#12 - JRL 7281
RIA Novosti
August 7, 2003
COMMENTARY: RUSSIAN HEALTH SERVICE NEEDS REFORM
By Marina SHAKINA, RIA Novosti political analyst

How is Russia's public healthcare faring after eleven years of market
reforms? Where do 140 million Russians get their medical treatment and how
good is
it? The answers are as follows: the picture is a mixed one, and Russians get
what treatment they can and where they manage to.

In the Soviet Union, which vanished from the world's political map at the end
of 1991, medical care was state-administered and free. But accessibility and
quality were things that the Soviet health services failed to provide. It was
budget-financed as a last priority and had no resources for development. In
the 70s years that the country was in isolation, the equipment, technologies,
materials, medicines and techniques used in Soviet public medicine fell well
behind the level of developed nations.

For ordinary people this meant long queues in outpatient clinics, shortages
of the most basic medicines, and a lack of effective and quality medicines.
In
fact, the official Soviet public health system had a "shadow", unofficial
paid
counterpart. Those who could afford it sought good specialists, good clinics
and hospitals, employing personal connections and ... money. The saying "free
treatment is free of effect" was coined in Soviet days.

The healthcare system in Russia is still state-administered. And all Russians
are entitled to its services. In 1996, a law on mandatory health insurance
was passed. Citizens received free health insurance policies. The
assumption was
that Russian public medicine would adopt market mechanisms and its
institutions would compete for patients and their money. But the policies
made no
difference. The system, market-orientated at face value, has remained
rooted in the
Soviet past and is cumbersome, irrational and non-cost-effective.

The mandatory health insurance scheme runs a constant deficit: it has a
budget hole of almost one and a half billion dollars. Finances for the
state health
service come from two sources. One is enterprises that pay insurance
contributions for their employees under a unified social tax, and the other
- for
non-working people such as children, pensioners, the disabled and others -
comes
in the form of the federal and regional budgets. However, employers try to
minimise insurance payments by handing the staff their wages in envelopes,
while
stretched regional budgets often fail to make any contributions because of a
lack of money. Funds allocated for treatment are either dissipated before
reaching the patients or reach them in miniscule amounts. The lion's share
of budget
funds and insurance payments is spent by medical institutions to pay communal
bills.

The quality and accessibility of state-provided medical care have not
improved over the past seven years. There are still the same long lines at
the
outpatient clinics. Hospitals badly need modern diagnostic and medical
equipment.
The list of free medicines offered to patients within this system has been
becoming shorter with every passing year. Moreover, only simple and primary
medical
services are free. If a patient requires a serious operation or a long course
of expensive treatment, the state policy is of no help.

However, patients can opt for highly qualified medical assistance in the
non-state clinics which abound in Russia, if they are ready to pay. Few,
however,
can afford such a luxury. For example, a blood test in a private clinic costs
about 3 dollars, and consulting a therapist between 7 and 10 dollars. The
average wage in Russia is roughly 180 dollars.

True, many prosperous companies buy health insurances for their personnel
covering outpatient clinic treatment, spa accommodation, and periods in
hospital.
But they are few and far between. Clearly, for the next 10 to 15 years the
state-run health system will remain the only possibility for the overwhelming
majority of Russia's population.

The country's health services are in for a major overhaul. Economic
Development and Trade Ministry specialists, after making a study of the
state of
affairs in the medical branch, have come to the conclusion that the main
problem is
not a lack of funds, but their extremely unpractical use. The main goal of
the
reform is to make the system more efficient. To this end, there are plans to
finance the health services from one source and pay for medical services
according to the results, i.e. the number of patients treated, rather than
according to estimates, as is the current practice.

Russia's Deputy Economic Development and Trade Minister Mikhail Dmitriyev,
who is responsible for health reform, believes that the new scheme will force
medical establishments to sell off unnecessary buildings and premises, and
cut
back surplus personnel and superfluous equipment. Moreover, the deputy
minister
is convinced that the Russians themselves should contribute to treatment
costs out of their pockets and he does not doubt that the middle class will
back
this reform. This will inspire them to take better care of their health.