns Albania a share of
2.8%, though it should be noted that this figure is for the year 1994. According
to data in the upper half of Table 9, public health care spending fell from 2.29%
of GDP in 1996 to 1.93% of GDP in 1998 before increasing slightly to 2.08%
of GDP in 2000 (9). The more recent figure of 2.08% puts Albanian spending
on health care at only slightly more than one third of the CEE average and is
one of the lowest proportions of GDP spent on health in the entire European
Region.
Actually, the Albanian figures are underestimates, since the considerable
amount of out-of-pocket payments are not included in the calculations. If they
were, the share of health care spending rises to about 3% of GDP, as shown in
the lower half of Table 9. Yet it remains a very low figure compared to most
other countries in the region.
3 The explanation for this paradox is that overall budgetary expenditures have fallen as a share of GDP, so
despite increasing allocations for health care, its share of the GDP has been falling.
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Table 10. Percentage of public budget allocations in health and education
% of budget allocations by years
1996 1997 1998 1999 2000
Health 7.7 7.6 7.6 9.2 9.9
Education 13.0 13.7 12.9 12.9 12.3
Source: MoF, 2000.
0
1
2
3
4
5
6
7
8
9
10
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
Albania Bosnia and Herzegovina. Bulgaria Romania The former Yugoslav Republic of Macedonia EU average CEE average
Health care spending has gone through several phases in the 1990s. During
the severe recession of 1990–1992, spending on health care nearly halved.
From 1993 until 1996, it increased each year, and by 1996 was US $85.14
million (10). It then dropped to US $70 million in 1997, and jumped to US $108
million in 1999, amounting to about US $33 per capita in 1999. This figure
would be substantially higher if expressed in PPP terms.4 But despite the upward
trend in health care spending in recent years, it remains very low and is not at
all sufficient to provide quality health care to all Albanians. Moreover, it should
be noted that a substantial portion of the increased spending has been due to
the increased proportion of out-of-pocket payments, a development that does
not favour equity or access to health care.
4 As Fig. 5 indicates, spending per capita was US $PPP 79 in 1994, and so would be higher today, given the
increases in real spending on health care in the interim.
Source: WHO Regional Office for Europe health for all database.
Fig. 3. Trends in health care expenditure as a share of GDP (%) in Albania and
selected countries
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European Observatory on Health Care Systems
5.1
6.8
9.0
4.8 6.1 6.1
7.0
8.5
10.5
0.9 1.2 1.9 2.1
2.9 3.0 3.0 3.2 3.5
4.2 4.2 4.4
2.6 2.8 3.5
4.5 4.7 4.8
5.8 6.1 6.2 6.2 6.5
7.3 7.6 7.7
6.8 6.9
7.7 7.9 7.9 8.1
8.2 8.2 8.3
8.7 8.7 8.8 8.8
9.3 9.4
10.4
0 2 4 6 8 10 12
% of GDP
Georgia
Belarus
Ukraine
Armenia (1993)
Turkmenistan (1996)
NIS average
Uzbekistan
Republic of Moldova
Russian Federation
Kyrgyzstan (1999)
Kazakhstan
Tajikistan (1998)
Azerbaijan
Croatia (1994)
Slovenia (1999)
Federal Republic of Yugoslavia
Czech Republic
Hungary
Slovakia
Poland (1999)
Lithuania
Estonia
CEE average
Latvia
Bulgaria (1994)
The former Yugoslav Republic of Macedonia
Bosnia and Herzegovina (1991)
Albania (1994)
Romania (1998)
Germany (1999)
Switzerland (1998)
France (1999)
Norway (1999)
Belgium (1999)
Malta
Greece
Iceland (1999)
EU average (1999)
Israel
Austria (1999)
Denmark
Netherlands
Italy (1999)
Sweden (1998)
Portugal (1998)
Spain (1998)
United Kingdom (1999)
Finland (1999)
Ireland (1999)
Luxembourg (1998)
Turkey (1998)
Fig. 4. Total expenditure on health as a % of GDP in the WHO European Region,
2000 or latest available year (in parentheses)
Source: WHO Regional Office for Europe health for all database.
CEE: central and eastern Europe; EU: European Union; NIS: Newly independent states.
1234567 1234567
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Health Care Systems in Transition
12 46 49 54 59 65 86
104 105 107
168 209 296
79 147
214 260 326 358 413 499 535 543
710 830
1023 1230
316 1194 1203
1262 1397 1508 1531 1547 1569 1732 1905 1922
2014 2125 2181 2225 2287 2325
2476 2543 2612 2794
0 500 1000 1500 2000 2500 3000 US $PPP
Switzerland (1998)
Norway (1999)
Luxembourg (1999)
Germany (1999)
Denmark
Iceland (1999)
Netherlands
Belgium (1999)
France (1999)
Austria (1999)
EU average (1999)
Italy (1999)
Sweden (1998)
United Kingdom (1999)
Finland (1999)
Israel (1999)
Ireland (1999)
Greece
Malta (1999)
Portugal (1998)
Spain (1998)
Turkey (1998)
Slovenia (1999)
Czech Republic
Hungary
Slovakia (1999)
Estonia (1999)
Poland (1999)
CEE average (1999)
Croatia (1994)
Lithuania (1999)
Latvia (1999)
The former Yugoslav Republic of Macedonia (1999)
Bulgaria (1994)
Romania (1998)
Albania (1994)
Belarus (1999)
Russian Federation (1999)
NIS average (1999)
Ukraine (1999)
Georgia (1999)
Kazakhstan (1999)
Armenia (1993)
Uzbekistan (1999)
Republic of Moldova (1999)
Kyrgyzstan (1999)
Turkmenistan (1994)
Azerbaijan (1999)
Tajikistan (1998)
Fig. 5. Health care expenditure in US $PPP per capita in the WHO European Region,
2000 or latest available year (in parentheses)
Source: WHO Regional Office for Europe health for all database.
CEE: central and eastern Europe; EU: European Union; NIS: Newly independent states.
1
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In the revised Medium-term expenditure framework: 2001–2003, published
in December 2000, the MoF identified four critical issues in health care
financing:
1. insufficient financing for the health sector as expressed in GDP share;
2. inefficient utilization of resources;
3. falling funding levels for PHC, which, combined with organizational and
management factors, has led to an overutilization of secondary care in
hospitals and outpatient clinics; and
4. the allocation of resources on the basis of facilities rather than population
distribution and needs, thus creating problems with equity of access.
To address these issues, the government has elaborated a medium-term
strategy on public health care spending (9) with the following objectives:
• increase the level of resources going to the health care sector during the
next three years, to ensure better funding of health services and reverse the
decline in health spending as share of GDP;
• increase funding for PHC services substantially, to improve access for the
whole population and reduce unnecessary demand for secondary hospital
services;
• restructure the hospital sector, adjusting each facility’s services to the needs
of its catchment area;
• make tertiary care more cost-effective; and
• extend the coverage of the health insurance scheme.
Structure of health care expenditure
Table 11 presents health care expenditure in Albania during the last five years.
The table does not include out-of-pocket payments, for which there are no
reliable figures.
According to these statistics, in 2000 nearly 57% of public health sector
spending went to secondary inpatient and outpatient care, compared to 51% in
1996. The Tirana University Hospital absorbed 8.6% of total spending compared
to 10.3% in 1996. Spending on PHC services and public health programmes
fell from about 33% in 1996 to about 23% of health expenditure in 2000.
The state’s capital investment in the health system varies considerably from
year to year. In 1996, it accounted for 12% of the government health care
budget, with 46% of the funds allocated to new construction, 32% to
rehabilitation of existing infrastructure and the remainder to equipment purchase
(10). In 2000, investments had increased to 32% of the total (Table 12).
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Table 11. Public expenditure on health (including health insurance) by sub-sectors
Subsector 1996 1997 1998 1999 2000
Leks % Leks % Leks % Leks % Leks %
Planning and
management 108 1.5 128 1.6 250 2.5 310 2.7 396 3.0
Public health and
PHC services 2 404 33.5 2 464 31.1 2 878 29.3 2 852 24.8 3 063 23.2
Hospital services 2 920 40.7 3 161 40.1 3 692 37.5 5 174 45.0 6 362 48.0
Tirana University
Hospital Centre 745 10.3 789 10.1 959 9.7 1 017 8.8 1 130 8.6
Health Research
Institutes 128 1.8 138 1.7 274 2.8 207 1.8 544 4.1
Basic drug
subsidies 867 12.2 1 202 15.4 1 783 18.2 1 941 16.9 1 705 13.1
Total 7 172 100.0 7 882 100.0 9 836 100.0 11 501 100.0 13 200 100.0
Source: MoF, 2000; HII.
Table 12. State budget allocations on healthby categories (millions of leks)
Budget lines 1996 1997 1998 1999 2000
Personnel and insurance 3 437 3 628 4 083 4 341 4 763
Maintenance and operations 1 804 1 984 2 474 2 517 2 623
Recurrent expenditures subtotal 5 241 5 612 6 557 6 858 7 386
Domestic capital investment 635 571 802 847 1 130
Foreign capital investment 57 89 458 1 240 2 300
Capital investment subtotal 692 660 1 260 2 087 3 430
Total budgetary expenditure 5 933 6 272 7 817 9 005 10 816
State contribution to Health Insurance Fund 506 790 1 070 1 300 1 300
Grand total 6 439 7 062 8 887 10 245 12 116
Source: MoF, 2000.
According to the information published by the MoF, in the period 1996–1999,
investment expenditure represented an average of 18% of the total expenditure
for health care, with 44% of these expenditures originating from foreign sources
(9). This very high proportion of investment can be explained in part by the
large foreign contribution, much of which did not correspond to real investments
but included such diverse activities as technical assistance and capacity building.
In addition, the investment category also includes some planned projects th