ATTACHMENT 14a_KZ strategy.doc

Approved by

Edict of President of the Republic of Kazakhstan September 13, 2004 № 1438

National Program of Health Sector Reform and Development in the Republic of Kazakhstan for 2005 – 2010

Astana, 2004

EDICT

Of the President of the Republic of Kazakhstan

On the National Program of Health Care Reform and Development in the Republic of Kazakhstan for 2005-2010

According to sub-clause 8 of Article 44 of the Constitution of the Republic of Kazakhstan and with the purpose of creation of the efficient health care delivery system and improvement of the basic population health status indicators in the Republic of Kazakhstan I DECREE to:

1. Approve the attached National Program of Health Care Reform and Development in the Republic of Kazakhstan for 2005-2010 (further the Program).

2. The Government of the Republic of Kazakhstan within a one month period shall develop and approve the Program Implementation Action Plan.

3. Central, local executive bodies and government agencies directly subordinate and accountable to the President of the Republic of Kazakhstan shall undertake the program implementation activities.

4. Delegate the control and coordination to ensure the Program implementation to the Ministry of Health of the Republic of Kazakhstan.

5. The Ministry of Health of the Republic of Kazakhstan once every six months and not later that 25th day of a month following the reporting period shall submit to the Presidential Administration of the Republic of Kazakhstan and the Government of the Republic of Kazakhstan information related to the program implementation.

6. This Edict shall come into force beginning the date of its signing.

President of the Republic of Kazakhstan

Nursultan Nazarbaev

September 13, 2004

Astana City

Contents

31. Program Passport

62. Introduction

73. Analysis of the current health status of the population and that of the health care system

184. Tasks and Objectives of the Program

195. Priority Directions and Implementation Tools of the Program

205.1 Solidarity-based joint responsibility of the state and people for health

215.2. Reform and Development of the Health Delivery System

215.2.1. PHC Reform is a foundation for the efficient health care system

245.2.2. Rural health care development

245.2.3. Assurance of sanitary-epidemiological control

265.2.4. Diseases prevention and healthy lifestyles promotion

275.2.5. Intersectoral approach to public health protection

285.3. Improvement of the health management system

285.3.1. Rational split of functions and authorities

305.3.2. Health services quality assurance system

315.3.3. Development of competition in the health care system

335.3.4. Basic approaches to the health care financing system

355.3.5. Improving efficiency of public regulation of drug circulation

365.3.6. Single health information system

385.4. Protection of maternal and child health

395.5. Improvement of prevention, diagnostics, treatment and rehabilitation of patients with diseases that take a high toll on society

405.5.1. Development of the medical science

415.6. Training and retraining of health personnel

435.7. Program implementation mechanisms

446. Required resources and sources of funding

447. Expected outcomes and Program indicators

1. Program Passport

(hereafter – Program)

· Transition to international principles of health care delivery shifting the focus to primary health care (PHC)

· Creation of a new health management model supported by an integrated health information system;

· Strengthening maternal and child health;

· Ongoing reduction of incidence diseases that take a large toll on society;

· Reform of the medical education system.

Stage I: 2005-2007

Stage II: 2008-2010

Total expenditures from the state budget allocated for the Program implementation will make up KZT165 658,5 million, including KZT134 609,9 million from the central budget and KZT31 048,6 million from local budgets.

By year Total Central budget Republican budget 2005 г.

42 877,8

32 766,2

10 111,6

2006 г.

65 330,5

54 974,5

10 356 0

2007 г.

57 450,2

46 869,2

10 581,0

In the period from 2008 through 2010 the annual growth of the health sector funding volume is envisaged, amounting to 4% of GDP by 2040.

· The level of coverage of population with health services will increase significantly; incentives for the person to care about his/her health will be introduced.

· Equity in terms of the accessibility of health care for the population will be ensured and the principle of joint responsibility of the state and the population for health protection implemented;

· The volume of preventive and sanitation intervention will increase, the efficiency and quality of outpatient monitoring improve, the

· The volume of preventive and sanitary interventions will increase, the efficiency and quality of outpatient monitoring will improve, the number of diseases that cause temporary or permanent disability (inability to work) will decrease due to the expanded guaranteed benefits package;

· The efficient health care quality assurance system will be implemented;

· The accessibility, efficiency and continuity of care throughout the system will increase;

· The health care financing system will be further improved, the funding deficit of the guaranteed benefits package will be eliminated and payment settlement mechanisms for the health care system participants will be introduced;

· The efficiency of using the state budget and private payments for health services will increase, while the level of unofficial payment will significantly reduce;

· An integrated health information system will be created;

· The health index with women of reproductive health and children will increase, the maternal and child morality rates will consistently decrease, the situation regarding diseases taking large toll on society will stabilize, the rate of infectious and controlled diseases will decrease;

· The efficiency of state regulation of drug circulation will increase;

· The volume of locally manufactured competitive pharmaceutical and medical products will increase;

· Advanced diagnostics and treatment standards will be introduced;

· Regulations of the state sanitary epidemiological norms will be realigned according to international standards;

· The issue of staff capacities will be resolved by 2010 though reforming all levels of the medical education system, introduction of mechanisms to retain the staff, the increase of students entering higher medical institutions and colleges through the state order system;

· Rights and responsibilities of physicians and medical workers will increase along with their social status and prestige in the society;

2. Introduction

The health status of the population is an integral indicator of the social orientation of the state and social guarantees, characterizing the level of responsibility of state toward its citizens.

Kazakhstan, having experienced a serious economic decline over the period of its development as an independent state, has undertaken a significant optimization of the social sphere; this includes the health sector where a cumbersome network of health facilities created in the Soviet period was basically oriented toward qualitative performance indicators.

In recent years the country has achieved significant economic growth resulting in a considerable increase of health funding (twofold over the recent two years) and new opportunities for its further development. Given the social orientation of the state, the development of the health sector will continue to receive serious attention.

Despite the fact that only 8-10% of the health status of the population depends on the performance of the health care system (according to the WHO data), the efforts of the state aimed at protecting public health should increase along with economic and social progress.

In this regard, it is important to involve citizens and employers in health protection activities and strengthen intersectoral coordination of activities implemented in the health sector.

The major program documents currently underlying health care sector development were adequate, based on the requirements of the period when they were developed; these program documents, however, lag behind the changes taking place in the economy at large as well as in other sectors of society. A number of activities outlined in the documents were not oriented toward an end result, while the structural changes, including changes in health care financing, lacked consistency at times. At this point in time, one cannot state that the current health care system fully satisfies the society, the state and the sector itself.

The accrued problems require radical revision of approaches toward health care management. The Address of the Head of State for 2005 states that the health sector requires serious change to improve the health care management systems, health financing, health care delivery system, the health care legal regulative base, statistics and computerization, optimization of reporting as well as efficient utilization of financial resources and mandatory decentralization of procurement.

The priority tasks have been identified as follows:

· Real shift of focus to PHC; shift of emphasis from inpatient to outpatient care;

· Systemic transition to international standards, new technologies, advanced treatment methods and medical service;

· Strengthening of maternal/ child health;

· Creating a system of independent expertise involving independent experts;

· Training of health care system, health resource and finance managers;

· Prevention, diagnosis and treatment of socially significant diseases;

· Strengthening the technical/ material base of health facilities;

The current State Program of Health Care Reform and Development for 2005-2010 (from here forward referred to as “The Program”) has been developed to support the implementation of the Strategy of Development of the Republic of Kazakhstan of March 19, 2004 entitled “To Competitive Kazakhstan, Competitive Economy and Competitive Nation.”

The Program sets out a package of required economic, social, organizational and other measures directed toward the development of accessible, quality, socially oriented and efficient health care system of the Republic of Kazakhstan.

3. Analysis of the current health status of the population and that of the health care system

The status of health of the population of Kazakhstan, the sanitary-epidemiological situation and development of the health sector over the past decade were characterized both by positive and negative indicators.

In recent years the basic medical and demographic indicators such as birth growth, mortality rate and life expectancy at birth have stabilized. The level of infectious diseases has decreased. The health care sector has proceeded with a number of reforms part of which has been successfully implemented while the others have not been logically completed. The latter reforms include the creation of a mandatory health insurance system and an attempt to transition to a family medicine model. The positive experiences include the creation of a legal health care base, significant increase in health care funding allowing for constructing new up-to-date clinics, capital repairs and improvement of the technical/ material base of health facilities, introduction of new medical technologies in the treatment and diagnosis process. As a result of improving the quality and accessibility of health care, some positive trends in the health care status of the population related to infectious and other diseases have been achieved. However, the majority of public health parameters remain unsatisfactory.

Medical and demographic situation and morbidity

Over recent years, certain medical and demographic changes have taken place in Kazakhstan. The size of the population in the republic in 2003 has increased by 49.6 thousand compared to 1999, totaling 14,951,200 at the beginning of 2004.

The birth rate in 2003 was 17.2 per 1000 population, an increase of 1.2 compared to 1999. The birth rate in the republic has been growing since 1999.

Over the last 5 years, the natural growth of the population has increased 1.6 times, making up 6.7 people per 1000 population in 2003. Since 1999 some increase in mortality rates has been observed: in 2003, the mortality rate was 10.5 per 1000 population compared to 9.7 in 1999.

Over the last five years the highest age-related mortality rate among both males and females has rested with the 70+ age group; in 2002, mortality rate was 104,51 per 1000 for males in this age group, and 79,98 per 1000 for females. Cardiovascular and oncological disease and trauma are the highest causes of mortality. One of the factors distorting the mortality indicators structure is the lack of an effective expertise system for determining the cause of death.

The average life expectancy over the last five years has stabilized: by end of 2003 it approached 65,9 years: 60.5 for males and 71.5 for females.

The general morbidity rate of the population of the Republic of Kazakhstan in 2003 increased achieving 56413.9 per 100,000 population, vs. 47972.8 in 1999.

Disease prevalence per 100,000 population includes the highest share of respiratory diseases (22160.6); with injuries and poisoning (4003.7) ranking second, diseases of the urogenital system (3948.6); third, skin and subcutaneous tissue diseases (3847.0); fourth, diseases of digestive organs (3688.7); eye and appendages of eye (2748.2); infectious and parasitic illnesses (2482.1).

In 2003, narcological disorders ranked first among socially significant diseases (424.7 per 100 thousand of population), over four times higher than indicators for other diseases.

Infant mortality rate is declining, but remains rather high compared to European countries, at 15.3 deaths per 1000 live births in 2003. It should be noted that this indicator is estimated without taking into account recommendations of World Health Organization (WHO).

Maternal mortality rates are also declining, to 42.1 per 100,000 live births in 2003 compared to 65.3 per 100,000 in 1999. One of the major reasons of the high level of maternal death is the low index of women’s health, which is 20-30%.

Children’s health is of serious concern. Mass preventive screening of children shows that every other child is unwell and this dictates the need for the arrangement of preventive interventions, adequate therapy/treatment and rehabilitation measures primarily at the out-patient and polyclinics level. According to WHO recommendations most illnesses in children under 5 can be effectively treated in out-patient facilities, whilst in Kazakhstan over 60% of patients of this age are referred to in-patient facilities. The lack of accessibility of medicines at the out-patient level is one of the reasons of excessive hospitalization among this patient group.

Socially significant diseases keep high rates. Prevalence of psychic and narcological disorders, insular diabetes, broncho-pulmonary and cardiovascular conditions, tuberculosis, sexually transmitted infections (STIs), and malignant tumors remain a serious problem. Unfortunately, the current health system is oriented toward treatment rather than prevention while the population is not properly encouraged to take care of their own health. This is proven, in particular, by the high percent of tumors diagnosed late, as well as by the high death rate for cardiovascular diseases. According to a WHO report, Kazakhstan is a leading country among CIS for tuberculosis prevalence (in 1999 141.0 per 100,000 population, 160.4 in 2003).

Due to the global pandemic, HIV/AIDS prevalence is growing in Kazakhstan, including the penitentiary system. In this respect the Program to Combat the AIDS Epidemic for 2001 – 2005 has been adopted and is being implemented in the country. Actions taken so far have only allowed slowing down the progress of the epidemic.

The overall reasons for the unsatisfactory health status of the population are the weak preventive interventions within the health system, inadequate responsibility of the population for its own health, ineffective intersectoral interaction in the area of health protection, as well as socio-economic problems of the transition period.

Health Care System

Since independence the Republic of Kazakhstan has undertaken numerous attempts to reform the sector. In 1996-1998 a budgetary insurance system was introduced for health care funding that allowed establishing two basic elements in the health system: formation of purchaser and provider relations and differentiated wage system depending on the volume and quality of health care. In 1999, health program funding was introduced allowing orientation toward final result given the funds allocated. At the same time, as the analysis shows, the reforms were not aimed at any major reforms in the health system, they were not seen through to the end, and couldn’t in any fundamental way change the situation in the health sector.

Over the recent period the health sector administrative system has undergone some changes, with the main ones being the restoration of the Ministry of Health of the Republic of Kazakhstan, establishment of the Committee for Pharmacy, Pharmaceutical and Medical Industry and its local affiliates, and Sanitary/ Epidemiological Surveillance Service (SES); the latter one has been divided into state bodies of sanitary and epidemiological surveillance with control and supervision functions and state organizations dealing with sanitary and epidemiological expertise and laboratory tests.

At present the health system of the country including all agencies is represented by a network of 886 hospitals and 3463 out-patient and polyclinic health facilities. The health care delivery system varies across different regions by a number of parameters, such as:

· Level of consolidation of funding and management functions;

· Amount of resources for funding the guaranteed benefits package allocated per capita;

· Provider payment methods used;

· PHC structure;

· Types/structures of health facilities;

· Approaches to quality control.

This situation considerably obstructs the implementation of the national health protection policy ensuring equity and accessibility of state guarantees for each and all.

In 2001 the number of hospital facilities began to increase. So in 2001 there were 845 hospitals, while there were 860 in 2002.

The bed availability indicator is 76.8 per 10,000 of population (total number of beds 114,782). The number somewhat exceeds a respective average European indicator which according to the WHO report makes up 73, 3 per 10 thousand of population. However even in advanced economies (such as Germany, France, Japan etc.) this indicator significantly varies and high rates are generally accounted for the large share of elderly people who are the major consumers of health services.

There is a total of 54,600 doctors and 115,000 mid-level personnel. The ratio of doctors is 36.5 per 10,000 of population, while the ratio of mid-level health personnel 76.9 per 10,000 of population. Despite the high ratios of medical staff and those of bed capacities, the health system doesn’t function efficiently enough, especially at PHC level.

Over the recent period work aimed at restoration of feldsher and feldsher-midwife points (FPs and FAPs) have been carried out. However, the current situation is characterized by poor attention to the development and strengthening of PHC, underestimation of its real potential, funding by a residue principle and lagging behind the advanced technologies. PHC staff has no economic motivation, their prestige among the society and population has fallen.

At the moment PHC facilities are not fully staffed with qualified personnel. The material and technical base of treatment and prevention facilities, rural ones in particular, remains in poor condition. Analysis shows that the number of actual visits to out-patient and polyclinic facilities per shift in some regions exceeds work load standards by more than 1.5 times.

Health facilities are mostly located in premises not complying with the sanitary and hygienic requirements. (This is the case for more than 70% of rural facilities.) Availability of modern medical equipment and means of transportation for medical purposes is below 50%. Only 36% of rural PHC facilities have telephone communication. Not all rural health facilities have pharmacy kiosks. Based on a study carried out by the Agency of the Republic of Kazakhstan on Disaster, 447 existing health buildings and facilities located in seismic areas of the country do not comply with the set standards and are subject to reinforcement or demolition. There is no effective medical equipment maintenance service in place.

There has been no systemic increase to reflect current PHC costs, based on the need for the functions assigned, and this has had some effect on the efficiency of this level of care. Currently, public health facilities, including PHC, are allocated budget funds according to three items: payment for services, major repairs and procurement of medical and non-medical equipment. The capitated financing rate for PHC normally increases along with consumer price indexes and increases in salaries. The current capitated rate reflects the cost of maintaining the old PHC network (accounting for the optimization implemented).

The current method of payment for services imposes major restriction on the competitiveness of private health facilities, as they can potentially be entitled to only one funding source – payment for service, and this restricts the development of private sector in the health care system. Given the circumstances, it is necessary to improve the method of tariff setting (per capita rate, fee schedule, diagnosis related groups (hereafter DRGs)).

In the existing situation, it is necessary to change the perception of PHC in society by raising the prestige of medical staff, procurement of proper medical equipment, introduction of new prevention, diagnosis and treatment technologies, improvement of the outpatient drug benefits system and increasing the value of capitated rate.

To date the allocation of resources from local budgets to inpatient care within the guaranteed benefits package has exceeded PHC expenditures by three times, while the health care delivery system remains predominantly inpatient-based.

As a result of excessive hospital admissions, the number of hospital beds along with the average length of hospital stay has been increasing consistently since 2000. The main reason of why people prefer hospital treatment to outpatient care is the lack of drug provision at out-patient level and the insufficient quality of services provided at primary level. Inpatient care has not been standardized so far (with the exception of republican health facilities), with the quality assessment system being inadequate.

To improve the quality of in-patient care it is necessary to undertake a set of comprehensive actions. These include upgrading physician and nursing staff, material and technical improvement of health facilities, detailing the guaranteed benefits package for in-patient care and standardization of health services by introducing diagnosis and treatment protocols meeting evidence-based medicine standards.

To improve the quality of professional health care, including specialty health care, provided to the population of remote and poorly accessible areas, requires the development of sanitary aviation as well as mobile and TV medicine.

The system of health care quality assessment, which has been evolving in the country since 1996, is an important tool of quality assurance. As part of the mandatory health insurance implementation process, tools for health care quality assessment and a system of fines and penalties were developed and various parameters for health care assessment identified.

Later, for objective reasons, the penalty system together with the control of volume of health services provided were replaced with the analysis and evaluation of quality of health services. Such criteria as the compliance of health services provided with medical standards, assessment of quality of health services and patient satisfaction surveys were used.

The positive results of the health care quality assurance system include introduction of the quality assessment institute along with the guaranteed benefits package, introduction of elements of the health information system supporting the health quality expertise, preparation of a methodological framework for the development of quality assessment criteria with the consideration of international experience.

The current health care quality assurance system faces a number of problems. Administrative measures do not motivate the staff and managers to improve their performance; proposals aimed at addressing problems in provision of health care are seen as recommendations and are not often followed; there is a lack of linkage between internal and external quality assurance. In addition, health facilities related to different agencies, as well as state institutions and health facilities that are not contracted for procurement of health services fall out of the system.

The sanitary and epidemiological situation seriously affects the health status of the population and, primarily, the level of infectious, occupational and somatic diseases caused by unfavorable environmental, working and living conditions.

Over the last few years, as a result of the improved social and economic situation alongside with preventive measures taken to control the sanitary and epidemiological situation in the republic, the decrease of most prevalent contagious diseases, intestinal and especially dangerous infections in the first place, as well as that of controlled infections, has been noted.

Over the last five years the prevalence of diseases falling in the group of vaccine-preventable infections has been reduced as follows: 58.2 times for measles, 5.0 times for tetanus, 4.7 times for whooping-cough, 3.6 times for diphtheria. Kazakhstan is certified by WHO as a country free from poliomyelitis.

The intestinal infection prevalence has reduced as follows: 3.5 times for typhoid fever, 3.1 times for bacterial dysentery, 1.7 times for salmonellosis, 1.7 times for acute intestinal infections, 1.6 times for viral hepatitis A. Prevalence of extremely dangerous infections has reduced to isolated instances.

This has become possible due to the restored regulative and financial base of the planned immunisation of population which is one of the most effective interventions aimed at prevention and reduction of infectious diseases. Within the named service a network of subdivisions preventing the export of especially dangerous infections into the country from abroad has been established and is being further developed. Over the last years sanitary-quarantine posts have been created along major transportation routes as well as at frontier posts.

With the purpose of prevention and reduction of intra-hospital infections, the internationally accredited infectious diseases control system, that allows generating considerable savings in the system, is being gradually introduced in health facilities.

The republic records a trend toward annual reduction of controlled sites that do not meet sanitary requirements and norms. The percentage of facilities, including water pipes, which do not meet sanitary requirements, has been reduced from 31.1 % in 1999 to 15.1 % in 2003; the number schools which are substandard from a sanitary perspective has fallen from 14.2 % to 5.9 %; for preschool facilities, the statistic has dropped from 7.6 % to 2.7 %; food markets from 42 % to 18 %; catering places from 22.2% to 10.5%; trade facilities from 15.7 % to 5.9 %.

Considerable areas accommodating natural pestholes of especially dangerous infections, including plague (area of 8 oblasts), rabbit fever (area of 11 oblasts), hemorrhagic fever (area of 4 oblasts), spring-summer tick-borne encephalitis (area of 6 oblasts), and a big number of anthrax-prone sites (1767) are a serious problem.

The food market situation remains complicated. Due to the lack of proper interaction between the controlling bodies a lot of substandard, low quality and harmful for health food products are imported to the country. Lack of proper control over the local food manufacturing industries and catering facilities has become a problem resulting in the production and serving of sub-quality food.

The priority issues of the sanitary and epidemiological well-being are as follows:

· low integration of the sanitary and epidemiological service into PHC which weakens the preventive facet of the health care system;

· inadequacy of the laboratory service, supporting the sanitary and epidemiological surveillance, in terms of proper equipment, timing, compliance with international test standards;

· carrying out major sanitary and epidemiological surveillance interventions and laboratory testing at the oblast and national levels while the rayon level is largely weakened;

· lack of coordination between sanitary and epidemiological service and other surveillance and controlling bodies (veterinary surveillance, state standard, environmental protection) concerning their functions and authorities.

Reform in the pharmaceutical sector began with privatization. At present over 7,500 pharmaceutical facilities operate in the sphere of drug circulation with only 306 facilities (below 4%) remaining state-owned.

Over the last 5 years other important reforms have taken place in addition to privatization. The pharmaceutical sector has completely adapted to market conditions. The Concept of Drug Policy of the Republic of Kazakhstan identifying major directions of pharmaceutical industry development has been approved. Basic legal and regulatory documents regulating the circulation of drugs have been developed. The vertical structure of state regulation of the pharmaceutical sector has been restored. Drugs, medical goods and medical equipment quality control activities have been put in order. Annual growth of nomenclature and volume of domestic pharmaceuticals is ensured.

However, the pharmaceutical sector reform has had some negative effects. Most importantly, the accessibility of drugs for vulnerable categories of population has deteriorated.

In addition, no mechanisms have been developed for conducting pharmaco-economic surveys; the monitoring of drug adverse side effects, quality control, usage, prices and accessibility of drugs is inadequate.

The material and technical base of testing laboratories doesn’t comply with modern requirements applied to drug quality control; there is no laboratory for immuno-biological testing. Problems related to drug falsification, pharmaceutical terrorism, aggressive advertising of drugs and biologically active additives are exacerbating. The situation is further aggravated by the fact, that the nature of the pharmaceutical market encourages illiteracy of the population regarding the use of drugs; additionally there are no effective measures of state control over dispensing prescribed drugs. As a whole, there are no manufacturers meeting international manufacturing standards.

Kazakhstan has inherited the Soviet system of training and retraining of medical personnel and over the last years no fundamental changes have occurred in this area. The Concept of Developing Education in the Republic of Kazakhstan before 2015 provides for the revision of principal approaches to training specialists with higher educational background and researchers.

Since 2003, medical education as part of the public educational system, has implemented new national mandatory standards of medical and pharmaceutical education ensuring continuity between consequent levels of education. At present the system of medical, pharmaceutical education and science has well trained qualified scientific and teaching staff; measures are taken to establish the efficient system of higher education and medical science aimed at meeting long-term strategic demands of the health sector, preservation and improvement of public health.

However there is a problem of low quality training and retraining of medical staff and the inadequate level of scientific research in the country. The poor legal framework regulating terms for entrance, training and quality control in the system of medical and pharmaceutical education is one of the major reasons: the legal framework does not take into account the medical specifics and therefore the same general approaches are used in training future physicians.

The quality of training and re-training of medical personnel and the level of scientific research reflect weak material and technical base of medical education facilities and science, which in fact is not replenished and makes this sector uncompetitive at the international market.

Medical higher educational and research institutions don’t have adequately equipped training and clinical bases and have no equipment required for scientific research. A reason for this is the lack of funds for training students under state order in medical higher institutions, and this doesn’t allow for the use of modern technical equipment to the full extent or for the procurement of the required equipment, visual aids, etc. Managers of medical education facilities are forced to resolve the problem of lack of funds by accepting the students with low knowledge level under contract. The average score required for medical school entrance with a state scholarship is 80, while a score of 40 is all that is necessary for admission for students who will pay tuition.

There is a concern regarding the annual growth in the proportion of students paying for their studies. Whilst in 1999 there were only 1059 individuals paying their own medical school tuition (with 1245 receiving state scholarships), in 2001 the number was almost double (1345 with scholarships, 2190 paying for their studies). Therefore the problems enumerated in medical and pharmaceutical education are reflected in the level of training and affect the quality of health care provided.

There is a problem of provision of qualified staff to PHC facilities, in distant locations and rural areas in particular. This is mostly related to the fact that the current deficit of the medical staff is not covered by the graduates from medical education facilities. Despite the fact that the entrance of students under state grants and loans starting from 1999, annually increases by 10% and the annual number of graduates is 2000 people on average, the need for staff remains.

The lack of mechanisms of distribution and allocation of staff (material incentives, favorable social and life conditions, provision of benefits) results in only about 50% of MHIs graduates accepting jobs where they are most in need.

In addition, there is a deficit of staff in some specialized qualifications; there are no specialists in health management and health economics.

Within the delineation of functions and powers between different governance levels carried out during 2002 – 2004 a number of important decisions was taken in the health care funding system.

During the last years the budget allocations for the sector increased significantly both in absolute figures (KZT 63.9 billion in 2001; KZT 73.0 billion in 2002; KZT 92.4 billion in 2003; and KZT 133.7 billion in 2004) and, more importantly, as a share of GDP (1.97% in 2001, 1.93% in 2002, 2.08% in 2003 and 2.63% in 2004). The lowest share of GDP allocated for health was recorded in 2002 (1.93%). The WHO recommends that the public budget for health care should be a minimum of 4% of GDP. There has also been some growth in per capita health expenditures over the last years (KZT 4308 (US$29) in 2001; KZT 4911 (US$32) in 2002; KZT 6201 (US$41) in 2003; KZT 8797 (US$63.6) in 2004).

It is worth noting that the increase in financing over the period from 2002-2003 did not yield the desired result, except for the annual increase of 5-7% in the number of patients treated in hospitals. Despite repeated increases in wages of medical staff (by 20% in 2004 alone), the official average salary in the sector is half of the national average.

There is still a problem related to the fact that the obligations assumed by the state to ensure guaranteed benefits package to the population are inadequately funded. Paid health care services take the place of free medical care. Due to the lack of clear distinction between the guaranteed benefits package and health care services provided for a fee, the level of informal payments remains high to the advantage of health workers. The recording of health services provided within the guaranteed benefits program is not properly established, thus promoting the growth of shadow economy.

There is no comprehensive sector policy of resource saving. The distinction between purchasers and providers of health services exists only as a formality, as almost all providers are state institutions, administratively and economically reporting to government health authorities. Health care development is not a priority of regional social and economic policy. Therefore a number of general negative trends could be identified requiring corresponding management decisions.

First, the most important principle of organization of the health care system – continuity of health care provision throughout the system— does not exist as it should.

Second, inequity is observed in quantity and quality of services provided as well as in basic indicators of health care development across different areas within the same oblast.

Third, the mandatory components of the HCS management system, including monitoring and evaluation of performance of health facilities and the health system as a whole are not well developed. Lack of coordinated policy in information support of the health system results in reduction of accuracy of information collected in the sector, late submission of information from sites to oblast and central level, impossibility of comparing the data collected by different sub-systems. This eventually results in reduction of efficiency of decisions taken on this basis and irrational use of resources allocated for health system.

Fourth, lack of uniform approaches and standards in medical equipment and medicines procurement results in more expensive equipment and medical goods procured as well as problems with the quality of procured goods.

Fifth, lack of coordination of operations of health management bodies with other public authorities directly or indirectly influencing the level of public health (labor and social protection bodies, culture bodies etc.) is observed. This coordination is an important instrument for formulation of a healthy lifestyle and, eventually, it reduces the need in health care.

Sixth, PHC being the central part of the health system should carry out the main function of qualitative improvement of the population health indicators. The efficiency and quality of performance of the entire health system, retention of national labour force capacity and solution of most medical and social problems arising at the level of the family and socially unprotected population groups: children, invalids and aged people depends on its condition. PHC doctor now carries out the dispatcher functions: the frequency of referring out-patients to specialized doctors is extremely high.

Seventh, a major misbalance is observed in the volume of funding of out-patient and polyclinics and in-patient care in favor of the latter. This hampers implementation of modern resource saving methods in provision of health care at pre- and post-hospital stages. This results in wider indications for referral for in-patient treatment, annual growth in numbers of hospital beds and, consequently, in more expensive health care.

Eighth, the state health system is not physically separated from the private one: some state-run health organizations occupy the same buildings as private ones, providing chargeable health care services.

Ninth, lack of properly trained qualified managers in the sector has resulted insufficient management and inefficient use of resources. The manager of a medical facility acts as a manager, administrator, chief doctor, assistant manager, clinician and so on.

Tenth, the health care system activities in current conditions cannot be limited to addressing purely sectoral problems. The comprehensive character of health of the population requires strengthening intersectoral coordination efforts, particularly in the area of health promotion and improvement of social, psychological and ecological environment. In addition, the population is not well- informed and doesn’t take an active part in the health care system. In this respect, it is necessary to choose a clear, publicly understandable, manageable and efficient model for the health delivery system.

4. Tasks and Objectives of the Program

The objective of the Program is to create an effective health care delivery system based on the principles of solidarity of the state and individuals assuming responsibility for health protection, priority development of primary health care aimed at improving the health of population.

The major tasks of the Program are:

1. Dividing up the joint responsibility of the state and population for health;

2. Creation of a new health management model supported by an integrated health information system;

3. Strengthening maternal and child health;

4. Ongoing reduction of incidence diseases that take a large toll on society;

5. Reform of the medical education system.

The scope of problems addressed within the Program, the necessity to align the proposed interventions with the capacities of national and local budgets determine a two-stage approach to its implementation.

During the first stage (2005 - 2007) the following tasks will be undertaken:

· dividing up joint responsibility of the state and population for health;

· setting up minimum standards for the guaranteed benefits package;

· working with the population to promote healthy lifestyle;

· transferring focus from in-patient to primary health care;

· separating PHC from in-patient services both financially and administratively;

· strengthening material/ technical base of health facilities, primarily PHC;

· rationalizing in-patient and emergency care services;

· implementing of actions to strengthen maternal and child health;

· strengthening preventive, diagnostic and treatment and rehabilitation measures related to diseases which take a large toll on society;

· establishing a system of independent medical audit to allow for the provision of quality of health care services;

· introducing economic relationships between health facilities;

· training health managers and improving of health resource management;

· improving quality of training and retraining systems for medical and pharmaceutical staff to meet the needs of the new PHC system;

· improving the legal and regulatory framework for the health system;

· taking action to bring the system up to international health standards;

· developing and implementing modern information technologies.

During the second stage (2008 - 2010) the following will be implemented:

· transformation of PHC by systemic and phased-in strengthening of general practice institution;

· reorganization and strengthening in-patient and emergency care, improved continuity at different stages of health care delivery;

· improving quality of health services provided by introduction of international standards and development of competition between health providers;

· introducing fundamental reform of the medical education system;

· shifting the real focus from treatment of patients to prevention of diseases and strengthening the health of “healthy” people;

· making preservation and strengthening of individual and public health a real joint responsibility of the population, employers, and the state.

5. Priority Directions and Implementation Tools of the Program The implementation of the Program will proceed along the following directions:

1. Solidarity-based joint responsibility of the state and the population for health;

2. Reform and development of the health care delivery system;

PHC reform creating a foundation for the efficient health care system;

Development of rural health care;

Ensuring sanitary and epidemiological well-being;

Health promotion and prevention of diseases;

Inter-sectoral approach to health protection of the population;

3. Improvement of the health management system:

Rational delineation of functions and authority;

Improvement of the health care services quality management system;

Development of competition within the health care system;

Major approaches to improving the health finance system;

Increase efficiency of state regulations in relation to drug circulation;

An integral health information system;

4. Protection of maternal and child health;

5. Improvement of prevention, diagnostics, treatment and rehabilitation of diseases that take a large toll on society; development of medical research and science;

6. Training and retraining of health staff.

5.1 Solidarity-based joint responsibility of the state and people for health

The State should ensure implementation of constitutional rights of people for the guaranteed benefits package funded from the central budget.

The minimum required level of health services will be provided under the guaranteed benefits package (services of physicians and nurses, appropriate standard tests and vital drugs, diet therapy). The guaranteed benefits package will be based on the following principles:

· correspondence with the financial capacity of the state;

· social equity in health care accessibility;

· transparency;

· dynamic development;

· sharing responsibilities for health prevention and strengthening by the state, employer and people.

As the health sector funding is increased the guaranteed benefits package will be expanded and approved every other year.

In addition to the provision of clinical care, the following interventions will be carried out within the guaranteed benefits package:

· provision of population with periodic medical examinations with dynamic follow-up observation and sanation;

· provision of population with true, objective and accessible information related to health protection, principles of rational nutrition, acquiring skills of disease prevention;

· implementation of programs and actions to combat drug addiction, alcoholism, smoking;

· sanitary and public awareness work to strengthen and protect health in preschools, secondary and higher educational institutions;

· determination of responsibility for timely undertaking periodical medical examinations;

Health care services exceeding the guaranteed benefits package will be provided:

· At the expense of private payments;

· Though the voluntary health insurance system;

· At the expense of the employer and from other sources allowed by Law of the Republic of Kazakhstan.

Health facilities will use the additionally generated resources for increasing salaries, reimbursement of incurred costs, strengthening of the technical material base, staff re-training. The procedure of utilization of such funds will be stipulated by the Law of the Republic of Kazakhstan.

5.2. Reform and Development of the Health Delivery System

5.2.1. PHC Reform is a Foundation for the Efficient Health Care System The experience in the developed countries shows that most adults and children receive medical care in PHC facilities, including from general practice doctors.

The new PHC model will be based on the principles of general medical practice and will consist of PHC centers under the state order of the local health authorities. The model will operate on the principle of patient’s free choice of a doctor and will function using economic methods of management including an incentive-based bi-component capitated rate. This will allow for accessibility of health care, improvement of quality of health services provided, and the increased motivation of health workers in their performance results.

PHC reform and development will be implemented in 2 stages.

During stage I (2002-2005) the existing network of out-patient and polyclinic facilities and the experience of general medical practice will be preserved. Their material and technical base will be improved allowing implementation of new treatment and diagnostics technologies. Procurement of drug benefits for treatment of certain types of diseases and some categories of outpatients will improve.

In rural areas the existing PHC system will be preserved. The main direction of health care arrangement improvement will be the increased role and widening activities of general practice doctor. He will be assigned the responsibility for the staff management of FPs and FAPs (feldshers, midwives, nurses) and social workers. To accomplish this, feldshers and midwives must be provided with substantial training on general practice topics.

The phased PHC reform will be…