Wellness and efficiency: The landscape of the sector is seeing major changes

A sea change is taking place in Mongolia’s health sector as a solid but somewhat unresponsive model is overhauled. The reform programme is very much a work in progress, but the country is experiencing the emergence of a modern, well-funded system with a growing role for the private sector.

STATISTICS: Mongolia already performs well on basic health indicators, having made extensive progress since the fall of communism. According to the World Health Organisation (WHO), life expectancy in 2009 was 65 for men and 74 for women. The discrepancy between these figures is probably due to the higher prevalence of health risk factors for males. Under-five child mortality in 2009 was 29 in 1000, down from 101 in 1990, and under-one mortality was 24 in 1000, down from 79.

The country commits around 5% of its GDP to health care, still below developed country norms, but a proportion that is expected to rise in the coming years due to both public investment and increasing private resources. Moreover, due to an ambitious programme of reform, that money should be spent more efficiently and effectively.

The Ministry of Health’s (MoH) Strategic Policy and Planning Department (SPPD) develops health policy, including that pertaining to the legal and regulatory framework, on behalf of the government. Currently the SPPD is focusing on four main areas of health policy: the legal environment, reform of the system’s organisational structure, supporting and maintaining human resources, and changing health financing, which includes insurance.

INSTITUTIONS AND BEDS: In 2010 Mongolia’s public health institutions numbered 16 tertiary-level hospitals and centres, 35 aimag (province) and district general hospitals, 37 “inter-soum” hospitals (serving several soums, or districts) and 274 soum hospitals, according to the Mongolian Statistical Yearbook 2010, published by the National Statistical Office (NSO). The many soum hospitals are in the process of being converted into primary health care centres so they will function more efficiently in a vertically integrated, preventative health system that is replacing Mongolia’s hospital-focused Soviet model. Similarly, many specialist tertiary units are slated to become general hospitals.

In the private sector, there are 1113 hospitals, 218 additional “family hospitals” and 666 pharmacies. The number of hospitals may seem very large for a country of only 2.76m, but this is partly an issue of different definitions and health structures. The designation “hospital”, for example, applies to many health centres that would not be defined as such in Western systems, while many small local clinics have a handful of inpatient beds. The planned reforms will aim to make the division of hospital and clinic services more clear.

Mongolia had 17,821 hospital beds at the end of 2010, equal to 6.4 per 1000 people. This is a high ratio, comparable to that of many developed nations including Belgium (7) and New Zealand (6), and above that of a number of others (Switzerland at 5, the Netherlands at 4 and the US at 3), according to the latest World Bank figures.

The high ratio indicates ample basic hospital infrastructure provision in Mongolia, a sign of the expansion of essential health services countrywide that took place under communism. It is also indicative of the elements of the Soviet-era system that are now being reformed, in this case the strong focus on hospital-based health care and inpatient treatment. Other comparable countries with high hospital bed ratios include Belarus, Kazakhstan and Cuba, all of which also followed the communist model.

CONSOLIDATION: This model, while it delivered reasonable outcomes in the past, is outdated and inefficient. The shift towards a more modern system will see resources focused on primary care, probably leading to consolidation in the hospital segment and a more efficient allocation of beds. This process of rationalisation has already seen the number of beds per 1000 people fall from more than 11 in the early 1990s to 7 in 2007 and now 6.4. A further drop is likely, and should be an indicator of increasing efficiency and modernity in the system, rather than of cutbacks and falling standards of provision.

“We need to change the policy idea that more hospitals means less disease,” M. Adiya, the director of the health project run by the Millennium Challenge Account - Mongolia (MCA), the local organisation set up by the US bilateral aid agency Millennium Challenge Corporation, told OBG. “The policy had previously been to increase the number of hospitals and doctors to treat those who already had disease. Now it is prevention and early detection.”

The structure is increasingly in need of reform as it struggles to deal with rising patient encounters: some 679,600 hospitalisations were recorded in 2010, up from 649,400 in 2009 and 618,500 in 2007. This growth reflects the trends of increasing access to health care, population expansion and awareness of health issues. Many of these cases would probably be best dealt with through primary care, hence the current policy focus on that area (see analysis).

PERSONNEL: There were a total of 39,608 health personnel in Mongolia as of 2010, including every registered worker in the health care system, according to the NSO. There are 7497 physicians, a number that has stayed at roughly the same level over the past five years. The number of nurses has risen steadily from 8633 in 2007 to 9179 in 2010.

REGIONAL DISPARITY: Regional inequality is a concern in the health system, as it is in other social and economic sectors: while Ulaanbaatar has a ratio of one doctor for every 248 people, the Western region has far less favourable statistics, with one doctor for every 616 people. The variation in the nurse-to-population ratio is less uneven, ranging from 257 in Ulaanbaatar to 346 in the Khangai Region.

Mongolia has 27 physicians per 10,000 people but only 33 nurses. According to the Kaiser Family Foundation (KFF), an independent US-based health research organisation, Mongolia ranks 40th in the world on its doctor-to-population ratio, based on WHO statistics, a similar level to the UK, US and Luxembourg. However, the ranking drops to 81 for the proportion of nurses, similar to Egypt and Trinidad. This gives Mongolia a doctor-to-nurse ratio of 1:1.22, while 1:3 is the norm in the developed world.

While there are currently no plans to increase the number of doctors substantially, the MoH does intend to boost the number of nurses considerably, to a ratio of three to four nurses per physician, S. Enkhbold, the director of the SPPD, told OBG.

To help recruit and retain staff, particularly nurses and specialists, the MoH is drafting career development path policies to create a clearer progression for medical professionals and provide incentives for them to stay in their jobs. These are particularly targeted at areas with fewer medical facilities and professionals. Since 2011 all doctors, assistants and nurses working in aimag centres receive a bonus equal to six months’ salary every five years, while those in soum and village facilities get a similar bonus every three years. Similar schemes are in practice in the private sector, with providers also offering options for staff to undertake further training and opportunities to study abroad.

CAPACITY BUILDING: Human resources are also a challenge in health management and regulation; there is a lack of management experience, particularly when implementing reforms that will radically change the structure of the health sector. The Asian Development Bank (ADB) is supporting the ministry’s capacity-building efforts, which seek to improve management, planning and oversight.

Structural changes will also be necessary. Many governmental functions, including regulation, are divided between a number of state agencies – some of which are open to political influence, while others conflict and overlap. To address this, the MoH will bring in consultants to advise the government on the creation of a single, independent regulator.

RISK FACTORS: Mongolia’s shift toward a vertically integrated health model with an emphasis on primary care indicates a move from a treatment-based delivery system toward a preventative public health policy. This move is particularly significant for an emerging market, as developing countries tend to see a decline in communicable diseases but a rise in chronic illnesses, such as cancers and heart diseases, many of which are associated with lifestyle. Research by domestic authorities and international organisations suggests that more initiative should be taken to prevent non-communicable diseases and illnesses (NCDIs), as well as to treat them earlier and more effectively when they arise.

A 2006 survey by the WHO found that nine out of 10 Mongolians had NCDI risk factors, and one in five had three or more risk factors. Most of these factors are related to lifestyle. For example, around 65% of males and 20% of females consume tobacco.

However, Mongolia has made great strides in its fight against communicable illnesses. Child immunisation programmes, for example, have been quite successful. By 2010, 98.5% of children nationwide had been given the BCG vaccination against tuberculosis; 96.1% were immunised against diphtheria, tetanus and whooping cough; 96.5% against polio; 96.9% against measles, mumps and rubella; and 98.1% against hepatitis B, according to the NSO.

PUBLIC HEALTH INITIATIVES: The government, in partnership with international organisations and donors, is now focusing on tackling NCDIs with a wave of public health initiatives. The MCA, for example, is supporting the government’s efforts with its $39.1m Mongolia Health Project, though it also expects the MoH to commit more than the current 5% of its budget to public health.

Schemes include several screening programmes to increase early detection. For example, a national screening campaign to make sure all women between the ages of 30 and 60 are screened for cervical and breast cancer, and both men and women aged 40 to 60 are screened for diabetes and hypertension.

The MCA is also encouraging increases in taxation on tobacco and alcohol, as well as the creation of more public areas for people to play sports and exercise. Publicity campaigns on the importance of healthy lifestyles are another major part of the drive. More focus will be placed on the prevention of noncommunicable and lifestyle-related diseases.

“Our health project is unique in that it is a long-term exercise that aims to completely revolutionise and change the thinking and behaviour of our people,” S. Bayarbaatar, the CEO of MCA, told OBG. “The project is intended to help people and educate them on the importance of early disease detection. This is common in all developed countries, but not in Mongolia. We are educating all individuals in the health sector to promote healthy eating, continuous exercising and be aware of diseases.”

PRIVATE: Mongolia has a sizable private health sector. While private enterprise is most evident in small-scale clinics (many of which are officially referred to as “hospitals”), economic growth and policy changes mean that the country has considerable potential for private health investors at all levels, including in providing sophisticated tertiary care. Greater regulatory clarity and the full implementation of funding changes will go a long way to ensuring more transparency and better quality of service.

The MoH is actively examining the opportunities for public-private partnerships (PPPs), which could take many forms, including the management of public facilities by private companies and the sharing of resources, such as high-tech equipment and facilities. While these are relatively early days for the involvement of PPPs in the sector, officials are confident about the potential, and are looking to expand the model sooner rather than later.

“We can work together with the private sector, which can provide some services which the public system does not,” Enkhbold said. “In other cases, the same services can be provided by both the public and private sectors, which then compete.”

STANDARDS: While following an agenda of promoting private participation, the MoH must also improve its oversight and regulation of private providers, Claude Bodart, the principal health specialist at the East Asia Department of the ADB, told OBG. Licensing and accreditation are quite weak, meaning that some operators’ standards are not as high as they should be; indeed some exist largely to extract health insurance payments. The ministry’s donor-supported efforts to boost its administrative capacity and licensing reforms are expected to pay dividends in this area over the coming years, and an independent regulator should help tighten standards in the private sector.

The ADB and MCA are encouraging the government to focus on developing primary and secondary health services, and open up tertiary provision to the private sector over the medium and long term, acting as an enabler for private providers to invest. “The government needs to define what it covers and then open more services to the free market,” Adiya told OBG. “It is impossible to cover everything under the public budget. It is currently difficult for private hospitals to compete in the market.”

Partnerships already exist between individual private providers and government institutions in a number of areas. For example, private clinics will refer patients to state hospitals when there is the need for a procedure that the former cannot perform, or when private clients need emergency surgery.

At present, many privately insured individuals, including both well-off Mongolians and expatriates, go abroad for major treatment, particularly surgery, so private clinics and insurers work with foreign providers to which they refer their clients. However, the expansion of private clinics and insurance in Mongolia means that fewer patients are going abroad for routine procedures such as vaccinations and check-ups, O. Odonkhuu, the marketing manager at SOS Medica Mongolia, a private health provider based in Ulaanbaatar, told OBG. She expects this trend to strengthen as more international-quality private facilities are set up in the country.

PROJECT PROPOSALS: In October 2010 Singapore Medical Group (SMG), a health care company, announced plans to enter the Mongolian market. SMG said it would build a 50-bed hospital in Ulaanbaatar and some 15 clinics around the country. According to the firm, the proposed multi-disciplinary hospital would have high-quality specialist care. The internationally accredited facility would have the same standards as SMG’s Singaporean hospitals, have the same technology, and be staffed by Singapore-trained Mongolian and Singaporean expatriate doctors. The hospital would target those who would typically go abroad for treatment by providing quality care within the country.

The firm has announced its intent to create a nationwide network following the establishment of the flagship facility. This network will consist of family medical clinics and “mini-hospitals” elsewhere in Ulaanbaatar and countrywide, including in major mining centres. In accordance with national health policy, these facilities would focus on preventive care and public health, and would also act as patient referral centres for the main hospital in the capital.

Also in 2010, a Mongolian consortium, including major conglomerate MCS Group, signed a memorandum of understanding with a subsidiary of Germany’s University Medical Centre Hamburg-Eppendorf for the construction of an international-standard general hospital. Vamed, an Austrian health care firm, would undertake the planning, project management and equipping of the hospital.

As of late 2011 there was little sign of these projects breaking ground, however. It may be that the investors are biding their time while reforms, particularly to health insurance and sector licensing, are finalised. Bodart told OBG that changes taking place in health funding would be crucial to catalysing private sector growth. Odonkhuu agrees that recent and upcoming reforms should lead to take-off in the private sector, given that demand for medical care and preventative medicine is forecast to increase.

“There is absolutely scope for growth,” Odonkhuu told OBG. “There are major Mongolian companies looking to invest in health as the economy grows. With foreign investment and more expatriates coming here for long periods, and insurance penetration growing among Mongolians, there are huge opportunities to fulfil local demand.”

OUTLOOK: The health sector has made a great deal of progress since 1990, with a combination of reforms, investment and international support leading to improved outcomes, often radically so. Now, as befits one of the world’s fastest-growing economies, change has stepped up a gear as an ambitious overhaul of the health system takes place to bring it up to international standards.

This is a dynamic period and it will be some time before new structures are fully implemented. As the reforms come into effect and investments continue to bolster the sector, public health outcomes should start to improve and the environment should become more appealing for private health care providers, which will help to meet growing demand.