How did the Kyrgyz Republic reduce informal payments between 2001 and 2006?

Presenter: Melitta Jakab, World Health Organization

Abstract

MOTIVATION: While there is a growing literature on informal payments, there has been limited empirical work showing the effectiveness of reform measures to reduce it. The Kyrgyz health system aimed to reduce patient financial burden (formal + informal) and increase transparency through a complex reform process well documented elsewhere. The goal of this study was to evaluate whether the Kyrgyz health financing reforms were successful at reducing informal payment over 2001-2006.

DATA SOURCES: Patient surveys were conducted in five waves in 2001-February (n=2,913), 2001-July (3,731), 2003 (n=4,440), 2004 (n=4,534), and 2006 (n=5,337). In each wave, interviews were conducted 4-6 months after discharge and the survey database was merged with the case-based database of the Mandatory Health Insurance Fund. The resulting merged database on informal payment is unique in many respects: (i) it is the largest data set on informal payment in published and grey literature accumulating a total of 20,955 interviews over the six years; (ii) the data was collected using the same methodology in all waves making comparisons over time feasible; (iii) it contains a large number of demand and supply side factors influencing health seeking patterns and payments.

METHODOLOGY: The study is based on a time-series regression analysis with the prevalence of informal payment and the level of payment conditional on non-zero payment as the dependent variables. Informal payment is decomposed to its components of payment to personnel, medicines, medical supplies and other supplies.

RESULTS: Total informal payment reduced by 30% in real terms over the 2001-06 period. Decomposition of the effect shows that large reduction occurred in informal payment for medicines (-53%) and medical supplies (-63%) while there was an increase in informal payment to personnel (17%) and non-medical supplies (38%). The carefully sequenced Kyrgyz reforms achieved efficiency gains through reduction of infrastructure and savings were channeled to medicines and medical supplies allowing a reduction in informal payment for these categories. Although there were efforts to increase salary of medical personnel, the gap between health sector salaries and that in the economies widened during this period which explains persistence of informal payments to staff.