CC BY
3
Baltic Journal of Economic Studies
Vol. 9 No. 4, 2023 ---
DOI: https://doi.org/10.30525/2256-0742/2023-9-4-253-261
THEORETICAL AND METHODOLOGICAL FOUNDATIONS OF THE HEALTHCARE SYSTEM OF UKRAINE
Ihor Shyshka1, Olga Mashchenko2, Viktoriia Tomareva3
Abstract. The aim of this article is to establish the theoretical and methodological basis for the operation of Ukraine's healthcare system through the definition of its objectives and functions, examination of its primary structural elements and performance indicators between 2010-2019, and identification of the key classification features that categorise the present healthcare system as belonging to a specific model of medical systems. Methodology. The study is based on theoretical research on the concepts of healthcare system functioning. Results. The article defines the "healthcare system" as a hierarchical formation of state, municipal, and private organizations that interact as subjects and objects of management. These organizations implement medical, financial, organizational, socio-economic, and other measures to maintain optimal human performance and social activity by restoring physiological and psychological functions. The main objectives of the healthcare system are highlighted. It is determined that the functions of the healthcare system are subordinated to its main goals and reflect its orderly, regular and organised behaviour in interaction with the external environment. It is emphasised that the functions of the healthcare system are an integrated result of the functioning of its constituent elements. Practical implications. The analysis and characterisation of the key performance indicators of the healthcare system for the period 2010-2019 showed that the existing infrastructure of the sector is still rather cumbersome, characterised by the dominance of specialised and inpatient medical care and irrational use of the potential of outpatient facilities. In terms of key criteria, such as ownership, financing methods, the role of the state in managing the sector, and incentives for healthcare professionals and consumers, the national healthcare system still has signs of the Semashko model, which does not meet modern requirements for the use of expensive medical technologies and is unable to provide high quality healthcare services. Value/originality. It is established that the primary means to reform the national healthcare system is through the formation of hospital trusts, which will guarantee improved medical services and significantly decrease the expense of maintaining medical infrastructure in Ukraine. Additionally, it is acknowledged that the key technology for forging a successful network of medical facilities should be strategical planning at all levels of the country's healthcare system.
Key words: national healthcare system, Semashko model, medical infrastructure, clinical district, medical care accessibility.
JEL Classification: 110,118
1. Introduction
The thematic focus of scientific research by Ukrainian scientists in the area of reforming and developing the national healthcare system is quite diverse. Among the issues under consideration are the following: search for ways to ensure the sustainability of the healthcare system (Firsova, 2019), assessment of the financial condition of a medical institution in the context of the reform
1 Classic Private University, Ukraine E-mail: shyshka0908@gmail.com
ORCID: https://orcid.org/0009-0003-4365-8638
2 Classic Private University, Ukraine (corresponding author) E-mail: pokataeva.olga1978@gmail.com
ORCID: https://orcid.org/0000-0003-3897-6845
3 Classic Private University, Ukraine E-mail: tomareva@gmail.com
ORCID: https://orcid.org/0000-0001-8910-2641
(Chernenok, Semenenko, Lukonin, 2020), formation of a mechanism for managing the efficiency of medical enterprises (Alsharf, 2020), effective management of the medical institution in conditions of reforming the health system (Nazarko, 2020), definition of the term "healthcare" (Terzi, 2018), genesis and prospects of development of public healthcare management in Ukraine (Bilynska, Radysh, 2013), administrative and legal framework for control
This is an Open Access article, distributed under the terms of the Creative Commons Attribution CC BY 4.0
in the healthcare sector (Lifintsev, 2016) and so forth. At the same time, there is inadequate attention paid to defining the theoretical and methodological foundations of the healthcare system, including its goals, functions, components, and classification features. These form the basis for further analytical research.
2. Basic Concepts and Purpose
When defining the essence of the concept of the "healthcare system", the paper's authors based their analysis on the central concept of "healthcare" rather than "system". Unfortunately, there is currently no consensus among national scholars as to the definition of the fundamental nature of the "healthcare system" concept. Some authors interpret this concept as a set of certain organisations and resources (Moskalenko, 2019; Bilynska, Radysh, 2013), others as a set of socio-economic and medical measures (Hlushkov, 1987) or legislatively regulated measures (Lifintsev, 2016), and still others as a specific market with a certain hierarchy and organisational system (Pryyatelchuk, 2018; Smiianov, 2021).
According to the authors, the most thorough and close to the essence of the term defined at the legislative level (Fundamentals of Ukrainian Healthcare Legislation, Article 3) is the definition of the healthcare system by O. Terzi as a set of interrelated activities of various directions carried out by state and non-governmental organisations to improve people's health (Terzi, 2018). Thus, the healthcare system is understood as a set of state, municipal and private organisations that form a certain hierarchical formation, interact as subjects and objects of management and implement medical, financial, organisational, socio-economic and other measures aimed at maintaining optimal human performance and social activity by restoring physiological and psychological functions.
The healthcare system in Ukraine, like any other system, has clear objectives, functions, components and unique features that enable its classification as a specific type.
The healthcare system has several primary objectives, including guaranteeing medical access for all citizens, providing exceptional healthcare services, maintaining economic efficiency (Smiianov, 2021), improving public health metrics consistently, promoting patients' financial protection, and delivering speedy and effective responses to crises (National strategy for reforming the healthcare system in Ukraine in 2015-2020).
The functions of the healthcare system are understood as a set of specific actions that ensure the achievement of the objectives of its existence and development.
According to the definition provided by the Unified Terminology Dictionary (Glossary) on healthcare quality management, "healthcare accessibility means free access to healthcare services regardless of geographical, economic, social, cultural, organisational or linguistic barriers" (The Order of the Ministry of Health of Ukraine "On Approval of the Unified Terminology Dictionary (Glossary) on the Issues of Medical Care Quality Management"). Experts in the fields of medicine, public administration, economics, and law consider the availability and quality of healthcare services to be the most important strategic goals of any healthcare system.
Thus, achieving the goal of ensuring access to healthcare for all citizens requires the following tasks:
- Creation of the optimal number of medical institutions of all forms of ownership with the appropriate medical specialisation;
- establishment and development of the material and technical base and staffing of healthcare facilities;
- creation and development of transport infrastructure (motorways, airfields, a fleet of aircraft, motor vehicles and other specialised ambulances);
- enabling the use of modern healthcare technologies (telemedicine, electronic medical records, electronic prescriptions, etc.);
- development of telecommunications infrastructure (broadband Internet, up-to-date software, computer equipment, etc.).
Achievement of all the aforementioned healthcare system objectives proves impractical without ensuring the economic efficiency of medical institutions. Regretfully, not all medical institution managers comprehend the concept of this efficiency, due to a prolonged period of time in which they have functioned as budgetary institutions.
Even in scientific publications focused on maintaining the economic efficiency of healthcare institutions, authors present an imprecise explanation of this concept. Thus, S. Nazarko defines cost-effectiveness as delivering medical care "in a way that maximises resource usage and avoids waste" (Nazarko, 2020), and I. Alsharf - as an economic category that "expresses the ability of a healthcare organisation to achieve its tactical and strategic goals with optimal resource use that best ensures the realisation of the economic interests of its owners" (Alsharf, 2020). This situation is due to the fact that the authors are guided by the definition of the term "efficiency" given in the Unified Terminology Dictionary (Glossary) on healthcare quality management, which outlines it as "achievement of the planned result through the minimum use of resources" (The Order of the Ministry of Health of Ukraine "On Approval of the Unified Terminology Dictionary (Glossary) on the Issues of Medical Care Quality Management").
According to the definition provided in the Economist's Dictionary: "Efficiency is a relative effect, effectiveness of a process, operation, project, defined as the ratio of the result to the costs that led to its receipt. The production efficiency is characterised by the market value of the output divided by the total cost of the enterprise's resources." (Honcharov, Kushnir, 2009)
Based on the classical understanding of the phenomenon of "economic efficiency", the main ways to improve it are either to increase the volume of medical services (which is incorrect given the main purpose of the healthcare institution) or to reduce overall costs (which may affect the quality of services provided). Thus, there are certain contradictions that justify the refusal of managers of medical institutions to use the indicator of "economic efficiency" of healthcare services. However, as I. Alsharf rightly notes, "in conditions where economic efficiency indicators are not calculated, standardised or planned, individual healthcare facilities and the entire healthcare system are doomed to be resource-intensive and inefficient" (Alsharf, 2020).
An important factor in ensuring the economic efficiency of healthcare facilities is their autonomy through obtaining the status of non-profit municipal enterprises, the main advantages of which are:
- Independence of the head of the enterprise in making decisions on the management of assets and finances, the formation of personnel policy, and the design of the organisational structure of the institution;
- independent establishment by the head of the company of any form of remuneration for staff;
- improvement of the efficiency of the use of financial resources provided on the basis of a financial plan rather than an itemised cost estimate;
- the right of a medical institution to have its own account in any banking institution;
- the right of a medical institution to form associations with other enterprises to redistribute functions and optimise the use of material, human and financial resources.
Among the possible areas for improving the financial and economic activities of a municipal healthcare facility, Chernenok and co-authors (Chernenok, 2020) point the following:
- Renewal of fixed assets and medical equipment, which will improve the quality of diagnosis and treatment and lead to a significant increase in the number of patients in a competitive environment;
- optimisation of the level of cash assets out of circulation to achieve a higher level of liquidity;
- searching for ways to increase funding for activities (corporate services, customer loyalty programmes, preventive measures);
- expansion of the list of funding sources (grant programmes, targeted loans, equipment leasing
and rental, patronage, investment of temporarily free cash);
- investment in human capital, increasing productivity and efficiency;
- optimisation of cost items (energy-saving technologies, optimal supply of resources, materials, works and services).
Thus, the main functions of the healthcare system to ensure its own economic efficiency are as follows:
- Development of strategic development plans at all levels of the system (formulation of goals, selection of effective methods and means of achieving them, determination of the amount of resources required and performance criteria for healthcare facilities);
- generation of financial resources from alternative sources, creation of trust funds to finance healthcare development programmes, and financial risk management;
- optimisation of information and communication support for medical institutions (internal communications, interaction with public authorities, the public, and consumers of medical services);
- increase the rationality of the processes of organising the provision of medical services.
Factors such as the rising cost of medical services, the inability to predict the need for them or their postponement, and the need to pay for services at the time of receipt are potential threats to the impoverishment of the population, which in turn necessitates the development of measures to protect patients financially. It is widely believed that the risk of impoverishment of the population can be minimised by reducing direct payments for healthcare services to 15-20% of their total cost.
Thus, the goal of ensuring financial security for patients is achieved through the implementation of the Medical Guarantee Programme, which allows each patient to receive the necessary medical services and medicines without incurring additional financial difficulties due to the payment for treatment. In 2021, patients had the opportunity to choose a hospital, submit an electronic referral for medical care and receive free medical services, which were paid in full by the National Health Service of Ukraine. Nevertheless, out-of-pocket payments could not be avoided, which requires the introduction of anticorruption mechanisms.
Over the past three years, there has been a significant increase in attention to the ability of the healthcare system to respond quickly and effectively to crises, which was first due to the spread of the COVID-19 pandemic and then to the military operations in Ukraine. Every year, Ukraine, as a State Party to the International Health Regulations (IHR), submits a report to the World Health Assembly on the implementation of the requirements for
Table 1
Implementation of the requirements for core capabilities in accordance with the International Health Regulations in 2021
IHR capabilities Average value for Ukraine, in % Average value for the region (51 countries), in % Average value in the world (184 countries), in %
Policy measures, laws and regulations to implement the International Health Regulations 50 61 52
Coordination of IHR efforts, functions of national IHR focal points and outreach activities 60 75 66
Financing 80 74 63
Lab services 76 80 72
Epidemiological surveillance 80 85 81
Human resources 40 67 59
Ensuring preparedness for and response to health emergencies 87 77 70
Providing medical services 80 80 72
Training in infection prevention and infection control 40 72 60
Risk communication and community engagement 47 69 67
Points of entry and sanitary measures at border crossings 60 65 62
Zoonotic diseases 40 76 65
Food safety 80 78 63
Chemical events 80 70 54
Radiation emergencies 80 74 57
Source: compiled based on data from (e-SPAR)
Table 2
Goals and functions of the healthcare system
Goals of the healthcare system Functions of the healthcare system that ensure the achievement of goals
Provision of access to healthcare for all citizens - Establishment of the optimal number of medical institutions of all forms of ownership with the appropriate medical specialisation; - development of the material and technical base and staffing of healthcare facilities; - transport infrastructure development; - creation of conditions for the use of modern medical technologies; - telecommunications infrastructure development.
Provision of high quality medical care - Licensing of medical institutions and monitoring compliance with licensing requirements; - certification, attestation and motivation of healthcare professionals; - accreditation of medical institutions and assessment of medical service delivery technologies; - certification of quality management systems of medical institutions; - implementation of international and national standards of medical care; - audit and monitoring of the quality of medical services.
Ensuring economic efficiency - Strategic planning of activities at all levels of the system; - formation of financial resources from alternative sources, introduction of financial management technologies; - optimisation of information and communication support for the activities of medical institutions.
Improvement of public health indicators - Reducing maternal and infant mortality; - ending the epidemic of infectious diseases; - prevention and treatment of drug abuse; - reducing mortality from non-communicable diseases; - ensuring access to essential medicines and vaccines.
Promoting financial security for patients - Implementation of the Medical Guarantee Programme; - introduction of anti-corruption mechanisms.
Quick and effective response to crisis situations - Formation and improvement of the institutional mechanism of the healthcare sector; - provision of medical institutions with consumables and equipment; - creation of information and analytical systems for risk reduction programmes, emergency preparedness and response measures; - enable effective management of medical institutions in case of emergencies.
Source: compiled by the authors
core capacities under the IHR and to ensure transparency and mutual accountability between States Parties for global public health security within the framework of the WHO IHR monitoring and evaluation mechanism.
IHR States Parties use the Self-Performance Annual Reporting Tool or SPAR, which consists of 35 indicators for 15 IHR capacities (Table 1) needed to identify, assess, report, communicate and respond to public health risks and emergencies of concern at home and abroad.
The self-assessment results submitted by Ukraine under the e-SPAR Tool identified four challenges in 2021: human resources (40%), training in infection prevention and control (40%), risk communication and community engagement (47%), and zoonotic diseases (40%). The average for all core IHR capacities for Ukraine was 65%, slightly higher than the global average (64%) and well below the WHO European Region average (74%).
The results obtained indicate the areas that require the implementation of specific optimisation measures at a certain point in time. At the same time, the functions of the healthcare system to ensure the ability to respond quickly and effectively to crisis situations should be more extensive and address such issues as:
- Formation and improvement of the institutional mechanism of the healthcare sector for emergency management;
- provision of consumables and equipment to relevant medical institutions to respond to emergencies;
- creation of information and analytical systems for risk reduction programmes, emergency preparedness and emergency response measures;
- ensuring conditions for the effective management of medical facilities in emergencies: providing conditions for improving the efficiency of the emergency medical care system, introducing procedures and protocols for hospital management in mass casualty events, ensuring the continuity of basic medical programmes and services, establishing
logistics and operational support functions (Firsova, 2019).
Thus, the functions of the healthcare system are subordinated to its main goals, reflect its orderly, regular and organised behaviour in interaction with the external environment and are a manifestation of the system's properties (Table 2).
There is a certain natural relationship between the functions and structure of the healthcare system, as the functions of any system are the integrated result of the functioning of its constituent elements.
3. Findings
The performance indicators of healthcare institutions in Ukraine in 2010-2019 showed negative dynamics, with the exception of the number of outpatient facilities, the total number of which increased by 17.5% (Table 3). The largest declines over the period were in the number of healthcare facilities (-40.6%), the number of hospital beds (-31.2%) and the number of paramedics (-29.2%). The most significant decline in these indicators was due to the temporary occupation of the territory of the Autonomous Republic of Crimea, Sevastopol, and the territories of Donetsk and Luhansk oblasts in 2014 - by 36.5, 22.4, and 20.4%, respectively. A certain decrease in performance indicators was also caused by the implementation of the healthcare system reform.
Nevertheless, experts believe that the existing infrastructure of the sector is still quite cumbersome, as these indicators are much lower in developed countries, and this does not lead to a deterioration in the performance of national healthcare systems. The main shortcomings of the Ukrainian healthcare system by 2017 were repeatedly noted: the dominance of specialised and inpatient medical care; irrational use of the potential of outpatient facilities due to their large number; lack of division into primary and secondary care facilities; inadequate qualifications and poor motivation of district doctors.
Table 3
Performance indicators of healthcare institutions in Ukraine
Indicators Year Deviation of 2019 to 2010, in %
2010 2015 2017 2018 2019
Number of healthcare institutions 2763 1755 1714 1671 1640 -40,6
Number of hospital beds 428675 332686 308736 301576 295107 -31,2
Provision of beds per 10,000 people 94,0 78,1 73,1 71,8 70,7 -24,8
Number of outpatient facilities 8993 9962 10373 10502 10567 17,5
Number of doctors 224876 186234 186178 185675 184713 -17,9
Availability of doctors per 10,000 people 49,3 43,7 44,1 44,2 44,3 -10,1
Number of medical assistants 466816 371736 360416 345364 330322 -29,2
Provision of medical staff per 10,000 population 102,4 87,3 85,4 82,3 79,2 -22,7
Source: demographic and social statistics
The need to optimise the structure of the healthcare system is driven by the inability of Ukraine's budget system to finance the extensive and cumbersome medical infrastructure. It is the specific financing mechanism that is used to classify healthcare systems into four types: the Beveridge model, the Bismarck model, the national health insurance model, and the out-of-pocket model. The classification proposed by WHO experts distinguishes three types of systems: public (Beveridge and Semashko systems); health insurance-based (Bismarck system); and nongovernmental, market or private healthcare systems (Table 4).
The names of the healthcare system models listed in Table 4 are currently more theoretical in nature, as each country forms its own individual system that may combine the characteristics of different models. At the same time, the criteria for organising healthcare management are the following:
the scope of state guarantees; sources of financing of the medical sector; status of the customer and service provider; mechanism of state healthcare management; institutions for protecting the rights of patients and healthcare providers. The relations of property rights, financing methods, and incentive mechanisms for healthcare professionals and service users are the main economic characteristics of the healthcare system (Smiianov, 2021).
The two opposing ideologies of the healthcare industry, solidarity and libertarian, are fully justified and meet the expectations and needs of healthcare consumers. The leading principle of the solidarity ideology is to ensure equal and free access of consumers to the basic set of medical services through the general budget in the form of taxes. The libertarian ideology is based on the interpretation of medical services as a commodity whose characteristics and price are regulated by basic market mechanisms - supply and demand, and whose quality
Table 4
Characteristics of different models of healthcare systems
Model name Government's role Sources of funding Advantages Disadvantages Countries with this model
State model (Beveridge system) Guarantees the provision of medical care to all citizens. - State budget. - Accessibility of medical care for all citizens; - simple technologies for financing healthcare facilities; - simple system of remuneration for healthcare professionals. - Absence of market incentives; - low motivation to improve the quality of healthcare services; - the need to invest significant financial resources from the state budget in the development of the industry. UK, Ireland, Sweden, Finland, Canada, Spain.
State model (Semashko system) Centralised state management and control. - State budget; - state funds for the supply of logistics and medical supplies. - Effective in emergency situations (wars, epidemics); - availability of medical care for all segments of the population. - Low rates of development of medical care; - lack of motivation to improve the quality of services; - low remuneration of healthcare workers. countries formed after the dissolution of the Soviet Union.
Model based on health insurance (Bismarck system) Regulates the activities of public or private insurance companies. - Taxes to public funds; - public health insurance funds; - mixed funding system. - Principle of joint payment for medical care; - accessibility of medical care for the entire population of the country. - Large administrative apparatus; - complicated system of settlements with medical institutions; - high costs of maintaining the insurance infrastructure. Belgium, France, Germany, Japan, Luxembourg, the Netherlands.
Non-state, market or private model Legislative regulation of relations between healthcare market players, implementation of certain programmes financed from the state budget. - Private insurance funds; - contributions from private sources; - direct payments to healthcare consumers; - combining the above-mentioned sources. - Stimulating the development of new technologies. - intensive activity of healthcare professionals; - improvement of the quality of healthcare services as a result of competition; - resource mobility. - Unequal access to medical care for different segments of the population; - high service costs; - lack of state control over the development of priority healthcare areas; - possibility of unfair competition between healthcare providers. USA, India, China, Africa and South America.
Source: compiled by the author according to (Smiianov, 2021; Reshota)
is determined by the purchasing power of consumers (the price of an insurance policy). It should be noted that a fairly common trend in many European healthcare systems is the increasingly weakening of state intervention in the provision of medical services, due to the emergence of new social institutions that take over these functions.
Modern healthcare systems in developed economies are characterised by the following features:
1. Medical institutions are financed by deductions from corporate income, the state budget and insurance premiums.
2. Medical care for employees and their families is financed exclusively by the enterprises.
3. Stimulating competition between healthcare providers through the free choice of a doctor and a healthcare facility by consumers, which in turn contributes to improving the quality of medical care.
4. A well-developed system of voluntary health insurance.
Among the main directions of modernisation of national healthcare systems around the world are international unification of standards of medical services, development of market mechanisms for the functioning of healthcare systems, and regulation of the amount of public spending on healthcare. In this case, measures to optimise medical care are the following:
1) Re-profiling of healthcare facilities from treatment to early diagnosis and prevention, which ultimately leads to a reduction in morbidity, alleviation of the disease, and reduction of treatment costs;
2) treatment of diseases at early stages, which also helps to save limited financial, material and human resources.
Thus, each country faces individual challenges in creating and developing its healthcare system. All systems have unique characteristics and peculiarities, which are determined by the need to take into account the national mentality, health problems and living standards of the population, as well as the priorities and direction of the state's social policy. Therefore, it is not always justified to adopt even the most progressive experience without consideration.
The Semashko model, created in 1918, does not currently meet modern requirements for the use of expensive medical technologies and is unable to provide high-quality medical services. This was the main justification for the need for healthcare reform in Ukraine. The approval by the Cabinet of Ministers of Ukraine in late 2016 of the concept of healthcare
financing reform was the starting point for the implementation of the main instrument of reforming the system - the creation of hospital districts in Ukraine.
It should be noted that strategic planning at all levels of the national healthcare system should be the leading technology for building an effective system of healthcare facilities.
4. Conclusions
The study of the theoretical and methodological foundations of the healthcare system in Ukraine from the standpoint of a systemic approach allowed to clarify the definition of the concept of "healthcare system", to identify its goals and functions, basic infrastructure elements and special characteristics that allow to classify the system as a particular type. It is determined that the functions of the healthcare system are subordinated to its main goals, reflecting its orderly, regular and organised behaviour in interaction with the external environment. It is determined that the functions of the healthcare system are an integrated result of the functioning of its constituent elements.
The analysis and characterisation of the key performance indicators of the healthcare system for the period 2010-2019 showed that the existing infrastructure of the sector is still rather cumbersome, characterised by the dominance of specialised and inpatient medical care and irrational use of the potential of outpatient facilities. In terms of key criteria, such as ownership, financing methods, the role of the state in managing the sector, and incentives for healthcare professionals and consumers, the national healthcare system still has signs of the Semashko model, which does not meet modern requirements for the use of expensive medical technologies and is unable to provide high quality medical services.
It is determined that the main tool for reforming the national healthcare system is the creation of medical districts, which will ensure the provision of better services and significantly reduce the cost of maintaining medical infrastructure in Ukraine. At the same time, strategic planning at all levels of the national healthcare system should be the leading technology for building an effective system of medical institutions.
Prospects for further research in this area may include the development of a conceptual framework for strategic planning of the development of the healthcare industry in general and individual medical institutions in particular.
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Received on: 05th of September, 2023 Accepted on: 19th of October, 2023 Published on: 17th of November, 2023
