Case Study on Piloting Complex Health Reforms in ... - PHRplus

2. Pilot Context
2.1 Emergence of the Pilot Concept
The pilot concept emerged in early 1994 as the MOH was pressured by the government of
Kyrgyzstan to begin implementing two laws that had been enacted in 1992. The Health Protection
Act of the Kyrgyz Republic was passed on July 2, 1992, and outlined a program to:
! Develop a framework of health protection and define measures to ensure rights of citizens to
sanitation and environmental health safety;
! Shift priorities toward health promotion and disease prevention and focus on primary and
family-based care;
! Make changes in the form of health facility ownership; and
! Diversify and decentralize health revenue sources, mandating that health care financing be
moved partially “off-budget” with revenues coming from special earmarked taxes and other
services.
The Law of the Kyrgyz Republic on Medical Insurance was passed on July 3, 1992, and
described the requirements for mandatory and voluntary medical insurance. The Law included a plan
to create a health insurance fund in each oblast to be financed through a minimum 6 percent payroll
contribution paid by employers, a per capita rate paid by the oblast government to cover non-working
and exempt populations (including employees of public budget organizations), and funds transferred
from the current 34.5 percent Social Insurance and Pension Fund payroll tax. A subsequent Cabinet of
Ministers decree stated that implementation of the Medical Insurance Law would begin on January 1,
1995.
Poor macro-economic performance, a low tax revenue base, and a lack of technical capacity
within the health sector delayed implementation of the 1992 health reform laws. But in early 1994,
under pressure to meet the Cabinet of Minister’s deadline, the MOH hoped to develop a plan to
demonstrate a transition from a government-financed, centrally planned health system to a more
efficient system of health service organization and delivery of care, with mixed (public and private)
financing. Realizing that such ambitious attempts to increase the efficiency of the health care system
might have negative affects on access to and quality of care, the MOH planned an initial pilot project
in a defined geographic area. The pilot project would implement the Medical Insurance Law in a
comprehensive way but on a limited scale, and use experience and lessons learned to plan for national
implementation (Langenbrunner et al., 1994).
USAID was simultaneously considering the concept of providing technical assistance in
demonstration or pilot sites, as a way to provide rapid-response assistance on a wide range of health
care financing and service delivery issues emerging throughout the former Soviet Union. USAID was
fairly new to the region and “[t]here was considerable political pressure from the State Department
2. Pilot Context 3