Ukraine. Healthcare system flowcharts. Out-of-pocket payments
According to NHA, the share of out-of-pocket payments in total health expenditure in 2003–2008 was almost 40% (minimum 34.6% in 2007, maximum 42.5% in 2008). Out-of-pocket payments are consistently increasing in all main forms of spending: official service charges, drug and medical product purchases, and informal payments. During the 1990s, the proportion of formal out-of-pocket payments in total health care expenditure increased significantly (from 19% in 1996 to 38% in 2000). It stabilized at 38% from 2000 to 2002 and then decreased slightly to 32–34% from 2003 to 2006. User charges make up a relatively small proportion (7.3–8.6%) of total spending or 19.7–22.5% of out-of-pocket payments for health care. Fees-for-service in public and private health facilities account for only 2.9–3.1% of total spending. It is possible to estimate the share of informal payments in total health expenditure only from 2003, when NHA started being used; from 2003 to 2005 informal payments accounted for 8–10% of total health expenditure.
Out-of-pocket payments are mainly for the purchase of drugs and medical supplies for outpatient as well as inpatient care (19.7–21.8% of total health care expenditure and 55.4–58.4% of the total volume of out-of-pocket payments between 2003 and 2005) (Gotsadze et al., 2006). Retail pharmacies distribute 79% of all pharmaceuticals directly to the population, while 21% go through hospitals. NHA data show that out-of-pocket payments on pharmaceuticals and medical supplies at pharmacies accounted for 1.3–1.4% of GDP in 2006, but 2.1–2.2% in 2008, a significant increase from 0.8% of GDP in 1996 (State Statistics Committee of Ukraine, 2010a). According to household surveys performed by the State Statistics Committee of Ukraine in 2008–2009, 89.0–90.4% of inpatients had to pay for their pharmaceuticals themselves. NHA surveys found that, as well as pharmaceutical expenditure, the share of direct private expenditure on dental care is quite large (32.9%), as is rehabilitation care (19.3% of total expenditure on these types of services).
This survey found a rather small percentage of out-of-pocket payments in outpatient and particularly inpatient care due to discrepancies in the way data were collected. Other statistical publications have provided data on informal payments to medical professionals. Some cities even have unofficial price-lists for different types of services.
In order to protect themselves from pharmaceutical costs, some patients use VHI and sickness funds as a complementary source of funding. They do not, however, have a significant influence overall. T he on ly mechan ism u sed to ea se the public bu rden of payment s for pharmaceuticals is the exemption of sales of pharmaceuticals and medical supplies from value added taxes. To protect socially vulnerable population groups and patients with socially significant and serious diseases, there are certain benefits available for outpatient health services and pharmaceuticals.
These groups can receive pharmaceuticals from the approved government list for free or for a discount with a prescription. However, expenditure through this programme does not exceed 2.7% of the total spending on pharmaceuticals (Gordienko, 2003). Expenditure on medical benefit is covered by general allocations to health care provided by the budgets. In reality, however, even socially vulnerable groups have to pay out-of-pocket for guaranteed services. Some patients from vulnerable groups pressure doctors into giving them more pharmaceuticals than required. This has caused the government to attempt to adjust the list of groups covered and introduce subsidies instead of benefits.
The government has attempted to regulate payments for health care services. The Cabinet of Ministers Resolution of 1996 introduced official user charges for health services and allowed local and regional governments to establish their own fees for health services provided at state and community facilities. The Resolution applies to those paid services that medical facilities provide in accordance with the approved services list and does not apply to these services that are required to be provided to the population for free. In reality, however, there is no clear line between free and paid medical services. As a result, the government does not regulate prices for those services which are provided for a fee in real life, but which are not yet included in the official list of paid services approved by the Cabinet of Ministers. Additionally, there is no official method of determining the full costs of medical services.
According to NHA, the volume of informal payments is currently almost equal to the volume of formal payments, that is, 8–10% of total health expenditure and 22% of household expenditure. But it is likely that the amount of informal payment s is u nderest imated (Got sad ze et al., 2006). In for mal payment s existed in Soviet times, but their presence then was on a very small scale. Most informal payments were in the form of gratuities for a service received (such as produce in rural areas, for example, or chocolate elsewhere). As a result of the economic downturn in the 1990s coupled with wage arrears, personnel in health facilities have introduced informal payments in order to provide an acceptable wage for themselves. These payments are mostly monetary and are made before the service is provided. Often, the necessity of such payments is indirectly initiated by medical staff: patients tell each other about the necessity and the amounts required. For additional payment, doctors offer different drugs and services which they claim are more modern and efficient (or faster access to both). Payments in kind (gifts, produce) are still present in rural areas. It is extremely difficult to gauge the true extent of informal payments in the total income of medical staff. According to the limited NHA data, informal payments account for roughly 20% of the total salary funds. Their distribution is highly uneven as well, depending on location (rates are higher in the city than in the country), type of care (inpatient care is much more expensive than outpatient), the doctor’s qualifications (specialists receive higher payments than family doctors/GPs), case complexity and so on.
Out-of-pocket payments are mainly for the purchase of drugs and medical supplies for outpatient as well as inpatient care (19.7–21.8% of total health care expenditure and 55.4–58.4% of the total volume of out-of-pocket payments between 2003 and 2005) (Gotsadze et al., 2006). Retail pharmacies distribute 79% of all pharmaceuticals directly to the population, while 21% go through hospitals. NHA data show that out-of-pocket payments on pharmaceuticals and medical supplies at pharmacies accounted for 1.3–1.4% of GDP in 2006, but 2.1–2.2% in 2008, a significant increase from 0.8% of GDP in 1996 (State Statistics Committee of Ukraine, 2010a). According to household surveys performed by the State Statistics Committee of Ukraine in 2008–2009, 89.0–90.4% of inpatients had to pay for their pharmaceuticals themselves. NHA surveys found that, as well as pharmaceutical expenditure, the share of direct private expenditure on dental care is quite large (32.9%), as is rehabilitation care (19.3% of total expenditure on these types of services).
This survey found a rather small percentage of out-of-pocket payments in outpatient and particularly inpatient care due to discrepancies in the way data were collected. Other statistical publications have provided data on informal payments to medical professionals. Some cities even have unofficial price-lists for different types of services.
In order to protect themselves from pharmaceutical costs, some patients use VHI and sickness funds as a complementary source of funding. They do not, however, have a significant influence overall. T he on ly mechan ism u sed to ea se the public bu rden of payment s for pharmaceuticals is the exemption of sales of pharmaceuticals and medical supplies from value added taxes. To protect socially vulnerable population groups and patients with socially significant and serious diseases, there are certain benefits available for outpatient health services and pharmaceuticals.
These groups can receive pharmaceuticals from the approved government list for free or for a discount with a prescription. However, expenditure through this programme does not exceed 2.7% of the total spending on pharmaceuticals (Gordienko, 2003). Expenditure on medical benefit is covered by general allocations to health care provided by the budgets. In reality, however, even socially vulnerable groups have to pay out-of-pocket for guaranteed services. Some patients from vulnerable groups pressure doctors into giving them more pharmaceuticals than required. This has caused the government to attempt to adjust the list of groups covered and introduce subsidies instead of benefits.
The government has attempted to regulate payments for health care services. The Cabinet of Ministers Resolution of 1996 introduced official user charges for health services and allowed local and regional governments to establish their own fees for health services provided at state and community facilities. The Resolution applies to those paid services that medical facilities provide in accordance with the approved services list and does not apply to these services that are required to be provided to the population for free. In reality, however, there is no clear line between free and paid medical services. As a result, the government does not regulate prices for those services which are provided for a fee in real life, but which are not yet included in the official list of paid services approved by the Cabinet of Ministers. Additionally, there is no official method of determining the full costs of medical services.
According to NHA, the volume of informal payments is currently almost equal to the volume of formal payments, that is, 8–10% of total health expenditure and 22% of household expenditure. But it is likely that the amount of informal payment s is u nderest imated (Got sad ze et al., 2006). In for mal payment s existed in Soviet times, but their presence then was on a very small scale. Most informal payments were in the form of gratuities for a service received (such as produce in rural areas, for example, or chocolate elsewhere). As a result of the economic downturn in the 1990s coupled with wage arrears, personnel in health facilities have introduced informal payments in order to provide an acceptable wage for themselves. These payments are mostly monetary and are made before the service is provided. Often, the necessity of such payments is indirectly initiated by medical staff: patients tell each other about the necessity and the amounts required. For additional payment, doctors offer different drugs and services which they claim are more modern and efficient (or faster access to both). Payments in kind (gifts, produce) are still present in rural areas. It is extremely difficult to gauge the true extent of informal payments in the total income of medical staff. According to the limited NHA data, informal payments account for roughly 20% of the total salary funds. Their distribution is highly uneven as well, depending on location (rates are higher in the city than in the country), type of care (inpatient care is much more expensive than outpatient), the doctor’s qualifications (specialists receive higher payments than family doctors/GPs), case complexity and so on.
Informal payments persist due to several factors, including low pay for medical staff and the weak regulation of service providers, especially doctors and professionals involved in decision-making. Further, the government is not ready to admit its incapacity to provide free health care in full, which breeds tolerance towards informal payments, despite regular loud campaigns against corruption.
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