The August 1998 regional financial crisis resulted in a 43 percent depreciation of the real exchange rate in the Kyrgyz Republic. As unemployment became more rampant and social systems collapsed, poverty grew and health indicators deteriorated. Mortality rates from non-communicable diseases were showing worrisome trends. The incidence of diseases, such as syphilis and tuberculosis, also increased rapidly. Infant mortality was 1.8 times higher in the poorest 20 percent of households than in the wealthiest 20 percent, and child mortality was almost twice as high. The state’s health expenditure priorities were misaligned and misallocated, thus putting the poor at greater risk of not being able to benefit from the health system given high out-of-pocket expenditures.
The Second Health Sector Reform Project (HSRP II) aimed at strengthening primary health care services which serve a large proportion of the rural population. The project also sought to improve access to health care by providing financial protection to a large section of the population that did not seek care because of prohibitive out-of-pocket spending for physician visits, laboratory and pharmaceuticals.
Ninety-eight percent of the population is now registered for a package that entitles them to basic primary care services.
Highlights:
- The extension of basic health care has also significantly increased access to secondary referral services by the poor from 1.6 percent in 2000 to 3.8 percent in 2004;
- Significant reduction of the hospitalization rate among patients enrolled with a primary health care physician. Between 2000 and 2004, referrals by physicians to hospitals went from 15.8 percent down to 9.3 percent for patients with hypertension. This reflects in part the improved quality at the primary health care level that is now able to provide treatment for such patients.
- Introduction of “Outpatient drug benefit” package reduced out-of-pocket payments for outpatient drugs. This was critical in reducing barriers to access to health since pharmaceutical spending accounted for the largest share of household budget expenditure on health.
- Share of health budget allocated to primary health care increased from 10.2 percent in 2000/2001 to 25.1 percent in 2004/2005. A shift away from large outlays for wages and utilities in hospital financing to increased allocations for medicines, medical supplies, equipment and other critical inputs has led to an increase in the share of health expenditure allocated to direct patient care–rising from 16.4 percent in 2000 to 36.6 percent in 2004.
- A health outcome improvement that is probably connected to these reforms included a 60 percent decline in infant mortality from respiratory infections between 1996 and 2004, falling from 123 per 10,000 live births to 48; and a more modest decline in mortality rates from TB due to successful implementation of the DOTS approach, from 13.4 per 100,000 in 1995 to 11.8 in 2004.
- The delivery of care through the family doctor model was welcomed by users and health professionals thanks to the patient focus maintained by the primary health care physician model.
- Critical institutional changes in the health system’s core functions were accomplished: the Ministry of Health (MOH) was reorganized at all levels, from being a service provider to a more modern institution, engaged in policy making, priority setting, resource mobilization, and budget formulation, monitoring and evaluation.
- IDA resources were critical to scaling up of a very successful health reform program in the Kyrgyz Republic which began under the First Health Reform Project (IDA resources US$18.5 million, 1996-2002). Resources were critical in building the institutions necessary to enable the Ministry of Health to function as a steward of the sector rather than an implementer.
- IDA’s convening role is evident in the exemplary collaboration among donors which led to the success of the reform program and not just the project itself. Partly due to close coordination, the current IDA supported operation is being implemented under a sector-wide approach (SWAp) which has included donor support for financing recurrent/operational costs and efforts to harmonize procedures and strengthen fiduciary systems in the health sector.
- Total project cost was US$19.5 million of which IDA provided US$15 million. The government and the United Kingdom’s DfID contributed to the project with US$1.5 million and US$3.0 million, respectively.
The positive experience and impact of the project caused the government to request additional support for the project, and IDA recently approved a second grant of US$15 million to continue the project and expand it to the rest of the country. In addition, DfID is expected to provide £ 7 million in co-financing for the second project phase.
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