A great deal has changed in how primary health care (PHC) facilities are financed under the new model. One could say that for facilities that have become municipal non-profit enterprises and signed a contract with the National Health Service of Ukraine (NHSU), almost every aspect of financing is new.
Under the Law of Ukraine “On State Financial Guarantees of Medical Care for the Population”, PHC services will be paid for on a per-patient basis, using a capitation rate under contracts for medical care of the population. Thus, the main source of income for a PHC provider will be payments under its contract with the NHSU. The amount of these payments will depend on the number and age structure of the patients who have submitted a declaration with a family doctor who works at the facility. This is how the “money follows the patient” principle works.
The amount received from the NHSU consists of payment for serving patients on the “green” and “red” lists (Resolution of the Cabinet of Ministers of Ukraine No. 407). The “green” list is made up of patients who have signed a declaration with doctors of the facility. Their number is shown in the electronic health care system (eHealth). Revenue calculations take into account age
coefficients (ages 0–5: coefficient 4.0; ages 6–17: 2.2; ages 40–64: 1.2; over 65: 2), as well as a mountain area coefficient (1.25) if the locality has the corresponding status.
The number of people on the “red” list is calculated using the formula: ChS=NN*(1–ZS/SNN)
Where:
ChS is the number of patients included in the “red” list;
NN is the present population of the relevant administrative-territorial unit served by the PHC provider as of 1 January 2018, as specified in the contract with the NHSU;
ZS is the total number of patients who, as of the 1st day of the relevant month, have submitted declarations choosing a doctor, according to eHealth, with all PHC providers located within one administrative-territorial unit (city, district, amalgamated territorial community);
SNN is the total present population of the relevant administrative-territorial unit served by all PHC providers that have contracts with the NHSU as of the 1st day of the relevant month and are located within one administrative-territorial unit (city, district, amalgamated territorial community), that is, the sum of the present population of all providers (as specified in the contracts). The base rate for the “green” list is UAH 370 per year, and for the “red” list, UAH 240 per year.
To calculate a PHC provider's total income, income from sources other than the NHSU must also be taken into account (the list is specific to each provider), for example:
- funds to cover the cost of utilities and energy;
- funds from the local budget (other than funds to cover the cost of utilities and energy);
- funds under the subvention for the development of healthcare in rural areas;
- income from providing PHC services to foreigners;
- income from providing PHC services not included in the Program of Medical Guarantees;
- income from renting out premises/land plots;
- charitable aid;
- other income.
Local authorities must understand that the switch to NHSU payments is no reason to wind down their own healthcare support programs. It is the job of Chief Physicians or Directors of PHC facilities to convey this to the officials responsible.
To make it easier for PHC providers to plan their income and expenses for 2018, an Electronic Tool for Financial Planning of PHC Provider Income and Expenses for 2018 was developed. It can be downloaded here: https://goo.gl/Mc1Lyn.
In the course of providing PHC, every PHC provider incurs expenses, including staff pay, utilities, maintenance of official vehicles, routine repairs of premises, upkeep of the surrounding grounds, and so on. These expenses must be covered by income, which in most cases consists of funds received from the NHSU under the contract for medical care of the population. Balancing income and expenses is key to financial sustainability. One of the most important expense items is staff pay. For patients to feel a change in medical services and thus increase the facility's income through their declarations choosing a doctor, the head of the facility must motivate doctors to do their work as well as possible. The first and most obvious incentive is salary. Since an autonomous facility has more independence in deciding on pay, the facility's management and staff must jointly define a calculation system that everyone considers fair and transparent. This system can be set out in a regulation on pay/bonuses of the municipal non-profit enterprise or be part of the collective agreement.
PHC providers that are municipal non-profit enterprises can use different models and approaches to calculating salaries and bonuses for their staff. For example, the facility can give all employees a one-time increase in base salary by a fixed amount (or a certain percentage), or pay doctors an additional bonus equal to a set share (percentage) of the facility's income for serving patients on the “green” list (including age coefficients). The size of this share is determined through negotiations between the facility's management/owner and the staff. Bonuses for administrative, support, nursing and junior medical staff can be set as a fixed percentage of the doctor's bonus.
Another option: after a one-time increase in base salary for all employees by a fixed amount or a certain percentage, the facility can create a bonus fund equal to a certain share (percentage) of its total income from the NHSU or of the amount by which NHSU income exceeds the former medical subvention. If the facility has set up PHC teams, the bonus fund can be distributed among the teams according to a labor participation coefficient. Yet another option is to link doctors' salaries to the number of signed declarations in the pay regulation or collective agreement, setting ranges for a family doctor (up to 500 declarations; 501–1,000 declarations; 1,001–1,400 declarations; 1,401–1,800 declarations) and corresponding ranges for pediatricians and general practitioners, with a fixed salary rate for each range; for nursing and junior medical staff, the salary can be set as a fixed percentage of the practice doctor's salary. The size of bonuses/incentive payments can depend on factors such as:
- overtime work (beyond the facility's working hours);
- quality of the services provided (patient satisfaction);
- quality of treatment.
Other ways of calculating pay, or a combination of the above, are also possible; the facility must make this decision itself. The main thing for medical workers to remember is that from now on their income is determined not “from above” but directly at their own healthcare facility. This issue can and should be resolved on site with the Chief Physician or Director of the facility, and the staff should play the decisive role in this important decision.
Optimizing the staffing of a PHC provider is also an important issue. It is unacceptable for a facility to have only two doctors, or even one, for a population of 6,000. In this case, the facility's management, together with the local authorities, must make every effort to attract the right specialists. Likewise, overstaffing in any staff group that is not justified by the needs of the practice leads to a lack of funds for decent salaries and for developing the facility.
You can calculate different options for staffing and pay components, together with other expense items, using the Electronic Tool for Financial Planning of PHC Provider Income and Expenses for 2018, available here: https://goo.gl/Mc1Lyn.
Among capital expenditures, the purchase of equipment deserves mention. The Procedure for Providing PHC (Order of the Ministry of Health of Ukraine No. 504) states that a PHC facility must have the equipment, devices and supplies needed to provide PHC, as defined in the relevant equipment list. The model equipment list was approved by Order of the Ministry of Health of Ukraine No. 148. Procurement plans should be drawn up individually for each facility.
For example, the Ministry of Health recommends thinking carefully about whether every outpatient clinic needs to buy biochemical blood and urine analyzers. Consider the cost of consumables, the number and range of tests needed, staff costs, and so on. Well-organized delivery of samples to a central laboratory may often be a better solution. In addition, international experience shows that central laboratories provide higher-quality testing and a much lower risk of errors. Providing a doctor with a car can also be approached flexibly: you can buy a used car, buy several cars together with another PHC provider, or buy a car on credit, which makes the price per vehicle lower.
The Electronic Tool for Assessing PHC Provider Compliance with the Equipment List for PHC Providers will help identify needs and set priorities among them, and will make it possible to draw up a corresponding procurement plan. The tool is available here: https://goo.gl/nNVUhd.
To explain in detail the issues related to the transition to the new financing system, the USAID “Health Reform Support” project has prepared a collection of methodological support materials for facilities providing primary health care.
The collection is an online document whose sections follow the stages of implementing healthcare financing reform in PHC facilities, from autonomization to the facility's operational management. It will be useful both for facilities preparing to sign a contract for medical care of the population with the NHSU and for those that have already joined the reform and are financed under the new model. Each section of the collection contains hyperlinks to webinar recordings, electronic tools, guidelines, answers to frequently asked questions and other useful materials on the section's topic. In particular, one of the sections is devoted to financial planning for a PHC facility.
You can view and download the Collection of Methodological Support Materials for PHC Facilities here: https://bit.ly/2MukApf.