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Health Financing Reform in Ukraine

Progress and Future Directions

Alexandr Katsaga , Caryn Bredenkamp , Elina Dale , Kateryna Maynzyuk , Khrystyna Pak , Loraine Hawkins , Olena Doroshenko , Olga Zues , Yuriy Dzhygyr

Law / Health

In 2015, the government of Ukraine initiated transformative reforms of its health system with the goals of improving the health outcomes of the population and providing financial protection from excessive out-of-pocket health care payments. This was to be implemented through modernizing and integrating the service delivery system, introducing changes to provider payment arrangements that incentivize efficiency, and improving the quality of care. It culminated in the passage of a new health financing law--the Law on Financial Guarantees for Health Care Services 2017--which established a health benefit package called the Program of Medical Guarantees (PMG), and also created the National Health Services of Ukraine (NHSU) to serve as strategic purchaser for this program. A joint World Health Organization--World Bank review of the early reforms was published in 2019 that took stock of reform progress since 2017. Two years later, implementation of the health financing reforms has progressed substantially, and it is time to again review where things stand and what the future directions should be. There have been many important accomplishments over the past two years, both in terms of institutional reform and expansion in access to care. The COVID-19 pandemic precipitated adjustments to existing health financing levels and arrangements. At the same time, the pandemic delayed implementation of some aspects of the health financing reforms, such as the anticipated transition to case-based payments. This report provides a comprehensive description and assessment of the development and implementation of policies associated with the PMG reform from the start of the reform in 2017 through mid-2021. It examines (1) how the PMG is financed, (2) strategic purchasing of the different components of PMG benefit package, and (3) the governance arrangements of the PMG. This includes changes in the packages, their contracting arrangements, how they are paid, their complementary enabling reforms, and the extent to which the population is benefiting from them. The report also positions these developments within broader contextual discussions of the financing and organization of health care in Ukraine in order to make the key features of the financing reforms and their importance accessible to domestic and international audiences. Adjustment by the health sector to cope with the COVID-19 pandemic is a common thread. Each section concludes with a set of key recommendations.
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