KYIV – A Ukrainian-American is leading a legislative charge this summer that could open up Ukraine, Europe’s 7th most populous nation, to a new world of private investment opportunities in health care.
Private hospitals, private health insurance, medical tourism, drug sales, drug manufacturing and drug testing are activities that could benefit from a package of laws pushed by Ulana Suprun, Ukraine’s acting health minister. An American-trained radiologist, Suprun was previously vice-president of a New York City women’s clinic, Medical Imaging of Manhattan.
While Ukraine watchers focus on pension reform and land reform this summer, an equally important game changer of this parliamentary session could be health care reform.
The new legislation is opposed by entrenched political interests reluctant to change the status quo. In a system inherited from the Soviet Union, health spending is allocated according to the square meters of a hospital, not the number of patients served. This system -- and attendant corruption -- have benefitted a minority. But Ukraine’s 40 million people are poorly served.
In the generation since independence in 1991, Ukraine’s population has shrunk by 20 percent. The culprits are: high mortality, low birth rates, emigration and loss of land to Russia. Fifty years ago, Ukrainians life expectancy was three years lower than Americans. Now the gap has widened to 11 years.
While some politicians resist change, Suprun and civil society are pushing the Rada to approve four piece of legislation this summer designed to modernize the system.
“Health care hasn’t been reformed, been really changed in almost 26 years since independence: it is the old Soviet system that has not been changed much,” Suprun said in an interview. “If anything it has degraded. Instead of the government paying for very poor quality health care, people pay out of the pocket for very poor quality health care.”
One key is to have money follow the patient, not the bed. Instead of simply drawing salaries at state hospitals, doctors will be paid for treating patients.
Here are the areas that are opening up in Ukraine, a nation with population slightly larger than Poland.
For years, corruption scared away foreign drug suppliers. In the last 18 months, the Health Ministry squeezed out much corruption by outsourcing procurement of basic drugs to three international agencies, Unicef, UNDP and Crown Agents. With a $225 million budget this year and transparent procurement practices, foreign suppliers now are participating in tenders for drugs for Hepatitis B, HIV, AIDS, cancer, tuberculosis, rare illnesses in children, cardiovascular stents and vaccinations.
“Last year, Unicef was so effective using the funds for the public supply of vaccines, that we have a glut, a 50 percent overstock,” Surprun said. “We are not even taking delivery of the ones we ordered in 2016. And we asked them to to hold off until summer, because we have such a glut.”
On April 1, Ukraine started a drug reimbursement program where patients receive free – or with a small copay – any of 157 medicines for cardiovascular disease, type II diabetes and bronchial asthma – the three leading causes of death in Ukraine. The prospect of steady sales is drawing foreign suppliers.
“Of the 35 drug manufacturers taking part, 18 are from the EU, one is from Israel, one from India and 15 from Ukraine,” Suprun said. “We have gotten a lot of those importers on board because they understand the process of reimbursement. They understand the price is less, but there is a larger cohort of patients who will be using their medication.”
Ukraine has approved fast track approval – within two weeks – of drugs already approved by the United States, Canada, the European Union, Israel and Japan. In addition, a new measure makes international protocols for patient treatment valid in Ukraine. This ends Soviet-era restrictions to follow “Ukrainian protocols.”
“Steady income, steady sales will be happening -- stability will encourage more manufacturers to come in,” Suprun said of drugs for Ukraine’s aging population. “Producing here would be great, because we have lower costs of production. If they could produce here, they could export them and be able to make a better profit because our labor costs are much lower.”
If legislation is passed this summer, Ukraine would move specialized care next year to a fee for service system. A new law would draw up a list of medical services paid for by the government. In turn, the government would pay a set fee valid to cover all or most of the service at a public hospital. If patients want a better or faster appendectomy, for example, they can go to a private hospital and pay the difference.
“At that point, there is an opportunity for diagnostic centers where now you can have really nice care,” Suprun said, whose center in New York ran on public and private payments. “There is Germany company interested in opening diagnostic centers where they have MRIs, CT scanners, ultrasounds. They open the center. As patients come, the government pays for a fee for service for each exam done.”
To cover the difference between state fee payments and private clinic charges, a private insurance market is expected to develop.
“That is another big investment opportunity in Ukraine now,” Suprun said. “Because there will be this copay, there will be a lot of demand for private health insurance. There are not many private insurers in Ukraine. There are a lot of employers that will want to buy the health insurance for their employers.”
A new law passed two months ago allows state hospitals to become nonprofit corporations. This allows hospitals to legally receive payments from private individuals and insurance companies – and to split the proceeds among the staff. Most hospital and clinics do this now, albeit on an informal basis.
“Ukraine could be a real mecca medical tourism – plastic surgery, in vitro fertilization, and dentistry,” Suprun said of an industry in its infancy here. “In Ukraine, those things are cheap as borscht. Ukrainians dentists are among the best: organized, modern and much less expensive than in most countries. I have many friends from New York who come to Ukraine to have their dental work done here.”
With laws changing to allow public-private partnerships, Suprun sees more opportunities for drug companies to perform clinical tests here.
“There is great potential in Ukraine to do clinical studies because the population is willing and the state center is supportive,” she said. “Clinical studies are usually innovative treatments for cancer, certain types of tuberculosis, and Hepatitis C.”
While some changes will require Rada approval this summer, others are in place or will be in place through administrative systems. The ministry is developing a medical version of ProZorro, the online, electronic tendering system that has been cutting corruption in other sectors of government procurement.
Already, companies are responding to new, transparent rules in Ukrainian health care. The new tender system is opening doors to new faces. Suprun: “In 2015, 40 percent of pharmaceutical companies taking part in the first tender were taking part for the first time ever.”
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Posted May 29, 2016