Through the War: What Happened to Healthcare in 2022

Despite announcing a new “infrastructural stage” and ambitious recovery plans, the system’s reform momentum continued to decrease. This was accompanied by a decline in the institutions established during the reforms, specifically the National Health Service.

Wartime decisions

The onset of the massive invasion resulted in an unprecedented level of stress on the healthcare system. Unlike other public sectors, hospitals and doctors had to continue operating even in the war’s most intense phases, particularly in the areas most affected by the Russian agression. Doctors and hospitals were major targets of the massive russian attacks, leading to the destruction or severe damage of at least 292 hospitals and the deaths of 62 medical workers. During the initial phase of the war, access to essential medicines and services was disrupted, causing thousands of doctors, nurses, and millions of patients to flee from their homes and workplaces.

Despite the challenges, the healthcare system managed to withstand the crisis and maintained its ability to perform its functions. This was due to several factors, including the dedication and service of many doctors, nurses, and heads of medical institutions and the wartime decisions made by the Ministry of Health, the Cabinet of Ministers, and Parliament. The previous structural reforms also played a significant role in making the system more viable.

During the most difficult times, many doctors, nurses, and managers chose to remain in their institutions and continued to provide care. Others took on the responsibility of helping thousands of internally displaced individuals who had relocated to new areas. Doctors also maintained communication with their patients through online platforms, and several online communities of medical professionals were established to help anyone in need.

The full managerial and financial autonomy that was implemented during the 2018-2021 reforms played a crucial role in the resilience of medical institutions. Delegated authority and the ability to make operational decisions on-site helped both our army and medical facilities, particularly during the first few months of the invasion. In instances where the vertical connections within the system were broken or non-existent, proactive directors of institutions had the necessary legal framework to independently make decisions, such as temporarily relocating departments, evacuating patients, and engaging humanitarian aid and specialists.

The Ministry of Health simplified access to primary medical care for internally displaced Ukrainians in March. Individuals with IDP status were granted the right to see a doctor without any restrictions on location and without having to submit a new declaration to choose a doctor.

The system was also simplified for individuals with chronic illnesses who required medication. For instance, the Ministry of Health modified the regulations regarding insulin prescriptions for patients. Patients could obtain a prescription from a primary care doctor if the electronic healthcare system (eHealth) indicated a previous appointment with an endocrinologist. In March, the Cabinet of Ministers of Ukraine (CMU) authorized free insulin dispensing to patients under the Affordable Medicines program. However, in July, the government reintroduced the mechanism for reimbursing the cost of insulin medications with the option of partial additional payment by the patient.

On February 25, the Cabinet of Ministers modified the payment terms for contracts with the National Health Service of Ukraine (NHSU) to ensure the stable functioning of healthcare institutions. The “money follows the patient” principle was put on hold, and actual monthly payments for medical services were made based on the principle of 1/12. This means that institutions were provided with monthly funds for the medical services they delivered, amounting to 1/12 of the previous year’s contract amount. The contract was established for 12 months, although it could be shorter. The requirement for entering information into eHealth was made optional.

Since  July, the payment for medical services provided under the 1/12 principle and the optional data entry in eHealth were only applicable to healthcare facilities located in territories affected by active hostilities or temporarily occupied areas (surrounded, blocked). Towards the end of the year, the NSHU introduced the “Readiness and provision of medical assistance to the population in areas of active hostilities” package for institutions in combat zones at the time of submitting a contract proposal. This package includes agreements with municipal medical institutions (excluding dental and primary care facilities). In 2023, the NSHU will cover the actual cost of services these institutions provided during 2022 under specialized assistance packages.

Providing funding for medical service providers in temporarily occupied territories has been and remains a complex issue. Throughout 2022, the NHSU continued to make payments to these institutions based on the 1/12 principle. At the end of the year, a package was introduced called “Preservation of Personnel Potential for Providing Medical Assistance to the Population in Territories under Temporary Occupation,” which is self-explanatory. However, this package only applies to municipal  medical facilities in temporarily occupied territories, and the government neglected the “personnel potential” of private medical facilities that provide state-guaranteed services to patients.

The government made changes to the Medical Guarantees Program in response to the new health challenges caused by the war at the end of 2022, particularly regarding mental health recovery and rehabilitation services. In November, two new healthcare packages were added to the MGP: “Support and treatment of adults and children with mental disorders in primary medical care” and “Complex rehabilitation care for adults and children in inpatient conditions.”

The government resolved the issue of obtaining assistive products , such as wheelchairs, crutches, canes, etc., for patients undergoing rehabilitation in healthcare facilities in December 2022. The new policy allowed patients to receive assistive products  directly from the facility without having to wait for a long time. If a multidisciplinary team or rehabilitation specialists identify a patient’s need for assistive products , they can obtain it temporarily from the healthcare facility and return it once it is no longer required.

In addition, the government approved the standard state plan for rehabilitating individuals with daily functional limitations and established guidelines for drafting individual rehabilitation plans. This represents a natural and essential step towards providing contemporary rehabilitation assistance within Ukraine’s healthcare system.

In November, the government also standardized the rehabilitation routes for spinal cord injuries, brain injuries, burns, amputations, and complex skeletal injuries.

Three great laws

In 2022, Parliament passed three major sectoral laws, whose preparation had been ongoing in previous years. They aim to regulate the development of the hospital network, the public health system, and the medicinal products sphere.

The law on the “capable network of hospitals.”

The need to reorganize Ukraine’s hospital network has been relevant since the country gained independence. Despite spending twenty-six times less on healthcare than the average EU country, Ukraine has the second-largest hospital network. This bloated, financially insolvent, and technologically weak network consumes enormous funds, with hundreds of hospitals existing more out of inertia than a real need. The network was established in the 1970s and 1980s and was ineffective even for a population of 50 million at the time. Nowadays, it is technically, “civilizationally” and morally outdated for present-day Ukraine, which aspires to join the EU.

Reforming hospitals has been politically toxic, resulting in slow progress. In 2017-2019, a team that included the authors of this article attempted to address the issue by proposing the creation of hospital districts serving 200-300 thousand people each. Unfortunately, this attempt was unsuccessful due to the time’s incomplete administrative and territorial reform.

The new law and subsequent government decree represent another effort to tackle the issue. Under these regulations, the country will be divided into hospital districts aligning with regional borders and hospital clusters corresponding to the new communities formed in 2020.

The hospital network will be categorized into three types: general, cluster, and supercluster, as per the new law. General hospitals are required to provide essential hospital services to a population of at least 40,000 people within a 60 km radius. Cluster hospitals are obliged to serve a population of at least 120,000 people, and each hospital district must have at least one cluster hospital. If the population exceeds 300,000, additional cluster hospitals may be established, which offer more comprehensive services with specialized treatments. 

Lastly, the supercluster hospital covers the entire hospital district’s population and serves as a center for specialized treatments such as oncology, cardiology, psychiatry, etc.

According to the new legislation, the hospital network looks neat and logical corresponding to the country’s new administrative-territorial division. Some streamlining is also anticipated. For instance, due to low births, general hospitals plan to phase out obstetric departments. Moreover, the law and resolution stress the importance of hospitals’ financial stability, which is critical given the challenging economic situation in Ukraine due to the ongoing war.

However, in terms of long-term planning (15-20 years), the changes appear too conservative. The law essentially accommodates all existing hospitals in the new network. General hospitals can easily be identified as low-capacity “district hospitals” and supercluster ones as “regional hospitals.” It is tempting to merely rebrand existing hospitals since the new law does not preclude this.

The population coverage of the hospitals, and consequently their capabilities and capacities, falls short of even current European standards, let alone future ones. A contemporary European general hospital caters to a population of 300,000 to 600,000, and many countries intend to further expand their facilities. Establishing inpatient facilities for 40-50 thousand people belongs to a bygone era. Financially speaking, such low-capacity institutions cannot meet the necessary financial requirements to remain technologically up-to-date.

The legislation intends to simplify the current hospital network but falls short in terms of establishing a new one. The government requires definitive and daring priorities since revamping or improving each hospital in the nation would be a significant mistake.

Law on public health

Public health needed an industry-specific law since its reforms in 2015, so its adoption was a significantly positive step.

However, the content of the law was significantly influenced by the COVID-19 pandemic, which caused considerable damage to Ukraine’s human capital. According to estimates by The Economist, in addition to the 106,860 deaths directly attributed to COVID-19, the pandemic resulted in an additional 195,210 deaths from related causes. Although Ukraine’s public health system did not perform well in response to the pandemic, this is not unique to Ukraine. Most countries, with a few exceptions in Scandinavia and Southeast Asia, struggled to effectively manage a major pandemic.

The two Ministers of Health, who were involved in fighting the pandemic, believed that the solution lay in “creating a vertical structure,” as provided for by the new law. The law transfers a long list of public health functions to the Ministry of Health, which changes the direction of the 2015 reform. The 2015 reform aimed for a decentralized model with distributed functions coordinated by the newly established Public Health Center (PHC).

A network of newly established Centers for Disease Control and Prevention (CDCPs) will be created on the ground to implement the Ministry of Health’s functions. These centers will be directly subordinate to the Ministry, and the “vertical” will be led by the Chief Sanitary Doctor, whom the government will appoint from among the deputy ministers. The head of each CDCP will be regarded as the chief sanitary doctor within their respective region.

The new law significantly reduces the role of the Public Health Center, which was initially supposed to be the central coordinating body of the system. Its functions have been limited to “mainly information gathering and research,” with the PHC head now serving as the deputy to the Chief Sanitary Doctor.

Some experts were concerned that the law might bring back the old Soviet-era Sanitary and Epidemic Service (SES) in a new form. Although the new system does not directly reproduce the SES, it revives some of its management traditions. This model is expected to make epidemic responses more manageable. Still, there are risks associated with concentrating most of the powers in a political figure, namely the deputy minister (who de facto serves as the minister), and in assigning most tasks to the Ministry of Health, which is not inherently responsible for direct management and policy implementation of the system.

Law on Medicinal Products

The adoption of the updated industry-specific law, which governs the drug market, was eagerly awaited by all market participants since the previous one had been passed in 1996. The regulation of medicines is one of several healthcare areas that affect Ukraine’s integration with Europe.

Despite not containing any revolutionary changes and even including some outdated elements, such as the recognition of homeopathy as a medicine, the new law serves as the foundational document for pharmaceuticals in Ukraine. It brings the regulation of manufacturing, registration, and circulation of medicinal products at all stages in line with EU standards.

Furthermore, the law establishes a new government agency responsible for regulating and overseeing the circulation of drugs in Ukraine. This agency is referred to as a “state control body” in the law. It is expected to result from the merger of two existing regulatory bodies: the State Expert Center (DEC) and the State Medical Service. 

However, the implementation of this change will not occur immediately. Most of the law’s provisions will take effect no sooner than 30 months after the end of martial law, which means the earliest possible date for implementation would be 2026.

Reform

Medical reform, whose continuation is crucial for the long-term sustainability of the healthcare system in wartime and post-war periods, experienced both progress and setbacks in 2022. 

At the end of 2021, the Verkhovna Rada introduced a new organizational and legal structure for hospitals in the form of state non-commercial enterprises. This allowed departmental and state medical institutions to participate in the Medical Guarantees Program, enter into contracts with the National Health Service, and receive refunds for the services they provide.

In October 2022, the government capitalized on this opportunity by approving the reorganization of one of the country’s key hospitals (the National Cancer Institute, NCI) into a state non-profit enterprise. The NCI signed a contract with NSHU to provide 15 medical service groups. It stands to receive over UAH 440 million in 2023, significantly more than it received under the previous state program.

The NCI remains the only such precedent. However, in March 2023, the government approved a “pilot project” to include the Feofaniya Clinical Hospital, which belongs to the State Management of Affairs and treats civil servants, in providing services under the program. Unlike the NCI, the notorious Feofaniya will not be transformed into an enterprise receiving funding from the NHSU and the State Social Security Administration. The pilot project will last until December 31, 2023. Still, it is likely to be extended, given that the National Academy of Medical Sciences institutions have been part of a similar project for seven years.

The healthcare industry suffered a setback with the reintroduction of wage regulation for medical and pharmaceutical workers. The Verkhovna Rada amended the fundamentals of Ukrainian healthcare legislation, allowing the government to determine the minimum wage for employees working in municipal  and state healthcare institutions. The law on salaries was also revised accordingly. 

Subsequently, in January 2022, the Cabinet of Ministers of Ukraine, acting under the President’s decree, set a clear minimum salary for doctors (UAH 20 thousand) and nurses (UAH 13.5 thousand), along with additional payments and allowances.

In fulfillment of this decree, the National Health Service had to perform an atypical task of effectively providing financial support to medical institutions by introducing a new medical services package called “Preserving Personnel Potential for Medical Care,” intended explicitly for publicly-owned healthcare facilities. Although the package does not involve actual services, it aims to provide extra funding to these institutions so they can compensate their employees at government-mandated salary rates. In 2022, approximately UAH 1.4 billion was allocated to institutions through this package, which is expected to rise to UAH 3.1 billion in 2023.

During martial law, a similar strategy was employed to pay medical interns. In July 2022, Parliament approved a measure that allows interns to provide medical assistance during emergencies. A new medical services package called “Ensuring the personnel potential of the healthcare system by organizing the provision of medical care with the involvement of intern doctors” was established to support this policy.

Weakening of NHSU

Using NSHU (a key body of the reformed system) in an atypical capacity suggests its institutional decline, compounded by the sustained reduction in its funding. 

The NSHU’s budget was already reduced in the pre-war 2022 budget, but the 2023 “wartime” budget saw a uniform reduction in spending for most programs by an average of 10% in hryvnias. However, the NSHU’s budget was disproportionately affected, experiencing a -39% reduction compared to 2022 and a -47% reduction compared to 2021.

There is no justification for this reduction in funding, especially considering that the National Health Service has been in urgent need of increased institutional capacity in recent years. In 2023, the NSHU’s budget will only account for 0.13% of the PMGP’s budget, which is over ten times less than the European standard for funding similar institutions (1-2% of the total budget for medical services). 

This lack of adequate funding will severely hinder NSHU’s ability to effectively provide guaranteed medical services and control  their quality and completeness. Additionally, it poses a risk to the organization’s independence and may make it vulnerable to being manipulated for political purposes.

Prescription drugs

The issue of prescription-only drugs was addressed in 2022 by the authorities through various measures. 

The first step was taken for antibiotics, which were restricted to electronic prescriptions starting August 1, 2022, except for pharmacies in combat zones or temporary occupation areas. Later, from November 1, electronic prescriptions became mandatory for psychotropic and narcotic drugs that patients purchase with their own funds. 

Additionally, the Parliament passed a law in October that imposed stricter controls on dispensing all prescription drugs and prohibited pharmacies from dispensing prescription drugs without a prescription (although the law will come into effect after the end of martial law).

In practice, the policy’s effectiveness can only be observed for psychotropic and narcotic drugs. Pharmacies could process 69% of the prescribed prescriptions and record data for these drugs in 2022. However, for antibiotics, this figure was only 8%, with the Affordable Medicines program having an 80% implementation rate, for comparison.

Reconstruction and integration into the EU

In July, the government unveiled a plan to rebuild the healthcare system after the war. However, the plan was developed hastily, with the input of nearly 100 experts in online meetings, and is more of a set of recommendations than a fully-formed strategy. 

This was further emphasized by adopting the priority areas for healthcare development for 2023-2025 in October. The fact that there were 17 priority areas suggests that it is premature to identify specific actions or directions the government intends to prioritize during the war and post-war period.

In January 2023, the government created the Project Office for the Restoration of the Health Care System to support the implementation of reforms, recovery measures from the consequences of the war, and the development of the infrastructure of the health care system in Ukraine. It is likely to formulate the agenda for restoring the system in the years to come.

The government established the Healthcare Restoration Project Office in January 2023 to assist in implementing reforms, addressing the impacts of the war, and improving the healthcare infrastructure in Ukraine. The Office is expected to be responsible for setting the agenda for the recovery of the healthcare system in the coming years.

With the support of