TBY talks to Elzhan Birtanov, Minister of Health, on the insurance system, healthcare legislation, and outlooks for the sector.

Elzhan Birtanov
Elzhan Birtanov is the Minister of Healthcare of the Republic of Kazakhstan. He began his career in 1991 after graduating as a nurse from the department of psychoneurology (CCCH), intensive care and resuscitation, and toxicology at the Emergency hospital in the city of Almaty. He has previously served as Vice-minister of Health and Social Development, Chairman of the Board of LLP "Center for support of public-private partnership projects," and Chairman of the Board of JSC National Medical Holding.

The government is increasingly considering PPPs for social projects. What is the potential for PPPs in healthcare?

One of the key points of our program is the promotion of PPPs. There are different factors that can contribute to the success of PPPs. First, investment demand in healthcare is growing, not only because of a limited public budget but also because in the future, we need to promote private investment in social infrastructure. PPPs are also beneficial to the private sector by generating stable cash flows, since the government will always spend on medical services. One of the major changes is switching to a health insurance system in which the role of more transparent regulation and competition between hospitals is much higher than in the existing budget model. When, for example, a region needs a new cancer or neonatal center, such concession-type projects become available based on this new regulation. Unfortunately, because we are at the first steps in PPPs, we do not have enough capacity either from the government or the business side to develop great financial models like payment structure or legal agreements. That is why we have applied to international financial institutions like the Asian Development Bank and the World Bank. These pilot projects will help us find a better model and distribute the model among other projects. There are also more sophisticated issues. We have spoken to major biomedical device companies about our infrastructure and our need for new equipment and upgrades despite the fact that we are unable to make payments in a lump sum. We agreed to develop several types of contracts with long-term agreements, such as leasing contracts.

What is the status of the new regulation around mandatory health insurance and how will it affect the healthcare system?

The law on health insurance was supposed to be effective in 2017; however, we seek to shift the implementation to January 2018. The goal is to improve healthcare services in the country and maintain the same or higher level of quality and accessibility to make healthcare more cost-effective. Currently, the system is fully covered by the government's budget. Within this model, however, we are not truly incentivized to save money. With health insurance, there is a fund that takes responsibility for society. The entire government contributes, so do employers and employees. That is why the first principle of the new insurance model is solidarity. The second principle is strategic procurement. The healthcare insurance fund is not just a paying machine. It is a tool to help us use money efficiently. The third principle is universal access. Everyone will have access to certain amounts of care. Another issue in Kazakhstan is that we have a huge out-of-pocket spending, about 35-37%. As an international benchmark, out-of-pocket costs should not exceed 20%. One of the goals of the insurance reform is to cover those services in the packages fully or partly, which will make the system more sustainable and also attract the private sector to enter the sector.

Where do you see the sector going in the next few years?

With our development program, we will introduce a new concept of value-centered care, which consists of organizing all health services around the value for patients. The reality, though, is that the system is rigid, so we need more than four years to change that. However, we have started to introduce some basic reforms. First, to make our primary care more attractive, we have to make it more accessible. Our primary care institutions are concentrated in large polyclinics for 25,000-50,000 people. Our goal is to increase the number of GPs by letting smaller institutions come into the market in villages, cities, and malls to make it more convenient and accessible for people to go there. Managing diseases together with patients and doing so in a more efficient way will bring a reduction in health complications. Lastly, we are also studying a new strategy regarding pediatricians.