The legacy of the Semashko system leftArmenia with an oversized and overstaffed health system.Beginning in the 1990s the country focused on re-designingits health system in an attempt to rationalize resources. Inorder to improve the efficiency, access and quality ofhealth care service provision, the Government undertooksupply-side reforms. These reforms included: (a)strengthening Primary Health Care (PHC) provision; (b)downsizing excess hospital capacity; and, (c) changingprovider payment mechanisms and introducing apurchaser-provider split.Armenia introduced the BasicBenefit Package (BBP) in 1999 for the socially vulnerablepopulation to target the so-called socially importantdiseases. The package utilizes public resources to finance,through provider contracts, PHC and emergency services forall Armenian citizens, with co-payment exemptions for thepoor and vulnerable. In addition, selected inpatientservices are provided for free for the poor, vulnerable andother specific categories.Unfortunately, low public healthspending levels and incomplete demand-side health financingreform have resulted in serious shortcomings in financialrisk protection outcomes. Armenia’s public health financingis among the lowest in the region. High co-payments for BBPcovered services, lack of in-patient care coverage for thenon-vulnerable population and outpatient pharmaceuticals forall, have resulted in household out-of-pocket (OOP) spendingbeing the predominant source of financing for health in thecountry. As Armenia is grappling with an aging society and ahealth care system struggling to adjust to morbidity andmortality epidemiological changes, its path to UniversalHealth Coverage (UHC) requires increased funding fromprepaid pooled sources in order to sustain and make furtherprogress on improving population health outcomes andfinancial risk protection.This paper examines the Armenianhealth system, with a focus on the BBP program. It takesstock of implemented reforms and analyzes the pendingagenda. The paper is organized as follows. Section twoprovides a general overview of Armenia’s health system,focusing on financing and health service delivery. Sectionthree describes the BBP program including its institutionalarchitecture, beneficiary targeting, BBP services and fundmanagement, and related information dissemination. Sectionfour discusses the sustainability of the BBP program amidsteconomic, epidemiologic, and demographic challenges. Thelast section focuses on the pending agenda related totargeting, integrated care, and coverage of thenon-vulnerable population.
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