Kyrgyz Republic
Kyrgyzstan is a small mountainous country with a population of approximately 5.2 million. Two thirds of the population lives in rural areas, with a significant rate of urban migration and a substantial rate of emigration to countries such as Russia and Kazakhstan. The Kyrgyz republic has a strong central government under a federal governing structure. The country is divided into 8 regions called oblasts, which are then subdivided into a total of 43 districts called rayons. In 1999, 64% of the population was considered to be impoverished.
Kyrgyzstan is a small mountainous country with a population of approximately 5.2 million. Two thirds of the population lives in rural areas, with a significant rate of urban migration and a substantial rate of emigration to countries such as Russia and Kazakhstan. The Kyrgyz republic has a strong central government under a federal governing structure. The country is divided into 8 regions called oblasts, which are then subdivided into a total of 43 districts called rayons. In 1999, 64% of the population was considered to be impoverished.
Throughout the Soviet era, Kyrgyzstan had been one of the poorest republics and had been heavily subsidized by Moscow. After independence in 1991, GDP dropped by over 50% during the first five years. The primary causes for this dramatic reduction were the loss of transfers from the Soviet Union, the disruption of trading partnerships, and a decrease in domestic output. During Soviet times, the health system was centrally planned, financed by general revenues, and free for all citizens as a fundamental right. After the transition, however, the broad benefits that had once been commonplace started to go unfunded due to the significant loss of revenues during the 1990s. Staff and utilities increasingly made up a larger portion of the health care budget (reaching up to 75% or more of the budget), thereby reducing available resources for medicines and supplies. In order to obtain care, patients had to contribute informal payments as well as medicines, syringes, IV tubes, bandages, and food among many other inputs. By 2001, those who had any contact with the health system contributed an average of five times their monthly per capita consumption.
The health care system inherited from the Soviet Union was inefficient, duplicative, and overspecialized. It was fragmented into five levels of government administration (republican, oblast, city, rayon, and rural), leading to unnecessary redundancies. It was riddled with structural inefficiencies, relying on in-patient and specialized care. Its preventive, diagnostic and treatment capacities at the primary level were virtually non-existent. Such specialization made it so that a woman requiring care needed to go to a women’s clinic for gynecological issues, to a marriage and family clinic for contraception, to a dermatovenereal clinic for venerealogical problems, and to an AIDS clinic for HIV testing.
Because the fiscal situation was expected to remain difficult in the medium term after the transition, it was essential to better target the limited public health expenditures. Such a process, however, was impeded by four primary and related obstacles.
- Structural health delivery system inefficiencies related to the overly specialized nature of clinical practice. Primary health care (PHC) facilities were weak or non-existent. The inpatient sector contained enormous excess capacity with too many hospitals and many specialty rather than general hospitals contributing to an unsustainable level of fixed costs. The need to fill excess hospital beds also drove the provision of unnecessary services and practice of medicine not based on evidence.
- Resource allocation mechanisms were fragmented. Facilities at the federal level were funded by federal taxes, facilities at the oblast level were funded by oblast taxes, and facilities at the rayon level were funded by rayon taxes. This system led to an unnecessary redundancy in health providers and service offerings across administrative levels. Streamlining the service delivery system could lead to significant efficiency gains and improved resource targeting.
- Provider payment mechanisms were based on inputs and were transferred through inflexible line-item budgets stemming from historical patterns. The budgeting process was grounded in 18 input categories (personnel, drugs, etc…), and managers had no freedom to reallocate resources across categories as they saw fit. Furthermore, such norms encouraged excess capacity because this was the only way to increase clinic and hospital budgets.
- The widespread use of informal payments led to a weakening of financial protection for patients. While patients were supposed to receive health care free of charge, the health care budget was insufficient to cover the costs associated with such a deep entitlement program. This led to informal and unregulated direct payments by patients into the health system. Thus, clarifying patient entitlements and responsibilities was essential in improving the financial protection of patients, particularly those unable to pay the substantial out-of-pocket costs. A significant portion of the Kyrgyz health reform program was implemented in order to remove such obstacles and introduce greater efficiency into the health system.
By 2000, the government budget allocated to the health sector was 30% of 1991 levels in real terms, with 80% of it going towards fixed costs. Out of the state budget for health, 21% was used for utility costs in 2000. In 1994, wages in the health sector equaled 92% of the national average, but by 2001 this number had decreased to 51%. Furthermore, in 1991 public health spending equaled 3.6% of GDP, but this number had steadily decreased to 1.9% by 2000.
Thus, it was imperative to implement a serious health system reform program. From 1994 to 1996, the Kyrgyz government worked with the WHO/EURO, the United Nations Development Program, and the Turkish development agency to create a ten year plan for the health system. The implementation of this plan commenced in 1996.
Kyrgyz Republic
Historical Context
Kyrgyzstan is a small mountainous country with a population of approximately 5.2 million. Two thirds of the population lives in rural areas, with a significant rate of urban migration and a substantial rate of emigration to countries such as Russia and Kazakhstan. The Kyrgyz republic has a strong central government under a federal governing structure. The country is divided into 8 regions called oblasts, which are then subdivided into a total of 43 districts called rayons. In 1999, 64% of the population was considered to be impoverished.
Throughout the Soviet era, Kyrgyzstan had been one of the poorest republics and had been heavily subsidized by Moscow. After independence in 1991, GDP dropped by over 50% during the first five years. The primary causes for this dramatic reduction were the loss of transfers from the Soviet Union, the disruption of trading partnerships, and a decrease in domestic output. During Soviet times, the health system was centrally planned, financed by general revenues, and free for all citizens as a fundamental right. After the transition, however, the broad benefits that had once been commonplace started to go unfunded due to the significant loss of revenues during the 1990s. Staff and utilities increasingly made up a larger portion of the health care budget (reaching up to 75% or more of the budget), thereby reducing available resources for medicines and supplies. In order to obtain care, patients had to contribute informal payments as well as medicines, syringes, IV tubes, bandages, and food among many other inputs. By 2001, those who had any contact with the health system contributed an average of five times their monthly per capita consumption.
The health care system inherited from the Soviet Union was inefficient, duplicative, and overspecialized. It was fragmented into five levels of government administration (republican, oblast, city, rayon, and rural), leading to unnecessary redundancies. It was riddled with structural inefficiencies, relying on in-patient and specialized care. Its preventive, diagnostic and treatment capacities at the primary level were virtually non-existent. Such specialization made it so that a woman requiring care needed to go to a women’s clinic for gynecological issues, to a marriage and family clinic for contraception, to a dermatovenereal clinic for venerealogical problems, and to an AIDS clinic for HIV testing.
Because the fiscal situation was expected to remain difficult in the medium term after the transition, it was essential to better target the limited public health expenditures. Such a process, however, was impeded by four primary and related obstacles.
- Structural health delivery system inefficiencies related to the overly specialized nature of clinical practice. Primary health care (PHC) facilities were weak or non-existent. The inpatient sector contained enormous excess capacity with too many hospitals and many specialty rather than general hospitals contributing to an unsustainable level of fixed costs. The need to fill excess hospital beds also drove the provision of unnecessary services and practice of medicine not based on evidence.
- Resource allocation mechanisms were fragmented. Facilities at the federal level were funded by federal taxes, facilities at the oblast level were funded by oblast taxes, and facilities at the rayon level were funded by rayon taxes. This system led to an unnecessary redundancy in health providers and service offerings across administrative levels. Streamlining the service delivery system could lead to significant efficiency gains and improved resource targeting.
- Provider payment mechanisms were based on inputs and were transferred through inflexible line-item budgets stemming from historical patterns. The budgeting process was grounded in 18 input categories (personnel, drugs, etc…), and managers had no freedom to reallocate resources across categories as they saw fit. Furthermore, such norms encouraged excess capacity because this was the only way to increase clinic and hospital budgets.
- The widespread use of informal payments led to a weakening of financial protection for patients. While patients were supposed to receive health care free of charge, the health care budget was insufficient to cover the costs associated with such a deep entitlement program. This led to informal and unregulated direct payments by patients into the health system. Thus, clarifying patient entitlements and responsibilities was essential in improving the financial protection of patients, particularly those unable to pay the substantial out-of-pocket costs. A significant portion of the Kyrgyz health reform program was implemented in order to remove such obstacles and introduce greater efficiency into the health system.
By 2000, the government budget allocated to the health sector was 30% of 1991 levels in real terms, with 80% of it going towards fixed costs. Out of the state budget for health, 21% was used for utility costs in 2000. In 1994, wages in the health sector equaled 92% of the national average, but by 2001 this number had decreased to 51%. Furthermore, in 1991 public health spending equaled 3.6% of GDP, but this number had steadily decreased to 1.9% by 2000.
Thus, it was imperative to implement a serious health system reform program. From 1994 to 1996, the Kyrgyz government worked with the WHO/EURO, the United Nations Development Program, and the Turkish development agency to create a ten year plan for the health system. The implementation of this plan commenced in 1996.
Different explanations have been offered for the political success of the Manas program. Some claim that a small but committed group of reform champions were responsible for the success of the program. Others argue that Manas was successful due to general Kyrgyz culture, which made the country open to new and innovative ideas. Yet others maintain that the severe poverty during the post-Soviet period made the adoption of reform strategies unavoidable. It is likely that these different explanations all played a role in the success of the reform program. Besides these general justifications, specific political characteristics of the Kyrgyz reform experience played a significant role in its success.
Different explanations have been offered for the political success of the Manas program. Some claim that a small but committed group of reform champions were responsible for the success of the program. Others argue that Manas was successful due to general Kyrgyz culture, which made the country open to new and innovative ideas. Yet others maintain that the severe poverty during the post-Soviet period made the adoption of reform strategies unavoidable. It is likely that these different explanations all played a role in the success of the reform program. Besides these general justifications, specific political characteristics of the Kyrgyz reform experience played a significant role in its success.
From the start of the Manas program there was an anticipation of resistance to the ensuing efforts to rationalize the health system and change the basic content of clinical practice. Medical professionals, especially specialists and auxiliary staff, were the primary interest groups with reason to worry. Forward-looking project leaders preempted much of this potential resistance by creating institutions such as the Family Group Practice Association, the Hospital Association, and the Licensing and Accreditation Commission that would lobby potentially unruly groups on behalf of reform. In addition, a recognition that medical leadership needed to accept and promote the introduction of evidence-based medicine and new clinical practice guidelines eventually helped mitigate some of the resistance.
The MOH and MHIF played an important role in coordinating the diverse donor activities within the health sector. By taking ownership of the project during the different stages of reform, the MOH successfully initiated its transformation from purchaser and service provider to steward and policy maker. The MOH was also efficient at coordinating donor and technical assistance. The continuity of donor personnel from organizations like USAID, the World Bank and the WHO has been an important boon for health reform. It has led to a productive division of labor where each donor has created a comparative advantage in different niches within the health sector reform program. The Kyrgyz leaders of the health reform effort have actively guided and managed donor efforts and this has created a strong sense of familiarity with the system and a sense of teamwork not only among the many different technical/aid partners involved but also between the partners and the government.
In 2002, opposition to reform arose from several different places. Some parliamentarians who were physicians had vested interests in the old system and wanted to derail some key elements of the reform. Others argued for the strengths of the Soviet-style system, and wanted key components of the reform abandoned. Well-connected physicians who were profiting from private practices run out of hospitals in Bishkek wanted certain aspects of reform dropped. There were also political antagonists whose interests were outside the issue of health reform but used it as leverage toward their goals. Finally, neighboring countries attempted to exert negative influences to the development of family medicine in Kyrgyzstan. Due to all of these influences on the reform process, the Kyrgyz parliament conducted a formal assessment of the reforms, concluding (without giving reasons for the judgment) that the reforms were “unsatisfactory.” The World Bank responded to this event in two ways. First, they threatened to give the World Bank sponsored project an unsatisfactory rating, jeopardizing future lending scenarios. Second, they organized a roundtable discussion on the reform process, which led to new commitment by the government and a revised action plan, thereby avoiding a meltdown in the reform process. Today, the greatest opposition to the reforms comes from Bishkek elite who tend to judge results by less than optimal change in Bishkek City as the reforms have been introduced more effectively in the oblasts.
Kyrgyz Republic
Political Context
Different explanations have been offered for the political success of the Manas program. Some claim that a small but committed group of reform champions were responsible for the success of the program. Others argue that Manas was successful due to general Kyrgyz culture, which made the country open to new and innovative ideas. Yet others maintain that the severe poverty during the post-Soviet period made the adoption of reform strategies unavoidable. It is likely that these different explanations all played a role in the success of the reform program. Besides these general justifications, specific political characteristics of the Kyrgyz reform experience played a significant role in its success.
From the start of the Manas program there was an anticipation of resistance to the ensuing efforts to rationalize the health system and change the basic content of clinical practice. Medical professionals, especially specialists and auxiliary staff, were the primary interest groups with reason to worry. Forward-looking project leaders preempted much of this potential resistance by creating institutions such as the Family Group Practice Association, the Hospital Association, and the Licensing and Accreditation Commission that would lobby potentially unruly groups on behalf of reform. In addition, a recognition that medical leadership needed to accept and promote the introduction of evidence-based medicine and new clinical practice guidelines eventually helped mitigate some of the resistance.
The MOH and MHIF played an important role in coordinating the diverse donor activities within the health sector. By taking ownership of the project during the different stages of reform, the MOH successfully initiated its transformation from purchaser and service provider to steward and policy maker. The MOH was also efficient at coordinating donor and technical assistance. The continuity of donor personnel from organizations like USAID, the World Bank and the WHO has been an important boon for health reform. It has led to a productive division of labor where each donor has created a comparative advantage in different niches within the health sector reform program. The Kyrgyz leaders of the health reform effort have actively guided and managed donor efforts and this has created a strong sense of familiarity with the system and a sense of teamwork not only among the many different technical/aid partners involved but also between the partners and the government.
In 2002, opposition to reform arose from several different places. Some parliamentarians who were physicians had vested interests in the old system and wanted to derail some key elements of the reform. Others argued for the strengths of the Soviet-style system, and wanted key components of the reform abandoned. Well-connected physicians who were profiting from private practices run out of hospitals in Bishkek wanted certain aspects of reform dropped. There were also political antagonists whose interests were outside the issue of health reform but used it as leverage toward their goals. Finally, neighboring countries attempted to exert negative influences to the development of family medicine in Kyrgyzstan. Due to all of these influences on the reform process, the Kyrgyz parliament conducted a formal assessment of the reforms, concluding (without giving reasons for the judgment) that the reforms were “unsatisfactory.” The World Bank responded to this event in two ways. First, they threatened to give the World Bank sponsored project an unsatisfactory rating, jeopardizing future lending scenarios. Second, they organized a roundtable discussion on the reform process, which led to new commitment by the government and a revised action plan, thereby avoiding a meltdown in the reform process. Today, the greatest opposition to the reforms comes from Bishkek elite who tend to judge results by less than optimal change in Bishkek City as the reforms have been introduced more effectively in the oblasts.
The Kyrgyz health care reform program was encompassed in a 10 year systematic plan called the “Manas National Program on Health Care Reforms 1996-2006.” The Manas program represented the Kyrgyzstan political will for reform and enabled the technical and aid organizations that worked in the health sector during this time. A driver of the reforms was the process by which Kyrgyz health partners worked seamlessly with WHO, World Bank, and USAID.
The Kyrgyz health care reform program was encompassed in a 10 year systematic plan called the “Manas National Program on Health Care Reforms 1996-2006.” The Manas program represented the Kyrgyzstan political will for reform and enabled the technical and aid organizations that worked in the health sector during this time. A driver of the reforms was the process by which Kyrgyz health partners worked seamlessly with WHO, World Bank, and USAID. These donors/agencies worked to their comparative advantages with WHO contributing to health policy and monitoring and evaluation, the World Bank establishing framework conditions and equipment/commodities, and USAID providing implementation support for the first pilot in Issyk-Kul and its expansion throughout the country. The first phase of reform from 1996 to 2000 introduced the Mandatory Health Insurance Fund (MHIF) and emphasized the strengthening of primary health care.
During the first phase of reforms, primary health care was strengthened by restructuring to create a new primary health care sector and service delivery improvements including introduction of family medicine and new clinical practice guidelines. First, primary care was separated from hospital care by establishing Family Group Practices (FGPs) to which patients would freely enroll for services. As the budget collapsed, hospitals were starving primary health care and the idea was to separate primary health care to create autonomous PHC practices in which general doctors (family practitioners as well as internists, pediatricians, and ob/gyns) could practice under one roof in a new entity with improved management and potential to increase the scope of more cost-effective primary health care services. This was an important step, since Kyrgyzstan had no family physicians prior to 1995. FGPs were supplied with equipment, improved management and health information systems, and with necessary drugs for emergency care and maternal and child health, thereby expanding the population’s access to health services in appropriate settings. Second, family medicine training was institutionalized at the undergraduate and postgraduate levels. In 1998, the first long-term training program was formed with the creation of two family medicine residencies. Continuous training programs were also put in place for practicing doctors. Approximately 65% of doctors and nurses participated in retraining programs. Finally, 162 clinical protocols were developed and introduced on the basis of evidence-based medicine in addition to the evidence-based standards introduced through WHO programs such as Integrated Management of Childhood Illnesses (IMCI). This process of institutionalizing family medicine took place with the help and expertise of several technical and aid organizations.
In 1997, the payroll tax for health was introduced along with the MHIF, which would function as an obligatory social insurance scheme. The MHIF was created as a parastatal social insurance fund under The Government of Kyrgyzstan. During the first three years of its operations, coverage increased to 30% of citizens, largely workers and former workers or pensioners. When the national government started to fund contributions for children and social welfare recipients, coverage increased up to 70% in 2000 and 83% in 2001. During this first phase of reforms, the primary benefit of the MHIF was that it led to a gradual introduction of the institutional mechanisms necessary for a full transition to output-based purchasing mechanisms in an environment that had been fundamentally input-based. The MHIF started to contract with some providers and facilities, and new reimbursement procedures (capitation based payments to primary care facilities and case-based payments to hospitals) were introduced. Initially the new provider payment systems only contained variable costs (e.g. drugs, supplies, food, and staff bonuses), in order to ensure that health facilities had time to adjust and that the small amount of payroll tax funding benefited the population most effectively, while ensuring that the reforms would be visible. The first few years of the reforms functioned primarily as a learning period for the new institutions within the health system.
The second phase of reforms from 2001 to 2004 focused on incorporating budget funds into the nascent health financing reforms. MOH and MHIF leadership recognized that conflicting financial incentives in the new payroll-tax-funded and budget-funded provider payment systems had caused the health financing reforms to hit a ceiling. The health budget input-based provider payment systems still rewarded maintaining excess capacity and there was also a growing risk of fragmenting the population by insurance status thus undermining universal coverage. The MHIF was merged under the MOH and it became the single-payer for the new State Guaranteed Benefit package, incorporating revenue from budget, payroll tax, and population copayments. This second phase was implemented in geographic areas step-by-step, beginning in two oblasts, gradually expanding to the rest of the country at the rate of two oblasts per year. The goals of the second phase were achieved through four primary mechanisms.
- Oblast, rayon, and city tax revenues allocated to health were pooled at the oblast level into oblast purchasing organizations, thereby reducing resource fragmentation. Budget funding was included in the MHIF as single-payer and the revenues were supplemented by the payroll tax collected by the MHIF. This change allowed for a cross-subsidization between city and rayon borders which had been impossible before. Furthermore, by 2006 these oblast pools were centralized into one national purchasing pool, opening the possibility for wider cross-subsidization at the national level.
- Unified output-based provider payment systems were introduced for both budget and payroll tax funding. Instead of the previous line-item payments, outpatient care would now be paid on a capitation basis and hospitals would be paid on a per-case basis. Such changes solidified and enhanced the financial incentives to restructure and downsize the excess capacity and overstretched facilities of the Soviet era initiated by the MHIF payment systems using payroll tax funding.
- The reform program established an explicit set of entitlements known as the State Guaranteed Benefit Package (SGBP). This package established free primary care for all citizens and specialized care with copayments. The copayments consist of relatively few categories and a flat fee and they vary with insurance status, exemption status, and the type of case. The copayment categories are prospective such that patients know their copayment before accessing services. An important motivation in instituting this reform was the prevalence of informal payments, which were a holdover from the Soviet health system and had expanded rapidly since independence and collapse of the health budget.
- It was necessary to downsize hospital capacity and restructure the service delivery system. Most Soviet hospitals had been built as agglomerations of 15-20 small buildings, so downsizing facilities was relatively easy. Unnecessary buildings were demolished, rented out, or transferred to alternate uses. By 2004, hospital sector real estate capacity had been reduced by approximately 46%. This downsizing took place within a cooperative arrangement whereby the MHIF, the Hospital Association, and a consulting company worked closely with hospitals in order to create successful restructuring plans. This shift in priorities from specialized/hospital care to primary care led to an important increase in primary care spending. From 2001 to 2005 the share of government spending on health care devoted to primary care increased from 11% to 25%. Corresponding reductions in utility costs were critical to the allocation of additional resources to direct patient care and became more important to the sustainability of the health system over time as the price of utilities increased rapidly.
In 2005, the MOH started developing a successor program (third phase) to the initial Manas scheme. The new program, known as Manas Taalimi, aims to institutionalize the reforms that took place under the first round of reforms. It also aims to strengthen facets of the health system that were not as actively emphasized during the Manas program. More specifically, Manas Taalimi seeks to incorporate public health and medical education into the reforms; base the content of clinical practice on evidence; strengthen services for groups with worse health outcomes; enhance the capacity of the MOH in policy formation, budget planning, and monitoring and evaluation; and strengthen the quality of care for priority health interventions in MCH, CVD, TB, and HIV.
Table 1: Chronology of events and legislation in the health sector
| Date | Event |
|---|---|
| August 1991 | Declaration of independence in Kyrgyzstan |
| 1993 | Introduction of user fees |
| March 1994 | Memorandum of Understanding between WHO Regional office for Europe and the Ministry of Health of the Kyrgyz Republic to undertake the MANAS Health Care Reform Programme |
| Ministry of Health requests technical assistance from USAID for a primary health care demonstration project in Issyk-Kul oblast | |
| August 1994 | National Health Policy approved by the government |
| November 1996 | Government approves MANAS Health Care Reform Programme |
| World Bank funded Health Project (1996-2000) started in Kyrgyzstan (Bishkek and Chui oblasts) | |
| January 1997 | Introduction of the mandatory health insurance system in Kyrgyzstan |
| July 1997 | MHIF introduces case-based payment to hospitals |
| 1997-1998 | Rolling out of primary health care reforms to Chui, Jalal-Abad, and Osh oblasts and Bishkek |
| November 1998 - March 1999 | FGPs enrolment campaign in Chui oblast and Bishekek |
| Jan 1999 | Introduction of capitation payment to FGPs in Bishkek |
| April 1999 | About 55 hospitals and 290 FGPs enter into contracts with the MHIF |
| January 2001 | Government decree on introduction of a new health care financing mechanism in health facilities of Kyrgyzstan since 2001 |
| Government decree on programme of state guarantees on provision of free and exempt health care to citizens of Issyk-Kul and Chui oblasts in 2001 | |
| Government decree on population's co-payment for drugs, meals and certain types of health services rendered by health facilities besides the program of state guarantees on provision of free and exempt health care to citizens of Issyk-Kul and Chui oblasts in 2001 | |
| February 2002 | Government decree on provision of health care to citizens of Kyrgyzstan under the State Benefits Package since 2002 |
| March 2002 | Maryn and Talas oblasts join the single payer system |
| March 2003 | Batken, Jalal-Abad and Osh oblasts join the single payer system |
| November 2003 | Republican facilities join the single payer system |
| July 2004 | Law on the Single Payer System in Health Care Financing in the Kyrgyz Republic |
| March 2005 | Popular uprising and subsequently new government elected |
| February 2006 | Government approves "Manas Tallimi" Health Care Reform Programme 2006-2010 |
Source: Adapted from Falkingham, J., Akkazieva, B., and Baschieri, A.
Kyrgyz Republic
Summary of Reforms
The Kyrgyz health care reform program was encompassed in a 10 year systematic plan called the “Manas National Program on Health Care Reforms 1996-2006.” The Manas program represented the Kyrgyzstan political will for reform and enabled the technical and aid organizations that worked in the health sector during this time. A driver of the reforms was the process by which Kyrgyz health partners worked seamlessly with WHO, World Bank, and USAID. These donors/agencies worked to their comparative advantages with WHO contributing to health policy and monitoring and evaluation, the World Bank establishing framework conditions and equipment/commodities, and USAID providing implementation support for the first pilot in Issyk-Kul and its expansion throughout the country. The first phase of reform from 1996 to 2000 introduced the Mandatory Health Insurance Fund (MHIF) and emphasized the strengthening of primary health care.
During the first phase of reforms, primary health care was strengthened by restructuring to create a new primary health care sector and service delivery improvements including introduction of family medicine and new clinical practice guidelines. First, primary care was separated from hospital care by establishing Family Group Practices (FGPs) to which patients would freely enroll for services. As the budget collapsed, hospitals were starving primary health care and the idea was to separate primary health care to create autonomous PHC practices in which general doctors (family practitioners as well as internists, pediatricians, and ob/gyns) could practice under one roof in a new entity with improved management and potential to increase the scope of more cost-effective primary health care services. This was an important step, since Kyrgyzstan had no family physicians prior to 1995. FGPs were supplied with equipment, improved management and health information systems, and with necessary drugs for emergency care and maternal and child health, thereby expanding the population’s access to health services in appropriate settings. Second, family medicine training was institutionalized at the undergraduate and postgraduate levels. In 1998, the first long-term training program was formed with the creation of two family medicine residencies. Continuous training programs were also put in place for practicing doctors. Approximately 65% of doctors and nurses participated in retraining programs. Finally, 162 clinical protocols were developed and introduced on the basis of evidence-based medicine in addition to the evidence-based standards introduced through WHO programs such as Integrated Management of Childhood Illnesses (IMCI). This process of institutionalizing family medicine took place with the help and expertise of several technical and aid organizations.
In 1997, the payroll tax for health was introduced along with the MHIF, which would function as an obligatory social insurance scheme. The MHIF was created as a parastatal social insurance fund under The Government of Kyrgyzstan. During the first three years of its operations, coverage increased to 30% of citizens, largely workers and former workers or pensioners. When the national government started to fund contributions for children and social welfare recipients, coverage increased up to 70% in 2000 and 83% in 2001. During this first phase of reforms, the primary benefit of the MHIF was that it led to a gradual introduction of the institutional mechanisms necessary for a full transition to output-based purchasing mechanisms in an environment that had been fundamentally input-based. The MHIF started to contract with some providers and facilities, and new reimbursement procedures (capitation based payments to primary care facilities and case-based payments to hospitals) were introduced. Initially the new provider payment systems only contained variable costs (e.g. drugs, supplies, food, and staff bonuses), in order to ensure that health facilities had time to adjust and that the small amount of payroll tax funding benefited the population most effectively, while ensuring that the reforms would be visible. The first few years of the reforms functioned primarily as a learning period for the new institutions within the health system.
The second phase of reforms from 2001 to 2004 focused on incorporating budget funds into the nascent health financing reforms. MOH and MHIF leadership recognized that conflicting financial incentives in the new payroll-tax-funded and budget-funded provider payment systems had caused the health financing reforms to hit a ceiling. The health budget input-based provider payment systems still rewarded maintaining excess capacity and there was also a growing risk of fragmenting the population by insurance status thus undermining universal coverage. The MHIF was merged under the MOH and it became the single-payer for the new State Guaranteed Benefit package, incorporating revenue from budget, payroll tax, and population copayments. This second phase was implemented in geographic areas step-by-step, beginning in two oblasts, gradually expanding to the rest of the country at the rate of two oblasts per year. The goals of the second phase were achieved through four primary mechanisms.
- Oblast, rayon, and city tax revenues allocated to health were pooled at the oblast level into oblast purchasing organizations, thereby reducing resource fragmentation. Budget funding was included in the MHIF as single-payer and the revenues were supplemented by the payroll tax collected by the MHIF. This change allowed for a cross-subsidization between city and rayon borders which had been impossible before. Furthermore, by 2006 these oblast pools were centralized into one national purchasing pool, opening the possibility for wider cross-subsidization at the national level.
- Unified output-based provider payment systems were introduced for both budget and payroll tax funding. Instead of the previous line-item payments, outpatient care would now be paid on a capitation basis and hospitals would be paid on a per-case basis. Such changes solidified and enhanced the financial incentives to restructure and downsize the excess capacity and overstretched facilities of the Soviet era initiated by the MHIF payment systems using payroll tax funding.
- The reform program established an explicit set of entitlements known as the State Guaranteed Benefit Package (SGBP). This package established free primary care for all citizens and specialized care with copayments. The copayments consist of relatively few categories and a flat fee and they vary with insurance status, exemption status, and the type of case. The copayment categories are prospective such that patients know their copayment before accessing services. An important motivation in instituting this reform was the prevalence of informal payments, which were a holdover from the Soviet health system and had expanded rapidly since independence and collapse of the health budget.
- It was necessary to downsize hospital capacity and restructure the service delivery system. Most Soviet hospitals had been built as agglomerations of 15-20 small buildings, so downsizing facilities was relatively easy. Unnecessary buildings were demolished, rented out, or transferred to alternate uses. By 2004, hospital sector real estate capacity had been reduced by approximately 46%. This downsizing took place within a cooperative arrangement whereby the MHIF, the Hospital Association, and a consulting company worked closely with hospitals in order to create successful restructuring plans. This shift in priorities from specialized/hospital care to primary care led to an important increase in primary care spending. From 2001 to 2005 the share of government spending on health care devoted to primary care increased from 11% to 25%. Corresponding reductions in utility costs were critical to the allocation of additional resources to direct patient care and became more important to the sustainability of the health system over time as the price of utilities increased rapidly.
In 2005, the MOH started developing a successor program (third phase) to the initial Manas scheme. The new program, known as Manas Taalimi, aims to institutionalize the reforms that took place under the first round of reforms. It also aims to strengthen facets of the health system that were not as actively emphasized during the Manas program. More specifically, Manas Taalimi seeks to incorporate public health and medical education into the reforms; base the content of clinical practice on evidence; strengthen services for groups with worse health outcomes; enhance the capacity of the MOH in policy formation, budget planning, and monitoring and evaluation; and strengthen the quality of care for priority health interventions in MCH, CVD, TB, and HIV.
Table 1: Chronology of events and legislation in the health sector
| Date | Event |
|---|---|
| August 1991 | Declaration of independence in Kyrgyzstan |
| 1993 | Introduction of user fees |
| March 1994 | Memorandum of Understanding between WHO Regional office for Europe and the Ministry of Health of the Kyrgyz Republic to undertake the MANAS Health Care Reform Programme |
| Ministry of Health requests technical assistance from USAID for a primary health care demonstration project in Issyk-Kul oblast | |
| August 1994 | National Health Policy approved by the government |
| November 1996 | Government approves MANAS Health Care Reform Programme |
| World Bank funded Health Project (1996-2000) started in Kyrgyzstan (Bishkek and Chui oblasts) | |
| January 1997 | Introduction of the mandatory health insurance system in Kyrgyzstan |
| July 1997 | MHIF introduces case-based payment to hospitals |
| 1997-1998 | Rolling out of primary health care reforms to Chui, Jalal-Abad, and Osh oblasts and Bishkek |
| November 1998 - March 1999 | FGPs enrolment campaign in Chui oblast and Bishekek |
| Jan 1999 | Introduction of capitation payment to FGPs in Bishkek |
| April 1999 | About 55 hospitals and 290 FGPs enter into contracts with the MHIF |
| January 2001 | Government decree on introduction of a new health care financing mechanism in health facilities of Kyrgyzstan since 2001 |
| Government decree on programme of state guarantees on provision of free and exempt health care to citizens of Issyk-Kul and Chui oblasts in 2001 | |
| Government decree on population's co-payment for drugs, meals and certain types of health services rendered by health facilities besides the program of state guarantees on provision of free and exempt health care to citizens of Issyk-Kul and Chui oblasts in 2001 | |
| February 2002 | Government decree on provision of health care to citizens of Kyrgyzstan under the State Benefits Package since 2002 |
| March 2002 | Maryn and Talas oblasts join the single payer system |
| March 2003 | Batken, Jalal-Abad and Osh oblasts join the single payer system |
| November 2003 | Republican facilities join the single payer system |
| July 2004 | Law on the Single Payer System in Health Care Financing in the Kyrgyz Republic |
| March 2005 | Popular uprising and subsequently new government elected |
| February 2006 | Government approves "Manas Tallimi" Health Care Reform Programme 2006-2010 |
Source: Adapted from Falkingham, J., Akkazieva, B., and Baschieri, A.
The Manas Taalimi Mid-Term Review Report framed the way forward as solidifying the gains brought about by health financing reform and restructuring, and addressing challenges in quality improvement. Solidifying the gains requires clear vision on future directions in health financing, continued restructuring in Bishkek and Osh Cities, and further integration of vertical systems with the general health system. More extensive quality improvement interventions are needed to improve health outcomes. In addition, increasing the emphasis on preventive services, improving public health, and medical education reform are still very fragile and need to be strengthened.
The Manas Taalimi Mid-Term Review Report framed the way forward as solidifying the gains brought about by health financing reform and restructuring, and addressing challenges in quality improvement. Solidifying the gains requires clear vision on future directions in health financing, continued restructuring in Bishkek and Osh Cities, and further integration of vertical systems with the general health system. More extensive quality improvement interventions are needed to improve health outcomes. In addition, increasing the emphasis on preventive services, improving public health, and medical education reform are still very fragile and need to be strengthened.
An important issue moving forward is the significant emigration of human resources. This situation is often referred to in Kyrgyzstan as a “catastrophe” because the best trained physicians and nurses are moving to places like Kazakhstan, Russia, and Yemen. This problem is compounded by the fact that few young professionals are entering the health sector. Furthermore, Russia has recently decided to accept the Kyrgyz family medicine diploma in lieu of a Russian diploma for its licensing requirements, making it very easy for Kyrgyz physicians to emigrate there.
On a separate front, the existence of Ambulatory Points and Family Group Practices has not always translated into better access to health services. Shortages of both supplies and personnel willing to live in rural areas have been difficult problems to overcome. Furthermore, low salaries and rising demand for health workers in neighboring countries have increased unfilled vacancies in rural health facilities.
Kyrgyz Republic
The Way Forward
The Manas Taalimi Mid-Term Review Report framed the way forward as solidifying the gains brought about by health financing reform and restructuring, and addressing challenges in quality improvement. Solidifying the gains requires clear vision on future directions in health financing, continued restructuring in Bishkek and Osh Cities, and further integration of vertical systems with the general health system. More extensive quality improvement interventions are needed to improve health outcomes. In addition, increasing the emphasis on preventive services, improving public health, and medical education reform are still very fragile and need to be strengthened.
An important issue moving forward is the significant emigration of human resources. This situation is often referred to in Kyrgyzstan as a “catastrophe” because the best trained physicians and nurses are moving to places like Kazakhstan, Russia, and Yemen. This problem is compounded by the fact that few young professionals are entering the health sector. Furthermore, Russia has recently decided to accept the Kyrgyz family medicine diploma in lieu of a Russian diploma for its licensing requirements, making it very easy for Kyrgyz physicians to emigrate there.
On a separate front, the existence of Ambulatory Points and Family Group Practices has not always translated into better access to health services. Shortages of both supplies and personnel willing to live in rural areas have been difficult problems to overcome. Furthermore, low salaries and rising demand for health workers in neighboring countries have increased unfilled vacancies in rural health facilities.
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