Some 2.5 million households in Ukraine experienced catastrophic health expenditure in 2021. This represents almost 1 in 5 households, a higher share than many other countries in the WHO European Region, according to a new report launched today at the forum WHO Barcelona Conference on Financial Protection in Europe.
Catastrophic health care costs mean that a family can no longer afford to meet their basic needs – food, shelter and electricity – because they have to pay out of pocket for health care. In Ukraine, households with catastrophic health expenditure are mainly those with low incomes and those headed by retirees or in rural areas.
The new WHO/Europe report, “Can people afford to pay for health care? New evidence on financial protection in Ukraine” shows that financial hardships due to direct payments are almost entirely due to spending on medicines and hospital treatment. Medicines are the main driver in the poorest households and hospital treatment in the wealthiest households. L Hospital care plays a much larger role in driving catastrophic healthcare spending in Ukraine than in most other countries in the European region.
This new analysis reflects the state of financial protection (affordable access to health care) in Ukraine even before the invasion of the Russian Federation in 2022. Drawing on survey data from 2009 to 2021, it explores the impact of financing reforms health care started in 2017, finding that there was a small but substantial decline in catastrophic health care spending between 2018 and 2021. This positive trend will likely be reversed by the devastating effect of the invasion on the economy, health care system, poverty of families and people’s health.
“Since 2017, the Ukrainian government has taken steps to reduce direct payments by increasing public spending on health care and through health care financing reforms that aim to improve the equity and efficiency of the health system. It is good to see a positive impact from these changes, although much remains to be done to address the challenge of direct payments, particularly for people on low incomes and others at high risk of catastrophic healthcare costs,” said Dr Jarno Habicht, WHO representative in Ukraine.
“The strengths of health coverage policy in the current system – near universal population coverage and very limited use of co-payments – are increasingly important in the context of war,” said Alona Goroshko, lead author of the report. WHO. “The report recommends that the government continue to support the National Health Service of Ukraine (NHSU) so that it is better able to reduce out-of-pocket payments for medicines and hospital care in ways that improve financial protection. This is likely to increase trust in the health care system and foster confidence in the government’s ability to improve people’s lives in the difficult context of war.”
The reforms aim to bring Ukraine closer to universal health coverage
The new WHO report finds that the hedging policy in Ukraine has 3 characteristics associated with greater financial protection.
First, entitlement to publicly funded health services is based on residency, ensuring that the majority of the population is covered, in contrast to health systems that constrain entitlement to contributions, where many people may not be covered.
Second, the introduction of the Affordable Medicines Program (AMP) in 2017 and the Program of Medical Guarantees (PMG) in 2018 (with further expansion in 2020) was a major attempt to explicitly link publicly funded health benefits health care needs and available resources.
Thirdly, utility costs (co-payments) are minimized, especially in primary care.
Gaps in coverage compromise financial protection
Despite these important positive features, informal payments and other direct payments are widespread in the health care system. This is due to low levels of public health spending and other inefficiencies, including the following factors:
- People often pay out-of-pocket for outpatient medications because the AMP introduced in 2017 still covers only a relatively small number of conditions and is accessible to a small fraction of the population. There is also some geographical disparity in access to PMI benefits.
- Although the law requires outpatient medicines to be prescribed by active ingredient (International Nonproprietary Name), in practice this is not the norm; doctors often prescribe brand name medicines with a higher relative cost. Furthermore, a significant proportion of prescription and out-of-pocket medicines are not proven to work.
- People are generally expected to provide their own medicines and other supplies in the hospital due to the PMG’s persistent underfunding relative to the range of services it covers, the limited scope of the Ukrainian List of Essential Medicines (which defines covered hospital medicines), of failures in the procurement or distribution of centrally purchased medicines and medical products and low levels of supplier liability.
Make access to health care accessible to all
The report highlights 5 ways the government of Ukraine can strengthen financial protection:
- Prioritize public spending on comprehensive primary care, which includes funding for improved access to drugs and diagnostic testing, and strengthen drug prescribing, dispensing, price regulation, and availability.
- Reduce informal payments for hospital care.
- Improve the governance of the PMG by making the process for its design and expansion more explicit, transparent and inclusive of a range of perspectives.
- Strengthen the ability of the NHS to be an active buyer of services, which will enable it to make better use of public resources.
- Implement policies to improve the protection of low-income and other households at high risk of catastrophic health care expenditures.
About the report
The report is based on data from household budget surveys conducted between 2009 and 2021 and information on coverage policy (population coverage, service coverage and user charges) up to the end of 2022. It assesses the state of protection protection in Ukraine before the full-scale invasion in February 2022. Ukraine is one of the few countries in the European region to provide evidence on financial protection until 2021.
On WHO/Europe’s work on financial protection
Financial protection is central to universal health coverage. It is an indicator of the Sustainable Development Goals, part of the European Pillar of Social Rights and at the heart of the European Work Programme, WHO/Europe strategic framework.
WHO/Europe monitors financial protection through the WHO Barcelona Office for the Financing of Health Systems, using equity-sensitive regional indicators. WHO’s Barcelona Office provides tailored technical assistance to countries to reduce unmet needs and financial hardship by identifying and addressing gaps in health coverage.
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