HEALTH CARE SYSTEM FINANCING IN UKRAINE AND ABROAD. Olha Zhmurko*

HEALTH CARE SYSTEM FINANCING IN UKRAINE AND ABROAD Olha Zhmurko* Lviv Ivan Franko National University, Ukraine Abstract. The bases of health care financing system in Ukraine are grounded on the model of health care financing system of former Soviet Union. Having achieved its independence, Ukraine accepted a number of legal acts in the sphere of health care. But the aim and tasks which stood before health care system of the former Soviet Union do not differ from the ones which our government follows, while providing a proper level of health protection. A comparative analysis of the constitutional norms of health protection in foreign countries which can be the examples of health care financing world models shows us an expediency to make changes to the article of the Constitution of Ukraine which guaranty the right of the person to health protection, The main authorities of state bodies in health care sphere and the main functions of state bodies in relationships in health care sphere gives an opportunity to show the perspectives of the role of state in health care sphere and what should be done in this aspect of research. The system of health care financing should be improved in Ukraine also. The system of health care financing from the cash fund will look like the following: the financing will be held for granted medical aid. We do not support the point of view that the financing should go to health care entities. The insured should pay a part of money. The other part one will be paid from the insurance fund after getting aid and the part of money paid by the insured will be returned to him/her by the insurance fund. The acceptance of legal act, which will establish a legal status of health care entities in the system of state obligatory medical insurance is necessary. Also a special attention should be devoted to the determination of legal bases of health care entities. All conclusions are based on the analyzed of health care financing world models. Keywords: health care financing system, constitutional norms of health care, the main functions of state bodies, health care entities, cash fund. The bases of health care financing system are grounded on the model of health care financing system of former Soviet Union. Having achieved its independence, Ukraine accepted a number of legal acts in the sphere of health care. But the aim and tasks which stood before health care system of the former Soviet Union do not differ from the ones which our government follows, while providing a proper level of health protection. Since the principles of our current system must correspond to international standards not only in this sphere, the order of health care financing and giving medical aid should improve. The scientists researched the general issues of health care financing, the ways of introducing the state obligatory social medical insurance, and proposed the ways of its development in Ukraine. They are: J. M. Busduhan, Z. S. Hladun, S. J. Kondratiuk, * Ass. prof., department of administrative and financial law, Law faculty, Lviv Ivan Franko National University POLITIKA KAIP TUŠČIA VIETA 411

R. A. Maydannyk, M. V. Mnykh, O. V. Soldatenko, and others. But the main tasks which we have the following: to define the basis of health care financing in foreign countries and decide which model of health care financing could be introduced in Ukraine. The matter of law of a person on a health care are differently reflected in the norms of constitutions of foreign countries. These norms do not make a detalization the question of functioning of health care entities, the general order of giving a medicare, and also the limits of its giving; the norms of constitutions of foreign countries do not set and do not determine the politics of the state on the already established model of the financial providing of health protection Canada comes forward as a prime example of budgetary model of financing of health care. According to the chapter I «Rights and Freedoms» article 6 fixes: «Every citizen of Canada and every person who has the status of a permanent resident of Canada has the right to move to and take up residence in any province; and to pursue the gaining of livelihood in any province. The above mentioned rights are subject to any laws providing for reasonable residency requirements as a qualification for the receipt of publicly provided social services» 1. The insurance model of health care financing exists in such developed countries, as France, Germany, Netherlands. The norms of Constitution of Germany fixes: Article 74: «(1) Concurrent legislative power shall extend to the following matters:12) labour law, including the organisation of enterprises, occupational health and safety, and employment agencies, as well as social security, including unemployment insurance;19-а) the economic viability of hospitals and the regulation of hospital charges». Article 87: «(2) Social insurance institutions whose jurisdiction extends beyond the territory of a single Land shall be administered as federal corporations under public law. Social insurance institutions whose jurisdiction extends beyond the territory of a single Land but not beyond that of three Länder shall, notwithstanding the first sentence of this paragraph, be administered as Land corporations under public law, if the Länder concerned have specified which Land shall exercise supervisory authority» 2. The private system of health care financing is used in such countries, as the USA and Japan. Constitution of the United States of America and its amendments fix no guarantees from the side of the state in relation to a human right on a health care, and the anymore on medical insurance. This right is set by the bylaws of civil legislation and has exceptionally private character. The legislator of Ukraine went another way. In Constitution of Ukraine a human right on a health care is regulated in detail,. The Constitution of Ukraine fixes the sources of the system of health care financing and its cost for a population, a cost of medical service for a concrete person. A necessary step for the input of insurance model of financing of health care is making alteration to the article 49 of Constitution of Ukraine. Namely, it is necessary to expound her in such release: «everybody has a right on a health protection. The state creates terms for effective and acces- 1 The Constitution Act of Canada of 1982. [Electronic resourse]. Available from : http://www.solon.org/constitutions/ Canada/English/ca_ 1982. html. 2 The Constitution of the Federal Republic of Germany of May 23rd, 1949. [Electronic resourse]. Available from : http://www.lexadin.nl/wlg/legis/nofr/legis.php 412 POLITIKA KAIP TUŠČIA VIETA

sible medical service for all citizens. The state assists development of curative establishments of all patterns of ownership. The state cares of development of physical culture and sport, provides sanitary-epidemic prosperity». We consider that it is enough to establish of the new system of health care financing and is the guarantee of a person on health care. As as an aim of defence of citizens defence of citizens comes forward in the field of a health protection, then the corresponding should be a duty on realization of such rights. And a just the same duty is fixed, in obedience to a current legislation, on the state. Basic lines of participation of the state in the field of state medical insurance are: the definiteness of the state as an obligatory subject, taking into account the role it plays and as whom it is in the system of health care, and also taking into account the aim of the system of health care (forming of budget of Ukraine, realization of financing from the budgets of all levels and control function after the usage of money); the publicity of character, that appears in an accumulation, distribution and usage of money of budgets of all levels; the satisfaction of interests of patients. The state executes next functions - legislative through the acceptance of normatively-legal acts (Supreme Council of Ukraine), administrative - exactly through public bodies and bodies of local self-government, control - the state through the authorized bodies carries out control after the participants of legal relationships in the field of a health care and execution - the state through its bodies is the performer of the rules of realization of the system of health care. So, the state sets the rules of realization of health care and executes those rules. We consider that it is wrong, when one participant of legal relationships executes all functions. It results in unefficiency and uneffectiveness of mechanisms of functioning this system. The state comes forward as a public subject in these relations and her role is qualificatory. However, consider that the institute of social insurance can not functioning effectively, when each other from participants sets, regulates. controls this sphere and comes forward as a performer. If relations in the sphere of health care arise up between different participants on satisfaction of public interest, the right and duties must be equivalent. For strengthening of position of the state at the insurance market and improvement of social defence of population it is necessary to reform the system of health care. Namely: the State must be provided with the prescribed legislative authorities. However, at legislative level it should be prescribed that the function of management and control must come true by local bodies; in relation to the administrative function of the state consider that possible and expedient will be to limit plenary powers of Government treasury service of Ukraine in relation to accounting after movement of money and direct movement of money in the cash fund of social health insurance; the State as a performer is practically only and basic participant in relations and it is wrong. As, citizens (insured) come forward as a main subject, that is why it is needed to revise position that the state is as a performer. POLITIKA KAIP TUŠČIA VIETA 413

The system of health care financing is fully financed from all the budget levels and is directed to realize the state programs. The enumeration of medical aid and health care entities which provide medical aid is comprehensive and it is foreseen in existing acts. The financing of state health care entities is provided by the state budget of Ukraine, health care entities of local self-government by the bodies of local self-government 3. The budgetary model of health care financing exists in Great Britain, Sweden and Canada. The main principles of this model existence are: accessible and free of charge medical aid to all the sections of state population: reliability of one-channel mechanism of financing (state budget) with the state controlling of all financial expenditures in this sphere; guaranteed level of paying for medical aid and services; the possibility to introduce quickly amendments in the health care system on all the levels; a deficiency of a competition in the sphere of granting medical services (with the hidden competition for the distribution of state financial resources which are given by the budget for paying medical aid and medical services); state control of medical aid quality 4. Sweden is a striking instance of this model. 26 regional bureaus of social insurance are administrating the system. National Council of social insurance supervises them. 18 % costs for health care are given by the government, 51 % - by local self-government, 31 % - by employers 5. Health care in Sweden is being operated by the following principles: decentralization, publicopened model, providing the insurance to all citizens. Approximately 90 % of income of local self-government is used for health care, 70 % of which are taxes. Local self-government owns and administrates almost all hospitals and hires most of doctors and other medical workers. A number of private hospitals and medical services is insignificant but they make a contract with local selfgovernment as well. This system is universal and everybody is free to choose the provider of health services. The providing of health services is based on the quality principle and needs of each person 6. Insurance model of health care financing exists in France, Austria, Germany and Netherlands. The main characteristics of this system is obligatory medical insurance in national scope; the joint participation of employers in medical aid payment is foreseen by law; the nonprofitness of insurance institutions with the obligation to pass all their money for medical aid and services. The subjects of this sphere are: the doctors and medicoprofilactic institutions, which offer their services, insurance institutions which are responsible for medical services payments, and patients. Germany is a striking instance of this model. The subjects are the following: patients who are the members of state or private insurance; insurance funds and their state and local associations; the association 3 Бюджетний кодекс України від 24.12.2010 р. N 2456-VI з наступними змінами та доповненнями // Відомості Верховної Ради України. 2010. 50-51. Ст. 572 Закон України від 5.10.2000 р. 2017-III «Про державні соціальні стандарти та державні соціальні гарантії» з наступними змінами та доповненнями // Відомості Верховної Ради України. 2000. 48. - Ст. 409. 4 Надюк З. О. Механізми державного регулювання ринку медичних послуг в Україні : дис. доктора наук з державного управління : 25.00.02 / Надюк Зіновій Олександрович З., 2009. c. 35-36 5 Мних М. В. Медичне страхування за кордоном та можливості його реалізації в Україні / М. В. Мних // Економіка та держава. 2006. 11. С. 39-41. 6 Bjцrn Albin, Katarina Hjelm and Wen Chang Zhang RHealth care systems in Sweden and China: Legal and formal organisational aspects / Albin et al. Health Research Policy and Systems. 2010. p. 1-2. 414 POLITIKA KAIP TUŠČIA VIETA

of private insurers; medical staff that gives out-hospital aid from the resources which they gain due to the collective agreement between medical associations and funds; the hospitals which are being financed from insurance funds; producers of medicine; ministry of labour and social politics in lands and federal ministry of health care. The process of paying for medical treatment due to this system can be realized in two ways: a) the insurance funds fully pay the expenditures to the doctors associations instead of paying directly to a doctor. The sum of compensation is committed according to the number of the insured covering all kinds of services granted by doctors. Then the associations pay directly to the doctors. b) the general sum of money is divided among the associations due to additional instructions and universal scale of reimbursement under which the associations figure up the sums of money which should be reimbursed 7. The private model of health care financing exists in USA and the main principles of its financing are the correlations between doctors and patients as free sides of the market. Under such conditions and existence of competition between suppliers of medical services real market prices are established; the absence of unique state medical insurance system; the commitment of state regulation of medical services market only by accepted laws and establishment of social medical programs 8. The definition of health care financing system. The system of health care financing from the cash fund will look like the following: the financing will be held for granted medical aid. We do not support the point of view that the financing should go to health care institutions. The insured should pay a part of money. The other part one will be paid from the insurance fund after getting aid and the part of money paid by the insured will be returned to him/her by the insurance fund. As financing being done not properly, when the individuals and legal entities can not pay and the state money is scarse, also a great number of social aid was established after adoption the State budget and thus it could not be financed and foreseen, then they were addressed to local budgets. And we consider that the best for Ukraine will be the establishment of the insurance model of health care financing. Considering the above mentioned drawbacks of our health care financing system, it is reasonable to consider about establishing the insurance model of health care financing system in Ukraine. The main principles of this system will be: the government will not be responsible for the health care system financing except some segments of this market; the main role of the government will be to establish conditions for proper functioning of medical insurance funds; the administration of this system will be laid on the workers and employers; the soliditary principle the level of services will be equal not depending on income, family status, risk to become ill; the existence of real paying for the services without contract between an insured person and a supplier of health care (health care institution); the right to choose a supplier of health care (health care institution) 7 Reinhard Busse, Annette Riesberg Health care systems in transition Germany. Copenhagen, WHO Regional Office for Europe on behalf of the European Observatory on Health Systems and Policies, 2004. Vol. 6. No. 9. P. 177. 8 Солдатенко О. В. Європейський досвід фінансування видатків на охорону здоров я / Оксана Солдатенко // Юридична Україна. 2010. 4. С. 56. POLITIKA KAIP TUŠČIA VIETA 415

and insurer by the insured; medical insurance funds should have the authority to define a proper sum of payments and allocation of this payment; health care institution expenditures for granted medical services will be reimbursed due to the number of insured and they will cover all kinds of medical aid given by them. Bibliography 1. The Constitution Act of Canada of 1982. [Electronic resourse]. Available from : http://www.solon.org/ Constitutions/Canada/English/ca_ 1982. html. 2. The Constitution of the Federal Republic of Germany of May 23rd, 1949. [Electronic resourse]. Available from : http://www.lexadin.nl/wlg/legis/nofr/legis.php 3. Бюджетний кодекс України від 24.12.2010 р. N 2456-VI з наступними змінами та доповненнями // Відомості Верховної Ради України. 2010. 50-51. Ст. 572 Закон України від 5.10.2000 р. 2017-III «Про державні соціальні стандарти та державні соціальні гарантії» з наступними змінами та доповненнями // Відомості Верховної Ради України. 2000. 48. - Ст. 409. (Budget Code of Ukraine from 24.12.2010 N 2456-VI with the next amendments // Supreme Council of Ukraine. 2010. - 50-51. Art. 572; Law of Ukraine On state social standards and state social guaranties from 5.10.2000 р. 2017-III with the next amendments // Supreme Council of Ukraine. 2000. - 48. - Art. 409.) 4. Мних М. В. Медичне страхування за кордоном та можливості його реалізації в Україні / М. В. Мних // Економіка та держава. 2006. 11. С. 39-41. (Mnych M. V. Health insurance abroad and the possibilities of its realization in Ukraine / M. V. Mnych // Economic and state. 2006. - 11. P. 39-41) 5. Надюк З. О. Механізми державного регулювання ринку медичних послуг в Україні : дис. доктора наук з державного управління : 25.00.02 / Надюк Зіновій Олександрович З., 2009. 344 с. (Nadjuk Z. O. The mechanism of state regulation the segment of medical services in Ukraine : diss. doctor of state administering sciences : 25.00.02 / Nadjuk Zinovij Oleksandrovych Z., 2009. 344 p.) 6. Солдатенко О. В. Європейський досвід фінансування видатків на охорону здоров я / Оксана Солдатенко // Юридична Україна. 2010. 4. С. 53-58. (Soldatenko O. V. European experience of financing the expenditures of health care / Oksana Soldatenko // Legal Ukraine. 2010. 4. P. 53-58.) 7. Bjцrn Albin, Katarina Hjelm and Wen Chang Zhang RHealth care systems in Sweden and China: Legal and formal organisational aspects / Albin et al. Health Research Policy and Systems. 2010. 8 p. 8. Reinhard Busse, Annette Riesberg Health care systems in transition Germany. Copenhagen, WHO Regional Office for Europe on behalf of the European Observatory on Health Systems and Policies, 2004. Vol. 6. No. 9. P. 191-199. 416 POLITIKA KAIP TUŠČIA VIETA