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The World Bank’s Board of Executive Directors approved a loan in the amount of $110 million equivalent (EUR 102 million) to support the Enabling Universal Health Coverage Program for Armenia. The operation aims to improve the quality of primary health care, ensure accessible health care services across the country and increase the efficiency of the government’s spending on healthcare. The operation supports the implementation of the Five Year Action (2021-2026) Plan of the Government of Armenia and is a subset of the national Healthcare System Development Strategy, the World Bank said in a press release.

Although Armenia’s health indicators have improved in recent decades for maternal and child health outcomes, non-communicable diseases still account for the largest share of deaths and illnesses. Low government spending on healthcare and the inefficiencies in the health system contribute to high costs, resulting in high out-of-pocket payments. Armenia’s share of these payments for health out of current health expenditures (81.4 percent in 2021) is among the highest in the world. 

“Armenia’s high private health care 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,” said Carolin Geginat, World Bank Country Manager for Armenia. “The broader reform has the potential for fundamentally altering the disease patterns within the Armenian population and making health care more affordable for the population.”

The approved operation will use a Program-for-Results (PforR) financing instrument, which links the disbursement of funds directly to the achievement of specific program results. It will support an ambitious health reform in the country that includes introducing mandatory health insurance. In addition to the measures for improving the quality of health services, the reforms will aim to increase the efficiency of government health spending such as the adoption of external reference pricing mechanism, which applies international price comparisons to selected publicly financed essential medicines. 

The project aims to benefit the entire population of Armenia, who will receive better quality and more affordable health services to prevent non-communicable diseases. Some of the key intended outcomes include introduction of a system where primary health care facilities are financed based on their performance, in terms of both quality and coverage indicators, improved training of nurses and family physicians, a reduction of the prices for prescribed drugs and decreasing out-of-pocket spending as a share of current health expenditures.