Pilots: work is going on

Dr. Antonis Malagardis, Project team leader

It's more than half a year since the Project has started its activities in Pilots. First experience gained from this work can be assessed as follows: specific changes "in places" and their influence on the Project experts evaluation of the current situation and development possibilities in healthcare system of Ukraine. Thus, the Central rayon hospital in Popilnya rayon, Zhytomir oblast, received the status of non-profit communal enterprise (NPCE) "Popilnya Central rayon hospital". The Project is also doing intensive work on creation of other health care units with similar form of ownership - "Territorial health union of rayon ambulatory policlinic facilities" and "Rayon stomatological territorial health union". On the basis of Central rayon hospital in Zolochiv rayon, Kharkiv oblast, a non-profit communal enterprise "Central rayon hospital" has been created together with the Centre of primary care. What has changed in these healthcare units since their change of status? First of all, new financing mechanisms have been introduced; also, hospital management has received more authority in funds distribution and inviting new alternative sources of finance. Rayon healthcare departments have been created within the structure of State rayon administrations. These departments and communal non-profit enterprises have concluded contracts for health services provision. Correspondingly, the Rayon state administration has gained the status of health services purchaser, while the status of provider has been attributed to the Central rayon hospital.

The changes taking place in the system are worth a more detailed analysis. In the past the financing of the above mentioned healthcare units was realised exceptionally through the "line-item" model from the State and oblast budgets while, today, the funds are received primarily from rayon budgets in the amount stipulated by the yearly contracts on cooperation. At the same time, the financing from other budgetary levels directed to health care units for realisation of specific programs or projects has been preserved. The new possibility for non-profit communal enterprises to enter into contractual relationship allows them on the basis of the relevant world experience to choose the form of contract most appropriate for their work. After the hospitals gained NPCE status, their administrations have been authorised to distribute funds received by the hospital independently, according to the real needs of the healthcare unit. This way it became possible to form the so-called global budget for a medicoprophylactic institution (MPI) as it is done in most healthcare facilities abroad and this is one of the crucial conditions for essential improvement in health services quality "in places" and increase in salaries of MPI staff.

With regard to inviting new sources of financing into healthcare, let us mention that healthcare units management has gained the power to conclude corporate contracts of health services provision with enterprises with different forms of ownership with individual persons. Currently the Project experts are carrying a comparative study of the performance of the communal non-profit enterprises "Popilnya central rayon hospital" and "Central rayon hospital" of Zolochiv rayon in Kharkiv oblast against the performance indicators of other MPI in Ukraine. The study is aiming at finding convincing evidence showing that the change of healthcare units status is one of the conditions fot successful reform of healthcare in Ukraine.

Let us consider practical achievements of the Project implementation in Pilots allowing our experts to judge about the current situation and prospects of the Ukrainian healthcare sector. The fact of the Project realisation on "the periphery" of the country proves that the legislative and executive power is sufficiently decentralised, in particular, it proves that oblast state administrations are enough independent in their activities related to the policy development for regional healthcare. It needs mentioning, that decentralisation is characteristic of many healthcare systems in EU countries, among others - Estonia, Hungary, the Czech Republic. This, I believe, can become a preliminary condition for further reform and development of health and pharmaceutical sectors as it allows to use regional economic potential to full extent, provided simultaneous support from the state. Still, Ukraine has to be warned against excessive decentralisation in healthcare, which may lead to the loss of control over it on the national level. Poland and Romania can serve as the example of negative consequences of the kind: currently these countries have to restore the centralisation of their healthcare systems. In the course of Project operation in Ukraine we have arrived at the conclusion, that the high level of autonomy of regional authorities cannot be enough for successful and equitable realisation of the reform in healthcare. It is also necessary to improve regulatory framework, introduce measures aiming at the reduction of the "informal sector" Ukraine`s economy.

With regard to the former, it is advisable to consider on the parliamentary level all aspects of work in healthcare; in particular, it is necessary to formalise a simplified common mechanism of the status change for MPI. For example, this can be done in the Law on healthcare. Project experts are ready to share practical experience related to these issues and take part in the development of the corresponding draft law. Reduction of the "informal sector" in economy is aiming at the increase of tax revenue that can be directed at the healthcare reform. As it is shown by the world experience, without doing this, we shall not be able to find an effective solution to the problem. One more important task is linked to. Nowadays in Ukraine, in my opinion, there is still a risk of their senseless "labelling" with "price tags". That is why it is important to create and formalise a unique framework system allowing all MPI, based on the conditions and specificity of their activity, to develop an effective methodology of cost calculation for health services provided by them. This is a crucial condition for creating an adequate budget for a healthcare unit. For example, in MPIs which are communal non-profit enterprises operating in the "Pilots", they apply a cost-calculation methodology to account for one day of the patient's stay in the in-patient department, one visit to the policlinics and one emergency call. Such approach has proved its effectiveness and practicability. Realisation of the Project provisions is not going on completely smoothly, without any difficulties. One of such difficulties is that some employees in healthcare in particular elderly people are not ready to work under new conditions. The main reason behind this is the absence of the relevant skills and knowledge. To address this problem, the Project has intensified it`s training measures.

One additional and very important issue for consideration is the implementation of mandatory health insurance in Ukraine (MHI). Over the period of the Project realisation in Ukraine, I personally came to believe that currently, this step is not urgent. Why? Pilots experience is an evident proof that the creation of an adequate regulatory framework and the modern level of healthcare decentralisation, allowing to optimally use the "local" potential, are certainly able to become a driving force for changes in healthcare. If the decision on MHI implementation is to be passed in Ukraine, then, the Project experts are unanimous in believing that it must be done only provided the institutional arrangements for a HI fund are well advanced. If to entrust the MHI implementation to private insurance companies, then, there may appear a risk of their directing the financial funds for other purposes than it has been defined and their unwillingness to work with "disadvantageous" underprivileged population groups, children and pensioners, whose level of solvency is usually much lower than that of working citizens. General condition for effective operation of MHI system is the transparency in "insurance" funds turnover and prevention of abuse of power from the part of authorities in charge of their distribution.

The Project is going to continue its activities in Ukraine till mid-2006. Hope, that our positive experience will assist Ukraine in finding the most effective way to reform the healthcare system.