The Government has approved the concept of the reform in the healthcare funding


Today, the Government has approved the concept of the reform in the healthcare funding which was prepared by the Ministry of Healthcare with the support of the Ministry of Finance and independent experts.

What was the problem?

One of the main causes of the poor quality of healthcare in Ukraine is the ineffective spending. The total footage of all medical facilities in Ukraine can be compared to the territory of Estonia. All these facilities need maintenance, repair and heating which can only be financed by taxpayers’ money. The outdated funding scheme for healthcare was focused on the maintenance of the medical infrastructure instead of covering the financial risks of citizens in case of disease. In fact, it was about financing buildings and rooms, no matter if they were occupied with patients or not, instead of financing the medical services.


One of the priorities of the Government is the implementation of the healthcare reform and adjustment of the Ukrainian medicine to the European standards. Changes in the healthcare funding approach helped the Healthcare Ministry and the Ministry of Finance initiate a systemic reform of the entire healthcare system. The key point here is to improve the quality of medical services, to increase the salaries of the medical staff, to implement healthcare insurance, to increase the autonomy of hospitals etc.

The main idea of the reform is that the state must stipulate a guaranteed package of healthcare services and engage providers selected by citizens themselves. Hence, the state shall pay for the contract with the doctor selected by the respective patient instead of paying for the network of doctors and the patient’s obligation to attend the doctor operating in his residential area. Thus, doctors will be motivated to provide better service so that citizens select them.

The implementation of this model does not require additional expenses. It won’t result in higher taxes, since the expenses will be covered from the total healthcare budget.

“Citizens themselves choose providers whose medical services the state must buy. This is the essence of the principle “Money follows the patient”. This means a higher competition in healthcare resulting in better quality and lower costs. Public funds will be used more effectively, and people will have a better medical protection”, Minister of Finance Oleksandr Danyliuk said during the joint briefing with the Healthcare Ministry.

What has been done so far?

The funding principle has been changed: instead of paying for empty hospital rooms, money is provided to buy better services.

Healthcare expenses will be increased by almost 26% (18.2 billion hryvnas) to 88.7 billion hryvnas in 2017.

Thanks to this, medicines for critically ill citizens will be completely covered by funding for the first time. This includes citizens suffering from cancer, HIV/AIDS and diabetes. The Government increased spending for the centralized procurement of medicines to 5.9 billion hryvnas. This is almost 2 billion hryvnas higher compared to this year and shall save thousands of human lives.

The increased medicine procurement funding will make it possible to gain access to the resources of the Global Fund increasing the total financial resources for procurement in healthcare to almost 9 billion hryvnas which is a record for our country.

Also, in 2016 additional 35 million hryvnas were provided for the purchase of ear implant systems, further 75 million hryvnas will be provided for this in 2017.
Also, the draft budget for 2017 includes 500 million hryvnas for the refund of medicine costs for three categories of chronically ill citizens suffering from cardiovascular diseases, diabetes and asthma.

The Government increased the salaries of the medical staff by approx. 40% to keep them properly motivated, enhanced the autonomy of hospitals and is now striving to decentralize the management of the healthcare system.

What’s next?

The new healthcare funding model based on health insurance will be implemented incrementally till 2020. As a result, the Ukrainian healthcare system will switch to the principle “Money follows the patient” and will become market-oriented. This will be the model where the health of each citizen is insured and doctors/hospitals receive their revenues for taking care of concrete patients.

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