Primary Health Care In Ukraine

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Primary health care in Ukraine has experienced rapid changes in terms of governance, financing and service delivery. Governance transformation started with a decentralization process of administrative functions and followed with the devolution of the ownership of health care facilities to local authorities. Dramatic changes in the funding mechanisms for PHC services include the implementation of the capitation payment system under the “money follows the patient” principle. Service delivery is now based on family medicine and services are people cantered. The Ministry of Health of Ukraine issued an order in March 2018, No. 504, ‘On approval of the regulation for the primary health care provision,’ which stipulated the scope of PHC activities including prevention, screening, health promotion and treatments.

According to the capitation method, the government pays a set amount per patient registered, with a particular PHC doctor, for a pre-defined PHC benefits package in a defined period of time. To be eligible to receive capitation payments, a primary health care center had to change its legal status to municipal non-for-profit enterprise, develop a business plan and commit to comply with a set of minimum quality requirements. Private providers and doctors can register as individual entrepreneurs. For the first time in the history of independent Ukraine, public and private providers were equal before the law and received the same conditions for contracting with the state and accept payments for their services. Providers receive prospective capitation payments into their bank accounts with no intermediation. This mechanism is promoted in other countries undertaking decentralization and is called Direct Facility Financing (DFF). Capitation also allows for smoother budgeting and management of funds for both providers and the payer; facilities experience more optimal cash flow by receiving their payment early in the month rather than submitting claims, while the payer can more easily project total outlay regardless of how catchment populations vary by facility.

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In 2019, when PHC facilities began operations under the new payment mechanism, there were 1,466 providers signing a contract with the NHSU; 1,050 facilities were community owned, 168 private facilities and 248 independent entrepreneurial doctors. More than 29 million people were enrolled with the PHC physician of their preference by signing a declaration. These affiliations to the system represent a 69% coverage to PHC services for a population of 42.1 million. More than 70% of the users report to be satisfied with the chosen doctor [NHSU, 2019]. Patients have the freedom to change their physician as many times as they want. Among the people enrolled 56% are women and 44% are men. Patients are given the opportunity to freely choose their trusted doctor. The doctors submit the declaration and the NHSU pays for the medical care to the PHC Centre in which the doctor works. The new capitation payment has made an increase to the revenue of the PHC Centers possible and increased the salaries of health care providers between two and three times, improved the facilities and increased the number of services. In general, in 2019, the NHSU paid over US$ 600 million to primary health care providers [NHSU, 2019]. To enhance the autonomy of the providers, the legal status of the PHC facilities shifted from budgetary (public) organization to not-for-profit municipal enterprises. This change allows primary healthcare providers to have an account in the commercial banks, and to reinvest surplus back into their facilities.

The published evidence to support the introduction of capitation payments in Ukraine suggests positive results of this payment mechanism. Capitation is associated with slower growth of health care expenditures on services that good sources of revenue and profitable under fee-for-service and these payments are helpful as a cost containment strategy [Yip W, 2004]. Capitation is associated with cost saving of 29% on pharmaceutical and 21% in laboratory services [Ponce, 2013]. Capitation achieves standardization of care and improvement in clinical outcomes alongside cost reduction [Ponce, 2013] and suggests that capitation does not affect the quality of care provided [van Dijk, 2013]. Also, capitation becomes a more predictable source of revenue for providers.

There are also unintended consequences of the capitation payment mechanism. Once implemented, capitation requires close monitoring to avoid deviations from stated objectives. For example, the introduction of capitation may result in providers reducing the time dedicated to patients, less use of laboratory testing and a greater number of referrals to specialized care. There are reports that physicians administer fewer medication to chronic patients and less skilled health personnel manage specialist conditions [Mills, 2000]. It has been observed that capitation produced shifts from PHC services to more visits to emergency departments and a high proportion were semi-urgent and non-urgent [Glazier et al]. Another study found that under capitation providers underserve patients in bad and intermediate health, while fee-for-service providers over-serve patients in good and intermediate state of health [Hennig-Schmidt, 2011]. Primary care physicians had a negative perception about the capitation payment [Cykert S, 1997] and patients accessing capitated physicians have lower level of trust in their physicians [Pereira 2001]. Patients under capitation were 36% more likely to switch their primary care provider than those with fee-for-service-paid providers [Sorbero, 2003].

These risks are higher for a primary health care system that is in transition and still very influenced by old practices. Monitoring contracts and key performance indicators is critical to implement adaptive management and ensure course correction and the achievement of objectives. The referral system is still weak, as patients had direct access to specialists and diagnosis testing at the polyclinics and hospitals. Ukraine needs to organize the intricate system of patient pathways that led to the overutilization and irrational use of services. Health providers had the incentive to create demand, generating more referrals, ordering unnecessary lab test and prescribing unnecessary medicines. The system used to be a fee for service model, though, with no patient pathways, poor quality and compromising the health and impacting the economy of the population. Capitation needs to be supported by information obtained through monitoring and evaluation to improve performance with an iterative process including these steps: define, measure, analyse, improve and sustain. This data-driven improvement cycle can be applied to improving, optimizing, and stabilizing PHC clinical and administrative processes. The final objective is to improve the quality of treatments and achieve better health outcomes.  

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