Ukraine healthcare reform and decentralisation

 

Ukraine has made significant efforts to tackle corruption and improve transparency across the country’s institutions. Vital progress has also been made on healthcare reform and decentralisation.

For the first time in Ukraine’s modern history, the country is changing from a corrupt, dysfunctional, oligarchic system towards a functioning market economy and liberal democracy. There are still a lot of challenges left, but during the last 4 years, more has been achieved than in the previous 20 (plus).

New privatisation law & anti-corruption institutions

State owned enterprises remain the untouched reform sector. Ukraine has 3,500 of these and despite declarations and plans little progress has been made. These companies are the biggest source of corruption, political favouritism, mismanagement and distortion of the business environment.

In January 2018 however, a new privatisation law was passed, and privatisation is now speeding up. Other reforms and changes that have had a positive effect on the fight against corruption include deregulation and decentralisation.

There are new institutions for example for fighting against corruption: a National Anti-Corruption Bureau, special anti-corruption prosecutor and National Agency for Prevention of Corruption.

Opportunities are thus opening up to private providers in Ukraine, where sweeping reforms are introducing more of a free market compared to the previously socialist system.

Healthcare market opportunities

The Ukrainian medical services market has always held significant potential for healthcare providers, but shifting politics, unstable public financing, lack of mandatory healthcare insurance and corruption has meant that potential investors often postponed their plans for Ukraine when considering expansion of their business.

New legislation on the operation of public healthcare facilities and the funding of medical services has now been adopted by Parliament, providing a new approach to the financing of healthcare institutions and individual healthcare practitioners.

Budget funding in the healthcare sector is provided only to public hospitals, but this new law could mean that private healthcare institutions and individual practitioners will be able to benefit from state budget financing after entering into an agreement with a newly created National Healthcare Service.

Money to follow the patient

The existing pay-per-bed approach will be replaced by a money-follows-the-patient principle. The law stipulates that the state will pay for health services on primary, secondary, tertiary levels; emergency and palliative care; medical rehabilitation; medical aid to children under 16; and medical aid related to pregnancy and labour, as well as reimburse the costs of medicines. Payment for a higher level of services will be made directly to institutions, based on their reports on the quantity and types of services provided under specific tariffs to be set by law. A nationwide e-system for tracking patients' health history will be implemented, starting in 2019.

The introduction of a new system on the primary level is planned for later in 2018, while the reform of other levels will be in 2019 and 2020. The reforms will affect the financing and the overall structure of the healthcare services market.

Dentists dominate private healthcare

Public institutions dominate the healthcare services market (90%); only 10% are private facilities. The private healthcare market is dominated by dental services (50%), followed by diagnostics services (18%), dermatology and cosmetology (15%), gynaecology and reproductive health (14%) and others (3%).

The opportunity to attract more patients through state guaranteed payments could motivate foreign and local investors to enter the market, increase competition and increase overall quality and diversity.

If Ukraine can offer improved health services to citizens, then fewer will need to go abroad for medical treatment.

Visit the IMTJ Country report on Ukraine for an independent assessment of the medical tourism sector in the country.

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