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Medical institutions, which are in jurisdiction of other federal agen cies deliver medical services of all three levels (first medical and sani tary, secondary and part of tertiary medical service) to the workers of corresponding bodies and subordinate to them organizations. Remain ing (except the Federal Agency on Health care and the Russian Acad emy of Medical Sciences) federal bodies, which have their own medical institutions9, can be divided into two groups. One group comprise agencies, which medical institutions deliver in addition to common medical services to the employees also specialized medical services, which are described by their professional activity. We are talking about medical examinations, which employees must pass before going to work or about regular prophylactic medical examinations or treatment of professional diseases, etc. This group of agencies comprise: Federal Agency of Railways, Federal Agency of Air Transport, Federal Service of Medical and Biological Extreme Issues.

The need to provide employees of these agencies with specialized medical services explains the creation of corresponding public health systems in their jurisdiction. However, it does not justify the need for these institutions to provide medical services exclusively by way of creation of such systems. Territorial medical institutions can deliver corresponding medical services in the same way.

Second group comprise agencies, which have their own therapeutic and preventive care institutions and this fact is explained by historic fea tures inherent to the Soviet system of public health and lobby capacity of separated agencies and correspondingly it is not explained by any medical factors. These medical institutions were created during the So viet era in order to deliver medical services to definite contingents of party and government officials, employees of a number of industries and organizations and members of their families. Prior to the year 1992, the party and state elite received medical services in medical institu Here we do not consider medical institutions which are in jurisdiction of the Defence Ministry and law enforcement agencies because specifics of their activity requires a sepa rate detailed analysis, which goes beyond this report.

tions, which were in jurisdiction of the USSR Health Ministry Fourth De partment and in jurisdiction of the RFSFR Health Ministry Fourth De partment. Part of these medical institutions was transferred under the jurisdiction of the Chancellery of the President of the Russian Federa tion in 1992. These medical institutions continue delivering medical ser vices to senior staff of the executive branch of power, members of the Federal Assembly and its staff members. In addition to the Chancellery of the President of the Russian Federation the Ministry of Foreign Af fairs, Federal Agency on Energy, the Ministry of Finance, the Ministry of Economic Development and Trade, the Federal Services of taxes and Levies and the Russian Academy of Sciences comprise this group.

Existence of departmental medical institutions network means that from the public purse additional social privileges are provided to sepa rate groups of people, who are not socially unprotected. Such situation leads to dissipation of financial resources of the public health system. In order to overcome unjustified dubbing of medical institutions in the public sector, secure adherence to principles of social justice and ef fective administering of public financial and material resources, it is ex pedient to turn to normative system of funding public health system as well as to restructure the departmental medical network. In case de partmental medical institution is financed on a per capita basis and has possibilities to deliver medical services not only to that agency staff members, then in case of the lack of additional financial takings from the agency (for capital repairs, purchase of equipment) it becomes ir relevant to such medical institution to what patients deliver medical ser vices. The agency retains only administrative leverages to secure medi cal privileges to its employees.

The utter majority of medical institutions remain in jurisdiction of re gional and local health service officials. Out of the overall number of hospital type institutions and therapeutic and preventive care institu tions over 90 per cent remain in the sub federal jurisdiction. For exam ple, according to the data of the Health Ministry and Social Develop ment in the year 2003 out of 8,425 hospital type institutions in the fed eral jurisdiction remained only 232. Out of 6,370 independent outpa tient and policlinic institutions in the federal jurisdiction remained only 39. Out of 8,609 outpatient and policlinic institutions forming part of hospital policlinic associations in the federal jurisdiction remained 196.

In comparison with European countries and even with the CIS coun tries Russias public health system has higher indices of doctors and hospital beds per 10,000 persons despite the fact that during the 1990s these indices went down10. For example, the number of hospital beds per 10,000 persons in Russia constituted in the year 2003 111.64, whereas in the CIS countries only 90.9, and in the European Union 60.0 (2002)11. The number of doctors per 10,000 persons in Russia is also higher than in the European countries and constitute correspond ingly 48.0 against 35.8.

At the same time, the resource potential of Russian health care sys tem is being used with low efficiency. During the whole transition pe riod, the overall health of Russias population deteriorated. Mortality and morbidity indicators crept up steadily. In the year 1990 there were nearly 6,156 incidences of first diagnosed disease per 10,000 persons.

In the year 1999 this number grew up to 7,100 incidences, and in the year 2003 this number came to 7,537 incidences per 10,000 persons.

The structure of health service is dominated by the hospital treat ment, which in comparison with the majority of foreign countries has higher average period of inpatient treatment. For example, according to WHO Regional Office for Europe health for all database average period of inpatient treatment in Russia constituted in the year 2002 14.5 days, meanwhile in the European Union countries 9.8 days. At the same time, according to evaluations of Russias Health Ministry between and 50 per cent of inpatient treatment cases in Russia are unjustified from therapeutic and economic points of view12.

ROSNO Health Insurance, one of major health insurance compa nies, in the year 2003 carried out in depth study of the quality and effi For example, the number of paramedical staff per 10,000 population dropped by about 12 per cent in comparison with 1990 level. The number of hospital beds per 10,000 popu lation declined much more drastically in 2002 this number constituted only about 83 per cent of 1990 level. The number of hospital type institutions was declining from 1990 and in 2003 it constituted 8,425. Only the number of doctors was growing: in 2002 the number of doctors by 6 per cent surpassed the level of 1990 and constituted about 48 doctors per 10,000 population.

Source: WHO Regional Office for Europe health for all database See Shevchenko Yu.L. On reform results and objectives health care and medical sci ence development in the Russian Federation for 20002004 and for the period till 2010.

Report of the Health Ministry of Russia. Moscow, Health Ministry of Russia, 15 March 2000.

ciency of medical service delivery to insured population. This study demonstrated a wide spread unjustified inpatient treatments at the level of 24 per cent of the overall number of inpatient treatments. During au dits of invoices for medical service payment submitted by the hospitals, this health insurance company discovered drawbacks in the organiza tion of medical service delivery in ten per cent of cases of hospital treatment. Prolonged periods of hospital treatment and inpatient treat ment without medical justification are among the main reasons for medical service inefficiency.

Prolonged terms of inpatient treatment in many respects is caused by repeated analysis taken at the hospitals due to distrust of the analy sis results provided by the outpatient policlinic sector, which is equipped at the inferior level. Research conducted by UNIKON and SESI in six Russian regions in the year 2001 demonstrated that only due to repeated medical tests taken at first in outpatient policlinic institu tions and then in the hospitals the cost of medical services grows up by 25 per cent13.

Due to this fact transition of part of medical resources to the outpa tient policlinic sector and development of hospital substitution tech nologies of treatment can become one of the way for improving effi ciency of resource management in the public health system. Program of government guarantees to citizens rights to free medical assistance annually approved by the President of the Russian Federation is de signed to achieve that goal. This program envisages a reduction in the current volumes of provided treatment in the hospitals down by 15per cent and providing treatment of a number of diseases in day hospi tals and in policlinics. However, restructuring of the public health sys tem did not take place over last years due to the lack of serious efforts on the part of the federal authorities directed at stimulation of realiza tion of the adopted program by the constituent members of the Russian Federation.

Comparative research of the indicators of the public health system in the regional context conducted in the year 2003 revealed a certain in consistence between supply of medical services, expressed in per Final report on review of budgetary expenditures on health care system from consor tium ZAO YUNIKOM/MS Consulting group and Centre of economic and social research.

Moscow, 2001.

capita resource indicators, and demand for health care services (popu lation morbidity, etc.). Per capita resource potential is practically the same on the whole territory of the Russian Federation (number of doc tors, paramedical personnel, capacity of outpatient policlinic institu tions, number of hospital beds). There is no direct link between morbid ity and the number of personnel, capacity of outpatient policlinic insti tutions and similar indicators. This points out to the fact that resource indicators and norms still remain the basis for financing the medical safety net. These indicators and norms do not take into account demo graphic and social features of the regions and structure of diseases.

1.1.3. Conclusions The system of public health care financing is based on budgetary and insurance sources. Public health care institutions receive between 50 and 60 per cent of their funds in the form of budget financing to cover general maintenance costs, between 30 and 50 per cent of funds from compulsory health insurance system as payment for the amount of delivered medical assistance, and between 5 and 15 per cent of funds as proceeds for providing paid services to the population. In spite of the fact that the share of compulsory health insurance funds in the RF con solidated budget expenditure on medical assistance is growing, the ob jective that the compulsory health insurance system covers all expendi tures on medical assistance has not been achieved. Insufficient volume of funds available to medical institutions from compulsory health insur ance funds is one of the reasons why the imbalance between the de clared in the Programme government medical guarantees and the vol ume of medical assistance delivered in life.

Public funding of the medical institutions is carried out on estimate regardless of their performance results. However, compulsory health care insurance funding is directly linked with the volumes of delivered medical assistance. This fact reduces the effect, which can be received from the new methods of payment existing in the compulsory health insurance system, and contributes to the reproduction of hang the expense (so called zatratny metod) economic approach.

Major share of funds for the health care system are appropriated under regional and local budgets. The Federations expenditure obliga tions come to finance highly specialized medical institutions, target programs and levelling of financial capacities of compulsory health in surance territorial funds. Correspondingly nearly 90 per cent of fund appropriated for the health care system under the RF consolidated budget during 19952003 were appropriations under the consolidated budgets of the constituent members of the Russian Federation.

Over 90 per cent of the overall number of hospital type and outpa tient and policlinic institutions are in the subfederal level jurisdiction. At the same time, per capita resource potential (number of doctors, medical staff, capacity of the out patient and policlinic institutions, number of hospital beds) is practically constant all over the territory of the Russian Federation. This means that the regional features are prac tically not taken into consideration in forming and financing health care institutions network.

Extensive health care institutions network in the jurisdiction of minis tries and agencies pose a problem in the organization of the federal public network. This fact leads to an inefficient use of funds, nonopera tional management and reduction in medical assistance availability.

An extensive network of therapeutic and preventive care institutions in the Russian Federation possesses a considerable and in many re spects excessive resource potential. Hospital treatment dominates in the structure of medical services. Periods of inpatient treatment are much longer than in the majority of foreign countries. Besides, ineffi cient use of available resource is evident.

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