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Ukraine’s healthcare spending is Europe's lowest, yet it maintains massive industry infrastructures – research

The study suggests that budget planning is characterized by excessive control and regulation, which does not give local authorities and hospitals sufficient powers to manage their finances.
17:26, 10 January 2018

Open source

As of 2015, Ukraine’s spending on healthcare was estimated at $77 per capita, which is the lowest across Europe. At the same time, such spending is supposed to maintain one of the largest healthcare infrastructures in Central Europe. This was the conclusion made by the authors of a study conducted by the World Bank, United Nations Development Program and Kyiv School of Economics at the end of 2017, Interfax-Ukraine reports.

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According to the study’s findings, Ukraine’s healthcare infrastructure is one of the largest in Central Europe as it provides 0.4 hospitals, 7.4 hospital beds, 4.4 doctors and 8.6 nurses per 1000 citizens.

The study’s authors point out that the shortage of government spending in Ukraine’s healthcare sector is multiplied by its inefficient allocation and use.

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Nevertheless, healthcare spending in Ukraine is skewed towards hospital services, as opposed to the less expensive preventive measures. Furthermore, the authors note the parallel non-transparent arrangement of paying for services in cash, which restricts Ukrainian patients’ access to healthcare.

The authors of the study draw the conclusion that budget planning is characterized by excessive control and regulation, which does not give local authorities and hospitals sufficient powers to manage their finances.

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At the same time, the study finds that state government funding accounts only for around half of total healthcare spending, while a non-transparent arrangement of paying cash is operating alongside.

Most of the spending in the healthcare sector is directed towards the provision of hospital services, as opposed to first aid, which provides inexpensive preventive measures. For example, the study finds that in Donetsk region 70% of the healthcare budget is spent on hospital care, while first aid services account for only 13% of the funding.

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Nonetheless, service providers (hospitals) in general tend to spend the majority of their budgets on employee wages and utilities, while medicine is purchased with what remains of the budget. “Around 50% of the employees polled admit occasional shortage of medicine. Most healthcare institutions cover less than 25% of medicine needs, 63% of doctors ask patients to purchase the necessary drugs when those are not available at the hospital”,- the authors of the study explain.

The study’s data suggests that healthcare workers are paid significantly less than the labor rate standard. More than 3 out of 10 doctors work second jobs.

The study’s authors conclude by suggesting a number of measures that could change the current situation. They believe that the implementation of the healthcare reform would allow to make budgeting decisions based on performance. Additionally, they recommend to introduce a more accurate specification of bundles of healthcare services, which, along with the introduction of mechanisms to enter into agreements, is likely to improve the way government funding is allocated and used for the provision of guaranteed medical services. Also, the authors point out that the formalization of co-payment mechanisms will allow to cover financial deficiencies and to give hospitals more responsibility for additional incomings. The research conducted in healthcare institutions in Poltava, Lviv, Donetsk and Lugansk regions.

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