Ukraine. Healthcare system financial flowchart.

Health care expenditure in Ukraine is low by regional standards and has not increased significantly as a proportion of GDP since the mid 1990s. The proportion of general government expenditure on health as a proportion of total health expenditure was 57.2% in 2008 (WHO, 2009). The bulk of government expenditure pays for inpatient medical services, with only a relatively small proportion (22.7%) going to outpatient services. Private expenditure primarily consists of out-of-pocket payments, which are high on account of the high cost of pharmaceuticals. These are generally purchased at full cost price by patients; significant informal payments are also levied in the system.

Officially, Ukraine has a comprehensive guaranteed package of health care services provided free of charge at the point of use as a constitutional right, nevertheless user charges are widely levied in the Ukrainian health system. Government attempts to define a more limited benefits package have left it to the individual facilities to determine which services are covered by the budget and which are subject to user charges. This has led to a lack of transparency in the system which has contributed to an increase in informal payments.

Most health financing comes from general government revenues raised through taxation (value added taxes, business income taxes, international trade and excise taxes). Personal income tax is not a significant contribution to total revenues (see Fig. below). Out-of-pocket payments account for a significant proportion of total health expenditure and there are some limited VHI schemes.

Funds are pooled at the national and the local level, as local self-governments retain a proportion of the taxes raised in their territory. There are also interbudgetary transfers to boost the coffers of poorer local authorities which cannot raise as much revenue. With the exception of a couple of pilot regions, allocations and payments are made according to strict line-item budgeting procedures as under the Semashko system. This means that payments are related to the capacity and staffing levels of individual facilities rather than the volume or quality of services provided.

Figure. Financial flowchart

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