About the Research
Strategy and Research department of RB ASIA conducted research of Healthcare sector of Uzbekistan, which includes analysis of demographics, health of nation, current condition of the market, financing of medical sector, recent reforms and future potential of the industry.
The objectives of the research were to review the healthcare market, volume of the medical services market, its prospects, to analyse dynamics of the healthcare sector and its key performance indicators, as well as a overview of the ongoing reforms in this sector in the Republic of Uzbekistan.
In 2019, UZS 12.1 trn (USD 1.27 bln) was allocated for healthcare sector- this is 30.5% more funds than in previous years and this number is expected to rise at a compound annual growth rate (CAGR) by 19.1% in local currency terms and by 9.0% in US dollars by 2022 to UZS 27.96 trn (USD 3.49 bln).
Healthcare of Uzbekistan
The main wealth of the nation is people and protection of public health was and will always be one of the main priority of Uzbekistan and constantly at the center of President and Government’s attention. According to the Constitution, residents of Uzbekistan have the free access to medical service provided through the network of state-owned medical institutions- polyclinics, first aid stations, and state hospitals. In 2019, UZS 12.1 trn (USD 1.27 bn) was allocated for healthcare sector- this is 30.5% more funds than in previous years. From the state budget in 2020, UZS 14,842.6 trn (USD 1,56 bn) will be provided for healthcare.
Life expectancy at birth in Uzbekistan from 2010 to 2019 remains almost steady, but with a certain growth. In 2019 life expectancy reached a sign of 77 years and 72,3 years for females and males respectively. This is higher than the official rate of 2010 when life expectancy for females accounted for 75,1 years and 70,6 for males.
The average Uzbek person has a life expectancy at birth of approximately 70 to 75 years. Nevertheless, the last 9 of those years are not spent in good health. Unfortunately, final years of many Uzbek people were marked by pain and illness, most often due to heart disease and respiratory infections. Uzbek woman, on average, live about 5 years longer than their male counterparties.
Healthcare sector analysis
Uzbekistan consumes more than $1 billion UZS in pharmaceutical products annually, 80% of which are imported. Russia, China, India and Ukraine have historically been among the main pharmaceutical importing countries in Uzbekistan. In addition, Uzbekistan’s Government seeks foreign partners interested in establishing local pharmaceutical and medical equipment production.
In 2018, 15.4% of Uzbekistan’s GDP was directed to healthcare sector, which rose 2 times since 2016. This means that more and more attention is being dedicated to the healthcare sector, attracting foreign investors to invest in this part of government segment.
Nowadays, there are many well-trained medical professionals in Uzbekistan possessing recognized medical qualifications (Ph.D.) registered with the state medical academy of Uzbekistan increased to 396 doctors, which is significantly more compared to previous years. Moreover, there are more academicians, professors, docents and doctors of sciences being increased day by day.
From 2019-2020 academic year, International Medical University - AKFA International University began its work in Tashkent and accepted 200 students. Highly qualified specialists in the field of fundamental, medical, exact and humanitarian disciplines will be trained there.
Government procurement and commercial imports (of pharmaceuticals and equipment used by private clinics) are main ways for foreign companies to enter the healthcare market. Despite complexity of procurement procedures of the government and public sectors, they are considered as major importers of goods and services. Solid relationships with decision-makers are useful, and employing of local representative or sales agent, additionally to visiting potential trade partners- especially in the initial stage of negotiations- is beneficial in developing professional relationships.
Privatization plan of hospitals and development of private medical services
Market overview and trends
In 2019, UZS 12.1 trn (USD 1.27 bn) was allocated for healthcare sector- this is 30.5% more funds than in previous years and this number is expected to rise at a compound annual growth rate (CAGR) by 19.1% in local currency terms and by 9.0% in US dollars by 2022 to UZS 27.96 trn (USD 3.49 bn).
Healthcare spending continues to rise faster than economic growth, driven by increasing demand for healthcare and the government’s willingness to invest in new facilities and compensate for previous shortcomings.
Non-communicable diseases will continue to dominate Uzbekistan’s epidemiological profile and are already a country’s leading causes of death and morbidity.
Traditionally, foreign companies have dominated through imports, while state implication in the sector is important, concentrating both on import substitution and on drug exports to CIS and Baltic countries. 300 producers at least are present in the pharmaceutical market in Uzbekistan and there are about 125 licensed producers.
Healthcare has become one of the Uzbekistan’s largest sectors both in terms of revenue and employment. The industry is growing at a colossal pace owing to its strengthening coverage, services and rising expenses by public as well as private players.
Key components of healthcare market
Starting from 2015, number of existing hospitals are increasing every year by almost 30, providing more facilities to people with various diseases. Nowadays, there more than 1165 hospitals being available in Uzbekistan.
In order to provide comprehensive assistance to the development of the private health sector, create the necessary conditions for private organizations to provide quality medical services to the population, a presidential decree “On measures for the further development of the private health sector” was adopted. For the last 6 years, the number of private medical organizations has increased 2 times and reached 3.5 thousand, their equipment with high-tech medical equipment has grown 3 times. The most developed specialization of private medical organizations in the field of dentistry, laboratory diagnostics, therapy, physiotherapy, neurology and others. Today, more than 67% of private medical institutions are located in Tashkent.
In 2019, the population of Uzbekistan amounted to 33.81 million people. The urban population is slightly higher than the rural: 50.6% versus 49.4%. Large-scale urbanization processes are observed.
According to the results of 2018, 768.5 thousand children were born in the country. Over the same period, 155 thousand deaths were recorded.
Consequently, the mortality rate is 4.7 ppm. The excess of birth rates over mortality by almost five times is the main reason for the country's population growth.
Overall, the average life span of men is higher than women by approximately 2,5- 3 years. Male fertility was high in 2015 and 2018 by 24,4 birth rate. Female birth, on the contrary was low in 2015-2017 years- 21,5 ppm, but in 2018 started to grow in terms.
While maintaining growth rates, by 2050 the population of Uzbekistan will exceed 50 million people. However, factors such as migration, the environmental situation, and an increase in the number of divorces can negatively affect this figure.
Mortality rate of male and female was at rates 5,3 and 4,5 relatively being almost stable in 4 years, with no significant changes. However, death among female seems to be more than male mortality.
From both graphs, it can be easily seen that both male fertility and mortality exceed female rate. An increase in the mortality rate is observed in Navoi, Surkhandarya, Syrdarya, Kashkadarya, Khorezm regions and the Republic of Karakalpakstan. A decrease in the mortality rate is observed in Andijan, Namangan, Tashkent, Ferghana regions and Tashkent.
From the total number of registered deaths, 59.6% are deaths from circulatory system diseases, 9.4% from neoplasms, 6.7% from accidents, poisoning and injuries, 5.9% from digestive diseases, 4.9 % - from respiratory diseases, 1.9% - from infectious and parasitic diseases and 11.6% - from other diseases.
The total number of physicians in the Republic of Uzbekistan is 84.1 thousand, of which 51.4 percent (43.2 thousand) are women and 48.6 percent (40.9 thousand) are men. The most significant number of professionals among both male and female is observed in Tashkent city- 6 842 and 12 325 men and women physicians respectively. This is due to education people acquire, facilities and opportunities being available in the capital city of Uzbekistan. The least number of physicians among male and female is accounted for Syrdarya region. However, this indicator keeps growing year by year.
In Uzbekistan, in 2018 from the state budget 9,562 billion UZS was directed for healthcare financing or 15.4% of budget expenditures.
This year, over 110 million dollars of foreign investments will be invested in the healthcare of Uzbekistan. According to Ministry of Health, currently, 17 promising investment projects worth more than $ 600 million are being developed in the field of healthcare. Together with project initiators, the implementation of another four investment projects worth $ 23 million has already begun.
International financial institutions’ healthcare projects in Uzbekistan
For the last 20 years, the World Bank has been supporting the development of the health sector in Uzbekistan. Throughout these years, the Health Ⅰ and Health Ⅱ programs were developed to help enhance the quality and cost-effectiveness of primary health care services, initiate 10-month doctor retraining courses on general practice and family medicine, and strengthen the public health care system capacity. Later, Health Ⅲ project was launched, where the main focus was on the development of secondary health services by investing in medical equipment across the country, enhancing the management of priority non-communicable diseases (NCDs), and financing hospitals. Significant results were achieved by the help of this project:
More than 500 medical facilities have improved the quality of services due to the provision of modern diagnostic and treatment equipment. By introducing 22 new treatment standards for NCDs, the capacity of health personnel and the quality of services has been improved.
Over 3,000 doctors have completed 10-month general practitioner training and as part of their continuous professional development, 11,600 general practitioners and 28,500 nurses have been trained.
Islamic Development Bank (IsDB)
Uzbekistan and the Islamic Development Bank (IsDB) signed a new partnership strategy worth USD 1.3 billion for 2018-2021. From this amount, USD 140 million will be directed to social projects.
Asian Development Bank (ADB)
In 2018, ADB has approved a 5-year partnership strategy with Uzbekistan, from 2019-2023 to support the government’s ongoing reforms in various spheres. ADB committed five loans to Uzbekistan totaling USD 1.1 billion, including the improvement of primary health care services
Reforms in the healthcare system of the Republic of Uzbekistan
In March 2017, the Presidential Decree “On measures to further improve the organization of primary healthcare in Republic of Uzbekistan” was adopted, which was aimed to expand the coverage of quality primary healthcare services, as well as improving preventive measures. As a result, around 800 family polyclinics were established. Moreover, in November 2017, the Asian Development Bank approved a USD45 million loan to help improve the quality of rural primary healthcare services.
In addition, on January 25, 2018, the President signed the resulting 'On Measures for Accelerated Improvement of the Emergency Medical Care System'. This established that all urgent medical care is provided free of charge in all medical institutions, irrespective of whether they are privately run or not.
In the health sector, the share of the private sector is growing. In accordance with the decree of the head of state "On measures for the further development of the private sector in healthcare" of April 1, 2017, special attention is paid in all regions of the country to the construction of private medical institutions and the expansion of the range of medical services they provide. Over the past period of 2018, more than 400 private clinics were organized, including 115 situated in Tashkent.
In Uzbekistan, 4 specialized centers of republican scale are organized and successfully operate: cardiology, surgery, microsurgery and urology. In Khorezm, a branch of a specialized center of urology is organized. It also organizes the work of the centers of eye microsurgery and cardiology.
In the Republic of Karakalpakstan, the reconstruction of a separate medical building of a branch of the Republican Scientific Center for Emergency Medical Aid was carried out, designed for 250 beds. Moreover, the Republican Children's Hospital was re-equipped with 180 beds.
Transfer to foreigner investors
From July 1, 2019, individual treatment and prevention institutions was transferred to the trust management of investors.
The head of state instructed, by April 1, 2019, to prepare investment projects for the transfer of certain medical institutions to the trust management of investors and to ensure their placement on the Investment Portal of the State Committee for Investments of the Republic of Uzbekistan.
7. Compulsory insurance
From January 1, 2021, in Uzbekistan the introduction of compulsory medical insurance will begin. The President instructed to develop and submit a draft law "On Compulsory Health Insurance" to the Cabinet of Ministers by July 1, 2019.
This document should prescribe the legal framework, mechanisms and stages of the implementation of compulsory medical insurance, identify the subjects of compulsory medical insurance and the authorized body for regulating legal relations in this area, their rights and obligations, as well as the sources of funding for compulsory medical insurance programs.
8. New structure
The Agency for Health and Social Services under the Ministry of Health will be created in Uzbekistan.
The Agency will organize and coordinate the activities of institutions in matters of medical and social services for the elderly, persons with disabilities and other socially vulnerable categories of the population. Also among the tasks of the new structure is the provision of needy people with prosthetic and orthopedic products and technical rehabilitation equipment.
Healthcare expenditure in Uzbekistan reached UZS 11.68 trn (USD 2.27 bn) in a few years and is expected to rise at a compound annual growth rate (CAGR) by 19.1% in local currency terms and by 9.0% in US dollars by 2022 will reach an indicator of UZS 27.96 trn (USD 3.49 bn). Over a 10-year forecast, healthcare spending is expected to reach to UZS7.55trn (USD 7.19 bn), placing a local currency CAGR of 17.35% and a USD CAGR of 12%.
Government healthcare expenditure was 58.4% of overall spending in 2017. Healthcare spending is expected to increase by a CAGR of 19.6% in local currency terms (in USD 14.4%) and by time will account for 71.0% of the total expenditure on health. At the same time, spending on private healthcare will post approximately 13.1% in local currency terms and 8.2% in USD, reaching UZS16.68trn (USD2.09bn).
The overall increase in spending is driven by the modernization and restructuring of healthcare, which is partially financed by loans from abroad and international donor funds. Economic development will also mean that more funds from both public and private sources will be available for healthcare services.
Over the long period of time, urbanization and more disposable income would lead to people following sedentary lifestyle, more alcohol consumption and more common high-calorie food intake. Conversely, due to continued advances in immunization and control, the incidence of infectious disease is projected to stabilize, despite the increase in epidemics after the collapse of the Soviet Union. The country faces major challenges in dealing with tuberculosis (TB) and HIV/AIDS.