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The purpose of the paper is to identify the main prerequisites and ways of the medical reform in Ukraine under decentralization, and the emergency of fee-for-service medicine in particular. Methodology. The survey is based on the study of legally enforceable enactments which regulate medical sphere and the process of decentralization of power. Results. The article outlines the main prerequisites and ways to solve the issue of the implementation of medical reform in Ukraine under decentralization, including the emergence of fee-for-service-medicine. The problem related to health care reform in general in order to improve the availability and quality of health care have been identified. Statistical data on the main healthcare indicators in Ukraine have been presented. National healthcare accounts of Ukraine have been presented and healthcare expenditures per capita in other countries of the world has been demonstrated. Practical implications. The main steps that are necessary to undertake for implementing changes in the medical field have been determined in the article. They are the following: involvement of communities, development of social infrastructure, transportation of patients and women in labor to hospitals, involvement of social workers, support of medical institutions, and assistance by the communities in public control. It is determined that the biggest challenge for the medical sector is the reorientation to a new level of medical services. The main directions in medicine under decentralization on the implementation of material, organizational and financial conditions to provide local authorities with own and delegated powers have been emphasized. Value/originality. An approach to implementing medical reform that meets the needs of the community is developed and its essence has been explained. The complex of actions on introduction of medical reform under decentralization of the power, which has been explained as an increase in powers and financial possibilities of territorial communities has been generalized.