Ukrainian government approves the PHC funds distribution for Q4 2018

The Cabinet of Ministers of Ukraine approved the fourth quarter 2018 funding for the primary care providers that had not yet signed agreements with the National Health Service of Ukraine (NHSU) – these health facilities will continue receiving the state healthcare subvention funds.

In 2018, a fundamental transformation of the healthcare financing model has begun in Ukraine. It provides for the introduction of a modern capitation model, starting in primary care, with strategic purchasing of services based on relevant output indicators gradually replacing the outdated system of input-based financing.

To ensure the gradual rollout of the new system, both financing mechanisms – the allocation of healthcare subventions and direct payments for the actual services under the agreements with the NHSU – operate during the transition period. The Ukrainian government issued an order to allocate funding for the PHC providers that have not signed the agreements with the NHSU yet – it provides for the redistribution of UAH 1.036 billion from the 2018 budget funds (previously allocated for the capitation program) to the healthcare subventions. Now, regional administrations have to make changes to the local budgets to allocate the state healthcare subvention funds to the PHC providers that have not joined the reform yet.

In July 2018, the NHSU funded single payer tax-based healthcare financing system was introduced in primary care and the NHSU started paying the contracted PHC providers an age-adjusted capitation per declaration at a rate, which is significantly higher than in traditional funding model. 

Since July, the NHSU has paid a total of UAH 819.8 million to the contracted PHC providers. The physicians working at these health facilities have received noticeably higher salaries – some PHC providers have tripled the salaries of doctors and medical staff.

In total, the NHSU has signed agreements with 623 PHC providers serving about 23 million patients. This means that almost half of all primary care facilities in Ukraine now operate under the "money follows the patient" model. The other municipal PHC providers have to sign an agreement with the NHSU by the end of 2018.