Identifier
Created
Classification
Origin
04ANKARA6490
2004-11-19 15:35:00
CONFIDENTIAL
Embassy Ankara
Cable title:  

LABOR UNION OPPOSITION TO TURKISH GOVERNMENT PLANS

Tags:  PGOV PHUM ELAB SOCI TU 
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This record is a partial extract of the original cable. The full text of the original cable is not available.
C O N F I D E N T I A L SECTION 01 OF 02 ANKARA 006490 

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DRL PLEASE PASS TO DOL ILAB

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E.O. 12958: DECL: 11/19/2014
TAGS: PGOV PHUM ELAB SOCI TU
SUBJECT: LABOR UNION OPPOSITION TO TURKISH GOVERNMENT PLANS
TO CONSOLIDATE GOVERNMENT MEDICAL FACILITIES IN MINISTRY OF
HEALTH

(U) Classified by Political Counselor John Kunstadter; e.o.
12958, reasons 1.4 (b) and (d).

C O N F I D E N T I A L SECTION 01 OF 02 ANKARA 006490

SIPDIS

DRL PLEASE PASS TO DOL ILAB

ISTANBUL PASS TO ADANA

E.O. 12958: DECL: 11/19/2014
TAGS: PGOV PHUM ELAB SOCI TU
SUBJECT: LABOR UNION OPPOSITION TO TURKISH GOVERNMENT PLANS
TO CONSOLIDATE GOVERNMENT MEDICAL FACILITIES IN MINISTRY OF
HEALTH

(U) Classified by Political Counselor John Kunstadter; e.o.
12958, reasons 1.4 (b) and (d).


1. (C) Summary: International financial institutions
recommend the transfer of Ministry of Labor and Social
Security hospitals to the Ministry of Health. With public
sector health care costs rising faster than inflation, the
idea is to assure more efficient and cost-effective delivery
of health care to insured workers and their families.
Although explained by AK Party Parliamentarians as an attempt
to streamline government expenditures in preparation for EU
membership, labor union critics allege the measure is a first
attempt toward ultimately privatizing health care with an
Islamist cast, perhaps restricting the availability of health
care rather than expanding it. End summary.

-------------- --------------
IFIs Recommend Transferring Hospitals to Ministry of Health
-------------- --------------


2. (U) IFI experts from the World Bank and International
Monetary Fund have recommended that the GOT transfer the
Social Security Institution (SSK) state-run medical
facilities from Ministry of Labor and Social Security (MOLSS)
to Ministry of Health (MOH) to achieve cost-efficiencies in
delivering government-provided health services. GOT included
this reform in a package of laws on local administration
reform which President Sezer returned to Parliament for
further discussion.


3. (U) On the face of it, the proposal seeks to achieve
budget savings and deliver health services efficiently and
cost-effectively. In recent years public sector health care
costs have risen faster than the rate of inflation, and the
GOT can ill afford to allow this trend to continue. However,
notably both left- and right-leaning labor union contacts
criticize this measure as the first step toward
decentralization of government services, eventual
privatization of health care and possibly paving the way for
what the unions assert would be inferior quality medical
facilities. In general, our interlocutors fear that medical

services will deteriorate under privatization, leaving a void
that they claim could easily be filled by Islamist-oriented
organizations, thus -- in their view -- tilting Turkish
society toward a more Islamic-oriented system.

--------------
Cost of Hospitals Burdens Treasury
--------------


4. (C) Dr. Mahfuz Guler, Bingol AKP MP and Chairman of the
Parliamentary Committee for Health, Family and Social
Affairs, explained the proposal to shift hospitals from the
MOLSS to the MOH as part of an overall program in the GOT's
Emergency Action Plan to put all health organizations, which
currently serve 30 to 35 million people in 148 SSK hospitals,
under one umbrella. Guler stated that until 1992, hospitals
were not state funded; since then the cost of supporting
these hospitals has doubled, putting a major burden on the
Treasury. He noted the number of health care recipients had
doubled in the last 20 years without a concomitant increase
in investments to support the cost of health care.


5. (C) Guler said individuals in the gray market (allegedly
five million unregistered workers who are paid below scale)
receive no health care coverage through the MOLSS because
premiums are not paid on their behalf by either the employers
or the workers themselves. However, poor people are able to
receive health care through a "Green Card" program similar to
Medicaid in the U.S. Guler asserted the MOH could easily
handle the health care requirements for all SSK members. He
noted a pilot project, begun with seven towns in the first
year, had expanded to 15 by the second year to participate in
this program. He expected all 148 MOLSS hospitals to be
transferred to local administration within two years.
(Comment: We note that Guler perceives the "State" and the
"Treasury" to be two separate funding sources, but was unable
to distinguish between their revenue sources. End comment.)

--------------
Privatizing Hospitals
--------------


6. (C) In a separate meeting with us Ministry of Labor and
Social Security Director General Cengiz Delibas described the
proposed hospital transfer as a straight-forward attempt to
bring the administration of all state-operated hospitals
under one authority and to separate the administration of
health benefits from retirement benefits. Although not
expressed in any official GOT document, and only inferred in
passing in a paper on SSK reform, the ultimate goal is to
turn over to local control and eventually privatize state-run
hospitals, Delibas conceded.

--------------
Labor Unions Oppose Privatization
--------------


7. (C) Close Embassy contact Hak Is Labor Union President
Salim Uslu, as well as other union contacts, accuse the MOLSS
of unnecessarily shifting hospital facilities to the MOH and
ultimately attempting to privatize state hospitals, a move
which is expected to make the cost of health care more
expensive for union members. Uslu, who portrays himself as
close to PM Erdogan, alleges the "bureaucrats" misled the
prime minister in citing a 22 quadrillion Turkish lira
(approx. USD 1.5 billion) health care financing deficit for
the first nine months of 2004. Uslu also cites "corruption"
by pharmaceutical companies using a two-tier pricing system
as contributing to cost overruns, possibly with reference to
accusations that Roche has overcharged for medicines. Uslu
does not see any practical benefit to be derived from
transferring MOLSS-operated hospitals to the MOH and believes
the central government could do a better job of managing
hospitals and health care. He suggests it would be more
efficient to consolidate various small non-MOLSS hospitals.

--------------
Turks Are "Problem Solvers"
--------------


8. (C) Yildirim Koc, special advisor to the President of
Yol-Is (Highway Workers Union),affiliated with the more
left-leaning Turk-Is Union, and another longtime Embassy
contact, insisted to us that the U.S. and the EU want to
dismember Turkey and carve it into several smaller states.
Koc asserts the health care financial problems are related to
MOLSS corruption and mismanagement and are being camouflaged
under the pretext of making health care services more
cost-effective by transferring them to the MOH. Koc
describes this transition as going "from a republican system
to a federal system" and cites what he calls failures to
deliver good health care under privatized systems in Algeria,
Egypt and the Palestinian Territories as examples of a vacuum
in services that will set the stage for Islamists to take
over and improve inferior quality state medical care in
Turkey, as well.


9. (C) In a continuation of his contradictory reasoning, Koc
calls Turks "problem solvers" who assume that someone (i.e.,
in this case Islamists) will turn up to resolve a difficulty
rather than thinking through a solution for themselves. He
suggests that after Turkish EU accession, problems related to
financing good health care delivery will loom large and need
to be resolved, either by Turks themselves or perhaps with EU
assistance. He cautions that at this point the Islamists
will have positioned themselves to be influential throughout
the local provinces.


10. (C) Comment: The health care reform is a case study of
the difficulty of pushing through IFI-inspired reforms in the
face of persistent statism and fear of market forces, both on
the right and left of the political spectrum. The GOT
appears to be taking IFI advice seriously, in an apparently
sensible attempt to rein in skyrocketing health care costs.
Nevertheless, labor union contacts across the board are
accusing ruling AKP leaders of pursuing a hidden agenda to
regionalize and, eventually, privatize health services in
order to create an opportunity for Islamic organizations to
take over basic health services and establish an influence at
the local level throughout the country. The health care
reform may be eliciting more labor union paranoia than other
reforms because it raises the specter of multiple labor union
bogeymen: privatization, foreign influence, decentralization
and the Islamist "hidden agenda" of the AK Party government.
End comment.
EDELMAN