| High-quality medical care is core to ensure public health and consequently, the country’s investment attractiveness and wellbeing of its people. Since the fall of the Soviet Union, Ukraine’s health care system has not undergone any substantial reform, and is widely criticized for low-quality and acceptability of medical services. For the last 20 years the average life expectancy in Ukraine decreased is currently 10 years lower than in the EU; the death rate from tuberculosis is 20 times higher. Obviously, health care system reform is currently a particularly pressing issue.
Should Ukraine keep its medical care predominantly public? Who should pay for its development? Which health care system model has better potential to ensure public health?
Each and every Ukrainian should have the right to receive certain level of medical services, irrespective of his or her financial state. The main responsibility for redistributing money from the rich and healthy to the poor and sick lies within the state. The majority of developed countries in the world exercise this principle of social solidarity through a system of universal public medical insurance. It is impossible to preserve social solidarity without active involvement of the government. For Ukraine this issue is of a particular importance as health of its people dramatically deteriorated as a result of the Chernobyl disaster.
The entire country has to carry the burden of responsibility for its consequences; therefore, the government cannot quit the nation’s medical care system.
It is financially justified to organize medical services payments and procurement via a single fund. The bigger the financial pool dedicated for medical payments, the lower the risk to run out of money at times of need for large withdrawals. The state has a capacity to organize the largest fund on a national level.
Additionally, if the state organizes medical equipment and products procurement via a single channel, it can considerably reduce costs of purchases.
Full commercialization of medical care could lead to health deterioration of low-income population groups. The state’s goal is to have as few sick people as possible, and, therefore, it is interested in promoting prevention and fast and effective treatment. In contrast, private clinics are interested in their patients receiving treatment more often and being treated in a more expensive but not necessarily more effective way. Moreover, commercialization can lead to closure of economically inefficient hospitals in thinly populated areas.
Unlike the state, private companies have to compete with each other and thus have no choice but to constantly improve their performance by introducing innovative solutions. Medical personnel in private clinics is more motivated, because their evaluation and appraisal systems are more transparent, based on observed performance and results. In the long term it leads to quality improvement and cost reduction in medical services. In contrast, public medical facilities are prone to bureaucracy, ineffectiveness and lack of motivation.
Currently, a substantial part of medical expenses is paid by patients from their pockets and unofficially. Introduction of market based principles will enable legalization of the current system and provide for revenue inflow into the national budget. Furthermore, despite potential benefits of managing medical services financing and procurement financing from a single government channel, corruption in state bodies would zero up all potential cost economies.
In a system under which the state manages, regulates and controls medical facilities, a conflict of interests is inevitable: the state essentially controls itself, which really is no control at all. Under private medical system, the state only sets rules of the game and controls that they are followed. Moreover, for private clinics their reputation is the major factor that attracts or repels clients. Consequently, low standards of medical care will immediately lead to losses in revenue. Obviously, patients also become more responsible concerning their health when they realize that they will have to pay for their treatment themselves.
Whether the state is a better provider of and investor in medical care than private sector will be discussed at a public debate in Kyiv on February 22, 2011. The event is organized by the Foundation for Effective Government in partnership with London-based Intelligence Squared.
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