World Bank Approves $110 Million Loan for Armenia’s Universal Health Coverage Program
The World Bank’s Board of Executive Directors has approved a loan of $110 million (equivalent to EUR 102 million) to support Armenia’s Enabling Universal Health Coverage Program. This initiative aims to enhance the quality of primary healthcare, ensure accessible health services across the country, and increase the efficiency of the government’s healthcare spending.
Despite improvements in maternal and child health outcomes in recent decades, Armenia continues to face significant health challenges. Non-communicable diseases, such as heart disease and diabetes, account for the majority of deaths and illnesses in the country. Low government spending on healthcare and systemic inefficiencies contribute to high medical costs, resulting in substantial out-of-pocket payments by citizens. In 2021, such payments constituted 81.4% of the country's health expenditures, one of the highest rates globally.
Carolin Geginat, World Bank Country Manager for Armenia, highlighted the adverse effects of high private healthcare costs on service quality. “Armenia’s high private healthcare costs are an outlier in the world with adverse effects on the quality of services provided to citizens. Ongoing reforms intend to create better financial and regulatory incentives for the provision of quality healthcare,” she stated. Geginat expressed optimism that the broader reform could fundamentally alter disease patterns and make healthcare more affordable for the Armenian population.
The approved operation will utilize a Program-for-Results (PforR) financing instrument, which ties the disbursement of funds to the achievement of specific program outcomes. This approach will support ambitious health reforms in Armenia, including the introduction of mandatory health insurance. The reforms aim to enhance the quality of health services and improve the efficiency of government spending on healthcare. One key strategy will be the adoption of an external reference pricing mechanism, which uses international price comparisons for selected publicly financed essential medicines.
The Enabling Universal Health Coverage Program aims to benefit the entire population of Armenia by providing better quality and more affordable health services, particularly in the prevention of non-communicable diseases. Key intended outcomes include:
- Financing primary healthcare facilities based on performance in quality and coverage.
- Improved training for nurses and family physicians.
- Reduction in the prices of prescribed drugs.
- Decreased out-of-pocket spending as a share of current health expenditures.
This comprehensive approach is expected to ensure that all Armenians have access to quality healthcare services, promoting overall health and wellbeing across the nation.
