Only a small chunk of Ukraine’s citizens today pay the extra dollar at private clinics for better quality health care service. More than 90 percent of the country’s cash-strapped citizens still rely on the corrupt and dilapidated socialist medical system Ukraine inherited from Soviet days.

Yet slowly but surely the country’s private health care clinics are setting the standards of quality medical care.

Experts say that, with time, investments will pour into private health care clinics.

The global financial crisis and emerging recession could temporarily stall the development of this potentially lucrative and vast business. But experts say private health care clinics, not ineffective state-sponsored hospitals, are the future medical services in Ukraine.

Volodymyr Zagorodny, a presidium member at the Ukrainian Medical Union, said the country’s state medical system remains ineffective, corrupt and plain dangerous for patients.

For populist reasons, Zagorodny said politicians have long delayed reform of Ukraine’s health care system – namely, the transition from state-guaranteed medical care to a system based on private clinics and hospitals where care is mostly covered by insurance policies.

And with state funding scant and quality of service poor compared to that of private clinics, the days of socialist medicine in Ukraine are numbered.

“Almost 80 percent of budget revenues set aside for the medical system in 2008 was used to pay salaries,” Zagorodny said.

“It is obvious that the rest of this money is not enough to purchase and fix medical equipment, buy new equipment and facilities,” he added.

Tetyana Bakhtyeyeva, chairman of parliament’s health care issue committee, said the burden for the state to finance its vast but ineffective medical system is too high.

Only about 60 percent of the $8 billion in minimal financing required for the sector was covered by this year’s budget. Even if all of this funding was pumped into a high-bureaucratic medical system managed by the state, the quality of medical care would still far lag behind what private clinics would provide.

Zagorodny said only about 3 percent of patients today turn to private clinics. While small, this number is growing steadily. A major shift is expected to occur as more investment pours in.

With a population of almost 47 million, the upside potential for growth is strong.

“Several years ago there were just a couple private clinics. Now we can say that private medical sector development is a trend that is gaining momentum,” Zagorodny added.

According to the All-Ukrainian Association of Heath Sphere Employers, the number of private medical clinics employing more than 20 health care professionals ballooned in 2000-2006 by 216 percent.

More sharp growth is expected in future years. Some say the number of private clinics could increase twofold by 2012.

Consolidation in this small but fast-growing business is also being detected. The number of clinics with 150-400 health care professionals is growing steadily.

Zagorodny is convinced that Ukraine’s medical service sector will follow a path of convergence towards the model seen in Europe. While state medical care will likely survive to service society’s most vulnerable citizens, middle and upper class individuals will turn to private care clinics for better diagnosis and treatment.

And with demand increasing gradually, it won’t take long until private clinics grow in size, developing into large-scale private hospitals capable of treating 300 patients or more.

“Such institutions are common in the West. They are easier to manage and they can usually respond to the patients needs faster,” Zagorodny said.

“In our country, the private medical business has a bright future,” he added.

That’s not news for Mykhailo Radutsky, head of Ukraine’s oldest private medical clinic, Kyiv-based Boris.

His large-scale medical clinic will in December celebrate its 15th anniversary.

Early on, Boris specialized in servicing Ukraine’s newly affluent and foreigners residing in the country. But in recent years, a newly emerging middle class has become a major clientele base for the clinic.

“More and more people understand that there is no such thing as free medical service. They are recognizing that it is better to pay for it officially rather than passing the cash over to the [underpaid, state-employed] doctor under the table,” he said.

Radutsky said the number of people seeking medical care in Boris mushroomed threefold in the past five years. Currently, about 500 patients turn to Boris’s for health care services each day. The level and range of services is also growing, according to Radutsky.

“We couldn’t even dream that we would be doing brain and spinal cord surgery five years ago. Today we are capable and we bring the best foreign specialists to work with us,” he added.

A growing number of foreign doctors are making their way to Ukraine to work for private clinics, and investment is trickling in little by little.

The business is not expected to skyrocket in coming years with the global financial crisis and recession curtailing investments. But looking further ahead, the vast upside is certain to attract investments that will revamp the country’s medical services sector, turning it from an idealized socialist dream into an effective profit-driven business.

“The medical sector’s turn has not come yet. First, we had investment pouring into financial institutions, such as banks. The medical sphere is next, but the crisis has delayed plans by investors to invest in the near term,” Radutsky said.

“The future of private medicine in Ukraine is all upside,” he added.