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Figure 1. Contracted Military Servicemen According to the FTP and Options of Following Actions by the Military Institution of Russia ( thousand persons by half-year period ) Figure 2. Total Number of PJCP, Including Draftees in the Military Institution of Russia (thousand persons by half-year period) Figure 3. Number of Draftees in the Military Institution of Russia ( thousand persons each half-year period ) Figure 4. Number of Draftees (thousand persons by half-year period) Figure 5. Effective Number of PJCP in the Military Institution of Russia (thousand persons by half-year period) Acceleration and completion of the FTP has been found to be obviously useful in terms of military effectiveness. However, the RF Minister of Defense stated that it requires the expenses that the country is unable to afford. We also have assessed these expenses to the extent of the amount of retirement benefits payable to the retired PJCP in the future. The results are shown in Figures 6 8.

Figure 6. Budget Expenditures Allocated for Implementation of the PJCP Recruitment Reform in the Military Institution of Russia on the Basis of 1-0 Option (RUR billion/year) Figure 7. Difference in Budget Expenditures for the PJCP Recruitment Reform of the Military Institution of Russia in Transition from 1-0 to 1-2_(6) Option (RUR billion/year ) Figure 8. Difference in Budget Expenditures for the PJCP Recruitment Reform of the Military Institution of Russia in Transition from 1-0 to 2-2_(6) Option (RUR billion/year ) It has been revealed that the difference between 1-0 option supported by the RF Ministry of Defense and those proposed by the IET is approximately 20 ( for 1-2 option ) or 40 RUR billion ( for 2-2 option ), thus not exceeding much the current military expenditures totaling over 600 RUR billion. Since the budget 2005 is exercised with surplus with regard to many items, and the budget is expected to be in surplus of 405 RUR billion24, the Russian economy can afford the transition of all regular armed forces to a contract-based system.

In addition, cost cutting is also possible if the reduction in the number of PJCP, appropriate for the increase in their combat effectiveness, would be followed by a reduction in the number of military officers required for military management.

. Konischeva. Budget 2006: Initial Outlines. Rossyiskaya Gazeta (a business newspaper) No. 13 of 19.04. 05.

Thus, the transition to the new recruitment system is useful in terms of combat effectiveness, and not only affordable but also beneficial. Social benefit for the society from the likely reduction of draft service to 6 months and radical changes in the purpose of such draft are enormous ( for reservists training alone ). Violations of human rights of draftees can be fully prevented provided that they are trained domiciliary under supervision of social organizations rather than with the regular troops.

The current favorable situation should be reinforced by political willingness of government officials and, above all, social activity of the citizens.

V.I. Tsymbal, N.I. Kardashevsky The public health care system: the reforms are over The reforming in the public health care system has become limited to the introduction of a new system for supplying the privileged categories of the population with pharmaceuticals. Public declarations concerning the necessity of reforming this sector are still being heard, but actual steps in this direction are no longer taken. The key and insurmountable obstacles are the institutional costs and the still irresolvable conflict of the demands addressed to the States social policy.

After the years first five months have passed, it can now be stated that the new system for supplying the privileged categories of the population with pharmaceuticals, developed within the framework of the campaign for the monetization of privileges, has begun to function with certain stability. The available quantitative indices that characterize its functioning are as yet rather fragmentary, and therefore it would be difficult to estimate correctly its efficiency. However, delays in providing the needed pharmaceuticals and the dissatisfaction with the new system have become noticeable to only a very slight degree.

The RF Ministry for Public Health Care and Social Development has already come forth with a new idea of creating a system of voluntary pharmaceutical insurance. It has been promised that its participants are to be granted discounts in the amount of 50-70% of the price of pharmaceuticals, if the monthly contribution is 70 roubles. This proposal, quite naturally, met a rather cool response on the part of insurers dealing in voluntary medical insurance, who are very familiar with the problem of decreasing selection, based on morbidity risk parameters, of those willing to be insured under insurance programs with low rates of insurance contributions, and, consequently, of insufficient insurance pool being formed for the insurance coverage of insured persons. For such programs to become viable, it would be necessary either to apply complex and time-consuming methods for calculating insurance tariffs and to promote the participation of low-risk insured persons, etc., or to convert said methods into supplementary mandatory insurance programs.

However, it should not be forgotten that the new system for supplying pharmaceuticals does not represent the entire agenda for the needed reform of public health care in Russia. This agenda was clearly formulated in the Presidents Address of 26 May 2004: more detailed guarantees for free-ofcharge care in the form of standards of medical services; restructuring of the network of budgetfunded institution, including changes in their status and the transition from the budget-of-expenses principle for financing medical institutions to the payments for the services actually provided, with regard to their volume and quality, in accordance with the principles of mandatory medical insurance;

the creation of appropriate incentives for the development of voluntary medical insurance. To achieve these goals, the Ministry for Public Health Care and Social Development developed draft federal laws on the government guarantees of medical care and on mandatory medical insurance, as well as a draft program for restructuring the public health care system. However, these documents have never been coordinated with other ministries: since the autumn of 2004, the Ministry for Public Health Care and Social Development has been focusing its efforts on the monetization of privileges and on reforming the provision of the privileged categories of the population with pharmaceuticals.

Meanwhile, the published directions for the planned reform of the public health care system became subject to strong criticism by a certain part of the medical community and the mass media. The discussion of the reform of the public health care system, initially planned to be held in March, was suspended. The Ministry for Public Health Care and Social Development prepared the report On the priority areas for the development of the public health care system in the Russian Federation in the years 2005-2006, which was then distributed among the RF subjects; however, its further discussion was also suspended.

In the Presidents Address as of 24 April 2005, once again, the concern for the situation in the public health care system was expressed; but it was also noted that the tasks of modernizing the systems of public health care and education were to be implemented with extreme caution, and reorganizing for the sake of reorganizing was not to become the principal goal.

Top officials of the Ministry for Public Health Care and Social Development are still talking about their intentions to further pursue the reforming of the public health care system; top officials of the Ministry of Finance and the Ministry for Economic Development and Trade are also making public declarations as to the necessity of such a reform; however, one gets the impression that the Government is not going to undertake any further real steps. The political credit granted to the Government by the President and his Administration for the reforming of the social sectors has turned out to be too small, having been almost fully exhausted by the implemented monetization of privileges.

Thus, the discussion of the concept for reforming the public health care system has been actively going on in this country for nine years already - since 1997; however, the only practical change has been represented by the introduction of the new system for supplying the privileged categories of the population with pharmaceuticals. So, what is constantly impeding the realization of the intentions, which are being regularly declared in the program documents issued by the federal authorities First of all, it should be stated that certain institutional traps have been formed in the system designed to finance the public health care system (just as in the other social sectors. i.e., education, housing and utilities, etc.):

- any revision of the currently existing guarantees would be associated with high budgetary and political costs; the monetization of privileges has very clearly demonstrated that it is impossible to change the social guarantees without substantial expenditures incurred by the State (payment for the abolition of the previously existing guarantees);

- the deeply rooted informal practice of receiving and paying for social services represents a serious obstacle to the distinguishing between the responsibility of the State and the responsibility of the population in respect to the provision of social services, and to improving the efficiency of using the respective state financing; this practice works efficiently for its subjects, i.e., for those who are providing the services and for many of those who are receiving them, because in the event of the legalization of payment these same services would cost higher to the consumer;

and therefore the costs of curbing this practice would be high;

- changes in the existing mechanisms for state financing would require vast administrative resources, which has also been demonstrated by the campaign for the monetization of privileges.

Thus, the costs of reforming in the public health care system, as well as in other social sectors, are very high. And practically for all the subjects inside a given sector, the ratio between the benefits and costs in the event of the existing situation being maintained is better, or, at least, no worse than in the event of it being changed. This represents the major factor impeding the development of reforms.

Another obstacle is the absence, in Russian society, of a sufficiently wide consensus in respect to the goals and content of the transformations needed. In this connection, one circumstance is noteworthy, namely that the object of the current criticism is not the real but an imagined content of the reforms (see the Table below). We believe that this is a reflection of a more profound conflict in Russian society the incompatibility of the requirements for efficiency and for justness of the reforms, being voiced by the Government, regional authorities, and the population.

Table 1/ Reforms in the public health care system: what is proposed and what is criticized Measures proposed: Measures criticized:

- More specified government guarantees of - Liquidation of free-of-charge medical care free-of-charge medical care (standards) - Closing-down of institutions needed by people - Networks restructuring - Intended privatization - New forms of state organizations In the directions for the necessary reform in the public health care system, which have been declared since 1997, priority has always been given to the efficiency requirement, while in the estimations of those intentions made by the population, sectoral communities and regional bureaucracies to the justness requirement. In the eyes of the population, the reform being promoted does not reestablish the availability of free-of-charge medical services, while the reformers keep silent about the main causes of the insufficiency of funds needed to materialize government guarantees, that is, the reforms implemented in the 1990s and corruption. Sectoral communities believe that the reform does not solve the problem of the unjustly low remuneration for their labor, and view the reform as a threat of maintaining the informal practices of ensuring adequate remuneration. Regional bureaucracies are not supporting reform because, from their point of view, the latter are intended to consolidate the unjust distribution of money and responsibility between the regions and the center. Each of those groups of subjects have their own notions of justness, which are incompatible and mutually contradictory. However, it is important that these notions differ from the declared directions of the reform, where priority is given to the requirements dealing with the sectors efficient functioning and the use of the state funds allocated to the public health care system.

It should also be stated that neither the federal authorities display a uniform standpoint regarding the reform in the public health care system. The notions of different departments as to efficiency also differ. In the past seven years, no stable consensus has ever been achieved, in respect to the content of the suggested transformations in the medical insurance system, between the Ministry of Finance, the Ministry for Economic Development and Trade, the Ministry for Public Health Care and Social Development, and the Presidents Administration.

The experience of the implemented monetization of privileges has provided evidence in favor of the conclusion that the space for a potential compromise between all those multi-vector requirements of efficiency and justness is too narrow, and that this compromise would be very hard to achieve. This is what represents the key obstacle in the way of reforming the public health care system.

The processes capable of promoting the consolidation of interests with regard to reforming would be: the ongoing growth of inequality in the access to medical care, serving as the factor for accumulating the protest potential, and the awareness of an inevitable national catastrophe,. which would happen if no in-depth transformations in the health care system are implemented. Without it being qualitatively changed, the tendency a decrease in the size of Russias population is not to be reversed.

Shishkin S. V.

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