RIGHTS AND PERMISSIONS The material in this work is subject to copyright. Because the World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given. Any queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: pubrights@worldbank.org. © 2023 The International Bank for Reconstruction and Development/The World Bank 1818 H Street, NW Washington, DC 20433 All rights reserved. i Contents Acronyms.................................................................................................................................................... i Acknowledgements ................................................................................................................................... 1 Introduction .............................................................................................................................................. 2 Current health systems challenges........................................................................................................ 2 Promising opportunities for change ...................................................................................................... 5 Re-envisioning Service Delivery ................................................................................................................. 6 Setting a strategic agenda ..................................................................................................................... 6 How do we get there? ......................................................................................................................... 13 Overview of the necessary investments .............................................................................................. 16 Conclusions ............................................................................................................................................. 19 References............................................................................................................................................... 20 ii Acronyms COE Center of Excellence EMS Emergency Medical Service EU European Union GDP Gross Domestic Product GOU Government of Ukraine FFS Fee for Service NHSU National Health Service of Ukraine MOH Ministry of Health OOP Out-of-Pocket PFP Pay for Performance PHC Primary Health Care PMG Program of Medical Guarantees TMO Territorial Medical Organization i Acknowledgements The Reshaping Ukraine’s health service delivery: Vision and Investment Needs paper was prepared by the World Bank team. The technical team was led by Olena Doroshenko (Senior Economist, Health) with contributions from Arthur ten Have (Economist, International Expert), Pavlo Kovtonyuk (Economist, National Expert) under the guidance from Tania Dmytraczenko (Practice Manager for Health, Nutrition, and Population Global Practice for Europe and Central Asia) and Caryn Bredenkamp (Program Leader, Human Development, Eastern Europe). Patrick Mullen (Senior Health Specialist), David Wilson (Program Director), and Toomas Palu (Advisor) provided valuable insights as peer reviewers for the report. The team would like to thank Oleksandr Zhyhinas (Evaluation Specialist, National Expert), Olha Fokaf, (Analyst, National Expert), Khrystyna Pak (Economist, National Expert), Mariana Hladkevych (Health Specialist, National Expert) for contributions at the inception phase and during the finalization of the report. Mahader Tamene (Health Specialist, Consultant) helped finalize the paper in line with the feedback and comments received by the reviewers. The World Bank team also appreciates editorial support received from Selvaraj Ranganathan and design and formatting support from Bohdana Fomina. Finally, the team is grateful for the support provided by the Swiss Agency for Development and Cooperation for co-financing the “Sustaining Health Sector Reforms in Ukraine” advisory and analytical services, which supported the development of this paper. The views expressed in this publication are those of the authors. The findings, interpretations, and conclusions herein do not necessarily reflect the views of the World Bank Group, its Board of Directors, or the countries that it represents. 1 Introduction The full-scale invasion of the Russian Federation in Ukraine has immense local impact and global consequences. Ukraine is experiencing huge human and economic suffering, which will have long-lasting effects. This war has been particularly devastating for the Ukrainian health sector, tremendously increasing the urgent need for specific services and simultaneously obstructing health outcomes and access to health care due to hostilities, disruption of service delivery, and damage and destruction of health facilities. Moreover, the recovery of Ukraine is shrouded in uncertainty as the duration of the ongoing war and the frequency and localization of the attacks are unknown, all occurring against the backdrop of economic challenges within the country and at a global scale. Despite an expected international effort to finance the recovery of Ukraine akin to the Marshall Plan, financial resources may not be easily available or may become more scarce and more expensive. Investments will receive more scrutiny, and competition for funds will increase due to monetary tightening, rising interest rates, and possibly sustained high inflation (International Monetary Fund 2022). However, in the short to medium term, Ukraine is expected to have favorable access to international financing on concessional terms. While Ukraine is struggling with the gruesome immediate impact of the war and a fight for survival, the shared understanding emerges that going back to business as usual will neither be possible nor desirable. This moment may also serve as a window of opportunity for rapid reform and innovation of health service delivery in Ukraine. Improving and reconstructing services while restoring and stabilizing them is critical to aiding a suffering population and to laying strong foundations of governance that will have lasting impacts into the country’s future. This document provides a proposal for stakeholders in the Ukrainian health sector on how service delivery may need to change, how to deal with this change, and how the health sector may come out stronger in the longer term. It focuses on the organization of health care service delivery and shares considerations of how it may develop using a long-term (10+ years) perspective. Other topics such as health care financing are reviewed in separate papers. Current health systems challenges As Ukraine embarks on a health system strengthening agenda, it is important to consider the various global and local trends shaping population health and consequently affecting health service delivery. Demographic changes will have a significant worldwide impact, including in Europe and Ukraine in particular. Populations in Europe are growing older, increasing the demand for elderly care and shrinking the working-age population. As older adults also live longer, there will be an increased need for elderly care, chronic disease management, and palliative care services, all of which are relatively absent in Ukraine. Fueled by mass emigration and low birth rates, the already shrinking population of Ukraine was estimated to see a population decline of at least 2 million in the next 10 years. This is exacerbated by the 2 ongoing war with Russia, with 6.3 million Ukrainians having fled the country1 since the full-scale war began. It is estimated that 1–3 million Ukrainians might remain abroad (Tharoor 2022). The already low share of the working-age population (50 percent in Ukraine versus 57 percent in the European Union [EU] in 2021) is expected to further decrease as well.2 Of those who remain, many are concentrated in city centers, with the country projected to see a continuing increase in the urban population relative to its rural counterparts. After the war, the availability of economic opportunities will likely concentrate in cities, which may lead to a further reduction of the share of the rural population. Furthermore, mortality and fertility are heavily interconnected during wartime. Evidentially, women are at high risk of gender- based violence. The burden of combat losses, physical injury, or psychological trauma could result in losing a potential reproductive partner (Kulu et al. 2023). Long before the COVID-19 pandemic, the state of mental health in Europe was a cause for concern. Across the EU, mental health problems affect about 84 million people, with costs estimated at more than 4 percent of the European gross domestic product (GDP) (more than EUR 600 billion) (OECD/EU 2018). This impact is expected to grow. Compared to other European countries, Ukraine carries a high burden of mental illness and a particularly high prevalence of depression, alcohol use disorder, and suicide. Ukraine bears an extra burden because of the ongoing war, which already began in 2014, and the consequent number of traumatized combatants, war victims, and displaced people and refugees. An estimated 1.5 million people are said to be internally displaced due to the conflict with findings showing that up to 74 percent of those requiring mental health and psychosocial support do not receive adequate care (Roberts et al. 2019). According to a recent estimate, approximately 9.6 million people in Ukraine may have a mental health condition (World Health Organization 2022). Given the existing barriers to mental health care (lack of trust in the psychiatry system, stigma, lack of accessible mental health services at the community level, and so on), a complex strategy is needed to ensure appropriate service provision. Ukraine faces additional challenges due to the current war. Even before the war, large, informal, out-of- pocket (OOP) payments (48 percent of total health expenditure in 2020), mainly explained by spending on pharmaceuticals and medicinal products, were blocking access for Ukraine’s poor or near poor. Household revenue is expected to drop further as the cost of living for families will increase, exposing many people to catastrophic health expenditures. In 2021, about 17 percent of households faced catastrophic health spending.3 Because of the rapidly growing poverty rate from just over 2 percent before February 2022 to 25 percent of the population by year-end (World Bank 2022), this share of households experiencing catastrophic spending may quickly double or increase several times. 1 UNHCR Operational Data Portal. Ukraine Refugee Situation. Accessed June 19, 2023. https://data2.unhcr.org/en/situations/ukraine?_gl=1*i8uz2q*_rup_ga*MTgwNjc5OTk1NS4xNjg3Mzc2NjUz*_rup_ga_EVDQTJ4L MY*MTY4NzM3NjY1Mi4xLjEuMTY4NzM3NjkyOS4wLjAuMA..*_ga*MTgwNjc5OTk1NS4xNjg3Mzc2NjUz*_ga_N9CH61RTNK*MTY 4NzM3NjgxOC4xLjAuMTY4NzM3NjgxOC4wLjAuMA..#_ga=2.242874891.823696697.1687376653-1806799955.1687376653. 2 Age dependency ratio (% of working-age population) – Ukraine, 2019, World Bank Open Data. https://data.worldbank.org/indicator/SP.POP.DPND?locations=UA. 3 Can people afford to pay for health care? New evidence on financial protection in Ukraine 2023. Copenhagen: WHO Regional Office for Europe; 2023. https://www.who.int/ukraine/multi-media/details/financial-protection-in-ukraine--can-people-afford- to-pay-for-health-care. 3 The government’s fiscal capacity to mitigate this financial burden of health expenses for many more households will be narrow. The Ukrainian government’s recurrent budgets will be severely constrained, limiting public services financing, including health care (Bredenkamp et al. 2022). It will likely exacerbate the existing capacity of the health care system to provide services within Program of Medical Guarantees (PMG) funding and create additional financial barriers to access care, self-rationing, or rationing of services at the point of care (Zweifel 2015). Human capital, specifically in health care, will migrate. Harsh economic conditions in the post-war decade in Ukraine and the growing demand for professionals in the current EU countries will likely lead to the constant outflow of the general working population and health professionals (especially nurses). Potential accession to the EU will likely exacerbate this trend. Poland is a good example, already compensating for its outflow of professionals with the Ukrainian labor force for years (European Commission 2022). The war will increase accumulated gaps in access to health services during the COVID-19 pandemic. Such gaps include decreased vaccination coverage of children and adults by 40 percent in 2022 compared to previous years, missed preventive and follow-up visits of people with risk factors or confirmed noncommunicable diseases, and interrupted treatment.4 It suggests that a special effort after the war will be needed for people to reconnect or (re)establish access to services and cover the gaps where possible. The stress of war is also likely to worsen lifestyles, exacerbating smoking, use of alcohol and drugs, and general risk taking. In addition, the disruptions caused by the war to the daily lives of people in Ukraine lead to less care-seeking behaviors5 and potentially deterioration of health because of delayed or foregone preventive and follow-up care episodes. Even before the full-scale Russian invasion, over 2.7 million Ukrainians were registered as living with disabilities. Priory Global Burden of Disease estimated that one in two people in Ukraine had at least one condition that would benefit from rehabilitation (World Health Organization 2023). In addition to regular needs in rehabilitation care, Ukraine currently faces growing demands for rehabilitation, assistive technologies, and prosthetics due to war-related injuries. Trends of demographic developments emphasize the importance of enhancing the accessibility of health care in small and medium-size communities. Supporting communities in their rethinking of health care delivery should be a key priority for stakeholders for the next decade. The Russian war against Ukraine affects beyond atrocities. Complex health emergency brings much uncertainty of what will happen next. With the explosion of Kakhovka Dam which was an outrageous act of environmental destruction causing widespread floods, thousands of Ukrainians lost everything, and now the flooded regions are at high risk of waterborne diseases. Moreover, the Russian attacks create yet 4 Selected results of the sociological survey conducted by Kyiv International Institute of Sociology (Omnibus) at the request of the World Bank (within the project co-financed by the Swiss Cooperation Office). September 2022. 5 Health Needs Assessment. Main findings of the representative survey conducted at the request of the WHO. September 2022. 4 another challenge to maintaining safety in and around the Zaporizhzhia Nuclear Power Plant (US Mission to OSCE 2023). Promising opportunities for change Harnessing existing improvements can bolster the process of rebuilding and restructuring health service delivery. COVID-19 has highlighted the importance of and critical need for a robust public health and primary health care (PHC) systems to efficiently deliver crucial health services (Barış et al. 2022). Over the last two years, Ukraine has found success in expanding access to PHC, increasing enrollment to include more than 80 percent of the population, according to official data. This serves as an opportune moment for the Government of Ukraine (GOU) to leverage its existing health reform framework and early successes and recommit to building a strong PHC system. PHC-related reforms can help reduce health care spending and unnecessary utilization of hospital-based care and improve access and quality of care—all challenges the country is currently facing. For Ukraine, the road to becoming a full member of the EU was cleared by a decision of the European Council on June 23, 2022. The significance of this step cannot be overstated because it anchors the future of Ukraine’s economy. EU accession will have an important but limited impact on the development of the health system. Health care is a national topic granting the member states considerable control over how to design, manage, and finance their health systems. The health sector benefits of EU membership are most visible in cooperation on disease surveillance, including rare diseases; cross-border health; and quality and commercial standards and regulations for health devices and pharmaceuticals.6 Responses to COVID-19 have increased the EU’s scope of action to include strengthening of surveillance systems, emergency preparedness measures, cross-border health data sharing, and pharmaceutical regulations, among other initiatives. The 2017 health reform in Ukraine laid a promising foundation. However, a dynamic shift to a new phase is necessary to deepen systemic changes and improve quality and efficiency of health services. The successes of the health reform's previous phase—including defining the state-guaranteed benefits package, the PMG (which included provision of emergency medical services [EMSs]), and establishing the strategic purchasing agency, the National Health Service of Ukraine (NHSU)—have produced a strong framework for more efficient health spending. The next phase of the reform demands addressing remaining gaps in financial protection and quality of care. Evidence from other conflict-affected settings demonstrates that war can serve as a vehicle for major development programs, including reshaping the health sector (Burgess and Fonseca 2020; Cometto, Fritsche, and Sondorp 2010; O'Hanlon and Budosan 2011). For example, a 2006 review examined seven 6 EU health policy, https://www.consilium.europa.eu/en/policies/eu-health-policy/#role. 5 case studies of post-conflict health system reconstruction and noted that “unless adequate attention is given to health, nation-building efforts cannot be successful” (Jones et al. 2006). The impact of war and the resources provided to address the damages can be a catalyst for wide-ranging changes. War often exacerbates preexisting inequities, laying bare what must be changed and offering an opportunity for action. Additionally, innovations that emerge during conflict can contribute to long-term health outcomes. Ultimately, leveraging war as an opportunity to reshape Ukraine’s health care system will build a more equitable, resilient, and responsive system that better serves the population. Re-envisioning Service Delivery The goal for the development of Ukraine’s health care system should be noncontroversial: Ukrainians deserve a high quality of life, with accessible and quality care that ensures their well-being while fostering a strong economy. How to achieve this goal in the coming decade(s) is a matter of debate and cannot be prescribed in detail. However, an implementation plan will help structure and sequence strategic policy directions, thereby improving the chances that goals will be met. The following section outlines strategic approaches for health care service delivery improvement amidst the restoration of the systems affected by the war. It then sets a path of how to get there and finally offers investment considerations necessary to undertake such an initiative. Setting a strategic agenda 1. Expanding to a multidisciplinary core PHC A comprehensive twenty-first-century health care system must have a multidisciplinary foundational PHC system focused on prevention and promotion. Building upon the gradual expansion of PHC before 2020, the government will need to continue prominently promoting the PHC model to convince the population, government officials, and health care providers of its benefits, which include lower cost, better quality, and easier access. A focus on building this model will ensure that in 10 years, PHC will form the backbone of health care service provision in Ukraine, helping to set the stage for further reform. Moreover, it is necessary to make it attractive for medical workers to work in primary care. 6 Different models for the provision of PHC may be Figure 1. Components of an optimal PHC+ tested and implemented to reflect the differences practice between rural and urban settings. However, group practices with enhanced functionality (PHC+) are considered particularly attractive. A PHC+ practice functions as a comprehensive center or clinic for first-line medical care with the ability to refer quickly and efficiently to secondary care facilities with which they cooperate. The PHC+ practice or clinic is proactive; practitioners diligently manage the health of enrolled people, empower healthy behaviors and lifestyle changes, and jointly implement patient management for chronic conditions. PHC+ practices may be the result of increased collaboration between existing PHC providers and family doctors either in new or existing locations, but PHC+ practices could also take over the provision of some services from existing rayon hospitals (Figure 1). The government must incentivize shifting services to the PHC level and extending the PHC service scope to PHC+. For the Ukrainian context, this may include: • Budget holding of laboratory and diagnostic services for PHC+ providers, with the Source: World Bank. Note: PHC+ = PHC practices with enhanced possibility of providing an extended range of functionality. diagnostic services on site; • Increased specialized services at the PHC+ level, attracting different types of staff into multidisciplinary teams; • Ability for PHC+ to provide emergency first aid and urgent care to patients requiring minor interventions but not hospitalization; • Simplification and liberalization of licensing specialized outpatient care services to allow easier integration into the PHC+ model; • Investment in quality PHC education and training programs; • Gradual development of a capitation payment mechanism mixed with other forms of financing (fee for service [FFS], pay for performance [PFP], and so on); • Extended authority and responsibility to nurses; • Better integration of social services through the introduction of community health workers and other care team members focused on addressing social determinants of health; and 7 • Engagement of private entrepreneurs in running PHC+ practices (especially for those communities most affected by war) through low-interest loans, legal support, and assistance in licensing and contracting procedures. 2. Refocusing hospital services toward acute and specialty care Ukraine’s future hospital network will be organized and designed using modern European concepts. These include efficiency, quality, managerial scope, proximity, and resilience, which form the four key values of health systems: for the people, equitable, resilient, and efficient (Kruk et al. 2018). With a shift toward increasing the scope and functionality of the PHC network, hospital sizes will be drastically reduced, and the capacity of these networks will be maximized to focus on acute and specialty care. While the definition of the network remains flexible, it will prioritize efficiency, functionality, and subsidiarity. The proposed hospital network consists of two layers of hospitals—general multi-profile and general multi-profile with additional specialization—which range in function from most acute to highly specialized (see Table 1). Table 1. Components of the proposed new hospital network model Hospital Service provisions Total number of Populations served Hospital bed capacity type hospitals nationally (per hospital) General Acute clinical care and 120–140 ~300,000  300 common services not provided by PHC+ General with Higher levels of 48–55 ~750,000 600 specialization specialized resources, 25–50% of which will plus 50–100 beds for including cancer care be Centers of COEs Excellence (COEs) General hospitals constitute the first layer (the estimated number for Ukraine is 120–140 hospitals), which will focus much more on acute clinical care and other common clinical services that cannot be provided by PHC+. Each general hospital will serve a population of approximately 300,000. While bed capacity may vary, every general hospital will have around 300 beds to be used flexibly, in line with European practices.7 The second layer, general hospitals with additional specialization (the estimated number for Ukraine is 48–55 hospitals), will require higher levels of specialized resources including clinicians and technology to provide more complex treatment. This will include specialized children’s departments and cancer care, which will be reorganized and consolidated into this structure. Of the total specialized hospitals, 25–50 percent, known as COEs, will have advanced specialist services and work in tandem with medical 7Unique circumstances require unique solutions and hospitals may be established for less populated catchment areas (for example, in remote rural or mountainous settings), but the scope and maintenance of such hospitals should be carefully decided taking into account also the development of roads and other means of transportation (for example, the use of helicopters). For those hospitals, a focus on first-line emergency care rather than elective inpatient services may be most appropriate. 8 universities. Each specialist hospital will serve a population of about 750,000 and have a bed capacity not to exceed 600 beds to maintain efficiency; COEs may add 50–100 beds to that total. A well-developed municipal or private hospital may serve as a specialist hospital; not all former oblast hospitals can automatically become specialist hospitals. A new hospital network structure will require a massive consolidation of hospital services, a reconstruction of existing buildings, and the construction of new buildings. Large municipalities should consolidate their hospital network to create facilities serving as either general or specialist hospitals. Without this consolidation of facilities, new investments will be impossible, wasteful spending would continue, and recurrent costs would become fiscally unsustainable. Smaller cities will require new general hospitals that will absorb services from old-fashioned former small rayon hospitals. Single-profile cities and oblast facilities will be merged with multi-profile providers. Ukraine will gradually dissolve or transform its polyclinics that currently provide specialized outpatient care. The current volume of consultations and diagnostic services will be absorbed by general hospitals and PHC+ practices in communities that may also include other services such as social care and mental health. Box 1. Territorial medical organizations as potential structures for integration of providers Establishment of territorial medical organizations (TMOs), which is a present practice in some locations in Ukraine, or similar structures that support functional mergers of facilities can be one of the ways to help consolidate the hospital network. A TMO operates and is contracted by the NHSU as a single legal entity. It consists of several health facilities (including hospitals and possibly outpatient and PHC facilities) with varying degrees of autonomy depending on the founder’s decision. It can include one or more owners (for example, city, oblast, and rayon). The benefits of TMOs include: • More considerable bargaining power in negotiating contracts with the NHSU and other payers; • The managed and organic process of consolidation of facilities within a TMO; • Economies of scale in core and auxiliary (laboratory, imaging) clinical services as well as nonclinical services and functions (laundry, cleaning, catering, procurement, stock management, administration); and • The concentration of scarce resources (expensive technology, managerial talent, training capacity, and so on). Reconstruction of existing facilities and construction of new ones require strategic planning and prioritization. Implementation decisions around reconstruction and/or construction should consider the following approaches: • Using evidence-based metrics (for example, past performance, capacity for service provision, accessibility, adequate number of people served), clearly identify priority areas to guide investment and implementation of hospital reconstruction and/or build. • Transition from input-based (for example, using blueprints for capacity of health infrastructure and human resources) to needs- or output-based (for example, health burden in catchment area) planning guidelines for hospitals; this will enable efficient and adaptable functional and capacity plans. 9 • Confirm whether the hospital’s current location is optimal; if not, consider using space for other functions. • Consider the availability of specialized doctors and nurses in planning for more complex specialties. • Diversify the experts that perform design and construction work to ensure contemporary standards and approaches are being used. • Consider geography in decisions and different solutions across the country’s unique territories. Functionality, coverage, feasibility, design, and cost should be determined for each new hospital before confirming the investment. • Integrate parallel service provision silos such as those managed by the Academy of Medical Sciences and other similar systems (penitentiary system hospitals, railroad hospitals, veteran hospitals, and potential military hospitals). The buildup of this hospital network is a long-term effort (taking place over 5–20 years) because significant investments are required (for example, a modern standard, 300-bed hospital will easily require EUR 70 million to build) (Sdino et al. 2021). Over time, an iterative process of improvement with each hospital will inform the design and function, reflecting new insights, technology, and means. Refocusing hospital services toward acute and specialty care will increasingly strengthen PHC capacity and improve the overall efficiency of service provision. Table 2 outlines key priorities and areas to avoid while pursuing this goal. Table 2. Restructuring hospital and PHC care Prioritize Avoid Group PHC+ extended practices Single PHC practices Diagnostic departments in PHC+ facilities or hospitals Polyclinics, separated diagnostic facilities General hospitals, 300,000 population, 300 beds Small rayon or city hospitals serving less than 100,000 people Specialist hospitals, 750,000 to 1 million population, 300– Single-profile city or oblast hospitals 600 beds Specialist children’s hospitals City and oblast children’s hospitals Specialist COEs for cancer City and oblast cancer hospitals Hospitals with a capacity of 300–600 beds Hospitals of capacity <300 or >600 beds General (multi-profile) hospitals Single-profile hospitals 3. Developing independent systems of ancillary care In concert with hospital network reform, establishment of new independent organizations dedicated to rehabilitation, elderly care, palliative care, and mental health will free up hospital capacity. Modern 10 approaches to the organization of these services see better performance when they function outside of traditional hospitals. For example, people suffering from mental disorders or difficulties seldom benefit from long-term inpatient hospitalization but rather from community-based care (Shields-Zeeman et al. 2020). In 10 years, Ukraine will likely have dedicated rehabilitation centers, elderly homes, and hospices, and the number of psychiatric hospitals will be substantially reduced and replaced with community-based mental and rehabilitation health care. Rehabilitation centers, elderly homes, and hospices will support patients undergoing extensive rehabilitation, living their elderly years with a chronic disease or dementia, or desiring a peaceful, caring environment in their final moments before death. Like many other countries, Ukraine will reserve the use of inpatient mental health care for acute cases and those aligned with international clinical guidelines. Mental health patients will have access to modern-style care integrated as closely as possible into their regular lives. This will be facilitated by psychological support from PHC+ centers and dedicated mental health centers where short-term inpatient support and outpatient therapies may be provided. These centers will include daycare facilities for long-term mental health rehabilitation, including for people with post-war mental health needs. The establishment of these centers will require innovative investment tactics. For example, as cities requiring new general hospitals absorb services from old-fashioned former small rayon hospitals, hromadas that have owned these hospitals may wish to create community health centers, providing daycare, palliative, rehabilitation, and veteran care services. In the centers of the new rayons, a merger of a city and rayon hospital will be on the agenda. Additionally, private sector participation will be encouraged through the offering of attractive reimbursement rates and investment support. The carving out of these systems of ancillary care—known to be a heightened burden in Ukraine—will significantly improve the efficiency of hospitals, which currently hold the burden of providing these services. While they are organizationally independent entities, these centers will be professionally linked to PHC+ clinics or hospitals. Box 2. Potential role of the private sector in health system recovery The private sector can play an important role in the provision of health care. In addition to retail and wholesale of pharmaceuticals and dentistry, it may cover niche clinical services such as ambulatory dialysis for chronic patients, eye care, lab, and diagnostic services. To stimulate economies of scale in the private sector and its involvement in new health care areas, such as rehabilitation, elderly care, palliative care, and mental health, a Private Health Care Innovation Fund can be set up and managed by a financial institution. The viability of health services by private providers will not be guaranteed by investment support only. Reimbursement of services should be done by providing as much as possible a level playing field between public and private providers to ensure the viability of the latter. 4. Consolidating emergency services into a nationalized network Over the following decade, emergency care should continue to undergo significant quality changes through the consolidation of services into a national EMS network. These changes include the following: 11 • Implementing a comprehensive retraining of EMS professionals to establish a modern paramedic workforce operating under enhanced and standardized protocols; this will build upon previous reforms initiated before the war. • Expanding population literacy in first aid delivery by leveraging the growing number of individuals with hands-on first aid experience gained during the war. • Establishing a national digitalized first-responder system based on modern dispatch standards: o Employ viable algorithms to redirect nonurgent cases to primary care and crisis mental health support, alleviating the burden on the system due to nonurgent calls for emergency aid. o Consider implementation of a specific line for urgent patient calls, potentially taken up by PHC+ providers. As reported by the Ministry of Health (MOH),8 even during the war, about 26 percent of calls received for EMS required only a telephone consultation. Only 47 percent of calls were attended by an emergency medical brigade. • Improving hospital-level emergency care units and integrating emergency care departments as one of the core elements of the redesigned hospital network. • Utilizing time-to-incident criteria (for example, 10 minutes) to incorporate other locations, such as fire brigades, rescue services, and private health facilities, into the EMS network. 5. Investing in the recovery of service provision impacted by war Before committing to long-term reconstruction and service delivery improvements, it is imperative to prioritize the immediate recovery of service provisions affected by the ongoing war. As a result of the war, the provision of health care services has been disrupted due to, but not limited by, the following: • Changing priorities (physical and economic survival during the war) • Massive displacement of people and loss of connection to usual providers of health • Damage or destruction of health care facilities • Loss of access to health care services usually delivered in those facilities. 8 MOH statistics were cited on its Facebook page on August 8, 2022. 12 The consequence of this disruption has led to the following challenges: • Lack of accessibility to hospitals, due to damages and Figure 2. Immediate recovery efforts disruption, electricity disruptions or prolonged blackouts, inaccessible/damaged roads, heating, water issues, and so on; • A mismatch of quantity and scope of services offered to the population in need, arising from demographic shifts caused by displacement; • Shortage of qualified staff rendering select services. To address these challenges, key short-term solutions should be undertaken to expedite people’s re-access to health services: • Repair of facilities with only minor damages, particularly if a facility is an essential part of the network; • Replacement of facilities that have been destroyed with: o Temporary use of services at another facility, o Temporary emergency facilities (field or mobile clinics), or Source: World Bank. o Semi-permanent solutions (modular construction) for all or partial functions, which may also require temporary relocation of services to other nearby facilities; • Permanent relocation of services to another facility. How do we get there? The strategic agenda set out above describes a major renewal of different service delivery networks in the coming years and decades. Implementation will not be a matter of renewing infrastructure alone but will also require a concerted effort to change important aspects of the whole health system. Policy makers and stakeholders in the health care sector may keep in mind the following principles for implementation while bringing about this change to more efficient and effective service delivery (Table 3). Table 3. Principles for recovery Principle Description Protect people An immediate and continuous effort is needed to shield the ill, wounded, and poor from ill health and catastrophic health expenditures. Consolidate capacity Fragmented and parallel health care delivery networks need consolidation to reap quick savings, reduce wasteful spending, and achieve efficiency and economies of 13 Principle Description scale. Development decisions should not be based on past performance of facilities with low quality and occupancy rates but on the projected service consumption levels and a shift of services to PHC and ancillary care. Likewise, consolidation of health care financing is needed to curb the ineffective use of spending on health care from OOP payments by pooling these resources under the common framework of the PMG organized by the MOH through the NHSU. Diversify networks A comprehensive twenty-first-century health care system should have multidisciplinary PHC as the foundation, acute hospital care, technology-enabled outpatient and daycare, and long-term care and rehabilitation. New service delivery networks are complementary and diverse by function. Value/treasure Professional medical staff should receive honest remuneration within the formal professionals system of care. Improved quality of care requires a large effort to improve and modernize the education and training of doctors and nurses alike. Lead the system Strong leadership focuses on the working of the system as a whole. Relying on professional responsibility, improving quality, smart incentives, and honest goals and targets will help build, over time, trust, maturity, and efficiency. Guided by these principles (Table 3), the following areas require special attention: • Focus on the financial protection of people. The war will impoverish many people, so financial protection should be at the core of the (post-)war policies in health system development. Ukraine must reconcile its medium-term fiscal pressures with the greater need for people's financial protection and growing expectations intensified by the ambitions of EU integration. • Ensure a well-prioritized and sufficiently funded PMG. An adequately funded PMG can replace additional private expenditures of households that constrain access to essential health services, including pharmaceuticals and diagnostics. Investments in better governance and accountability of service providers will be essential to reduce waste and optimize costs. • Target inefficiencies in the current system. Value for money in health care delivery will be of utmost importance considering the large inefficiencies in the current system (for example, many hospitals with low occupancy rates). Tackling these inefficiencies by the government will be a crucial first step to capitalize on available financial resources and reduce wasteful spending. • Improve quality of care. Quality of care is a crucial element of health reforms and should be undertaken through various avenues including (1) improving qualifications and standards of professionals (for example, a credible system of accreditation and continuous education), (2) establishing an independent organization to monitor and maintain modern medical and organizational norms and standards, and (3) developing and instituting transparent standards and criteria for NHSU contracting of providers. 14 • Consolidate diagnostic services. Diagnostic, particularly laboratory, services benefit from significant economies of scale. At the same time, considerable opportunities for participation in the private sector exist. Reaping the benefits of scale while maintaining the role of the private sector requires careful cooperation between the public and private sectors. • The central government will play an essential role to regulate market power in public and private sectors to avoid reducing efficiency and affordability. Where necessary, such as for essential medicines, the government will develop capacity to step in if markets fail to provide. • Prioritize provision of care at the right level. Focused efforts to build a strong PHC core ensure that health care is provided at the ‘right level’ as close as possible to where people live and work. To this extent, the primary care network will need to continue to expand and upgrade massively across the country. As a matter of priority, this involves substantial investments in facilities, equipment, and the training of professionals. PHC provides ample and excellent job opportunities for health care professionals, often close to home. • Shift away from the overutilization of hospitals. Not only are hospitals costly organizations to run, but they also often do not offer the best healing environment for patients. A more limited number of hospitals focused on acute and specialized care will help improve the capacity and function of these facilities. Psychiatric care and rehabilitation are examples of types of care provided in dedicated nonhospital settings as much as possible in an ambulatory mode. • Reorient medical education. Current medical education is partly based on Soviet Union curricula and requires modernization. Without this educational overhaul, the expansion and introduction of new roles (for example, community nurses and nurse practitioners) as well as the anticipated return of the cadre of providers from abroad will not function efficiently. Pan-European initiatives of Ukrainians working abroad, expansion of the role of private academic institutions, and close cooperation with European training resources could play an important role in this reorientation. • Realign provider incentives. Competitive salaries and improved professional development opportunities for health care professionals are essential. Individual licensing and professional liberalization for doctors and nurses will also play a key role in retaining qualified medical staff. The principles presented in Table 3 serve as guidelines to inform short- and long-term implementation decisions that balance effective recovery of health services with renewal and improvement of health infrastructure. Adherence to these principles will help mitigate the risks in redeveloping the health care system resulting from, for example, • Fragmented approaches to reconstruction (by different donors or regions); • Hospitals built to outdated standards (new hospitals will last for 30–50 years); • Orientation toward short-term services instead of the long-term need; and 15 • Underestimating the role that primary care, along with daycare, diagnostic, and specialist outpatient facilities, can take to replace some functions currently provided by hospitals. Overview of the necessary investments An effort of health service delivery restructuring while restoring requires extensive investments both in the short and long term. It is estimated that financial resources of at least USD 16.4 billion in the next 10 years, or about USD 40 billion over the next 20+ years, are necessary to support investments in infrastructure, development of eHealth, educational needs, and additional investments in health services. While significant investments are required, a reorientation toward PHC and prioritization of prevention yield substantial returns, including not only improving population health but saving costs through reduction of expensive specialized care and hospitalization. An illustrative estimate of the investments needed across the five key strategies is outlined below (see also Table 4). 1. Investments to expand PHC Strengthening primary care is the priority and will require at least USD 0.1 billion to cover rebuilding the approximately 135 destroyed PHC facilities and 162 damaged PHC facilities.9 About 40 percent of these facilities will need to be rebuilt as PHC+ and the other 60 percent will be smaller PHC facilities. Strengthening the capacity and scope of the PHC network over the longer term is estimated to require an investment of USD 0.35 billion per year. This will cover investments in new and existing PHC facilities. New PHC facilities will allow for flexibility in design and function to accommodate different conditions and demands between urbanized areas and smaller, independent communities in the country (with stronger emphasis on group practices and PHC+ facilities). 2. Investments towards improved hospital care The proposed hospital network, if built new, is estimated to cost approximately USD 18 billion. This includes 136 general profile first layer or general hospitals and 52 hospitals with additional specialization. Of the 52 specialized hospitals, 26 will be COEs, including for specialized oncology cancer care, such as for children. Investments in hospitals will need to follow a long-term strategy, accompanied with consolidation and graduation of oversized capacities. Still, in some hospitals, quick refurbishments can help improve conditions and quality of service delivery in the short term. 9 This estimate of damaged facilities may increase as war continues. 16 3. Set up of networks of ancillary care The establishment of new independent organizations dedicated to rehabilitation, elderly care, palliative care, and mental health will cost an estimated USD 1.3 billion. This investment will facilitate the establishment of rehabilitation centers across the country to help people regain function after severe trauma and to expand services to patients surviving stroke, cancer, and so on. This will cover building 18 new rehabilitation centers and reconstructing 59 existing facilities as modern rehabilitation clinics. Another USD 2 billion will cover renovations of 26 psychiatric hospitals, construction of approximately 554 mental health community centers, training of PHC providers in the identification and management of mental health issues, making outpatient drugs available and covered, and preparing communities and families to be ready to have mental health patients in community and homes and provide support. These services will require an additional USD 0.1 billion per year to provide the necessary resources to cover additional needs. 4. Consolidating emergency services into a nationalized network The investment in improving emergency services is minimal. Costs include vehicles, relevant equipment, improvement of dispatch algorithms, emergency telemedicine services, and additional placement of stations for ambulances, which are estimated to range between USD 5 to 10 million. 5. Investing in the recovery of services To quickly repair health infrastructure that is not severely damaged, investments of about USD 0.25 billion in 2023–2024 are needed. The government already received external support to sustain the provision of health services guaranteed within the PMG in 2022–2023, estimated at over USD 2.6 billion. About USD 6 billion in budget support will be required to keep the current government operational expenditures for health care for the next five years. An additional USD 5 billion during the time frame may be necessary to cover the additional needs and address war-related disruptions of health service delivery. We do not estimate immediate needs to set up mobile clinics, modular clinical capacities, or field hospitals. It is expected that Ukraine’s ongoing humanitarian support can cover such investments. 17 Table 4. Investments needed to implement strategies Strategy USD, billion What investment will accomplish Expanding a multidisciplinary 0.1 + 0.35 per year Rebuilding 135 destroyed and 162 damaged PHC practices PHC core plus recurring resource needs Refocusing hospital services 17.9 Building 136 general hospitals and 52 hospitals with toward acute and specialty specialization (50% will be COEs) care Building out focused 3.3 + 0.1 per year Building 18 new rehabilitation centers and reconstructing independent systems of care 59 existing facilities (1.3 billion) Renovation of 26 psychiatric hospitals, construction of 554 mental health community centers, provider + community training (2 billion) Consolidating emergency 0.005–0.01 Purchasing vehicles, relevant equipment, and additional services into a nationalized placement stations for ambulances network Investing in the recovery of 14 Quick repairs (USD 0.25 billion) service provision affected by (2022 – 2027) Sustaining PMG provision of health services (USD 2.6 war billion, already received) Supporting government operational health care expenditures for the next five years (USD 6 billion) Covering additional needs to address war-related disruptions (USD 5 billion) Across the whole health care system, workforce development and technological innovations will also require additional investments. To change curricula, provide additional training, and improve quality standards for doctors and nurses, an investment of at least USD 0.13 billion is foreseen. This cost also includes additional training for managers, administrators, and owners of health care facilities as improvements in service delivery will require complex capacity-building investments. Hardware and software deployment of new technologies (e-health system, teleservices) will require an estimated investment of additional USD 0.2 billion. Ultimately good health care is also an economic activity contributing directly to GDP. With a severely depressed economy in the short term, good quality health care will ensure that a strained workforce will be fit to help rebuild Ukraine’s economy. Provision of health care also means employment in towns and rural areas and is important for households and local communities. If done well, the health care sector will, over time, be able to attract medical tourism much better from well-paying customers. Health care would be exported, becoming an economic growth sector. 18 Conclusions Building on the momentum of the previous health care reform initiative, and despite the outrageous war, Ukraine can further revise and improve its health care system. New policies and regulations accompanied by short- and long-term investments in health infrastructure will be of paramount importance to establishing modern health practices in Ukraine. Considering strategic changes in organization, management, and concepts of care, as well as norms and standards, including those for investments and human resources, will be imperative for change. These new policies and regulations can also set the stage for future-proof, EU-standard investments. The establishment of a well-functioning and effective service delivery, as well as catching up on accumulated service delivery disruptions, will in many aspects depend on how quickly PHC can be further strengthened and expanded. Such expanded services at the primary care level will also help quickly scale up services that are new, urgent needs associated with the war (mental health, rehabilitation, catch-up on preventive screenings, and follow-up care for patients with chronic diseases). Investments in hospitals will need to be strategic, in line with EU concepts, to a right-size modern network of facilities, while quick improvements may help update conditions of service provision in the existing outdated facilities. Leveraging this moment to focus not only on addressing the urgent health care needs of the population but on the long-term restructuring of the health system is a necessary but challenging endeavor. 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