In 2000 Japan had the best medical system in the world, but the new medical residency system that started in 2003 visibly made things worse.

Literal

2000-year [in-に] Japan [genitive-の] medical-system [subject-が] world-first [but-だが], 2003-year [in-に] residency-system [subject-が] begin-and, eye [in-に] visibly become-bad-past.

A critical observation about Japanese healthcare. Note the tense mismatch in the first clause — 世界一だ is in present tense even though 2000年に ('in 2000') sets a past time frame. This is a common Japanese pattern: the first half frames a historical starting point almost like a setup ('[as of] 2000... was #1'), then the second half narrates the consequence in past. 目に見えて is an adverbial idiom, literally 'visible to the eye,' meaning 'visibly' or 'noticeably.' The ~て linking form chains 始まって ('started and then...') into 悪くなった ('became bad'), making the residency-system start the causal trigger for the decline.