SUSPENSION OF FUNDING OF US AGENCY PROGRAMS: CHALLENGES IN ACCOUNTING FOR PAYMENT SETTLEMENT OF HEALTHCARE INSITUTIONS

Abstract

During the period of full-scale invasion, Ukraine’s healthcare system profound transformations, with one of the key challenges being the urgent need to secure adequate funding fot the healthcare institutions to the ensure timely payments to medical staff and maintain their professional motivation. This article explores the key stages and directions of the healthcare reform in Ukraine, with particular attention paid to the transition to a new model of the healthcare service financing – «money follows the patient» - implemented through the newly established National Healthcare Service of Ukraine. This transition fundamentally changed the mechanisms for the calculating medical personnel wages. The study outlines how these changes altered payroll approaches under the new budget financing model for the healthcare institutions. Furthermore, the article highlights the role of international assistance, particularly funding from the United States Agency for the International Development (USAID), which significantly contributed to improving the quality of the medical services, motivating healthcare employees, and automating accounting processes. The paper examines the main consequences of the suspension of USAID medical program funding in 2025, including reduced staffing capacity, difficulties in processing payroll accounting and ensuring timely payments, financial discipline disruptions, and an overall decline in the operational capacity of the medical institutions — especially those located in frontline regions. Comprehensive solutions are recommended to overcome financial instability, including diversification of funding sources, enhanced cooperation with the WHO, international donors, and the European Union, as well as engagement of domestic businesses through public-private partnership mechanisms. Practical recommendations are provided to help stabilize Ukraine’s healthcare financial system amid war and economic destabilization, with a focus on ensuring continuous salary payments and effective accounting practices.