By Emil DanielyanThe Armenian government approved a cut-price sale of the country’s biggest state-run hospital on Thursday, resuming the controversial privatization of healthcare institutions suspended a year ago after protests from a member of the ruling coalition.
A government statement said ministers decided to allow the staff of the Armenia Republican Medical Center to privatize their sprawling hospital for 135 million drams ($267,000) without a tender. It have no reasons for the move, saying only that the new owners have pledged to invest 100 million drams in the Yerevan-based complex.
Senior officials at the Armenian Ministry of Health contacted by RFE/RL were not immediately aware of the decision. They said the ministry, which had direct control over the hospital until now, had no role in the deal because it was on the list of state assets subject to privatization.
Another ministry source predicted that the hospital will end up under the personal ownership of its current executive director, saying that he will almost certainly force his approximately 700 employees to surrender their shares. The privatization of 37 other health institutions in recent years largely followed the same pattern. Virtually all of them are now owned by their previous government-appointed bosses.
Under Armenian law, workers of state-run enterprises can buy them out at a quarter of their face value set by the government. It is not clear whether the legal clause was applied to this case. Officials at the government’s privatization agency, the Committee on State Property Management, could not be reached for comment.
The sale of the Republican Medical Center leaves only one big hospital, also located in Yerevan, under state ownership. Most of Armenia’s Soviet-era hospitals and policlinics have been privatized since the late 1990s. The cash-strapped government has argued that it lacks the resources to maintain them.
The process was frozen in August 2003 after strong objections voiced by parliament speaker Artur Baghdasarian whose Orinats Yerkir Party has three ministers in the cabinet. “The haphazard privatization of medical institutions may paralyze the country’s health care sector and lead to social problems,” he said at the time.
Baghdasarian argued that Armenia still lacks a mandatory national system of medical insurance. Its creation is seriously hampered by widespread poverty and unemployment.
Access to healthcare in Armenia has declined dramatically since most medical services became paid more than a decade ago. They remain beyond the means of a considerable part of the population.
The privatization appears to have failed to alleviate another grave problem facing the sector: rampant corruption. Even in private hospitals many patients still have to give kickbacks to doctors and other medical personnel.