The regional financial crisis of August 1998 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 displayed worrisome trends. The incidence of diseases, such as syphilis and tuberculosis, also increased rapidly. Healthcare access—particularly for the poor—was shrinking, in part due to Government’s misaligned health expenditure.
The Second Health Sector Reform Project (HSRP II) aimed at strengthening primary healthcare services that serve rural areas (the majority of the population). The objective was to realign the healthcare system’s bias away from large, urban infrastructure to better include rural and primary care. The project followed on the heels of the first health reform project, which was almost completed, and already showing good results.
This project extended healthcare access and strengthened the stewardship function of the Ministry of Health (MOH) by reorganizing the role of the ministry at all levels. The MOH is becoming more engaged in policymaking, priority setting, resource mobilization, and monitoring and evaluation.
Highlights:
- 98 percent of the population is now registered for a package that entitles them to basic primary care services. This has extended access to basic healthcare for the poor and has significantly increased access to secondary referral services by the poor from 1.6 percent in 2000 to 3.8 percent in 2004.
- There has been a significant reduction of the hospitalization rate among patients enrolled with a primary healthcare physician. Between 2000 and 2004, there were reductions in referrals by physicians to hospitals from 15.8 percent to 9.3 percent for patients with hypertension, from 20 percent to 9.5 percent for peptic ulcer, and from 34 percent to 22 percent for bronchial asthma cases. This reflects in part the improved quality at the primary healthcare level.
- Introduction of an outpatient drug benefit package reduced out-of-pocket payments for outpatient drugs. This was critical in reducing barriers to access to healthcare since pharmaceutical spending accounted for the largest share of household budget expenditure on health.
- An increased share of the health budget is now allocated to primary health care: from 10.2 percent in 2000-01 to 25.1 percent in 2004-05. 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 deaths per 100,000 in 1995 to 11.8 deaths per 100,000 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 healthcare physician model.
Total project cost was US$19.5 million of which IDA provided US$15 million. The government and DFID contributed to the project with US$1.5 million and US$3.0 million, respectively. IDA resources were critical to scaling up a very successful health reform program in the Kyrgyz Republic that began under the First Health Reform Project (for which IDA provided US$18.5 million from 1996-2002). These 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). The SWAp includes donor support for financing recurrent and operational costs, and aims to harmonize procedures and strengthen fiduciary systems in the health sector.
The objectives for this project reflect key priorities for the health sector as defined by the Kyrgyz Government’s current health sector reform program (MANAS II), the Poverty Reduction Strategy and the current World Bank Country Partnership Strategy. IDA resources were critical in leveraging funds from other international agencies, including USAID, DFID, ADB, UNFPA, UNICEF, and UNDP.
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