A Healthy Future
"In order for an investor to enter the Ukrainian medical market, this market should first appear"TATYANA GAVRYSH, MANAGING PARTNER AT THE ILF LAW FIRM, BELIEVES
— It has been more than a year since the adoption of medical reform legislation. What are the main achievements and shortcomings of this period?
— At this stage, everything is going well in the area of priorities at which the medical reform strategy is aimed. I have in mind change in the system of financing primary medicine. In terms of achievements, it is, first of all, the establishment of a fully operational office of the National Health Service of Ukraine (NHSU) — the central executive body that implements the state’s policy in the area of health care guarantees. Second, it is fulfillment of obligations assumed by the NHSU team (we already have the first contracts concluded with public health facilities, private clinics, and individual practitioners). There are lots of examples all over the country, where both doctors and their teams who, before the reform, received starvation wages, but now earn two to three times more. And these are real stories. Nobody believed, many resisted, but it works. Only representatives of the local authorities, who certainly lose control over the subvention and influence over public sector employees, i.e. on practitioners, opposed the reform. But where the local authorities and the medical team have worked together, there are positive results with which practitioners and patients are pleased.
It seems to me that the main thing, i.e. formation of the medical services market in Ukraine, has begun. My assessment of the situation is that it is very healthy and I welcome it to the fullest extent.
As a shortcoming, I can name the issue of communication. Some local authorities have not assessed the situation properly. There are examples where local councils rejected decisions on the autonomy of medical institutions two or three times, thereby risking being without a subvention in 2019 and burdening local budgets with maintaining primary health care centers (PHCC). Political ambitions and potential possibility to exploit this situation often become an obstacle towards implementing the reform. Fortunately, such stories are not common. Reform is going as planned. Now, more than 20 million Ukrainians have concluded declarations with their family practitioners. This shows, on the one hand, that there is demand for changes in the country and, on the other hand, that the formulas and mechanisms of such change are correct. If so many people believe in their practitioners, this is a healthy sign. This reform is the most successful in the history of modern Ukraine.
— What opportunities will the hospitals involved in the process of autonomy, practitioners and patients get in connection with the establishment of NHSU?
— In the course of reform, state and municipal medical institutions become autonomous enterprises. This enables them to efficiently manage medical business, to retain and promote the best doctors. That is, the efficient management of PHCC can lead to the fact that both the doctor and the patient will benefit; additional resources will be found for the infrastructure. After all, the budgets, which autonomous hospitals receive now, are two or three times higher than the previous ones. And the ability to manage funds gives them the chance to do it as efficiently as possible. Our team (consisting of lawyers, financiers, experts from other areas) supports the process of changes in 62 medical institutions from nine regions. We have to expand the team responsible for medicine and pharmacy practice, because the number of requests for such services keeps growing.
The legal independence of municipal enterprises (which hospitals become) makes it possible to establish boards of trustees and supervisory boards. We have experience in establishing a board of trustees in Rivne. In this process, we saw how the environment, the clinic itself and approaches are changing institutionally. This is excellent experience that we plan to disseminate throughout Ukraine.
— Does Ukraine have prospects for long-term interaction between the state and the business sector in the health care field?
— It requires rather stable and resilient structures preventing corruption and ensuring justice. Investments come to the state when business is confident that they will be protected.
In order for an investor to enter the Ukrainian medical market, this market should first appear. For the time being, the competition for patients is taking place only at the primary level. The market volume is incomparably smaller than the next stage (secondary) service market (specialized medical care). But the reform of the "secondary" market is scheduled to start only in 2019.
It is still difficult to predict whether this stage of the reform will be as successful as the previous one. The current medical infrastructure, formed in Soviet times, was designed for 52 million people, for other processes, other approaches and other protocols. In terms of budget expenditure today, it is redundant: the number of beds and the number of medical staff serving them exceed European standards by 1.5 to 2 times.
In addition to the absence of a medical services market, there is no medical staff market in Ukraine either. There is no mechanism for a doctor to get a decent legal salary (except for the private sector). There are no opportunities for professional growth due to inefficient management and a corrupt system of specialized medical care. Here corruption exists not only at the level of procurement and repairs or relations with the patient, but also at the level of advancement of medical staff. Quite often they have to pay to get a promotion. And then they work not under the conditions of healthy market competition, but in completely dead-end conditions (in terms of opportunities for personal development).
We will be able to talk about public-private partnership (PPP) in Ukrainian medicine only in 2020. At the present time it is almost impossible to foresee whether the political discourse will remain the same or will change dramatically, thus, leveling all the achievements of the previous stage. But even now, a PPP agreement is practically unrealizable in our country due to the complexity of its coordination and launch. The remaining models that we conditionally number among PPPs, such as a management agreement, PPP agreement, and lease agreement are a quasi-partnership with a very small set of guarantees. Under such conditions, no system investor will enter the market, especially as there is no market, as I noted above.
— Does this mean that business cannot at present influence and take part in the development of the Ukrainian health care field?
— Now, at the transitional stage, I believe in corporate social responsibility (CSR) projects. Here, business also acts as a player, but it has different motivation than under a PPP. In the first case, profit is the goal of a business. In CSR projects, the goal is to increase influence and/or reduce risks.
For example, in depressed regions of India, where many people have died from diseases and injuries due to the lack of medical care, business opens medical centers, runs vaccination programs, etc. This keeps the working capacity of the population (both employed people and potential workers) at a higher level. In Ukraine, there is similar experience: we currently support the CSR project of one of the major agricultural holdings, aimed at developing city’s medical structure. An increasing number of business representatives is realizing that medicine is an important component of social infrastructure. If the enterprise is located in a region where there are no good medical and educational institutions and roads, then even a high salary will not be able to motivate the necessary number of employees to move to this region.
Business always invests in local medicine at local level. For example, farmers repair ambulance stations in villages. They do it at their discretion and on a cash basis. The reform will allow systematization of such investments.
World medicine is already quite developed and able to "fix" most of the problems that occur in the human body. At the same time, Ukrainians are dying from diseases that have long been successfully treated in other countries. Many believe that the issue here is the country’s poverty. But I am certain that Ukrainian medicine is simply stuck in the infrastructure swamp with no way out except for launching the market. No centralized actions will save medicine from its current condition.