Ukrainian Health Minister Alexander Kvitashvili has had three months in office, enough time to pinpoint what he wants to do. He says he wants to create a health care model in Ukraine that is similar to many found in Europe.
“The government must be the main player in the health care system,” he said. “But there is no single model that can be copied in Ukraine. We should build our own system.”
Kvitashvili, 44, was Georgia’s health care, labor and social affairs minister in 2008-2010 and became Ukraine’s health care minister in December.
His home country’s health care system is similar to the U.S. model in some ways. For example, most of the hospitals in Georgia were privatized early on. But he says such an idea is premature in Ukraine.
“It’s too early to talk about privatization,” Kvitashvili told the Kyiv Post in a recent interview. “I wouldn’t recommend investing in (Ukrainian clinics and hospitals). They are old, decrepit buildings.”
Before that happens, the hospital system should be “cleaned up” to make it more attractive for investors, he added. One way to do it is to change the way hospitals are financed.
Revising finances
Ukraine’s health care sector receives substantial state financing but it’s not used wisely, Kvitashvili says. The nation spends over 4 percent of its gross domestic product on health care, according to World Bank data. It’s close to what Israel and Poland spend.
In absolute terms, the Health Ministry pays out Hr 46 billion ($2.1 billion) in transfers and subsidies. But the problem is that the cash is carved up based on the number of beds in hospitals, which is highly inefficient.
There are some 400,000 beds in state hospitals but only 30 percent of them are used, Kvitashvili says.
“This is why state funding chronically runs short,” he says. He wants to introduce a new funding mechanism based on the number of medical services provided.
Pilot projects
The idea is not new. The first pilot projects of health care system reform were launched under former President Viktor Yanukovych in 2011 in Vinnytsia, Dniptopetrovsk and Donetsk oblasts, as well as the city of Kyiv.
Kvitashvili’s ministry produced a new bill to extend the pilot project to Kharkiv, Lviv, Volyn, Zakarpattia, Zaporizhzhya and Poltava oblasts.
This year the World Bank is providing an 18-year loan of $215 million to support health sector reform. The funds will be used to implement the new funding mechanism at hospitals, improve service delivery and develop necessary medical infrastructure, as well as to enhance primary and secondary prevention.
“The major idea of this reform is to enable all citizens of Ukraine to receive high-quality medical care at any geographic location,” he says.
This month the ministry also plans to submit a package of bills to the parliament required by the International Monetary Fund, including regulations that will make hospitals’ revenues more transparent, according to Kvitashvili.
Transparent purchases
One of the first initiatives Kvitashvili started in his new job as a minister was to change the notoriously corrupt drug procurement system. He wants international organizations to handle all purchases of medication that are currently being done by his ministry. This would prevent corruption and ensure timely deliveries of medications, Kvitashvili believes.
The ministry has drafted a bill to procure vaccines against tuberculosis and HIV through the United Nations Children’s Fund and the World Health Organization. It has been approved by parliament, and Kvitashvili hopes this process may start in April.
“This is a litmus test that will show us if legislative authorities are ready to support the process of reforms,” he says. “It’s the first step that gives us an opportunity to turn away from standard procurement schemes that existed in Ukraine in recent years. We want to engage the organizations which are helping many other countries to make timely purchases of high-quality medications,” he says. Moreover, everybody will be able to monitor these tenders online, according to him.
Several competing bills were registered in parliament on procurement, making anti-corruption watchdogs ring alarm bells in fear that this is an attempt by the pharma lobby to derail change. But Kvitashvili dismissed this criticism, saying that the differences between these bills were very minor.
Electronic procurement
The ministry also plans to switch to electronic procurement tenders. A pilot system for electronic tenders is already operating in Ukraine but it allows for bids on supplies up to Hr 100,000 ($4,545), which is below the amount that the ministry usually spends, according to Kvitashvili. Right now only the Economic Development Ministry is using the new system and if the ceiling is raised, the Health Ministry will also do purchases through the electronic system, he says.
Georgia switched to electronic procurement in 2009, while Ukraine plans to make the full switch this year. Online auctions will be introduced to remove the human factor from the procurement process.
“This will not give you a 100 percent guarantee that all corrupt schemes will disappear but this gives us an opportunity to monitor the tender process from the very beginning to the very end,” Kvitashvili says.
Kyiv Post staff writer Anastasia Forina can be reached at [email protected] and Oleg Sukhov can be reached at [email protected].
