Saule
K. Iskendirova, PhD in Economics, associate professor,
Gulmira
A. Rakhimova, PhD in Economics
Kokshetau State University named after Sh. Ualikhanov, Kazakhstan
DEVELOPMENT OF HEALTH RESORT INSTITUTIONS OF
KAZAKHSTAN: THE FINANCIAL ASPECTS
The operation of any
sector or industry assumes provision of its resources, including human
resources, facilities and financing.
The
problem of financing the social sector of the country today features not only
the growing demand in significant financial resources, but realistic
opportunities of the state to finance the most critical social areas.
Until
now, limited financial resources impeded the improvement of budget financing
for the healthcare system. To resolve this issue more favorable preconditions
start to develop at the present time.
Within the
continued commercialization of the social sector, the growth of paid medical
services and narrowing of healthcare for workers, health resorts represent a
significant addition to medical network in diagnosis and treatment. Therefore,
providing affordable health resort services and their expansion gain national
importance.
The
transition to a market economy resulted in privatization of the majority of
health resort institutions and refusal from the state budget financing. In contrast to the Western countries the
Soviet government’s budget financing of health resorts was reasoned by
providing complimentary medical care.
The Western
European resorts, as noted by E.G. Mogilevich back in 1930, differ on their
objectives and organizations from the Soviet resorts. The basis for operations
and development of the European resorts is formed by the principles
attributable to any capitalistic enterprise. An indirect or direct profit is
the main incentive for their development.
By the
beginning of “perestroika” (rebuilding), resort operations in Kazakhstan
introduced new progressive forms of resort therapies and increased their level
of comfort. But the economic collapse of the end of 80ies negatively affected
the development of resort and spa sector: service quality deteriorated,
nutrition level decreased, and prices for resort vouchers rose. Sanatoriums
left without the state financing could not shift to self-financing. The
communal expenses became rackingly high, which resulted in higher ticket
prices. Decrease of population income led to the lack of possibility to pay for
resort vacations.
The sector of health resorts went into decline. Rich people preferred
vacations abroad or in elite resorts of the former General administration of
the Ministry of Health, which possessed a certain level of comfort and variety
of health services. These institutions were held “afloat” with their “new
Russian” clients and better developed facilities with the state budget.
Former labor
unions’ health resorts, unable to adapt to a market economy, opted for
"washout" low-cost medical services necessary for competent medical
process, and their replacement with expensive fashionable services to increase
prices. In these circumstances resorts facilities have largely lost their
social significance. Losing to elite health resorts in the comfort, they
started facing challenges in ensuring occupancy. Unprofitable resorts were closed, while others, in the process of
reforms, were transformed into joint stock companies of open and closed
ownership (OJSC and CJSC), as well as limited liability partnerships
(LLP). The number of resort institutions increased by 14% in the period
from 2004 to 2010 mainly due to the increase of non-government institutions
(Table 1).
A
joint-stock company or a corporation is an enterprise or institution
(organization), acting as a legal entity based on issue of shares to raise
funds of their owners to carry out its activities, to produce and sell various
goods and services on the markets [1, p.14].
Facilities
financed through the state budget continue operations together with health
resorts organized in new legal forms.
At the present time they mainly include anti-phthisic resorts. The
majority of authors consider it practical to maintain children’s and
anti-tuberculosis resorts in forms of budget institutions. A.T. Bykov in his
research analyzes advantages of a state-owned health resort in comparison with
other forms of ownership [2].
Using
an example of one resort similar to a health resort, A.T. Bykov gives evidence
of competitiveness of this state-owned resort institution in the market of
health resort services. Not only it has
government procurement contract for tickets - 70 % (which guarantees sales by
the above organization), but also the possibility for own sales of tickets –
30% at their regional auctions and fairs. Besides, partial state subsidies and
investment of non-budgetary funds make discounts possible for ticket prices
sold by the health resort itself. The author emphasizes that a state-owned
legal form of a business does not impede attracting outside investment.
Other
authors consider recreation as a cost-effective way of providing health resort
services, as vacations at resorts not only serve medical purposes, but also
offer entertainment programs rich with various animation cycles, which can
raise the vital tone of vacationers, satisfy their spiritual and emotional
needs. They also predict conversion of many resorts into recreational
facilities.
Table 1 – Health resorts and recreation facilities in
the Republic of Kazakhstan in 2004 – 2010
Title |
Years |
||||||
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
|
1. State-owned, total
including: |
50 |
50 |
52 |
53 |
53 |
50 |
53 |
- resorts, retreat centers with treatment, health and
preventative resorts
|
47 |
47 |
48 |
50 |
50 |
48 |
50 |
- rest homes and centers,
retreat centers
|
3 |
3 |
4 |
3 |
3 |
2 |
3 |
2. Non-state, including:
|
56 |
52 |
67 |
64 |
67 |
67 |
68 |
- resorts, retreat centers with treatment, health and
preventative resorts
|
46
|
43
|
51
|
55
|
56
|
57
|
61
|
- rest homes and centers, retreat centers
|
10 |
9 |
16 |
9 |
11 |
10 |
7 |
Total |
106 |
102 |
119 |
117 |
120 |
117 |
121 |
Annotation:
Calculated and compiled by authors based on data of the Statistics Agency of
the Republic of Kazakhstan; |
At the
present time the interest for animation activities at resorts not only have not
decreased, but also obtained high importance.
Choosing a vacation spot people consider not only medical factors, but
also sports and animation services, which are provided at a resort. This makes
modern resorts pay more attention to leisure activities for vacationers in
addition to enhancement of medical facilities.
Analysis of
data in Table 2 shows that the number of people who used health resort services
for treatment is higher in the regions including Akmolinskaya, Aktobe, Atyrau,
Karaganda, South-Kazakhstan as well as the city of Almaty.
Consequently,
changes in recreational needs of the population and its demands of quality
vacations at resorts must lead to transformation of health resort sector into a
resort and recreation system (RRS), with the main purpose of improving people’s
health, the quality and duration of life.
Table 2 – Number of people who used health resort treatment
In thousands $
Regions |
Years |
2010/ 1992 |
||||||
1992 |
1993 |
2006 |
2007 |
2008 |
2009 |
2010 |
||
1. Akmolinskaya |
õ |
õ |
õ |
4.66 |
15.67 |
14.7 |
30.9 |
6.6* |
2. Aktobe |
2.9 |
2.5 |
4.46 |
3.65 |
2.73 |
3.5 |
4.6 |
1.6 |
3. Almatinskaya |
30 |
13.7 |
1.01 |
3.86 |
6.06 |
22.2 |
25.9 |
0.9 |
4. Atyrau |
3.8 |
3.9 |
2.81 |
3.70 |
5.96 |
9.4 |
8.5 |
2.2 |
5. East Kazakhstan |
7.9 |
8.4 |
3.43 |
2.2 |
3.11 |
4.9 |
7.7 |
1.0 |
6. Zhambyl |
10.4 |
10.4 |
2.67 |
2.85 |
1.50 |
7.3 |
11.2 |
1.1 |
7. Zhezkazgan |
3.6 |
4.2 |
õ |
õ |
õ |
õ |
|
õ |
8. West Kazakhstan |
5.3 |
6.1 |
1.45 |
1.83 |
1.81 |
1.6 |
2.2 |
0.4 |
9. Karaganda |
14.4 |
14.6 |
15.6 |
38.28 |
43.95 |
19.1 |
27.0 |
1.9 |
10.Kzyl-Orda |
5.6 |
6.7 |
0.404 |
1.48 |
1.93 |
6.1 |
12.0 |
2.1 |
11. Kostanai |
24.8 |
19 |
3.70 |
4.07 |
4.37 |
2.3 |
9.2 |
0.4 |
12. Pavlodar |
10.2 |
11.4 |
3.86 |
4.44 |
4.97 |
5.2 |
6.2 |
0.6 |
13. North Kazakhstan |
1.3 |
1.3 |
7.84 |
2.16 |
1.98 |
1.0 |
0.6 |
0.5 |
14. South Kazakhstan |
20 |
24.8 |
3.35 |
5.08 |
16.23 |
16.6 |
44.1 |
2.2 |
15. Almaty city |
21.1 |
20 |
11.04 |
11.52 |
11.01 |
17.1 |
67.0 |
3.2 |
Annotation – Calculated and compiled by authors based on data of the
Statistics Agency of the Republic of Kazakhstan |
As we know
from the recreation sciences, RRS is a form of recreation system, which
originated as a result of interaction of three super systems: society, nature
and industrial production. It has long been a part of social and economic
lives. Now it is connected with an increasingly insisting manifestation of the
economic aspect of resorts operations, compared to the Soviet period, when the
social area was dominant. Production of
any goods, services, or benefits requires labor costs. Therefore, health resort services must be
financed by the difference between their prices and costs taking into account
deductions to the state budget from revenues, the source of financing their
services. Sources of funding can be grouped depending on the level of state
involvement in their development [3].
The state
budget funds provide for maintenance of healthcare organizations, which help
improve the health of population in the CIS countries. However, within the last
decade most of the CIS states have had higher mortality rates and socially
preconditioned morbidity of population with a sharp decrease in childbirth.
The main
causes of death were diseases of the circulatory system, respiratory system and
malignant neoplasms.
There is a
growing incidence of respiratory, infectious and parasitic diseases, especially
tuberculosis. The epidemiological situation with regard to infections
caused by human immunodeficiency virus (HIV-AIDS) has been exacerbated.
The state
also plays control and coordination roles. And funding is represented by
sources of mandatory contributions by all business entities accumulated by the
state in special extra-budgetary funds.
At
present, public funding for health resort therapies throughout the Republic of
Kazakhstan applies only to veterans of the Great Patriotic War (GPW), invalids
and international soldiers of the GPW. The numbers of people, who receive
health resort therapies, increase year by year (Table 3).
Health
resort services consist of two elements: dominant and recessive.
The dominant element is represented by initial set of services including those
that are essential for organizing health resort treatment, specifically:
accommodation, meals, as well as specific services determining distinction of a
given trip, treatment and leisure. The cost of services of dominant part
includes the price of a trip ticket.
The
recessive part of health resort services includes supplemental set of optional
paid services associated with health resort treatment or vacation. For
instance, it may include hairdressing services, billiards, lawyers available
for additional payment.
The ratio of
dominant and recessive parts of recreation services in the world practice is
40:60, and 80:20 in Russia. Many of the
health resorts in the Republic of Kazakhstan have an average ratio of 93:7 [4,
5].
Consequently,
a major portion of revenues received is generated from health resort treatment
service, while additional services represent a small portion of that. It is
important to achieve two sources of revenue from paid services – recessive
elements, and providing optional services, unrelated directly to health resort
treatment of a patient. These could be rent of unoccupied spaces, sales of
materials and waste and others.
During the
period of reforms in the Kazakhstan’s economy the nature and sources of
financing, specific forms and methods of attracting investments and their
technologies have changed drastically. The experience shows that only health
resorts providing high quality treatment can survive within the market economy,
whereas profitability of health resorts depends on the culture of services. [6,
7]
Table 3 – Dynamics of health resort services for separate categories of
citizens
|
Years |
Growth/ Decline |
||||||
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
||
GPW veterans |
2.9 |
2.6 |
3.2 |
3.8 |
4.2 |
5.0 |
5.1 |
1.8 |
GPW invalids |
1.8 |
1.5 |
1.7 |
1.8 |
1.8 |
2.0 |
2.2 |
1.2 |
International soldiers |
0.3 |
0.4 |
0.4 |
0.5 |
0.6 |
0.7 |
0.8 |
2.7 |
Annotation –
Calculated and compiled by authors based on data of the Statistics Agency of
the Republic of Kazakhstan |
The
termination of centralized capital investments into the development of spa and
resort sector in the economy of Kazakhstan was not compensated by the increased
inflow of investments provided by market mechanisms.
Price
increases for energy resources, food and industrial goods, transport tariffs
caused increased cost of vouchers to health resort facilities.
New social
and economic conditions provide higher economic and organizational freedom to
resorts, putting them, however, in more stringent existing conditions. These
conditions are characterized by:
a)
Termination of various types of donations, subsidies, subventions, health resort
facilities shift to self-financing and self-sufficiency.
b)
Introduction of independent sales of vouchers into practice.
Our
country has high expectations in regard to establishment of the tourist
cluster. Connecting in a cluster of all entities in tourist industry and health
resorts into one unified system may lead to higher competitiveness and
quality of services to tourists.
At the
first glance, health resorts and tourism sectors in the republic of Kazakhstan
develop dynamically, providing revenues to these institutions and revenues to
the state budget. The problem is that, on one hand, the Healthcare Ministry is
in charge of resorts business, and on the other hand, according to the Law on
tourism, Kazakhstan resorts are considered facilities of the tourism industry,
while people arriving for health resort therapies are considered tourists.
Consequently,
the resort business is necessary both for the healthcare system and the tourist
business as complementary. This has caused fragmentation of mechanisms for
managing these sectors, which are so significant for Kazakhstan.
References:
1
A.Nurseit, A.Temirbekova,
R.Nurseitova. Theory of market economy: entrepreneurial aspect. Almaty: “BIS”
PF, 2000. p. 272.
2
A.T.Bykov. Strategi for developing resort tourism complex in transition
period: Saint Petersburg, 1998.
3
E.G.Reshetnikova. Service sector: planning, issues, outlook. Saratov,
1998. – p. 92.
4
Zh.M. Dyusembekova. Quality management of HR on marketing principles:
dissertation. – Almaty, 2001. p. 11.
5
V.Yu.Ogvozdin. Quality Management. Fundamentals of theory and practice:
textbook. – Ì., 1999. - P. 112.
6
N.A.Varkan, Ya.S.Yadgarov. Quality of services and culture of services
to population. Ì.: Consumer goods and food
industries, 1984.- p. 80.
7
Ye.N.Nikiforova. Management aspects of HRI development in the Republic
of Kazakhstan: dissertation – Almaty, 2002.