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Healthcare reform in Ukraine under attack of old mafia clans

Acting Health Minister Uliana Suprun at a visit to a regional hospital. Photo:
Healthcare reform in Ukraine under attack of old mafia clans
Article by: Alya Shandra

Healthcare in Ukraine is a paradox. On the one hand, the country has produced world-famous surgeons like Mykola Amosov and is a destination to receive a medical education for students from Central and West Asia, China, and Africa. On the other hand, the life expectancy in Ukraine is 11 years below the average EU level, hospitals use equipment that hasn’t been updated for half a century, and despite the nominally free healthcare, you’re unlikely to get quality treatment without bribing your way  – sometimes, an impregnable obstacle for the 58% of the population living below the poverty line.

Quimiao Fan, World Bank country director for Ukraine, named “inefficient allocation and use of resources, decades of neglected investments and rampant corruption in the sector” as the problems Ukraine must solve to give its citizens the healthcare they deserve. With an average monthly medical salary of $110 (compare to $8250 in Germany), only 2.8% of GDP devoted to healthcare (compared to 6-8% in the EU), and an obsolete Soviet system of suffocating paperwork and financing of empty hospital beds, the Ukrainian medical sector is ungratifying for both patients and doctors alike.

One might ask how Ukraine’s healthcare system even stayed afloat with such small financing and ridiculous salaries to people who hold responsibility for others’ lives and whose profession requires a decade of studies. As outlined in The Guardian article titled Welcome to the most corrupt nation in Europe, monetary infusions from bribes and unofficial payments of patients covered some of the deficit.

But money was extorted not only from patients. Undercover schemes of milking the state budget through medical procurement tenders, in which companies with conflicting interests supplied state institutions with overpriced materials, enriched medical bosses and politicians alike – all at the expense of the patients who suffered from a lack of drugs which should be supplied by the state, from drugs for cancer treatment to vaccines.

Window of opportunity

Uliana Suprun, acting Health Minister of Ukraine, in a Patriot Defense T-shirt

After the Euromaidan revolution, Ukraine got a window of opportunity to finally modernize its medical system. The chiefs of the Health Ministry changed often after 2014, but the long-awaited changes were not as fast to come until the position was assumed by Uliana Suprun in July 2016. The position was left vacant for four months after the appointment of the new Prime Minister Groysman, and reportedly 15 candidates declined this post, being intimidated by the difficulty of the office and severe situation of the health sector in general.

Dr.Suprun, an American-trained doctor of Ukrainian heritage, had been busy in Ukraine since 2013, first in the medical service of Euromaidan, and later by organizing Patriot Defense, an initiative providing NATO standard first aid kits and providing training on using them to the ragtag Ukrainian army that fought against Russian-backed separatists in eastern Ukraine after Russia occupied Crimea in March 2014. After being appointed as acting Health Minister on President Poroshenko’s solicitation, Suprun outlined a plan to kickstart the transition of Ukraine’s health sector into modernity, the major pillars being a transition to a health insurance system, financing patients not hospital beds, and developing preventive medicine and the practice of family doctors.

The work her team managed to do in 6 months was generally well-received: Ukrainian outlet NV listed the healthcare reform as part of the “10 confident victories” of Ukraine in 2016 prior to the New Year.

New Year’s attack on new Health Ministry team

Boris Todurov is the first Ukrainian surgeon to do a successful heart transplantation from a donor. Photo:
Borys Todurov is the first Ukrainian surgeon to do a successful heart transplantation from a donor. Photo:

However, the first days of the New Year set off a scandal when the famous surgeon and director of the Heart Institute Borys Todurov made a number of allegations against the new Ministry of Health team on his facebook page (the main vehicle of political discussion in Ukraine) accusing it of “thousands of deaths of Ukrainians” due to incompetence. Particularly, Todurov publicly accused the Health Ministry of disrupting the procurement of essential drugs his institute needs and blocking the opening of two new branches of his institution.

The Ministry responded that in fact no initiatives were blocked, and that this year all the pharmaceuticals for the Heart Institute will be purchased by international organizations – a reform innovation from January 2016 that was hailed as a step to beat Ukraine’s pharma mafia, one of the main corruption players in the health sphere. It is planned that the international organization Crown Agents do the purchasing Ukraine needs in 2017.

The conflict grew stronger each day, with more and more people joining in to support each side. Among the new team’s attackers were such pro-Kremlin politicians as Viktor Medvedchuk, whose child is the goddaughter of Vladimir Putin, controversial Opposition Bloc (successor to ousted President Yanukovych’s Party of Regions) MP Vadim Rabinovich, disgraced Yanukovych Premier Mykola Azarov who openly expressed to establish a parallel Ukrainian government in exile, opposition Bloc MP and former Yanukovych Vice Premier Oleksandr Vilkul. Their accusations such as the ministry’s supposed “policy of the deliberate extermination of citizens” were virulently disseminated by selected media outlets and proliferated in facebook.

The campaign appears to be a concerted attack. The Anti-Corruption Action Center had analyzed the key actors of the information campaign and concluded that the messages were spread first of all through the media channels close to the Opposition Bloc, successor to Yanukovych’s Party of Regions and pro-Russian politicians. The rest of the outlets had balanced coverage. Traditional critics of the government such as Batkivshchyna didn’t participate in the attacks.

On January 17, prominent doctors held a press conference titled “Who is guilty of the disaster in domestic healthcare?”, accusing the new Health Ministry team of collapsing the field and failing to procure the necessary medicines through international organizations. The next day, a Parliamentary Committee on Healthcare was called to initiate the dismissal of Dr.Suprun. It failed to get a quorum due to strong resistance from civil society, healthcare professionals, and the general public.

Meanwhile, a #SupportTeamSuprun movement was launched in social media. According to MP Viktoriia Voitsitska, the reformer team is being intensively pressured by those who want to preserve the corruption schemes and protect their financial streams in the medical sector. Prime Minister Groysman also stood up for Suprun, calling the new team “incorruptible.” Civic Society actors such as the Reanimation Package of Reforms and Patients of Ukraine have also firmly backed Suprun.

The pharmaceutical mafia strikes back

Daria Kaleniuk (second from left), now head of executive director of the Anti-Corruption Action Center, and Olga Stefanyshyna (third from left), executive director of NGO Patients of Ukraine, protesting failing state pharmaceutical procurement in 2014
Daria Kaleniuk (second from left), now head of executive director of the Anti-Corruption Action Center, and Olga Stefanyshyna (third from left), executive director of NGO Patients of Ukraine, protesting failing state pharmaceutical procurement in 2014

To Olha Stefanyshyna, executive director of NGO Patients of Ukraine, which deals with overseeing state medical procurement, this campaign is far from being random: the system of international procurements had been violently attacked by the groups that previously controlled the tender market through all of 2016. “It is a planned campaign to return the old 2014-2015 schemes of the Health Ministry when procurement was done through corrupt mechanisms,” she told NV.

One of the participants of these schemes is the company Liudmyla Pharm, who together with Halapharm are the main medical suppliers of Todurov’s Heart Institute. During Yanukovych’s time, Liudmyla Pharm won the most state tenders with prices 20-40% higher than their real cost, for which the State Security Service initiated a criminal investigation in 2015. Today, this company is one of the fiercest opponents of international procurements but remains the top supplier for the Heart Institute.

Oleksandra Ustinova, Board member of the Anti-Corruption Center, stresses that the majority of people criticizing reforms today are people who for years worked in managerial positions, supporting the existing system of manipulations with state tenders.

Average savings from international procurements for only seven programs amounted to 40% in 2016; imagine how much will be saved in 2017. Everyone will see how much was actually stolen and is being stolen,” Ustinova said.

According to Ustinova, corruption enters the Ukrainian medical system also through private clinics renting space on the territories of state hospitals. Alfa Medica is one such company situated on the territory of Todurov’s Heart Institute. The private rehabilitation clinic sells services at prices much higher than average – for example, a heart stenting procedure costs $350-620 for the government, but $1,800 for Alfa Medica. These services are purchased by state medical facilities, including those on the basis of which Todurov wanted to open the branches of his institute. The ownership structure of the clinic (including one clone clinic with a similar name) is extremely complicated but runs down to the families of Yanukovych-associated politicians. Other companies supplying the Heart Institute with medicine costing twice more than it should are connected to Todurov’s family, Ustinova reveals in a detailed investigation on Ukrainska Pravda.

Previous decision-makers whose monopoly has been violated are another vector of the opposition to healthcare reform. One such person is Volodymyr Koziavkyn, the author of a unique rehabilitation method who however had a monopoly for rehabilitation of children in Ukraine in his clinic with overpriced living costs and royalty payments from the state.

“There really does exist an impoverished system. There really are doctors who save people’s lives for pennies. And there is the feudal system of those who reap the benefits and don’t want to lose them.

This is how the scandal erupted. Apart from that, the system just doesn’t accept new people. The worldviews are different. The old ones are used negotiating their way out, which is now impossible,” Ustinova sums up.

Communication problems?

However good the Ministry’s reform plan may be, it seems it’s not being communicated properly to the Ukrainian medical community. Andriy Huk, deputy research director of the Romodanov neurosurgical Institute, says the reform plan isn’t clear to him, which causes tensions in communication with the Ministry.

Its activities are positive. But they are not communicated to the professional community whatsoever. The Ministry decided to reform the branch with methods that only it knows and understands,” he told NV. “This question must be solved without politics. The healthcare system is a social sphere. Shame on those politicians who use it as for their publicity stunts.” 

Another communication problem lies in the sphere of oligarchic control over Ukrainian media. The Anti-Corruption Action Center concludes that over 1-4 January 2017, messages about the health care reform in general, and Uliana Suprun in particular, were 82% negative in mainstream media and 85% negative in facebook. These included incendiary fake news such as Dr.Suprun not having a diploma, state funding being dropped for oncological patients, and others. Revanchist politicians with media influence have proven to be a major threat for Ukraine’s fragile reform efforts, as well as shown how essential the good communication of state actors is for their success.

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