4. Paying for services
Adequate funding for health is important to manage the excess demands on the health system. This section considers how countries are PAYING FOR COVID-19 SERVICES. Health financing describes how much is spent on health and the distribution of health spending across different service areas. The section also describes who is covered for COVID-19 testing and treatment, whether there are any notable gaps (in population coverage and service coverage), and how much people pay (if at all) for those services out-of-pocket.
4.1 Health financing
Additional injections of funds into the health system specifically for the COVID-19 outbreak started in February-March 2020. Funds are allocated from the state and local budgets.
On 23 March 2020, the Cabinet of Ministers of Ukraine introduced hourly payments to physicians and other workers directly involved in the treatment of Ukrainians with COVID-19. On 2 April 2020 the President signed the law providing additional payment to medical and other workers directly involved in fighting COVID-19 in the amount of up to 300% of their wage, and to social workers providing services to people at home, in the amount of up to 100% of their wage. Local authorities also allocate funds to enable financial incentives for health care workers. On 13 April the Parliament approved changes to the law on the State Budget 2020 and created a Fund in the amount of UAH 64.7 bln (USD 2.4 bln ) to combat COVID-19 and its consequences (hereafter – COVID-19 Fund). The Government approved the distribution procedure of the fund on 22 April 2020. The funds should provide financial support to the health care sector, in the form of additional payments to medical staff (up to 300% of their salary), procurement of medical equipment, express-tests, PCR analyzers, artificial lung ventilation apparatus, personal protective equipment and social protection of Ukrainian citizens.
As of 3 April, the state (i.e. central) budget allocated a total of UAH 1.25 billion (about USD 45.2 mln ) for measures to prevent and combat COVID-19. These funds were allocated as extraordinary measures. The largest share of these funds (UAH 905.8 mln / USD 32.8 mln) comes from a subsidy of the state budget to the local budgets, in accordance with a resolution on 25 March 2020 by the Cabinet of Ministers. The funds should support health care facilities that provide secondary (specialized) and tertiary (highly specialized) health care during the COVID-19 pandemic, including infectious diseases hospitals, with the aim of ensuring uninterrupted provision of medical services to the population. UAH 67.1 mln (USD 2.4 mln) are used by the Ministry of Health to centrally procure medical products, which aim to prevent the spread of the coronavirus and which will be distributed among the regions. UAH 249.3 mln (USD 9 mln) were allocated to the Ministry of Internal Affairs, the Ministry of Justice and the Ministry of Health to provide them with funds to procure PPE and medical equipment.
On 9 April 2020, the Government and the World Bank delegations agreed on USD 135 mln support from the World Bank to modernize the health sector and address the COVID-19 pandemic, with USD 35 mln dedicated to the COVID-19 response.
Ukraine will receive an additional USD 150 mln from the World Bank, in particular, USD 50 mln to support vulnerable populations during the COVID-19 epidemic and USD 100 mln to improve the overall social protection system.
The Prime Minister welcomed the launch of a separate Ukraine 2020 Humanitarian Response Plan for the COVID-19 Pandemic. According to the Plan, the United Nations will mobilize USD 165 mln by the end of the year to prevent and fight the pandemic in Ukraine. These funds will be directed to address the needs of the health care system and to contain the socio-economic impact.
In April, the European Commission decided to allocate a EUR 190 mln aid package to Ukraine to support the healthcare system, the economy, small and medium-sized businesses, and protect vulnerable groups of people. Separately, the EU has allocated EUR 13 mln for humanitarian needs in Donbas. On 22 April, the President of Ukraine announced on additional decision of the EC to provide Ukraine with EUR 1.2 bln to counter coronavirus. The Government of the Republic of Korea has allocated USD 700,000 to assist Ukraine in the fight against the COVID-19 pandemic. The funding will be spent on the purchase of Korean laboratory test kits and the support under the UN Humanitarian Response Plan.
Furthermore, the private sector is providing strong support, and private businesses are donating funds and equipment to hospitals. For example, in Chernihiv due to combined efforts of private business and local authorities, a modern laboratory performing PCR diagnostics to detect COVID-19 was established. Private companies provide free transportation services for health care workers, free fuel for ambulances, free telecommunication services (phone calls from abroad to state hotlines on COVID-19), etc. International partners, including WHO, are also providing humanitarian support to Ukraine.
Overall funding of the health sector, including non-COVID related health services, from the central budget has not been undermined by the impact of COVID-19 on economic growth.
In addition to COVID-19 Fund the Parliament reprioritized expenditures within the State Budget 2020 and allocated UAH 15.8 bln (USD 585.6 mln) for medical services provision for patients with suspected or confirmed COVID-19 under the Programme of Medical Guarantees (PMG).
On 25 April, the Cabinet of Ministers adopted a decree approving three separate packages for the provision of medical services to patients with suspected or confirmed COVID-19 under the Medical Guarantee Program . The packages include payment to mobile teams conducting home testing, pre-hospital emergency care and inpatient care for COVID-19 patients. The National Health Service of Ukraine, as the sole provider of health care services, will enter into contracts with healthcare providers and pay them for the identification of patients with COVID-19 and for readiness to provide care for them. Payment rates include up to 300% salary top-ups for involved staff and medicines for inpatient/ICU treatment. Additional payment package was envisioned to provide one-month (only in April) payment to the hospitals which had patients with COVID-19 but are not included in the list of COVID-19 designated hospitals. Also amendments to the law on the State Budget 2020 ensured additional funding for social protection measures: UAH 29,7 bln (USD 1.1 bln) has been allocated to the Pension Fund; UAH 19.5 bln (USD 723.1 mln) to the Ministry of Social Policy to support people who lost their jobs as the result of COVID-19.
On 6 May, the Government took a decision to allocated UAH 3.132 bln (USD 116,12 mln) to fight COVID-19 for the following assignment: (i) providing PPE for healthcare facilities and emergency medical care departments; (ii) purchase of goods (works, services) necessary to ensure preparedness and response to COVID-19 outbreaks (in particular, it concerns the costs of Oblast Laboratory Centers of the MoH, UPHC of the MoH and Mechnikov Anti-Plague Research Institute of the MoH; (iii) salaries of healthcare workers and personnel of the Oblast Laboratory Centers of the MoH.
On 22 July the Government allocated 5 955 360,3 UAH to MOH for additional payments to medical and other health care workers who provide medical care to patients with COVID-19, particularly: 5 539 316,4 UAH (consumption expenditures, 276 709,2 tnd UAH of which is for salaries) – to the employees of communally owned health care facilities (except for doctors and/or primary healthcare teams) that provide medical care under the Medical Guarantees Program, and health care facilities under the Ministry of Health; 416 043,9 tnd UAH - subvention from the state budget to local budgets for additional payments to medical and other employees of health care facilities at the expense of funds allocated from the COVID-19 Fund - employees of communally owned health care facilities (except for doctors and/or primary healthcare teams) who do not provide medical services under the Medical Guarantees Program. On 22 September, the MOH approved the passport of the budget program for 2020 (supplements (a total of 5 539 316,4 UAH allocated) for health-care workers providing treatment of patients with COVID-19).
According to the State Treasury, as of 27 August payments in the amount of UAH 5.36 bln were made at the expense of national and local budgets (not from COVID-19 Fund) for the purchase of goods and services at the simplified procedure: UAH 2.33 bln from the state budget and 3,03 bln UAH from local budgets. In August, more than UAH 850 mln was spent. As of 29 September, UAH 25.8 bln, or 39% of allocated funds, has already been used from the COVID-19 fund. As of September 3, the NHSU had paid almost UAH 3.5 bln to health care facilities which have provided care to patients with and suspected of suffering from COVID-19 in April-July.
On 30 September, the Cabinet of Ministers reallocated of 253 mln UAH to increase capacities of the laboratory system in COVID-19 testing. The expenditures will be covered within the framework of the Loan Agreement for Serving People, Improving Health Project between the Government of Ukraine and the International Bank for Reconstruction and Development.As a part of COVID-19 response additional allocations were distributed among other sectors: UAH 5.1 mln (USD 0,1846 mln) – to the Ministry of Infrastructure to cover the costs of measures related to the evacuation of Ukrainian citizens evacuated from China and Italy; UAH 3 mln (USD 0.1089 mln) – to the Ministry of Internal Affairs to cover the costs of measures related to observation of Ukrainian citizens evacuated from China; UAH 4.69 mln (USD 0.16682 mln – to the Ministry of Defencse to cover the costs of shipping medical products from China; UAH 49.89 mln (USD 1.78 mln) – to the Security Service of Ukraine for the acquisition and implementation of the “Verint NowForce” dispatch and response system necessary to take measures to prevent the spread of acute COVID-19 respiratory disease. At the Cabinet of Ministers session as of 08 July, the Government adopted a resolution on the allocation to MOH of additional funds in the amount of (ii) 5.3 bln UAH from the COVID-19 Response Fund for the purchase of equipment for the emergency departments of 212 district hospitals. Among the equipment to be purchased are endoscopes, angiographic systems and computed tomography. On 15 July, UAH 41,1 mln allocated from the COVID-19 Fund for the State Management of Affairs: UAH 11,2 mln. – PPE procurement; UAH 29,9 mln – laboratory equipment and PCR-testing. On 14 September, the Government allocated UAH 160,9 mln to the Ministry of Finance from the COVID-19 Fund for the additional payments to the State Custom Service employees performing the activities at the entry-exit checkpoints.In addition, local governments can allocate funds to combat COVID-19. More than UAH 1.78 bln (USD 64.6 mln) has been allocated from regional and municipal budgets. These funds are used to procure artificial lung ventilation apparatus, test-systems, medicine, PPE, disinfectants, equipment for intensive care and infectious diseases units and wards. Moreover, part of these funds is used to increase health worker`s salaries, e.g. Kyiv City allocated almost UAH 10.8 mln (USD 0,40 mln), which allowed to increase salaries by 9 times.
The Accounting Chamber of Ukraine has created a dashboard with COVID-19 expenditures from the state, local and other budgets (earmarked funds, deposit accounts). The data is based on information on payment transactions conducted by the State Treasury Service of Ukraine. The purpose of payment transactions is analyzed on a daily basis with the use of machine algorithms and transactions earmarked for COVID-19 are being identified. Though sometimes the purpose of payment transactions is not clearly formulated, and those transactions may be missing from the report. As of 29 April 2020, in total UAH 1.35 bln (USD 49.96 mln) has been spent for COVID-19 including UAH 0.5 bln (USD 18.5 mln) from the state budget, UAH 0.8 bln (USD 29.7) from local budgets and UAH 0.046 bln (USD 1.69) other.
On 30 September, at the initiative of the Ministry of Health, the Government has allocated almost UAH 253 mln to increase capacity for COVID-19 diagnostics.
On 21 October, the Government took a decision to allocate UAH 540 mln. for the procurement of disinfectors for schools in 2020.
According to information from the Ministry of Finance, as of 06 November, UAH 39 billion, or 59% of the allocated funds, has already been used from the COVID-19 Response Fund. Of these, UAH 6.6 billion was spent on healthcare out of UAH 16.3 billion, or 40% of the planned amount. In the field of healthcare, the Fund provides UAH 100 million for the purchase of ventilators, of which UAH 42 million was used. Almost UAH 3 billion is provided for the maintenance of MOH laboratories and the purchase of personal protective equipment for employees of healthcare facilities, of which UAH 709.7 million was used. UAH 571 million has been allocated for the subvention to local budgets to provide hospitals with oxygen. Also, UAH 3.2 billion out of the envisaged UAH 6 billion was spent on increasing allowances and surcharges for medical workers. In addition to the Fund's financing, under the program of medical guarantees, the National Health Service has already made payments to health care facilities in the amount of more than UAH 8.0 billion for services related to the treatment of COVID-19. Also, as of 05 November, UAH 3.8 billion was spent from local budgets on the purchase of goods and services to prevent the spread of COVID-19. Data on the use of funds to combat COVID-19 is available on the official website of the Ministry of Finance in Ukrainian: https://www.mof.gov.ua/uk/data_and_analytics-433.
On 11 November, the Government allovcated additional funds to the MOH in total amount of 2,154 bln UAH: 1 bln – for the rapid tests’ procurement; 895 mln – for regions for providing oxygen supply.
On 17 November, UAH 118,5 mln. was allocated for the deployment of temporary hospitals.
Additional credits: Dr Elina Dale; Dr Vitalii Stetsyk; Dr Liudmyla Slobodianyk;Mr Artem Skrypnyk;Ms Olga Demeshko; Ms Anastasiya Brylova; Ms Tetiana Dolhova