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The Russian Healthcare

Lecture 9
Tracey Lynn Koehlmoos, PhD, MHA
HSCI 609 Comparative International Health

The Russian Federation

Largest country in the world.
However, most of the land lacks the
proper climate and soil to be used in
Capital: Moscow
Government type: Federation
48 oblasts, 21 republics, 9 autonomous
okrugs, 7 krays, 2 federal cities, & 1
autonomous oblast

Political-Historical Impact on Health

Since 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 Measures

Population: 142,893,540 (2006)
Infant Mortality: 15.13 per 1,000
Life Expectancy: 60.4m / 74.1 f
Largest 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 Disease
60% of men have hypertension
Leading mortality and morbidity causes:
CVD causes 56% of deaths (2003)
alcohol-related injury and poisoning

Russia has sky-rocketing HIV/AIDS

infection rates
Multi-resistant strains of tuberculosis are

2006 Major Reform

Since the fall of the Soviet Union, there
has been no major health care reform
Until 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 Reform

Controversial 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 frontline, first responders
Russian 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 feedback
Conflict 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 System

Ministry of Health
Semaschko 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
Rapid opening to undeveloped market forces by
unprepared administrators has led to poor

Financing the Healthcare System

55% from Federal and Local Healthcare
30% Employee payroll taxes: .2% for
federal funds and 3.4% for territorial funds
The rest: optional purchase of
supplemental insurance & out of pocket

How the System Works

A psuedo-Bismarkian model
Employees must purchase health
MHIF (Mandatory Health Insurance
Oblasts and Territorial governments
contribute to cover the health insurance of
the unemployedtaken from general
funds paid by workers

Trouble with the new system

By rapidly decentralizing, the Ministry of Health
lost touch with the oblasts and with the
introduction of the territorial insurance schemes
Lack of MoH legislation to encourage market
growth and control relations between payers and
Operational problems and fraud have led to
incomplete implementation of the plan in all of
the territories/oblasts
Coverage continuessort of

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

More trouble with the new system

Lack of portability: there are no
transferability contracts between the
oblasts, local funds will not pay for care in
other regions
Lack 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 received

30% of population receive primary care
through work related clinics and hospitals
Special health services exist for the
following employment based groups:
police, railroad, university, high-level
government officials
Polyclinicsstaple of Russian healthcare

Basic site of health services delivery
Formerly considered successful by the
sheer volume of patients SEEN
Provider attitude: receive and refer!
30% of initial contacts lead to a referral
New system tries to emphasize primary
carewe will have to wait for the results

Sources of Healthcare Expenditures (2002)

55.8% Public Health Expenditures
41% from Social Security
0.2% from External Sources

44.2% Private Health Expenditures

What are External Sources?
Not NGOs, which are supposed to be
classified as private source funding, but very
hard to differentiate
Grants 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 care
16% Outpatient care
8% Preventative care
22% Pharmaceuticals
5% Public Investment

Provider Payment
Physicians: Private or Public, most are still
salaried employees of a polyclinic or hospital
Hospitals: Retrospective fee-for-service
The Black Market: The healthcare sector
absorbs the largest proportion of bribes in
Russia (about $600 million in 2000)
This is unreported healthcare spending
A long standing tradition, an expectation of care
Higher in rural areas

Compared to US
American v. Russiafundamental differences
US: Private sector provides most healthcare
services with public sector as a safety net for
the poor.
US: Powerful and diverse private insurance
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

Compared to US
US 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 US
Russian healthcare transitional problems
are not unique:
Public health sector reliance in other countries
have led to shortages, misallocation of
resources, declining quality
Resulting in reduced health status of the

More Comparisons to US
Russia healthcare reform should look at
local situation and at successful efforts
Warning signs: ill-designed benefit
package, hasty decentralization, and overreliance on the private sector
(Rozenfeld for RAND)
4.chap5.html#fn0 accessed 12 May 2006

The Russian Federations healthcare system
has been in a constant state of flux
Russian health status has dramatically declined
Rapid 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)