SOL-121-17-000009_Health_Reform_RFP.pdf

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11. TABLE OF CONTENTS

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SOLICITATION, OFFER AND AWARD

SOLICITATION

OFFER (Must be fully completed by Offeror)

AWARD (To be completed by Government)

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SOL-121-17-000009

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07/25/2017 REQ-121-17 -000042

USAID/Ukraine/Regional Contract Office Department of State 5850 Kyiv Pl.

Washington D.C. 20521-5850

17:00 (Kyiv LT) 08/29/2017

Ms. Larisa Lomonosova Acquisition Specialist llomonosova@usaid.gov

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USAID/Ukraine/Regional Contract Office Department of State 5850 Kyiv Pl.

Washington D.C. 20521-5850

USAID/Ukraine/Office of Financial Management Department of State 5850 Kyiv Pl.

Washington D.C. 20521-5850

Request for Proposal SOL-121-17-000009 Health Reform

PART I - THE SCHEDULE

SECTION B - SUPPLIES OR SERVICES AND PRICE/COSTS

B.1 PURPOSE

The purpose of this contract is to strengthen the pharmaceutical system in Ukraine through the activity entitled “Health Reform” as described in detail in Section C. STATEMENT OF WORK.

B.2 CONTRACT TYPE

This is a Cost-Plus-Fixed-Fee (CPFF) Term Contract. For the consideration set forth in the contract, the Contractor must provide the level of effort described in Section F.5. The Contractor must also comply with all other contract requirements.

B.3 ESTIMATED COST, CEILING PRICE, FIXED FEE, AND OBLIGATED AMOUNT

(a) The estimated cost for the performance of the work required hereunder, exclusive of fixed fee, if any, is __________ [ TBD ]. The fixed fee, if any, is _________ [ TBD ]. The estimated cost plus fixed fee, if any, is ___________ [ TBD ].

(b) Within the estimated cost plus fixed fee (if any) specified in paragraph (a) above, the amount currently obligated and available for reimbursement of allowable costs incurred by the Contractor (and payment of fee, if any) for performance hereunder is _________ [ TBD ]. The Contractor shall not exceed the aforesaid obligated amount.

(c) Funds obligated hereunder are anticipated to be sufficient through _________ [ TBD ].

B.4 PRICE SCHEDULE

(a) The contract budget found herein is based on the Contractor’s original proposal and/or final proposal revision, which was accepted by USAID through award of this contract.

(b) The following itemized budget sets forth the estimates for individual line items of cost:

Cost Category Amount Direct Costs TBD Grants Under Contract $163,260 Indirect Costs TBD Fixed Fee TBD Total Cost Plus Fixed Fee TBD

B.5 PAYMENT OF FIXED FEE

USAID will pay a proportion of the contractor’s fixed fee each month pursuant to FAR § 52.216- 8, “Fixed Fee,” upon the receipt of an invoice deemed proper by the Office Financial Management (OFM) located in USAID/Ukraine. Payment of fixed fee shall be made according to the following formula:

From the agreed upon total fixed fee, $100,000 will be withheld for final settlement. The remainder will be divided by the number of months in the award (est. 60) and paid in equal installments when invoiced.

Payment of withheld fee amounts shall be paid in accordance with FAR 52.216-8.

B.6 INDIRECT COSTS

(a) Pending establishment of revised provisional or final indirect costs, USAID will reimburse allowable indirect costs on the basis of the following negotiated provisional or predetermined rates and the appropriate bases pursuant to the Contractor’s current executed Negotiated Indirect Cost Rate Agreement:

Description Rate Base Type Period % 1/ 1/ 1/

1/Base of Application:

Type of Rate:

Period:

(b) The Contractor will make no change in its established method of classifying or allocating indirect costs without the prior written approval of the Contracting Officer.

B.7 CEILING ON INDIRECT COSTS (if applicable) [determination to include this clause in the contract will be made at the time of award in accordance with FAR 42.707(b)(1) ]

(a) Reimbursement for indirect costs shall be at the lower of the negotiated final (or predetermined) or the following ceiling rates:

Description Rate Base Type Period % 1/ 1/ 1/

1/Base of Application:

Type of Rate:

Period:

(b) The Government will not be obligated to pay any additional amount should the final indirect cost rates exceed the negotiated ceiling rates. If the final indirect cost rates are less than the negotiated ceiling rates, the negotiated rates will be reduced to conform to the lower rates.

(c) This understanding will not change any monetary ceiling, obligation, or specific cost allowance or disallowance. Any changes in classifying or allocating indirect costs require the prior written approval of the Contracting Officer.

B.8 COST REIMBURSABLE

The U.S. dollar costs allowable will be limited to reasonable, allocable, and necessary costs determined in accordance with FAR § 52.216-7, “Allowable Cost and Payment,” FAR § 52.216-8, “Fixed Fee,” FAR § 52.232-20, “Limitation of Cost,” and FAR § 52-232-22, “Limitation of Funds,” if applicable, and AIDAR 752.7003, “Documentation for Payment.”

[END OF SECTION B]

SECTION C - DESCRIPTION/SPECIFICATIONS/STATEMENT OF WORK

HEALTH REFORM SUPPORT PROJECT

I. SUMMARY

Title: Health Reform Support Project

Purpose: The goal of this activity is to support a transparent, accountable, and effective health care system that is capable of meeting the health needs of the Ukrainian people.

Advancing health sector reforms, tackling corruption, and enhancing transparency will improve access to and availability of high quality health care services for Ukrainians, while boosting the health system as a significant sector of Ukraine’s economy.

Objectives:

1. Improving health sector governance.

2. Implementing the new health care financing model.

3. Strengthening the health workforce.

4. Enhancing transparency, accountability and responsiveness of the health care system.

5. Strengthening support for health reform efforts.

6. Improving service delivery system at all levels.

II. PROBLEM STATEMENT AND PURPOSE

This activity will address pervasive corruption in the health sector. This corruption results in the loss of a significant portion of limited health care resources and ultimately contributes to poor health outcomes.

Corruption in Ukraine’s health sector has many faces. It includes high informal out-of-pocket payments for health services, deterring patients from seeking care in a timely manner. It is persistent vertical public financing of subventions for health services, channeled from the center to Oblast Healthcare Departments and then to hospitals and clinics. It is health workers facing corruption through their entire career, starting from being asked to pay bribes for interim exams in medical school and thereafter “buying” positions with a symbolic official payroll from a hospital chief doctor; charging patients informal fees to make up for the investment; prescribing brand name drugs that a patient doesn’t need to receive a kickback from pharmaceutical companies; and paying a tuition fee for the post-diploma qualification course that a doctor will never attend, but will receive a certificate in order to reach the next, higher attestation level.

The first and most important victims of the current situation are patients, required to “contribute” to semi-formal hospital “charity funds”, asked to buy and bring necessary drugs and materials into the hospital for a surgery, while still receiving substandard care from a run-down facility with obsolete medical equipment and unhappy medical personnel.

Therefore, the goal of this activity is to support a transparent, accountable, and effective health care system that is capable of meeting the health needs of the Ukrainian people. Advancing health sector reforms, tackling corruption, and enhancing transparency will improve access to and availability of high quality health care services for Ukrainians, while boosting the health system as a significant sector of Ukraine’s economy.

III. BACKGROUND

1. Health Sector overview in Ukraine

Ukraine inherited from the Soviet Union an extensive, centralized, command-and-control type health care system, which struggles to meet the needs of its population. The system has not changed much in the 25 years since independence, with the exception of incremental changes in decentralization and delegation of limited functional and managerial powers to the 27 regions.

According to the State Statistics Service of Ukraine, the average life expectancy in Ukraine in 2015 was 71.1 years (76.2 for women and 66.3 for men), well below the European Union average of 84 years for women and 79 years for men. Non-communicable diseases (mostly cardiovascular diseases and cancers) and injuries are the leading causes of death and disability. Nevertheless, Ukraine also suffers from a concomitant burden of infectious diseases such as HIV/AIDS and tuberculosis. Ukraine has one of the fastest growing HIV/AIDS epidemics in the world. Ukraine also has one of the highest DR TB rates in Europe. Child routine immunization coverage rates are significantly below both average European figures and world figures largely due to misbeliefs and myths about the harms of vaccination, in many instances cultivated by medical personnel. The Maternal Mortality Ratio has steadily declined after a rapid spike in the early 1990s and has stagnated at the level of 24 for the last several years, which is about three times higher than the European average. The Infant Mortality Rate, at the level of 8, is twice as high as in the European Union. Ukraine has

3.5 physicians per 1000 population – equivalent to the average in the European Union.

Oblast (regional) Health Departments are functionally subordinate to the Ministry of Health (MOH). At the same time they are accountable to the regional governments. The public funds for health, collected through general taxation (value added tax, income tax, customs fees, excise tax, etc), are allocated to an extensive network of publicly owned health facilities based on their existing infrastructure (number of hospital beds, staff, and building size). Such an input-based, line-item financing system bears inefficiencies in itself. There are few incentives for rationalizing use of resources or controlling funds allocated for health care services.

Hence, Ukraine is the fourth country in the world for the number of hospital beds per population: there are 879 hospital beds per 100,000 people. The average length of hospital stay is 11.8 days, compared to seven days as the European average. According to estimates, one third of all hospitalizations in Ukraine are unnecessary.

With only a few exceptions, hospitals are outdated, poorly maintained and equipped. Low patient turnout in many facilities results in poor quality of services and potential harm to patients. In addition to the extensive network of the MOH affiliated health care services, Ukraine also retains parallel health service delivery systems belonging to railroads system, military, Ministry of Infrastructure, maritime, Interior Ministry, and the penitentiary system. These parallel systems account for more than one tenth of total public expenditure on health, and about 9% of total hospital beds.

Total health spending in Ukraine constituted 7.4% of Gross Domestic Product (GDP) in 2014, with only 46% of it coming from public sources. According to the Article 49 of the Constitution of Ukraine, all Ukrainian citizens are entitled to a comprehensive guaranteed package of health care services provided free of charge at the point of use. However, this constitutional commitment is not backed by the available public financing of health.

Out of pocket payments, mostly for medicines and informal fees for health services, are a serious deterring factor for timely care-seeking by patients. According to estimates, about half of health care expenses are paid from patients’ pockets. Nine out of every ten Ukrainians have a fear of financial hardship in case of an episode of illness. So called “Charity Funds,” existing at many hospitals and clinics, are semi-formal methods of requiring patients to pay for health services. Formal salaries of medical personnel are at or below the subsistence level. Clinics primarily use the funds accumulated through the “charity funds” for supplementing salaries of medical personnel, and sometimes for upgrading the infrastructure and equipment of the hospitals. According to some health sector experts, doctors often have to “buy” their position: despite the physician’s formal salary averaging only $200/month, some of the positions cost $10,000 to $25,000.

Corruption across all sectors, including health, is a pervasive and persisting problem in Ukraine. Public procurement has been considered for years as one of the most corrupt areas. Lack of transparency in the state procurement of medicines, supplies and medical equipment created opportunities for complex and highly lucrative schemes to pocket funds from the state budget. According to Ukraine’s Security Service estimates, up to 40% of public funds allocated annually for the medicines and equipment procurement were misappropriated through artificially inflated prices.

Private sector engagement in health, albeit developing in larger cities, is still nascent. According to the current budget code of Ukraine, public funds cannot be used to purchase services from private facilities.

Emerging private clinics in Kyiv and larger cities are mostly confined to outpatient specialist services, diagnostics, family planning and obstetric care, dental care and cosmetic surgery. Demand for private health care services, generally perceived to be of higher quality, is growing steadily. Managers of the private clinics complain that even when offering salaries many times higher than in the public clinics, it is often difficult to attract highly qualified doctors. Private voluntary health insurance is under-developed, with only 1% of total health care expenditure coming from this source.

The health services provision system in Ukraine is hierarchical, consisting of outpatient and inpatients blocks.

The outpatient level consists of primary health care (PHC) clinics and district consultative-diagnostic centers, offering specialist and more sophisticated diagnostic services. As a result of reforms from 2010, more than half of all PHC doctors have been retrained as family doctors. Family Medicine, as a standalone medical specialty, has been recognized in Ukraine. At present, there are about 560 family medicine centers /ambulatories functioning in Ukraine. However, patients often bypass the PHC level and self-refer directly to specialists or for diagnostic tests as a result of the lack of trust in the qualification of family doctors. Self-diagnosis and treatment is also a common practice since most medications are available through pharmacies without prescription.

The inpatient system in itself is also tiered and consists of small rural hospitals, providing basic inpatient services; district (central) and municipal multi-profile hospitals; and the tertiary, regional and national level hospitals and specialized clinics, for provision of highly specialized care to the patients with severe conditions and complications.

The regional level is administratively and financially responsible for emergency medical care, after the adoption of law on Emergency Medical Care in 2012. The system differentiates between emergency and urgent care. With the new law, emergency care and disaster centers have been created in all regions.

Mental health services in Ukraine have been traditionally overly medicalized, but not based on modern evidence-based guidelines. There is a high level of stigma attached to the field of mental health and those who seek mental health care. An average Ukrainian is typically not willing to openly seek mental health services because of this stigma. Currently, with the on-going military conflict in the East of Ukraine, the need for mental health services is growing. The experience of participating in armed conflict, being displaced, and living through protracted conflict has significant impact on mental health and psychological well-being of combatants, their families, displaced persons and communities.

The health workforce in Ukraine is aging. According to MOH data, one fourth of all physicians are of retirement age. There is also a significant out-migration of qualified doctors and nurses. Generally, long-term planning of the health workforce is not done by the MOH. There is a striking imbalance between specialists and primary health care physicians, with too few primary health care physicians in the country.

Every year, thirteen public medical universities in Ukraine, affiliated with the MOH, produce about 10,000 graduates. One third of the graduates are foreign students who will not remain and practice in Ukraine.

Public funds spent on medical education equaled 650 million UAH in 2016. The pre-service medical education system has not undergone significant changes since the collapse of the Soviet Union.

The standards for higher medical and pharmaceutical education are set jointly by the MOH and MOES. An independent Testing Board, officially called Center for Testing Professional Skills of Health Workers, established in 1999 as a result of USAID supported US-Ukrainian partnership in the early 1990s, successfully administers a three-step exam. The testing is mandatory for every Ukrainian medical university. Though affiliated with the MOH, the Center does not receive direct budgetary funding for its operations. Its funding comes from the universities for which testing services are provided. The modernization of testing is not necessarily reflected in the curricula and teaching methods of the universities, which are in most cases outdated and not responsive to the current demands of the health care system. As some health care experts have reported, bribing is widespread in medical universities, and there are “prices” set for every interim examination mark.

Another inheritance from the Soviet Union relates to an inefficient health workforce regulatory framework.

There is no formal licensing process for physicians, but every doctor is required to go through periodic (every five years) so called post-diploma qualification courses, offered by one of the three existing National Medical Academies of post-graduate education or medical universities. Attendance at those courses determines “attestation categories” of physicians: 2nd, 1st, and highest. The courses in most cases are lecture type, with no practical or case based approaches used. Tuition fees for the courses are sometimes paid by attendees themselves, and often, with few exceptions, physicians just need to pay the fee to receive the certificate without even attending the course. Overall, the system does not ensure that physicians keep up-to-date with the ever-evolving medical knowledge and evidence, and focus on continuous and lifelong professional development.

There are about 8.5 nurses (including midwives and feldshers) per 1000 population in Ukraine. Declining salaries and limited career prospects for nurses contributed to a decline in the nursing force. Existing nursing education options include both recently introduced University level Bachelor of Science in Nursing (BSN) degree, and the traditional vocational level education through more than 100 medical nursing colleges.

Graduates of BSN often have no advantages as compared to the college graduates in terms of pay scale or employment prospects. Although some health care facilities formally have job descriptions for nurses, functions between physicians and nurses are not clearly delineated and teamwork is not exercised.

Health administrators at facility or local government levels lack essential managerial knowledge and skills to adjust to the current realities and planned changes in the health care sector. At the central level, MOH deputy ministers often complain about low qualification, motivation and morale of the MOH staff. Salaries are not competitive and many positions at the MOH are left vacant. The MOH often relies on donor funded highly qualified temporary consultants (mostly Ukrainian nationals) to perform its daily duties. Overall, it is mandatory for health care managers to have a degree in medicine and specialization in health care organization and management. The specialization course is provided by the same National Medical Academies and only lasts two months. Some of the recent initiatives (e.g. Health Care Management Master of Science Program offered by National University of Kyiv Mohyla Academy) improved opportunities for advanced specialization in health administration, but their penetration is still low. The situation with other allied health professionals, such as paramedics, medical rehabilitation specialists or medical technologists is even worse.

There is no integrated nationwide health information system in Ukraine that would allow for real-time, evidence-based policy and decision making. Periodic (monthly, quarterly and annual) paper based standard statistics reporting, mandatory for health care facilities, is collated by the Regional Health Departments in an electronic datasheets format and accumulated upwards by the Medical Statistics Center of the MOH. Based on this data, Ukraine’s State Statistics Service publishes a statistical yearbook on health, reflecting both administrative and clinical data. There are certain incentives for health care facilities to skew or misrepresent data reported through the standard paper-based statistical forms, which ultimately reflect in the yearbook.

Facility level health management information system initiatives, in the absence of uniform standards, often are not compatible with each other and do not allow for aggregation of data at sub-national or national levels.

Non-existence of a national, integrated and functional electronic health information system, and hence, lack of transparency, creates an excellent ground for corruption at every level.

Until recently, the state Sanitary-Epidemiological Service (SES) was the MOH’s main instrument responsible for public health service delivery and surveillance. SES monitored the distribution and administration of the vaccines. Since SES merged into another structure and its local SES stations abolished, local health authorities are in charge of immunization oversight. Another public health service funded through the public purse, until recently, was mass medical screening (from dental checks to eye-sight, heart, lungs, orthopedic, urinary system/ gynecologic check-ups, and bio-chemical blood analyses) of certain groups of people, like school children, university students, military conscripts, big enterprises workforce. Most of these screening programs are not evidence-based and remain primarily as inertia from the soviet style mass “dispanserization” programs.

Responding to the challenges above, GOU and MOH, with the support of international donors implemented several waves of Ukrainian health care sector transformation. In the past most of these reforms were of incremental value and left the old system practically intact. The current wave of reforms was initiated after the 2014 Revolution of Dignity and intensified with the appointment of the new Acting Minster of Health in September 2016.

2. Ongoing Health Sector Reform Initiatives

In 2015, the MOH commissioned the development of the National Health Reforms Strategy for Ukraine 2015

– 2025. The strategy documented problems existing in the sector, namely long-lasting absence of modernization, a disregard to population needs, and substantial pockets of inefficiency and corruption.

Mismatch between what the state promises in terms of health service access, and what it is able to provide was identified as one of the major obstacles. The Strategy defined the vision, principles, priorities, objectives and key measures of the sector and identified key principles for Ukraine’s health care system reforms: a state-guaranteed package of services available for all; the national standards of excellence and professionalism;

single purchaser of health care services instead of fragmented funding via local administrations; patients’ empowerment; collaboration across organizational boundaries; value for money and effective use of limited resources; and accountability to the public, communities and patients. The Strategy stipulates major directions for the reform, which include PHC strengthening, reforming the hospital sector and public health, emergency services, and dental care. The Strategy also circumscribes the role of the MOH, re-profiling it from operational functions to policy making, steering and regulatory oversight. According to the Strategy, those changes should come along with enhanced autonomy of the formerly vertically governed health service providers. The strategy also paid special attention to reorienting the health workforce and reforming the pharmaceutical sector. All of the changes rely on timely and valid health information.

Following the strategy development, the MOH drafted the Healthcare Financing Reform Concept, consequently approved by the decree of the Cabinet of Ministers of Ukraine on November 30, 2016 #1013-p.

According to the concept, under the new health financing arrangement, the money will follow the patients.

This will change the old input-based financing system and create incentives for improved quality through free choice and competition. Other major changes, envisioned in the Concept, include establishment of the new national health purchasing agency – National Health Service (NHS), enhancing provider autonomy, introducing strategic purchasing (contracting) of health services from providers, and developing the new Government Guaranteed Healthcare Benefits Package (GGHBP). The Package will define the scope of primary, secondary and tertiary services and medicines, to which every citizen of Ukraine will be entitled, with co-payments in certain cases. A component of the GGHBP, guaranteed package of primary health care services (GPPHCS), has been drafted by the MOH and circulated for discussion within the medical community. The draft also defined a package of essential equipment that PHC doctors must have in order to provide GPPHCS.

At the initial stage, due to legislative barriers, the decision was made to establish NHS as a new MOH department, using the funds allocated for existing vacant positions in the MOH. The NHS will also have regional branches, ultimately transitioning to become an independent purchasing agency under the MOH. In order to launch the new institution, the Ministry of Health created a dedicated Technical Implementation Unit.

Its primary goal is to boost capacity, launch and support a set up of the NHS to execute strategic purchasing of health care services, design key business processes and procedures, and help scale-up the NHS to its full capability.

As the vanguard of the new health financing model, the MOH plans to implement capitation payment for primary healthcare. The MOH placed priority on PHC by significantly increasing the budget allocation for PHC in 2017. According to the capitation method, the government will pay a set amount per patient registered with a particular PHC doctor for a pre-defined PHC benefits package in a defined period of time, one year as a rule. Despite the lack of reliable medical data, the MOH calculated estimated annual capitation rates that the NHS will pay to a PHC center for each of the registered patients by dividing the total budget, allocated for PHC services on the number of eligible population. At this stage the decision was made to keep the capitation rate flat, without risk-adjustments of any type. The new capitation payment for PHC services is planned to come into force from July 1, 2017. In the meantime, people will have time to register with their preferred PHC physician. Those patients who do not register themselves will be randomly assigned to a physician based on geographical coverage. Patients will have the freedom to change their physician as many times as they wish.

For secondary and tertiary care, in order to enforce provider autonomy and exercise “money follows the patient” principle, the MOH plans to introduce a provider payment method such as Diagnosis Related Groups (DRG). Another MOH initiative - formation of hospital districts - aims to improve quality and streamline and consolidate provision of hospital services across the country. Oblast state administrations are forming the geographical boundaries of the hospital districts (HDs). By the end of March 2017, the Cabinet of Ministers of Ukraine approved hospital districts proposals from 11 oblasts (to include Dnipro, Zhitomyr, Zaporizhzhya, Kyiv, Luhansk, Poltava, Rivne, Ternopil, Kherson, Khmelnytsk, Chernigiv oblasts with 3-5 HDs in each) and Kiev city. Each hospital district should have at least one hospital with round-the-clock intensive care and specialized medical care capability. The coverage population should be at least 120,000 people and a patient should be able to reach the hospital within one hour. It is envisaged, that some of the smaller hospitals with low volume of services, where patient workload for individual physicians is lower than the necessary minimum to ensure maintenance of skills, ultimately leading to lower quality of services, will be converted into rehabilitation centers, diagnostic centers, outpatient clinics, hospices, etc.

The MOH is also restructuring the public health system of the country. USAID is assisting the MOH to streamline the public health service delivery system through the establishment of the National Public Health Center as a single national agency; developing human resources for the public health system; establishing regional public health centers; developing the appropriate regulatory framework; and developing financing models for provision of public health services.

The MOH also plans changes in the pharmaceutical sector in order to improve access to essential medicines.

Specifically, the MOH from April 1, 2017 introduced a drug reimbursement scheme for the three priority conditions: cardio-vascular diseases (CVD), diabetes type 2, and bronchial asthma. For this purpose the government allocated UAH 500 Million in the 2017 state budget. In total, 21 generic name drugs have been selected that will be reimbursed at a minimum generic price level.

In 2015, under civil society and patients’ groups pressure, the MOH launched the procurement of medicines through international organizations for the 18 state targeted health programs as an interim measure to fill the managerial capacity gap and reduce corruption in the state medicines procurement. By 2019, it is planned that Ukraine will have a functioning independent National Procurement Agency. Despite initial bureaucratic GOU delays to develop and approve regulations supporting the new international procurement law, in 2015 the international organizations succeeded in procuring 95% of the ordered medicines, with more than $26 million USD saving in comparison with the 2014 state procurement done by the MOH. There is still significant opposition to international procurement among the pharmaceutical community, with a strong lobby in Verkhovna Rada (the Ukrainian Parliament), fueled by a loss of lucrative bonuses and cashbacks that accompanied the previous corrupt procurement system.

In 2016, the GOU launched a new public e-procurement system, ProZorro, which replaced old paper based tenders and reduced the space for corruption in public procurement. In order to monitor public procurement, civil society organizations, with support of Transparency International Ukraine, launched the DoZorro e-platform in November 2016. The main feature of DoZorro is the establishment of a unique database of real assessment of certain tenders, contractors, and procurers. According to some assessments, introduction of the ProZorro system has reduced corruption in public procurement by 25%. More time is needed to demonstrate the effectiveness of the DoZorro civil monitoring platform.

The proposed initiatives necessitate a functional and integrated electronic health information system, or eHealth. The MOH, in collaboration with civil society and donor organizations, has developed the eHealth concept as an initial step towards developing a comprehensive information system. According to the concept, the goals of the new eHealth system are: increase the effectiveness of health care system; enforce the “money follows patient” principle for increased transparency and reduced fraud and corruption; improve health care quality; allow for evidence-based policy and decision making; empower patients and doctors; improve patient safety; build new relationships between patients and health workers; and ensure continuity of care across levels of health system. The immediate next step for development of eHealth system is to enable the planned changes in the financing of the primary care services. Specifically, the eHealth pilot would allow patients to register with the PHC physicians of their choice, and calculate the capitation payments. Additional next steps in the eHealth operationalization include development of the so called minimum viable product (MVP), an initial platform that will define overall data standards and will allow for further connectivity and stepwise expansion of the system. The initial platform will include a national register of patients, a registry of medical healthcare providers, registry of medicines, model health service agreements, standard classifications of health care interventions, and reimbursement modules.

Reform initiatives are being piloted at the sub-national level in parallel to national level health sector reform efforts. Specifically, the Health Department of the Kyiv City Administration has developed a Concept of Health Sector Development for Kyiv, aiming to ensure access to high quality medical services for every city resident. The components of the concept mirror the national level efforts, and cover changes in the funding mechanisms for health care services; enforcing the “money follows the patient” principle; enhancing the autonomy of the PHC and inpatient care providers; modernizing infrastructure and equipment in the primary health care centers/ ambulatories and clinical diagnostic centers (CDC) ; introducing insurance principles;

developing the eHealth platform; and re-organizing the public health system in the city. In line with the concept, the legal status of the PHC and CDC of Kyiv has been modified from the budgetary (public) organization to not-for-profit municipal enterprise. This change allows primary healthcare and diagnostic centers to have an account in the commercial banks, and reinvest surplus back into facilities.

In the medium term, the MOH plans to continue reforms in the above-described directions. On the health financing side, the MOH will continue rolling out the PHC capitation system during 2017 and 2018. In parallel, preparatory work is underway for introduction of the DRG payment system for inpatient services, accompanied by hospital districts formation and activities aimed at enhancing health service provider autonomy, and possibly introducing legislative changes that would allow for the contracting of private entities for provision of services.

In brief, during 2017 and beyond, the MOH plans to develop a comprehensive GHBP that will cover all levels of care and medicines, develop and strengthen the NHS, further expand eHealth, and continue to streamline the public health system. All of these changes will be accompanied by a strategic and targeted communication and information campaign in support of the reforms.

3. Challenges and opportunities Radical reforms, launched by the MOH are facing numerous barriers and challenges. Proposed reforms have met heavy resistance from medical personnel at all levels. Despite MOH communication efforts, many physicians still complain about not being informed and/or consulted about the directions of reforms. Many of them fear losing jobs and informal income. In many cases, chief doctors of hospitals and heads of Oblast Healthcare Departments are conservative and resistant to change. Regional health administrators and chief doctors fear losing their existing influence and formal or informal benefits. Local doctors, dependent on those administrators, are being mobilized to resist reforms. Incomplete and deliberately manipulative information about planned changes cultivates numerous myths, which MOH attempts to tackle in a reactive mode.

Overall, there is a need to better structure and intensify communication in support of the ongoing reforms, with better targeting of the messaging to particular groups, identifying champions and change agents, and multiplying allies of this process.

Despite all the challenges, there are clear opportunities to accelerate reforms. The current MOH leadership is determined and motivated to implement changes. The Acting Minister seems to have strong political backing from the Cabinet of Ministers, the Prime Minster, and the President. A fast approaching new election cycle calls for ruling party politicians to demonstrate tangible results to the public. Decentralization reforms, implemented in parallel to health care reform, create fertile ground for moving the health reform agenda forward.

IV. SUPPORT OF INTERNATIONAL DONORS TO HEALTH SECTOR REFORMS

In 2015, the World Bank launched a five-year, US $215 million Serving People, Improving Health Project, seeking to improve the quality of health care services in eight selected Oblasts, with a special focus on primary and secondary prevention of cardiovascular diseases and cancer, and to enhance the efficiency of the health care system. Under the project’s Strengthening MOH Governance component, the World Bank intends to spend US $20.2 million for design, piloting and implementation of new provider payment systems such as DRG; strengthening the MOH’s stewardship role through developing the eHealth platform; preparing and implementing the public health services development strategy and action plan; supporting the information and communication campaigns to keep up the reform momentum; and improving the management of health services at regional and national levels through capacity building and learning activities.

The Swiss Agency for Development and Cooperation (SDC) is concentrating its efforts on strengthening the PHC level with a focus on health promotion and prevention. SDC supports ongoing health sector reforms through several of its projects. SDC is partnering with the World Health organization (WHO) through the Policy Dialogue for Better Health Governance project (2015–2019, CHF 1.85 Million) to strengthen the Government of Ukraine’s capacity to lead and steer reforms; endorse evidence-based policies; improve inter-sectoral and donor coordination and efficient communication; and strengthen the MOH’s institutional capacity to govern and deliver quality public health and people-centered, results-oriented, and inclusive health services. In the framework of the project, WHO is assisting the MOH to develop the GPHCS. SDC is also partnering with the World Bank through the Support for Reforms and Good Governance project (2016 – 2020, CHF 2.65 million) to tackle the root causes of poor health outcomes, support reform implementation at the regional level, and ensure transparent implementation of the World Bank project at a local level. SDC, jointly with UNICEF, is assisting the MOH in health promotion and communication in reproductive, maternal and child health, as well as communication about reforms (2013-2017, CHF2.83 million). SDC, through its Human Resources for Health – Medical Education project (2017-2026, CHF 10 million) is also planning to invest in the improvement of the medical education system in Ukraine with particular emphasis on preparation of family doctors / general practitioners and nurses. Finally, SDC is contributing to strengthening mental health care services provision through support for the mental health reform efforts of the MOH. These include introduction of modern evidence-based care guidelines, improving quality and standards of mental health education, and improving network collaboration and development of preventive programs for war-affected and general populations with mental health disorders.

V. USAID ONGOING SUPPORT OF REFORMS

The USAID HIV Reform in Action (HIVRIA) project (2013-2018) aims to strengthen Ukraine’s health system to ensure effective and sustainable delivery of HIV/AIDS prevention, care and treatment services to key populations. The project assists the MOH and the GOU in modernizing and streamlining the public health service delivery system through establishment of the National Public Health Center and Kiev Public Health Center; providing high quality training opportunities in public health and health systems; assisting the introduction of new health financing models; supporting MOH’s move towards enhancing the autonomy of health service providers in line with the ongoing decentralization process; and assisting the MOH in designing and implementing a communications campaign in support of the current reforms.

Under the Systems for Improved Access to Pharmaceuticals and Services (SIAPS) project (2012 – 2017), USAID assists the GOU to improve access to HIV/AIDS and Tuberculosis (TB) medications and diagnostics at public health facilities. The project improves information systems to assure continuous product availability and appropriate use of TB and HIV/AIDS medications; builds institutional and human resource capacity to ensure adequate commodity supplies and services; and strengthens pharmaceutical policies and systems to assure safe and appropriate use of TB and HIV/AIDS medicines.

The purpose of the new Safe, Affordable and Effective Medicines for Ukrainians (SAFEMed) project (2017 – 2021) is to strengthen the pharmaceutical system in Ukraine to ensure transparency and cost-effectiveness for desired health outcomes. This project will support the ongoing efforts of the GOU and its civil society partners to transform its healthcare system to effectively meet the needs of its citizens.

Specifically, the project will provide technical assistance and support to the GOU, civil society, and the private sector to improve public procurement of medicines and health commodities. In addition, the project will contribute to the creation of sustainable health pharmaceutical financing, and strengthen rational pharmaceutical management and the pharmaceutical supply chain. The project aims to strengthen pharmaceutical sector governance, optimize financing, and increase availability and appropriate use of essential medicines. It is expected that the Ukraine Health Reform Support Project will work in tandem with the SAFEMed to maximize synergies in order to achieve its purpose and objectives.

USAID Health Financing and Governance (2016-2018) project is assisting the MOH in adaptation and implementation of international cost-accounting system to Ukrainian conditions, developing practical guidelines for facility level cost–accounting systems, supporting implementation of cost-accounting and hospital performance systems in pilot regions and their roll-out; assisting the MOH in designing the DRG and capitation payment systems; and building the human and institutional capacity of the MOH and NHS.

USAID is also supporting Improving Mental Health and Psychological Support Services (MHPSS) project (2015 -2017) for Conflict Affected Populations in Eastern Ukraine. The Increased Capacity for Psychological Support Activities and Services activity is aligned with Inter-Agency Standing Committee (IASC) Guidelines on MHPSS in Emergency Settings among National Actors, Organizations, and Agencies, and implemented by International Medical Corps. The project strengthens the provision of mental health and psychological support in Ukraine in line with international principles and guidelines, increases the capacity of relevant local organizations to apply the IASC guidelines and to link psychological support to evidence-based mental health services for conflict-affected populations in selected localities in Ukraine.

The goal of the USAID’s Ukrainian Standardized External Testing Initiative (USETI) (2013 – 2017) is to help Ukraine’s higher education system to become more transparent in selecting applicants for baccalaureate and other levels of higher education. The project is building coalition for standardized testing for university admissions, bringing together a growing circle of supporters among educators, NGOs, businesses and parents who understand the benefits of merit-based admissions to higher education institutions.

USAID’s Transparency and Accountability in Public Administration and Services (TAPAS) project (2016 – 2021) provides e-governance tools to reduce opportunities for corruption within the GOU and engages the public in anti-corruption efforts. TAPAS has three major components: training Ukrainian officials to use software-based procurement processes that reduce corruption (e.g. eliminating malfeasance, providing transparency in acquisition, and imposing accountability); supporting an Open Data initiative that disseminates standardized, accessible, and consistent GOU data for public, intra-governmental, and international oversight; and maintaining an e-Services platform that provides government services over a secure and user-friendly medium. In addition to the project level assistance, and in order to fill the qualified staff gap in the MOH, USAID provides several Ukrainian national advisors to the MOH on legal, communication, health financing, and procurement issues.

The Substance Abuse and Mental Health Services Administration (SAMHSA) under the US Department of Health and Human Services, with the PEPFAR funding, will start a new activity in Ukraine with the objective to support the prevention, care and treatment of HIV/AIDS and associated with substance abuse and/or mental health issues. The activity employs technical assistance, direct training, coordination, and (limited) financial assistance to promote the availability of high quality effective prevention, care and treatment of SUD/MH associated with the spread of HIV/AIDS. SAMHSA is supporting three main mechanisms in the area of Substance Use Disorders and mental health: 1. Assessing and developing the Substance Use Disorders and Mental Health Policy environment; 2. An Assessment of Drug Addiction Treatment in the Ukrainian Context: Development, Effectiveness and Options for SAMHSA Involvement/Support, and 3.