A transfusion for Kazakhstan's healthcare reforms

By bne IntelliNews December 10, 2008

Clare Nuttall in Almaty -

Although money has been poured into the sector, the provision of healthcare in Kazakhstan lags behind other countries with similar income levels. A $300m programme - co-funded by the Kazakh government and the World Bank - was launched in December to help move the reform process along.

Health-related indictors are "not encouraging," according to the World Bank, which has carried out a four-year analysis of the country's health sector. It points out Kazakhstan's relatively high infant and child mortality. The incidence of tuberculosis has almost tripled between 1993 and 2004, meaning that Kazakhstan now has one of the highest rates among former Soviet countries. Adult mortality and heart disease, cancer, tobacco- and alcohol-related diseases and injuries are increasing, especially among ethnic Kazakh men. HIV/AIDS infection rates are also on the rise, with the highest incidence among intravenous drug users, sex workers and prisoners.

Various government initiatives launched in the decade after independence failed to get off the ground, and although the healthcare budget has tripled in the last three years to just under KZT230bn (€1.48bn), the state health system is not yet able to address these problems.

Meanwhile, the private healthcare sector - although still small - has grown considerably. Most pharmacies and dentists are now private, and the number of private hospitals almost doubled between 1999 and 2004. The government is promoting voluntary healthcare insurance, which has been taken up by some large business, especially in the financial services and hydrocarbons sectors. Economic growth and purchasing power growth have slowed recently, but in the longer-term Kazakhstan can look to the example of other Central and Eastern European countries such as Poland, where private healthcare expenditure has soared.

The growing number of expatriate workers has already attracted the interest of international companies. In June this year, Aberdeen-based Abermed bought a 65% stake in local medical services company Kazanada, which operates 20 clinics in Kazakhstan. Abermed plans to use Kazanada as a platform for expansion in Kazakhstan and the Caspian region.

Transition pains

The state sector, however, is still based up on the system inherited from the Soviet era. The immediate post-independence years saw funding cuts, and health facilities - especially in rural areas - became increasingly dilapidated and ill equipped. The increase in funding since hasn't yet resulted in a corresponding improvement in quality of service. "When Kazakhstan was going through the transition crisis in the early 1990s, the legacy Soviet system continued to work. Child survival rates - a key indicator - fell slightly but did not slide down to sub-Saharan African levels. However, in the past decade GDP per capita has increased from $700 to $7,000, but child survival has increased only slightly," points out Sergei Shatalin, World Bank country head for Kazakhstan.

Kazakhstan's President Nursultan Nazarbayev has slammed the sector recently, blaming its problems on poor management. Speaking at a meeting in early November, he criticised health professionals for paying over the odds for out-of-date equipment, when they had no specialists to install or operate it. "In general the situation in this sector is unsatisfactory and there can't be any illusions," Nazarbayev was reported as saying. "I have some information from the Prosecutor General's Office. Judging by the information the healthcare system is severely affected by financial crimes, scams in government's bidding processes and other violations. The investigation is still underway... The state monies should be utilized more efficiently."

Nazarbayev was speaking at a meeting in Shymkent - Kazakhstan's second largest city and the location of the now notorious 2006 'Shymkent incident', when more than 100 children in two hospitals were infected with the HIV virus. Exposure of this disaster has spurred on efforts to reform the country's healthcare system.

According to Shatalov, the sector's problems are "primarily because Kazakhstan's healthcare is still based on the old system introduced before 1991. You can't just pour money in and buy equipment. You need to change the way it is managed, change how doctors are certified, stamp out corruption - there are a lot of under-the-table payments - make sure that pharmaceuticals are both high quality and affordable to all, and bring rural health centres services up to the same level as those in Astana and Almaty."

Better cures

Wide-reaching reform of the sector has already begun under the five-year State Health Care Reform and Development Program for 2005-2010. Key elements of the programme are a gradual increase in health spending to 4% of GDP by 2010, and the introduction of a free basic benefits package of services.

The new World Bank-backed project - the Kazakhstan Health Sector Technology Transfer and Institutional Reform Project - is intended to help achieve this. The Kazakh government is providing $178.4m of the total $296.1m project cost, with the remaining $117.7m coming from the World Bank.

Various components of the project will address healthcare financing and management, quality improvement, reforming medical education and science, information systems, pharmaceuticals and food safety - the last being a key issue regarding Kazakhstan's WTO accession.

Low wages for doctors and other health professionals have meant that unofficial payments for shorter wait times for operations, longer hospital stays and generally a better quality of care are extremely widespread, though their precise extent is not known. In the 1990s, universities started accepting medical students who were paying their own tuition fees; since their entry requirements - set by cash-strapped universities - were often lower than for state-funded students, this further lowered the quality of medical education.

Another thorny issue is how to bring the standard of care in remote rural areas up to that found in major cities. "While services are not universally low outside the two capitals, the quality of both prophylactic and treatment and diagnostic services is definitely quite different between big urban areas and remote villages," says Shatalov. "Making services available to different areas in a country the size of Western Europe costs is expensive. One new facility in a big city for 10,000 people is cheaper per capital than to provide the same facility for villages."

Young professionals are naturally keener to move to major cities such as Almaty, Astana or Aktobe than to remote villages. Addressing this will require not just investment in healthcare, but an overhaul of existing rules of public sector pay.

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A transfusion for Kazakhstan's healthcare reforms

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