Health spending in the Kyrgyz Republic experienced a rapid decline from 1996 to 2004, falling from 3 percent in 1996 to around 1.8 percent in 2004. This was due to the country’s large debt burden and irregular revenues, which had been affected significantly by the regional financial crisis in 1998 and slow growth in the years thereafter. This situation reduced the level of funding available for essential health services and led to a steep increase in out-of-pocket payments as healthcare providers found themselves unable to finance service delivery from budget sources alone. Not surprisingly, even though the country continued to make good progress on other aspects of health reform, having been a "star performer" on health reform in the Former Soviet Union, the consequences of this for access to healthcare services were significant and negative.
In 2004, a consortium of 10 donors led by the World Bank agreed to adopt a Sector-Wide Approach (“SWAp”) to supporting the health sector. The project, the first IDA SWAp in the ECA Region, made reducing financial barriers to access a major focus. Five donors (including the World Bank) agreed to pool their funds and allocate them directly to the country’s health budget. In return, the Government committed to a program of phased improvements in the stability and level of healthcare financing and agreed to implement a range of reforms as part of its new Manas Taalimi health reform program. The program is reducing financial barriers to access for healthcare services; cutting down out-of-pocket spending on healthcare; increasing the utilization of primary care and hospital services; and improving the targeting of fee exemptions for health services.
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