Medical Reform: Reorganization of the Industry and Mind

The reform of the healthcare sector initiated by the Ministry of Health of Ukraine in recent months has been one of the most urgent social issues. Approval on October 19^th, 2017 by the Parliament of the Draft Law “On the State Financial Guarantees for the Provision of Medical Services and Medicinal Products” No. 6327 dated April 10^th, 2017 (as adopted in its entirety), the Draft Law “On Amendments to the Budget Code of Ukraine on the Provision of State Financial Guarantees for the Provision of Medical services and Medicines” No. 6604 dated June 21^st, 2017 (adopted in the first reading), and the Draft Law “On Improving the Availability and Quality of healthcare in Rural Areas” No. 7117 dated September 18^th, 2017 (adopted in the first reading) was a complicated process from a political point of view and caused a remarkable resonance in the society.

The issue of reforming the healthcare sector is complex and affects a lot of aspects of healthcare. The mentioned draft laws concern the sphere of financing medical services to the population, in particular, the introduction of a state-guaranteed package of medical services and medicines, the creation of the National Healthcare Service of Ukraine as the sole customer of medical services, the reform of the primary healthcare system and the introduction of electronic records of patients. Particular attention is paid to the reform of rural medicine.

The Law of Ukraine “On Amending Certain Legislative Acts of Ukraine on the Improvement of Legislation Regarding Activities of Healthcare Institutions” No. 2002-VIII of April 6^th, 2017 adopted in spring, which was the first step in reforming the health care system, is also worth attention.

Autonomization of healthcare facilities

Back in 2015, the Ministry of Health released statistics stating that 75-80% of the state expenditures on healthcare is spent on maintaining an outdated infrastructure and staff salaries.

Therefore, an important stage of medical reform is the autonomy of healthcare institutions, which will make the effective management of funds possible by providing healthcare facilities a sufficient level of autonomy. Thus, the Law of Ukraine No. 2002-VIII provides for a simplified procedure for the transformation of public healthcare institutions, both state and municipal, into state-owned enterprises and communal non-profit enterprises. At the same time, the existing network of public and communal healthcare facilities will not be reduced, they will not be subject to privatization. The process of reorganizing all institutions in Ukraine is scheduled for the end of 2018. Today, this process has already been launched in some hospitals.

In order to minimize the risks of uncontrolled actions by the management of hospitals, all public and communal healthcare institutions that provide secondary and tertiary medical care should establish supervisory boards with mandatory involvement of representatives of the public. Such councils will consider issues, in particular, regarding the observance of rights and safety of patients, compliance with the legislation while providing medical care to the population and financial and economic activities of the healthcare institution. The development of relevant regulations is already being done with the participation of Legal Alliance.

The autonomy of healthcare institutions will allow the latter to dispose of their assets, independently identifying priority needs, attracting funds from national and international investors, international donors, and changing the system of remuneration for healthcare workers.

This process was preceded by the creation of hospital districts, which were formed on the basis of Resolution of the Cabinet of Ministers of Ukraine “On Approval of the Procedure for the Establishment of Hospital Districts” No. 932 as of November 30^th, 2016. During their preparation, the population and territorial features of the regions were taken into account, in particular, geographical, communication paths, etc. At the moment, it is not clear how efficiently the district will function. Given the criticism, this scheme will probably be amended.

Primary level

The primary level reform implies that patients will exercise their right to choose a family doctor by giving a healthcare provider a declaration on the choice of a primary care provider. To date, the Ministry of Health of Ukraine has drafted and revised regulations on the organization of primary care provision, including a decision to choose a primary care provider. The procedure for providing medical care will determine the duties of the doctor and what kind of primary healthcare will be provided to a patient and paid from the budget.

Financial aspect

The ideology of the medical reform is that the financing of healthcare institutions will take place on a contractual basis. That is, healthcare institutions will get paid for specific services provided to specific patients. Instead of spending on “beds”, from now on the principle “money follows the patient” will function. At the same time, in accordance with the amendment which was introduced in draft law No. 6327, during the discussion in the Verkhovna Rada, funding for beds is planned to cease from 2020.

The adopted laws established that the amount of funds of the State Budget of Ukraine planned to implement the program of medical guarantees is determined annually in the Law of Ukraine “On the State Budget of Ukraine”. At least 5% of Ukraine's GDP will be allocated annually to the implementation of the program of medical guarantees. Expenditures for the health insurance program are guaranteed. The curtailment of the medical guarantee program is not allowed except in cases established by law.

It is worth noting that during the revision of the draft law by the Verkhovna Rada, the possibility of funding the primary care unit through the subvention mechanism was excluded.

So, the reform introduces new public healthcare financing rules. The notion of the program of state guarantees of medical care for the population is introduced, according to which the state covers expenses fully from the state budget of Ukraine. Such a list includes primary, emergency and palliative care. According to the estimates of the Ministry of Health of Ukraine, this will cover about 80% of all appeals for medical assistance. For expensive treatment, as it is today, there will be targeted programs. Treatment programs for oncology, hepatitis, AIDS, etc. will continue.

Every medical service will have a defined rate paid by the state to a hospital for treatment. In accordance with Law No. 6327, the tariff for medical services related to the provision of primary healthcare consists of two parts: the rates for medical services and rates for diagnostic services, including laboratory tests. A detailed list of services and tariffs paid by the state will be approved by the Government.

At the same time, before making conclusions, it is necessary to wait for the final text of the Law after its signing by the President of Ukraine.

The National Health Service of Ukraine, which will be established in the near future, will conclude contracts with providers of healthcare services. Such a model has lower corruption risks as it is planned to be controlled by the Accounting Chamber of Ukraine, the State Audit Office of Ukraine, as well as anti-corruption bodies - the National Anti-Corruption Bureau of Ukraine and the National Agency for the Prevention of Corruption of Ukraine as the central executive body with a special status as a newly created body.

We believe that at this stage of the reform, the creation of such a body is the right step. At the same time, in the future, if territorial communities are responsible, financial issues should also be addressed locally.

According to the ideology of reform, competition and the principle “money follows the patient” will lead to a streamlining of the network of healthcare institutions - small, poorly equipped and little-loaded hospitals will be forced to adjust to real needs of the population - rehabilitation, diagnostic centres, hospices.

Reform vs. Constitution

Of course, the main stumbling block on the path to medical reform is financing issues, namely the compliance of medical reform with Article 49 of the Constitution of Ukraine, which guarantees the right to free medical assistance. Opponents of medical reform are turning their eyes to the fact that such a state of affairs has long failed to meet the realities, and it is finally time to change it.

The viability of reform in the future may depend on the position of the Constitutional Court of Ukraine in this regard, which several times, in particular 15 years ago, provided an assessment of the constitutionality of paying for medical care from patients' pockets. The decision of the Constitutional Court of Ukraine in the case of free medical aid of May 29^th, 2002 clarified that in public and communal healthcare facilities medical care should be provided to all citizens, regardless of its volume, free of charge; the concept of medical care, the procedure for the provision of medical services that go beyond the scope of free medical care and a list of such services must be determined by law.

When considering the drafts on October 19^th, 2017, the deputies discussed about a thousand amendments and approved only a few. The mechanism of patient co-payment for medical services was removed from draft No. 6327 at the stage of making amendments due to non-compliance with the Constitution of Ukraine.

In practice, the waiver of the co-payment mechanism means that the guaranteed package of services will include fewer services for which the state pays. As a result, patients will have to pay for more services.

Taking into account the above, we believe that either this convocation of the Parliament, or the next will still have to make a decision to amend the Constitution regarding the medical issue.

Terms of the reform

The program of medical guarantees is expected to be implemented gradually. From January 1^st, 2018 - for primary health care; for 2018-2019 - for other types of medical care, in particular through the implementation of pilot projects of certain healthcare facilities, settlements or regions. From January 1, 2020 - the implementation of state guarantees of medical care of the population under the program of medical guarantees is planned for all types of medical care.

Switch to e-recording

A family doctor selected by a patient will have to enter information on the patient in the electronic register. In 2016, the Ministry of Health is working on a large-scale eHealth project, the ultimate goal of which is the total refusal from paper circulation in all healthcare processes. This will sometimes simplify the reporting by doctors. This process is inextricably linked with the computerization of hospitals and access to the Internet. The project is funded through technical assistance programs by international donor organizations, including the United States Agency for International Development (USAID), the Expert Deployment for Governance and Economic Growth (EDGE), the Global Fund and the World Bank.

In the test mode, the eHealth system has been in operation since September 2017. By today about 400 primary healthcare institutions throughout Ukraine have been connected to it. By August 2018, eHealth should cover all primary healthcare facilities in order to provide a payment option in the format “money follows the patient”.

Rural medicine

Draft law No. 7117 as of September 18^th, 2017 is devoted only to this issue. By its importance, this document is equivalent to the other two voted draft laws, as it will allow those residents who are not able to reach a medical specialist to significantly improve the quality of life.

A recent survey by the Ministry of Health found that qualified family doctors were willing to work in rural communities if, in addition to a good salary, they would have housing with water and heating, equipped workplaces and reimbursement of fuel costs for public transport.

The draft law initiated by the President of Ukraine provides for the introduction of telemedicine in Ukraine, which aims to simplify the diagnosis in cases where there is no need for a personal review, but rather an assessment of examination data that will provide more opportunities for patients from remote areas to consult with a narrow profile specialist.

Commenting on the last draft law Petro Poroshenko said: “It gives opportunities for providing affordable and quality primary health care for rural residents. Healthcare facilities and their departments will be equipped with the necessary equipment and a set of medicines.” The village doctors will receive stimulating wages and have decent living conditions. Telemedicine and counselling of the best specialists will become available to villagers. This law already has a financial resource.” It is noted that the budget provides at least UAH 5 billion of additional financing of medicine in the rural areas for two years, in particular, for construction of modern outpatient clinics, as well as providing access to the Internet.