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Ukrainian government approves the PHC funds distribution for Q3 2018

13 June 2018

On June 13, 2018 the Cabinet of Ministers of Ukraine approved the third quarter 2018 funding for primary care providers that had not contracted with the National Health Service of Ukraine (NHSU) – these facilities will continue receiving funds through subventions from the local budgets. Starting July 2018, 149 PHC facilities that joined the reform by signing contracts with the NHSU in early June, will receive payments under a modern single payer tax-based health financing model.

In 2018, for the first time ever, a fundamental transformation of the healthcare financing model has begun in Ukraine. It envisages a true paradigm shift from the old hospital-centric financing system, when state budget funds were spent on keeping hospital networks across the country, to a modern capitation model -payments under contracts with the NHSU based on relevant output indicators. Strategic purchasing of services will gradually replace the old system of input-based financing.

Primary care facilities can start operating under the capitation payment model only after signing contracts with the NHSU. To ensure the gradual rollout of the new system, both financing systems – a healthcare subvention and direct payments under the agreements with the National Health Service of Ukraine – will operate during the transition period. Therefore, to provide funding for PHC facilities that have not signed contracts with the NHSU yet, the Ukrainian government issued the relevant order on redistribution of the 2018 budget funds between the capitation and the healthcare subvention programs. As a result, the healthcare subventions for the third quarter of 2018 worth more than UAH 2 billion were allocated to primary health care.

In total, about UAH 8.05 billion of the state budget funds were allocated to the primary health care for the second half of this year.

On June 13, 2018 the government also approved resolution that regulates the use of healthcare subvention balances on accounts of PHC facilities contracted with the NHSU. Since these PHC providers will be financed under the capitation model starting July 1 or October 1, which depends on the date of signing agreement with the NHSU, the medical subvention balances are to be redistributed to secondary and tertiary care facilities.

Starting July 2018, the NHSU funded, contract based age-adjusted capitation model will be introduced at the primary care level. Capitation is a provider payment mechanism in which healthcare providers are paid a pre-determined fixed rate to provide a defined set of services for each individual enrolled with the provider for a year, irrespective of whether that person would seek care or not during this period. This is a mechanism of payment through general taxation, instead of the patient's pocket. In July, the NHSU will pay contracted primary care providers an age-adjusted capitation per declaration at a rate which is significantly higher than in traditional funding model. 

In 2018, the base pay rate or a one-year tariff for a patient is set at 370.00 UAH.  However, the pay rates are calculated using several age-adjusted coefficients. Until the end of 2018, primary care providers funded under a contract with the National Health Service of Ukraine will also receive UAH 240.00 a year for a ‘conventional’ patient, who theoretically visits a particular healthcare facility as s/he resides within the area registered under this institution, but has not signed an agreement with the chosen doctor yet. However, the total number of such patients will be adjusted on a monthly basis by subtracting patients who have already signed agreements with the chosen doctors. These tariffs were approved by the Resolution of the Cabinet of Ministers as of April 25, 2018 (available in Ukrainian).

As of June 5, 2018, the National Health Service of Ukraine signed contracts with 149 primary care facilities nationwide serving about 20% of Ukrainian patients. Primary care facilities in Kyiv, Vinnytsia, Khmelnytskyi, Cherkasy, Poltava, Kryvyi Rih and Kremenchuk will receive funding under the new healthcare financing model. In total, 21 oblast of Ukraine joined the healthcare transformation process.

View map: MAP

Primary care providers can also switch to the new financing model in October 2018 by signing an agreement with the NHSU no later than August 15, 2018. The key prerequisites for signing the agreement with the NHSU include the healthcare facility’s independent management as non-profit enterprise owned by local government, its connection to eHealth, being appropriately equipped and having patients signing declarations with the chosen doctors.

"A Doctor for Every Family" campaign has become the first step in the implementation of the new healthcare financing model. Since April 1, 2018, more than 8 million Ukrainians have chosen their primary care physicians – family doctors, general practitioners and pediatricians. To date, the leading regions are distributed as follows: Vinnytsia oblast (37% of the population), Kharkiv oblast (32% of the population), Poltava oblast (31% of the population), Chernivtsi oblast (26% of the population) and Zhytomyr oblast (25% of the population).

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