Healthcare reform

The outdated system of healthcare funding which has been in use for years is focused on maintaining the existing medical infrastructure instead of refunding the healthcare costs citizens have to bear in case of sickness. By changing approaches to the healthcare funding, the Ministry of Finance initiated a systemic reform in this area. The Ministry of Finance is now joining its efforts with the Ministry of Healthcare and civil experts to improve the quality of healthcare services.


The goal is to make a significant step forward to the implementation of healthcare insurance in 2019.

Targets for 2016

Elaboration of legal frameworks meant to implement a universal package of healthcare services guaranteed by the state as well as the mechanism “money follows the patient” and autonomy for healthcare institutions.

What has been done so far?

- New funding approach: the money follows the patient. Instead of paying for empty hospital rooms, we now provide funding for better healthcare services;
- Healthcare spending for 2017 will be 8 billion hryvnas higher compared to 2016;
- Funding for the centralized procurement of medicines for critically ill citizens by 2 billion hryvnas making it possible for the first time to completely cover the needs of citizens suffering from HIV/AIDS, diabetes mellitus, virus hepatitis and other critical diseases. This will save lives of thousands of people;
- The salaries of medical personnel have been increased by approx. 25% to keep the medical specialists properly motivated;
- Autonomy of healthcare institutions has been enhanced;
- The draft healthcare funding reform concept has been elaborated. The concept stipulates key phases and a step-by-step plan for the reform implementation;
- A draft law was adopted in the first reading which provides management and financial autonomy to healthcare institutions;
- The preparation of a new funding mechanism has been started which shall provide funding to healthcare institutions for actually provided services.

What’s next?

A new modern healthcare funding system providing clear state guarantees in healthcare services, better financial protection for citizens in case of sickness, effective and fair distribution of public funds and reduction of unofficial award payments to medical personnel;

- A healthcare package guaranteed by the state.

Instead of declaring free-of-charge healthcare for everyone, the state commits itself clearly to provide a fixed set of healthcare services. Citizens should know what exactly they can receive free of charge and what services, how and at what terms they should pay for (official, simple and clear system of co-funding). Medical services included in the state-backed package shall be provided by all medical institutions irrespective of their property form, these services shall be paid for by the entitled national entity. Limited public resources shall be spent for the guaranteed medical services. Unofficial award payments to medical personnel will be cut. The quality of medical services and the mutual responsibility of patients and doctors will be improved. Patients will have more financial security.

- The single national entity ordering healthcare services.

The new system will have a new model without a conflict of interests — functions of the customer (payer) and service supplier (autonomous hospitals) will be separated. The funds for the state-backed service package will be accumulated in a united national fund. A single network of healthcare institutions will be established. Artificial division between the budgets of regions, towns and district will be removed. Services shall be paid by the state at the location where they are provided to the respective customer (extraterritoriality).
Competition shall be established on the market of healthcare services which shall be provided on the basis of contracts between customers and providers. Public funds shall be spent more effectively. Customers will be able to select a hospital and a doctor by themselves. More transparency and reporting will be ensured for public spending.

- New funding mechanisms for healthcare services (principle “money follows the patient”.

The state abolishes funding for the medical infrastructure. Step by step it will be paying for healthcare services which are really provided to concrete customers. Hospitals will receive incentives to increase the quality of their services and to become effective. Quality and terms for service delivery will be improved. Medical specialists will be able to expect higher incomes.

Strengthening the role of communes.

New roles of the Government and local authorities. Communes shall be acting as founders and owners of effective and competitive hospitals selling their services to the state, insurance companies and citizens. The state will be acting as a buyer (on a contest basis) of the guaranteed service package. Commune residents shall have tools to control the quality of healthcare services. Relations between the state, communes and patients will get healthier. The functions of the state and communes in the healthcare sector will be clearly divided; duplication of functions will be removed. The management of healthcare institutions will be decentralized.

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