The Russian Healthcare SystemLecture 9Tracey Lynn Koehlmoos, PhD, MHAHSCI 609 Comparative International Health Systems

The Russian Federation

RussiafactsLargest country in the world.However, most of the land lacks the proper climate and soil to be used in agricultureCapital: MoscowGovernment type: Federation48 oblasts, 21 republics, 9 autonomous okrugs, 7 krays, 2 federal cities, & 1 autonomous oblast

Political-Historical Impact on HealthSince the end of the Soviet Union and the birth of the Russian Federation (1991)health status of the Russian population has dramatically declined.Federal spending on healtha staple of the Soviet systemhas continued to decline to bare minimal levels

Updated Russian Health MeasuresPopulation: 142,893,540 (2006)Infant Mortality: 15.13 per 1,000 Life Expectancy: 60.4m / 74.1 fLargest gender gap in the world!Population >65: 14.4% Population below the poverty line: 17.8%Health Expenditures as part of GDP: 6.2% (2002) (but, this number dropped as low as 3% in the years prior to 2006!)Per Capita Health Expenditure: $150 US

Burden of Disease60% of men have hypertensionLeading mortality and morbidity causes:CVD causes 56% of deaths (2003)alcohol-related injury and poisoning Russia has sky-rocketing HIV/AIDS infection ratesMulti-resistant strains of tuberculosis are growing

2006 Major ReformSince the fall of the Soviet Union, there has been no major health care reformUntil 2006!$3.2 billion in spending increase on health care as part of national priority projects. The funds, mostly drawn from Russias oil revenues, are expected to cover:Salary increases for doctors and nurses, Purchase of new equipment for clinics, and Construction of eight high-tech medical centers in Russias vast, outlying regions.

More Russian Healthcare ReformControversial major shift in emphasis on quality of treatment, rather than Soviet-style obsession with quantity The plan will eliminate tens of thousands of specialists - the idea being to encourage more doctors to become general practitioners or front-line, first respondersRussian media say that about 300,000 doctors and health care workers (about half the nation's total) could be laid off, and scores of hospitals shut down in the next few years

Reform feedbackConflict between GPs and Specialist physicians (Specialists say GPs should classify and send them to a specialist)Concerns from leadership and staff in the current healthcare system:How is it possible that a national health care project is managed not by the health ministry, but by the presidential administration? Is it really about quality or is it about cost?

Organization of the SystemMinistry of HealthSemaschko Institute on the Organization of Health Care (particularly powerful for planning under Soviet system)Now: Territorial Medical Organizations conduct planning for majority of the oblasts.Rapid decentralization decreased quality of care, increased cost, and (because of costs) reduced access.Rapid opening to undeveloped market forces by unprepared administrators has led to poor results.

Financing the Healthcare System55% from Federal and Local Healthcare Funds30% Employee payroll taxes: .2% for federal funds and 3.4% for territorial fundsThe rest: optional purchase of supplemental insurance & out of pocket

How the System WorksA psuedo-Bismarkian modelEmployees must purchase health insuranceMHIF (Mandatory Health Insurance Funds)Oblasts and Territorial governments contribute to cover the health insurance of the unemployedtaken from general funds paid by workers

Trouble with the new systemBy rapidly decentralizing, the Ministry of Health lost touch with the oblasts and with the introduction of the territorial insurance schemesLack of MoH legislation to encourage market growth and control relations between payers and providersOperational problems and fraud have led to incomplete implementation of the plan in all of the territories/oblastsCoverage continuessort of

More troubleConfusion rages: budget and insurance funding to organizationsGeneral distrust of releasing funds to the insurers with no control over the quality or provision of future careLack of incentive for insurers to provide care in sparsely populated regions 1/3 of regions have no insurance companiesGeneral failure to produce market competition (in larger cities there is division rather than competition)

More trouble with the new systemLack of portability: there are no transferability contracts between the oblasts, local funds will not pay for care in other regionsLack of funding to federal research institutions/hospitalsthe cut in federal funds and the lack of transferability (hence, referrals) to large research hospitals has led to the closure of many formerly prestigious institutions

How health care is received30% of population receive primary care through work related clinics and hospitalsSpecial health services exist for the following employment based groups: police, railroad, university, high-level government officialsPolyclinicsstaple of Russian healthcare system

PolyclinicBasic site of health services deliveryFormerly considered successful by the sheer volume of patients SEENProvider attitude: receive and refer!

30% of initial contacts lead to a referralNew system tries to emphasize primary carewe will have to wait for the results

Sources of Healthcare Expenditures (2002)55.8% Public Health Expenditures41% from Social Security0.2% from External Sources44.2% Private Health ExpendituresWhat are External Sources?Not NGOs, which are supposed to be classified as private source funding, but very hard to differentiateGrants and loans for medical care and goods channeled through the Ministry of Health

Where does the Russian healthcare ruble go?Expenditurestypical year (1998 data)49% Inpatient care16% Outpatient care8% Preventative care22% Pharmaceuticals5% Public Investment

Provider PaymentPhysicians: Private or Public, most are still salaried employees of a polyclinic or hospitalHospitals: Retrospective fee-for-serviceThe Black Market: The healthcare sector absorbs the largest proportion of bribes in Russia (about $600 million in 2000)This is unreported healthcare spendingA long standing tradition, an expectation of careHigher in rural areas

Compared to USAmerican v. Russiafundamental differencesUS: Private sector provides most healthcare services with public sector as a safety net for the poor. US: Powerful and diverse private insurance industry. Opposite trends: Russian government attempts to offer more autonomy to health care providers and users; US, autonomy has been limited by the long term grasp of managed care.

Compared to USUS health insurance experience can prove useful to Russian reformers. US example of excessive consumption and skyrocketing costs of health care suggests that controlling utilization and costs is a crucial prerequisite for a sustainable health insurance scheme. Failed US efforts to introduce compulsory health care coverage can also serve as an important lesson to Russian politicians who propose obligatory national health insurance.

More Comparisons to USRussian healthcare transitional problems are not unique:Public health sector reliance in other countries have led to shortages, misallocation of resources, declining qualityResulting in reduced health status of the population

More Comparisons to USRussia healthcare reform should look at local situation and at successful efforts abroadWarning signs: ill-designed benefit package, hasty decentralization, and over-reliance on the private sector (Rozenfeld for RAND)Source: http://www.rand.org/pubs/conf_proceedings/CF124/CF124.chap5.html#fn0 accessed 12 May 2006

SummaryThe Russian Federations healthcare system has been in a constant state of flux Russian health status has dramatically declinedRapid decentralization without legislation and competition has lead to market failure and poor health outcomes.2006 healthcare reformswill they work? When will we know? Will throwing money at the problem solve it?Source: Tragakes, E and Leggof, S. Healthcare Systems in Transition: Russian Federation. Copenhagen, European Observatory, 2003: 5(3)