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Now let us turn to the structure of health care expenditures of the federal budget. Prior to 1 of January 2005 these expenditures were in cluded in Chapter 1700 (Health care and physical culture). Starting with 1 January 2005 these expenditures are included in Chapter (Health Care and Sport) in the functional classification of expendi tures of the budgets of Russian Federation. In 2004 the federal budget assigned to the ministries and agencies for these purposes 47.098 bil lion rubbles, including for expenditures of the Health Ministry of the Russian Federation 27.557 billion rubbles or 58.5 per cent of the overall outlays. Out of the overall outlays in the year 2004 on the health care system was assigned 36.988 billion rubbles and for sanitary epidemiological surveillance 6.795 billion rubbles (see Table 5). The Health Ministry of Russian Federation administers the major share of funds assigned in this subsection7 sanitary epidemiological surveil lance (in the year 2004 the Health Ministry administered 91 per cent of those funds, the rest was administered by the Ministry of Railways (8.per cent) and the Medical Centre of the Administration of the President of Russian Federation (0.6 per cent). Over 90 per cent of the funds as signed from the federal budget over the last years for sanitary epidemiological surveillance fell to financing centres of state sanitary epidemiological surveillance.

Table Economic structure of the consolidated budget outlays on maternity hospitals, hospitals, policlinics, obstetric centres, blood transfusion centres, baby houses and emergency stations in the year 2003, in per cent Vologda oblast Russian Federation Remuneration of labour 33.7 35.Wage fund accounting (unified social tax), including tariffs on compulsory health insur 11.8 12.ance against accidents at work and profes sional diseases Procurement of supplies and expendables, 17.0 21.including Medication, dressing materials and other 9.2 12.treatment costs Payment for utility services 17.5 12.Capital investments 10.4 8.Other 9.6 9.TOTAL 100.0 100.Across subsection 1701 Health Care the Health Ministry adminis ters a smaller share of assignments. For example, in the year 2004 the Health Ministry received 57.8 per cent of funds and the remaining share was distributed among 18 other users8. The largest of them were the From 2005 expenditures on sanitary inspection and epidemiological surveillance were not allocated as a subsection of functional classification.

Expenditures on health care of the State Customs Committee, Defence Ministry, Ministry of Internal Affairs, Federal Security Service, RF State committee on Controlling Narcotics Psychotropic Substances Turnover, RF Ministry of Justice were not included into section 1700 of the budgetary classification. Health care expenditures of these agencies are in cluded into section 0500 Low enforcement activity and security of the state and section 0400 National defence. Health care expenditures on the RF Ministry of Civil Defence, Emergency Situations and Liquidation of Consequences of Acts of God are included in Russian Academy of Medical Sciences (19.7 per cent), the Federal Agency of Medical and Biological and Extreme Problems under the Health Ministry of Russian Federation (7.14 per cent), the Medical Cen tre of the Administration of the President of the Russian Federation (4.92 per cent), the Ministry of Railways (3.49 per cent), the Russian Academy of Sciences (1.44 per cent), The Ministry of Ownership Rela tions of the Russian Federation (1.05 per cent). The rest received less than 1 per cent of the assignments.

As can be seen in Table 6 7078 per cent of the federal budget out lays in subsection 1701 Health Care lately fell at the target line De partmental expenditure on health, first of all, on the maintenance costs of hospitals, maternity homes, clinics, sanatoria and policlinics (55per cent). Remaining 1016 per cent of expenditures of this line consti tuted target expenditures on provision of expensive types of medical services delivered to the citizens in the Russian Federation.

Target program financing in 20022004 received 718 per cent of allocations. For example, in the year 2004 four federal target programs were carried out. However, the main share of funds was directed at the realization of the federal target program Prevention and fight against diseases of the social character (20022006). Six per cent of the over all public outlays on the health care system were appropriated under the federal budget on the realization of that program.

Table Distribution of the federal budget expenditures on the health care system according to the lines of budget classification Code according to budget classifica- 2001 2002 2003 tion 1 2 3 4 5 6 7 8 Health care system, in 17 1 18,700,610 26,595,423 31,421,025 36,987,thousands rubbles Including, in per cent:

Funding of the Committee of Veterans of department 17 1 398 0.04 0.05 0.06 0.of special risk of RF section 1300 Prevention of liquidation of the consequences of emergency situations and acts of God. 1 2 3 4 5 6 7 8 Hospitals, maternity hospitals, clinics, military hospi- 17 1 398 300 0.04 0.04 0.06 0.tals Other public health institu17 1 398 300 0.00 0.00 0.00 0.tions and undertakings Departmental expenditure 17 1 430 68.76 71.71 75.06 77.on the health care system Hospitals, maternity hospi17 1 430 300 48.44 46.19 48.98 50.tals, clinics Policlinics, outpatient 17 1 430 301 3.42 2.93 3.18 3.clinics, diagnostic centres Blood transfusion centres 17 1 430 303 0.05 0.06 0.05 0.Sanatoria for consumptives 17 1 430 306 1.37 1.52 1.47 1.Sanatoria for children and 17 1 430 307 2.80 2.70 2.61 2.teenagers Sanatoria, holiday centres 17 1 430 308 0.95 1.00 1.05 1.and rest homes Other public health institu17 1 430 310 1.81 2.40 2.74 2.tions and undertakings Target expenditure on providing expensive types of 17 1 430 315 9.68 14.91 14.96 15.medical services to the citizens of Russian federation Costs on accounts payable 17 1 430 462 0.24 0.00 0.00 0.for past years Other expenditure on fed17 1 515 31.20 20.22 0.00 15.eral target Other expenditures that are not relevant to other type of 17 1 515 397 31.20 20.22 17.90 15.costs Target federal program Children of Russia 17 1 640 0.00 0.34 17.90 0.(20012002) Subprogram Children17 1 640 726 0.00 0.00 0.51 0.invalids Program Safe motherhood 17 1 640 729 0.00 0.34 0.00 0.(20012002) Subprogram "Children17 1 640 733 0.00 0.00 0.02 0.orphans" Subprogram Health child 17 1 640 820 0.00 0.00 0.00 0.1 2 3 4 5 6 7 8 Federal target program Prevention and fight 17 1 649 0.00 7.30 0.01 6.against social character diseases (20022006)" Subprogram "Diabetes" 17 1 649 737 0.00 2.35 0.49 1.Subprogram "Emergency measures of campaign 17 1 649 738 0.00 4.20 6.16 3.against tuberculoses in Russia" Subprogram "Vaccinal 17 1 649 739 0.00 0.06 1.97 0.prevention" Subprogram "Emergency measures for preventing 17 1 649 740 0.00 0.69 3.55 0.spreading in Russia of AIDS" Subprogram "On measures for developing delivery of oncological services to the 17 1 649 796 0.00 0.00 0.00 0.population of Russian Federation" Subprogram "Modernization of all-Russia Service of 17 1 649 804 0.00 0.00 0,05 0,catastrophe medicine" Subprogram "On measures for preventing further spread- 17 1 649 808 0.00 0.00 0.00 0.ing of venereal diseases" Federal target program "Prevention and treatment 17 1 650 0.00 0.15 0.39 0.of arterial hypertension in Russian Federation" Other costs not ascribed to 17 1 650 397 0.00 0.15 0.20 0.other types of expenditure Federal target program Complex measures against 17 1 651 0.00 0.24 0.13 0.drugs and their illegal turnover for the years" Other costs not ascribed to 17 1 651 397 0.00 0.24 0.13 0.other types of expenditure Sanitary-epidemiological 17 2 2,653,180 4,052,313 5,463,025 6,795,surveillance Including, in per cent:

1 2 3 4 5 6 7 8 Departmental expenditure on sanitary-epidemiological 17 2 432 94.61 98.94 99.13 99.surveillance Hospitals, maternity hospi17 2 432 300 1.52 1.75 1.70 1.tals, clinics Policlinics, outpatient 17 2 432 301 0.41 0.40 0.38 0.clinics, diagnostic centres Disinfective centres 17 2 432 309 1.05 0.99 0.35 0.Other public health institu17 2 432 310 0.12 0.00 0.00 0.tions and undertakings Centres of state sanitaryepidemiological surveil- 17 2 432 311 89.94 94.65 95.51 95.lance Measures to fight epidem17 2 432 312 1.58 1.04 1.13 0.ics Other institutions and undertakings in the sphere of 17 2 432 313 0.00 0.11 0.06 0.sanitary-epidemiological surveillance Other costs not assigned to 17 2 515 5.39 1.06 0.87 0.other target lines Other costs not assigned to 17 2 515 397 5.39 1.06 0.87 0.other types of expenditure Source: Federal Law On the Federal Budget for the years 2001, 2002, 2003, 2004.

1.1.2. Characteristics of the public health institutions network Russian public health system represents an extensive network of therapeutic and preventive care institutions, the vast majority of which are public and local institutions, which, from the point of view of budg etary legislation, are qualified as budgetary institutions. Main types of medical institutions in the Russian public health system are:

- Obstetric centres.

- Outpatient policlinic institutions, outpatient clinics, policlinics, pe diatric policlinic, dentists clinics, diagnostic centres.

- Stations (departments) of emergency medical care.

- Blood transfusion centres.

- Hospital type institutions: general hospitals, district, rural regional, urban, pediatric urban, regional, republican; specialized hospitals:

restorative treatment, infectious diseases, ophthalmologic, mental, tuberculosis, narcological, etc.; maternity homes; hospitals of nurs ing care; medic sanitary departments.

- Dispensaries: TB, oncological, dermatovenerologic, psychoneu rologic, narcological, medical exercises, etc.

- Clinics of higher medical educational institutions and medical scien tific organizations.

- Sanatorium and balneology institutions.

- Institutions of sanitary epidemiological surveillance.

- Public health system also comprises institutions of a special type:

hospitals for lepers, hospices, centres for preventive care and fight against AIDS, etc.

Table Public health institutions network in Total Hospital-type institutions 8,Including:

Regional Urban 1,Hospitals of acute care Hospitals for the war veterans Central regional hospitals 1,Regional District 3,Maternity homes Centres for nursing care Dispensaries 1,Outpatient and policlinic institutions 14,Including:

Independent 6,Forming part of hospital-policlinic associations 8,Dental policlinics Stations of emergency medical care 3,Source: the Health Ministry and Social Development data.

Out of 2,296 unrelated institutions that were under the jurisdiction of principle users of the federal budgetary funds as of 1 January 2004, thirty seven per cent were public health institutions. For example, only 168 out of 685 hospitals and 54 out of 230 rest homes and sanatoria, which were in federal jurisdiction, were in reality in the jurisdiction of the Health Ministry in 2003. As can be seen in the Table 8 in 2003 twenty three federal government bodies had unrelated to their main type of activity public health institutions.

Table Number of unrelated public health institutions, which are in jurisdiction of the federal government bodies (as of 1 January 2004) Number of unrelated institutions in jurisdiction of principle users of the budgetary funds Names of principle federal budgetary funds users Including public Total health institutions 1 2 Ministry of Railways of the Russian Federa802 tion Federal Agency of Medical and Biological and Extreme Issues under the Health Minis- 160 try of Russian Federation Ministry of Internal Affairs of Russian Fed282 eration Russian Academy of Sciences 48 Ministry of Education of Russian Federation 20 Ministry of Finance of Russian Federation 20 Administration of the President of Russian 40 Federation Medical Centre of the Administration of the 45 President of Russian Federation Ministry of Labour and social Development 54 of Russian Federation Siberian Department of Russian Academy 33 of Sciences Ministry of Taxes and Levies of Russian 8 Federation Moscow State University 9 RF Federal Service of Railway Troops 8 1 2 Urals Department of Russian Academy of 8 Sciences Ministry of Energy of Russian Federation 92 Ministry of Transport of Russian Federation 84 State Customs Committee of Russian Fed5 eration Ministry of Foreign Affairs of Russian Fed11 eration Ministry of Ownership Relations of Russian 1 Federation Russian Agency on Patents and Trade 2 Marks Russian Academy of Agricultural Sciences 6 State Committee of Russian Federation on Control of Drugs and Psychotropic Sub- 8 stances Turnover Far East Department of Russian Academy of 4 Sciences Source: Ministry of Finance of RF.

Major share of hospitals, which are in the federal jurisdiction, were created in order to develop corresponding directions of science and provide highly technology intensive specialized medical services to the population in the Russian Federation. At present, practically all these institutions are in jurisdiction of the Federal Agency of Health and the Russian Academy of Medical Sciences. In terms accepted in interna tional practice, federal treatment and therapeutic and preventive care institutions belong to that sector of medical services, which supple ments medical sanitary services and secondary medical services (which is provided mainly in local hospitals). Features of tertiary medical service consist in high level of specialization, complexity of used medi cal technologies and cost intensive treatment.

In Russia tertiary medical services provide both federal therapeutic and preventive care institutions and institutions, which are in jurisdiction of the constituent members of RF (republican and regional clinic hospi tals, specialized clinics, etc.). Federal institutions deliver the main bulk of tertiary medical services. Major share of medical technologies of ter tiary level is in their possession. Thus, a net of treatment and therapeu tic and preventive care institutions, which are in jurisdiction of the RF Health Ministry and the Russian Academy of Sciences, represent ac cording to their genesis and functional application a system of delivery of highly technological specialized medical services to all population of the country, i.e. a component of multilevel national system of medical service delivery.

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