You're reading: New health minister to rely on market forces to improve care

Ukraine’s highly corrupt medical system is the biggest enemy that the country’s new Health Minister Oleh Musiy faces.

The government spends $7.4 billion, or 4 percent of gross domestic product, on this sector annually, much of it squandered through various procurement schemes or simply wasted because of misplaced priorities, such as focusing on the number of hospital beds. In comparison, the European Union average is 8.3 percent of GDP, according to the Organization for Economic Cooperation and Development.
Musiy hopes to improve the situation.

One will be dealing with fiction because the nation’s universal healthcare system isn’t actually free even though it is enshrined in the constitution. In fact, patients have to pay for almost every service that they receive. Moreover, public hospitals usually do not provide any drugs needed for treatment and require patients to buy what they need, including bed sheets, pillows, and food for inpatient care.

As for medical workers, they receive an average monthly salary of $260.
Appointed on Feb. 27, Musiy, a former EuroMaidan Revolution activist, holds degrees from the National Bohomolets Medical University in Kyiv and the Shupik Medical Academy in Kyiv.
His appointment is not without controversy, however.

Initially, the post was offered to prominent Kyiv physician and EuroMaidan leader Olha Bohomolets, who is running for president. “I was ready to become health minister,” says Bohomolets, “but only on my terms, which included an independent financial audit of the entire industry.”

The government rejected her efforts to clean up corruption, she says.
Musiy sees reducing the state’s stake in the health care system as essential. He says the private sector can better regulate many issues.

To the Kyiv Post he outlined three main components effectively changing the healthcare system: de-monopolizing the control system of medicine; introducing mandatory national health insurance, which would see businesses and employees sharing costs; and improved training of medical workers.

“I am deeply convinced that changing the health care system without reorganization and closure of certain facilities is impossible,” he said. “When villagers see that they can get half of their health care from a qualified family doctor, the need for a hospital will fall away by itself.”

In fact, the minister has cancelled numerous public procurement orders that the previous administration made on the grounds that they were not registered properly and, therefore, could not be effectively enforced, according to the Health Ministry website. Some experts suggest that Musiy wants to “clear the ground” of corrupt schemes practiced by previous health ministers, according to the Day newspaper.

“We have had some very encouraging signals from minister Musiy regarding his plans for the future. For example, he has engaged experts with backgrounds in pharmaceutical procurement within nongovernmental organizations…to assist in advancing the ministry’s reforms in regards to medicinal public procurements.

He has begun to work closely and collaboratively with a broad range of stakeholders on new policy and legislation,” says Nolan Townsend, country manager of Pfizer in Ukraine.

“I also am aware that the Health Ministry has begun discussions with the World Bank to conduct a review and audit of the internal procedures and develop recommendations for areas of efficiency improvement,” Townsend said.

Alex Sokol, president of American Medical Centers, said that “essential reform should begin with transparency and accountability, the funding of state hospitals and polyclinics under the leadership and auspices of health executives, funding being tied to specific hospital improvement goals, training and with highly regulated and proven administrators.”

There should be a greater push toward private care, raising capital, fostering greater competition, in both private and government or quasi-government systems, he adds.

Krzysztof Siedlecki, chief representative of Astellas Pharma Europe, appreciates the minister’s vision of mandatory insurance, because “it would create a separate fund for health care, since the state budget cannot cover its costs.”

Meanwhile, others complain that Musiy has been a little too enthusiastic in trying to change things, particularly in the area of lustration, another of the new government’s crusades.
Pharmaceutical industry lawyer Vitaly Pashkov, on the industry site Apteka.ua, accuses Musiy’s actions as taking on the hue of a “witch hunt.”

Cleaning up the public procurement system is critical to solidifying the new minister’s legacy.
Already, Oleksiy Solovyov, chairman of the State Service on Medicinal Products, was dismissed on April 30.

Procurements in the past were seen as uncompetitive or lacking in predictability, two pre-conditions that would help providers offer their best prices to the government, explains Pfizer’s Townsend. Last year only five companies won almost 80 percent of medical tenders worth $269 million, according to Prime Minister Arseniy Yatsenyuk, who is trying to reduce drug prices.

Kyiv Post business journalist Evan Ostryzniuk can be reached at  [email protected].