The new Ukrainian healthcare is attractive to private equity investors

The Ministry of Health of Ukraine intends to attract private investments in the development of health infrastructure and health facilities. The Ministry is committed to design pilot projects in the regions and to establish a clear and practical algorithm for public-private partnership by the end of this year.

Today, Ukraine is attractive for private investments, and not only in the infrastructure development activities. Both foreign and domestic companies are equally interested in investing in the health sector, just like in the transport sector development, in the construction of roads and ports.

"Healthcare projects currently account for over 50% of the public-private partnership projects submitted for consideration to the Ministry of Economic Development and Trade of Ukraine. This means that the new healthcare model in Ukraine, which is currently being implemented by the Ministry of Health, is attractive to private equity investors. On the other hand, the state always needs additional financial resources. The transition of health facilities to independent management and to a new level of service quality requires the use of modern equipment and the creation of comfortable conditions for patients, etc. This is exactly why the public-private partnership in the Ukrainian health care system is now more relevant than ever before," noted Roman Ilyk, deputy Minister of Health of Ukraine at the first Public-Private Partnership Working Group meeting.

According to R. Ilyk, the transition to the new healthcare financing model – capitation-based financing – provides for the adaptation and implementation of the world’s best practices in developing public-private partnership projects in Ukraine. The objectives of the Ministry are to make the most of this opportunity and to upgrade health facilities through partnership with the private sector.

The PPP Working Group, comprised of experts from the Ministry of Health of Ukraine, the United Nations Economic Commission for Europe, the World Bank and the European Bank for Reconstruction and Development, has defined the following objectives:

• to develop the health-facility based PPP models enabling health facilities to implement own projects for attracting investors;
• to identify the main types of care and health facility profiles that need private investments;
• to select several pilot projects in different regions of Ukraine and different health care settings;
• to create a road map for all parties involved in the PPP pilot projects: from initiating a project to concluding a PPP agreement;
• to develop standard documents and forms, and to recommend legislative amendments, where appropriate.

In addition, the Ministry of Health of Ukraine plans to work closely with the private sector to clearly define the state guarantees. According to the members of the PPP Working Group, the lack of state guarantees constitutes a barrier to the implementation of the PPP projects.

In September 2018, the Ministry plans to complete the work on methodological aspects of implementing PPP projects and to finalize the relevant recommendations for both health facilities and private investors. The Ministry is also committed to design pilot projects to be implemented in the regions and to present them to private investors by the end of the year.