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Constraints on Universal Health Care in Russia: Inequality,

Informality, and the Failures of Insurance Reforms

Linda J. CookPrepared for presentation at:

Financial University under the Government of RussiaMoscow, December 18, 2015

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Soviet Health Care System

• Centralized, universal, stratified, state-funded

• Overstaffed by international standards

• Origins in extensive model of economic development and socialist ideology?

• Effective at basic care, screening, control of infectious diseases

• Moved life expectance and infant mortality toward OECD norms to 1970s

• Poor in adapting to chronic disease care;• Growing disparities with OECD from

1980s

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Soviet health care system (2)

• Effective at basic care, screening, control of infectious diseases

• Moved life expectancy and infant mortality toward OECD norms to 1970s

• Poor in adapting to chronic disease care;• Growing disparities with OECD from

1980s

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Differences in Levels of Deaths between Russia, EU Countries by 2007, EU Countries by 2004

Source: WHO Europe, European HFA Database, Jan., 2012

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Reforms of 1990s

• Decentralization and devolution of responsibility

• Private practices legalized• Mandatory Med Insurance (MMI)• Health Insurance Companies and Competitive Contracting Limited effects of reforms

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Financing, 1990sSource of Finance 1992 1993 1994 1995 1996 1997 1998 1999

Federal Budget 11.3 8.9 8.6 6.4 4.9 7.7 4.6 4.9Regional health budgets*

Budget contributions or

mandatory health insurance

for non-working

population

88.7

 

 

--

75.3

 

 

0.5

64.7

 

 

4.5

60.6

 

 

6.7

58.6

 

 

6.3

53.1

 

 

5.1

47.1

 

 

5.6

44.7

 

 

5.2

Mandatory health

insurance contributions

for working population

-- -- 15.6 14.7 15.7 14.5 16.0 15.9

Private contributions to

voluntary health insurance0 0.9 1.5 2.0 2.5 2.7 3.0 3.5

Household payments for

medical services**-- 1.6 2.2 4.7 6.3 7.3 9.1 8.4

Household payments

for pharmaceuticals-- -- 7.8 13.2 13.7 15.6 21.1 24.9

Corporate payments for

medical services-- -- 1.1 0.3 0.7 1.7 2.1 1.2

TOTAL 100 100 100 100 100 100 100 100

Changes in Main Sources of Healthcare

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ELITE POLITICAL CONTENTION OVER HEALTH REFORMS: LIBERAL

PROMOTERS, STATIST RESISTERS

LIBERAL ELITE PROMOTERS WANT: -transfer of welfare responsibilities away from state

-increase efficiency of service provision

-diversify sources of social sector financing

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ELITE POLITICAL CONTENTION 1990s

• Outcomes of contention: -system mixed, institutionally- fragmented -formal and informal provision

-predominant state, some private provision

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SPONTANEOUS PRIVATIZATION’ AND ‘SHADOW COMMERCIALIZATION’

Impoverished providers and administrators use informal income-generating strategies;

combinations of formal ‘cash register’ and informal ‘shadow’ payment requirements = informal brokers of access to care

COMPONENTS OF RUSSIA’S POPULATION CHANGE(IN THOUSANDS OF PEOPLE)

(Ioffe and Zayonchkovskaya, 2010)

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‘SPONTANEOUS PRIVATIZATION’ AND ‘SHADOW COMMERCIALIZATION’

Growth in payments, mostly to providers in public facilities

Mostly for hospitalization and pharmaceuticals

Some preliminary evidence on access to health care in RussiaStructure of medical services provided in public outpatient Treatment facilities in Russia circa 2002

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Free-of-charge

On a commercial basis

On a basis of voluntary health insurance

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Lab diagnostics

Functional diagnostics

Treatment procedures

Appointments with general practitioners and specialists

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Proportion of population paying for various types of medical care

1994, 2000, 2004

131994 2000 20040%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

4%

9%

13%

9%

17%

23%

13%

30%

46%

For visit to a doctor

For diag-nostics and procedures

for hospital care

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Growth in Inequality of Access to Health Care

formal private system used mainly by upper income

Large disparities in public system:

-by socio-economic status -urban-rural -regional

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Inequality in access:Underclass without access to care- exclusion and abstention;

-pharmaceuticals as main issue, comp

Unregistered labor migrants – no access except emergencies in transnational space

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Economic Recovery and Health Care

From 2000, economic growth, stronger state, more

regulation, higher public health expenditures, stronger state administration

Health as priority – raised providers’ official incomes, insurance reform revived 16

PUBLIC HEALTH EXPENDITURESAND GDP 1995-2011

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Economic Recovery (2)

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Major government concern about demographic decline

-National Priority Health Project -Pro-natalist campaign -Health subsidies for pregnant women

Health ExpendituresTotal health expenditure as % GDP =

5.2% (for 2008, WHO) Public Health Expend as % total: 65% (for 2008, WHO)Private expend growing since 1990s,

35% of total; most directly OOP 19

2005-2026 Dynamics of Russia’s Working-Age and Total Population in the Absence of Immigration (in Thousands of People)

(Source: Ioffe and Zayonchkovskaya, 2010)

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Health Sector WorkforceTotal doctors per 10,000 pop 2009:

50 (of which 32 are pediatricians)-No. of nurses per 10,000 pop 2009:

74 steady increase in no. of nurses -All mid-level personnel: 107 -Outpatient contacts per person 2006:

9 21

‘OUT-OF-POCKET ‘PAYMENTS AND ‘SHADOW INCOMES’ PERSIST

By 2002 ‘quasi market’ in health services prevalent (Shishkin)

Practices and prices varied by: -specialties -hospital departments -income of patient -urban-rural -other parameters

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Main Reform OutcomesRe-establish central controlsExpand legally paid services Raise wages in state sectorSome prosecutions for corruption

Limited effects of reforms

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Overall performance of system Russian system has poor public

health outcomes relative to expenditures

High private and out-of-pocket expenditures relative to public

Inefficient use of resources -over-reliance on in-patient care, specialists - high provider-patient ratio - poor distribution of provisions

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Greatest Improvements since 2000Mothers and Children

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Greatest health improvements for priority groups

-Infant, Maternal, Child Mortality

-Stunting, children under 5

-Increases in life expectancy

Under-5 Mortality and Stunting1990-2010, RF (WHO)

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Less Improvement in other areas of adult health

Persistent high adult mortality, esp. men,

low healthy life expectancy – both genders

-Improved but persistent high rates of infectious diseases- -TB, MDR TB HIV/AIDS 28

TB IN RUSSIA, 1990-2010

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DISTRIBUTIONAL CONSEQUENCESContributes to inequities of access and quality, exclusion and abstention from care

Burden of OoP expenditures income-regressive, reports of higher costs in poorer regions

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CONCLUSION: Consequences for Health Care Provision, State Capacity, Citizenship

Health Care ProvisionFormal legal sector small; insurance

works poorly in most regionsHigh proportion of private vs. public

health expenditure in international comparison

Comparatively poor public health indicators

Underclass without access to many health services.

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CORROSIVE EFFECTS ON STATE CAPACITY

Entrenched informal payment system hurts state’s capacity to

- tax and distribute expenditures social expenditures

-implement policies that would improve equity and efficiency

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Effects of informal payments “Informal payments undermine the shift toward more transparency in governance and public services and pose challenges to policy-makers seeking to regulate health markets according to public health goals.”

(Thompson and Witte 2000) 34

What system does well:Aspires to universalismAll citizens covered by MMICommitment to control of infectious

diseases Right to free emergency care

universal Health needs of newborns, mothers, children prioritized

Biggest failure – de facto exclusions35

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