The Prime Minister of Kazakhstan

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Medical organizations of Kazakhstan will be headed by professional managers — Y. Birtanov

06 February 2018, 12:16

Today at the meeting of the Government chaired by the Prime Minister Bakytzhan Sagintayev, the Minister of Healthcare Yelzhan Birtanov reported on the implementation of measures to develop corporate governance and management in medical organizations.

Within the framework of the implementation of the 81st step of the National Plan "100 Concrete Steps", as well as Densaulyq State Health Development Program for 2016-2019, the Ministry of Healthcare is working to introduce the principles of corporate governance and management in medical organizations.

In addition, in his 2014 Address to the People of Kazakhstan, the Head of State set the task of applying OECD principles and standards for Kazakhstan to become one of the 30 most developed countries in the world.

Therefore, in order to increase the competitiveness and efficiency of the activities of Kazakhstan companies, the implementation of the OECD Principles of Corporate Governance is topical.

To date, the majority of healthcare organizations of Kazakhstan have already been translated into legal forms that promote the introduction of elements of corporate governance, such as Enterprises on the Right of Economic Use with supervisory boards (RSE on REU with SB), JSC and LLP. Out of 42 subordinate healthcare organizations, 10 were transferred to JSC, 25 – to RSE on REU with SB, 3 – to RNE, 3 – to SM, and 1 – to LLP.

The Ministry carried out a rating evaluation of the effectiveness of activities in the pilot medical  organizations. So, it was found out that medical organizations that implemented the principles of corporate governance have higher efficiency of activities than organizations that did not implement these principles.

To date, the total number of public health organizations is 840, of which 750 are to be transferred to SE on REU. By the end of 2017, the number of transferred to REU form amounted to 618 or 82%. The transfer of the remaining 132 organizations to the form of SE on REU is planned for 2018. Thus, by the end of 2018, 100% coverage of the transfer to RSE will be provided.

As Yelzhan Birtanov noted, active work is carried out to provide organizational and methodological support to organizations at the regional level. Typical corporate documents for JSCs, SE on REU are being developed and implemented, which are introduced in all subordinate MH RK JSCs and partially in the regional MOs. Also work is carried out to ensure the transparency of the activities of the Ministry of Defense by creating a section "Corporate Governance" on their official websites.

The regions are working on the creation of collegiate management bodies — supervisory boards. In 2017, their number in SE on REU amounted to 352. Active work is carried out to update the composition of collegiate management bodies with the inclusion of representatives of the public and business in the subordinate MH RK.

In 2017, a rating of regions on the implementation of the Corporate Governance Principles was drawn up, taking into account the creation and full operation of the supervisory boards.

"We see that Astana, Almaty, West Kazakhstan and Karaganda regions have a high level," the Minister of Healthcare said.

Within the framework of the direction on the development of leadership and professional management, the question of training professional managers in healthcare remains urgent.

The industry employs about 3000 top managers. However, 60% of heads of medical organizations have higher medical education without professional education in management. And only 13.5% of the first leaders have a master's degree.

Yelzhan Birtanov emphasized that medical organizations should be headed by professional managers. To this end, a new specialty of the master's program, Healthcare Management, was introduced; training programs, a standard curriculum for the preparation of masters were developed; the professional standard is on the approval; independent certification is being introduced.

One of the main indicators of the effectiveness of management is the salary of the doctor. According to the Committee of Statistics, the average monthly salary of a doctor in Kazakhstan was 159 307 tenge, and the nominal wage of an employee 147 988 tenge, the ratio as a whole for Kazakhstan is 1.1.

According to the Densaulyq State Program for Health Development for 2016-2019, the target are: in 2017 – 0.9, 2018 – 0.9, 2019 – 1.1. In the context of the regions there is an overfulfillment of the State program indicator, in some the ratio reaches 1.5: 1.

In conclusion, Yelzhan Birtanov assured that the work on the development of corporate governance and management will continue. For effective corporate governance and management in medical organizations, it is planned to legislatively consolidate the Principles and concepts of corporate governance, in accordance with the OECD Guidelines.

Also, IFC expert, representative of the World Bank Adalyat Abdumanapova took part in the consideration of the issue. According to her, to date, corporate governance at macro and microeconomic levels is one of the decisive factors for the successful development of the national economy of any country. Within the framework of her presentation, Adalyat Abdumanapova noted two points that underline the importance of corporate governance in Kazakhstan.

"First, based on our experience as an international investor, we came to the conclusion that the successful development of business and attracting investments directly depends on the availability of proper corporate governance practices," said the representative of the World Bank.

Adalyat Abdumanapova expressed her opinion, progressive work is being done in Kazakhstan to improve the system of corporate governance, since traditionally the health sector is one of the most investment attractive.

"The second point at which I would like to stop is that traditionally, historically, the concept of corporate governance has evolved as a tool for private corporations, but for the last few years, the focus is moving to the companies with state participation. It is expected that these companies are able and even responsible for creating a positive example, which local companies will follow," said Adalyat Abdumanapova.