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3.6. Social sphere

3.6.1. Health service

As compared against the 1990s, certain improvements have occurred in the dynamic indicators of infant and maternity mortality, as well as of morbidity rate of some diseases, e. g. tuberculoses, venereal and/or infectious diseases. These developments, however, were taking place in the context of rather alarming overall morbidity/mortality trends during the past decade: in the period between 1990 – 2002, the total population morbidity rate showed about 12 (twelve) per cent increase, mortality – 45 (forty five) per cent. Which was caused not only by the notorious stress factors of the period in transition but by deficiencies of the national health service itself as well: significantly reduced respective prophylactic and educational activities among population, inefficient spending of the budget monies allocated for the health service. Population health condition as well as the state of the whole Russian health system itself can be best described by most serious problems to solve which does require serious changes in the state and society attitudes with regard to the existing population health protection methods.

Central to the problems of the Russian health system is the fact that the state declared guarantees of providing medical service to population as well as their respective mechanisms which were developed and formulated as far back as in the 30s of the past century, under contemporary conditions, already cannot not be leading to fair and efficient health care of the population within the affordable budget means.

Socialism has left to us exceptionally wide state obligations with regard to providing free medical servicing to the population. But the Soviet healthcare system was then targeted to mass use of relatively simple and rather inexpensive medical technologies. Progressive developments in the area of medical sciences and pharmaceutics have considerably expanded our abilities in treating many diseases having thus stimulated demand of the population for higher quality medical services. However, the state is no longer capable of meeting such needs through providing free medical services to all our citizens either now or in any feasible future.

Similar to many other countries, we are now facing a clear-cut dilemma: greater financing of the health service due to still higher taxation or better targeted guarantees and more efficient use of the available resources A specific peculiarity of our situation is the crying gap between the guarantees declared and their financial support, on the one hand, and the extent to which this gap is to be compensated by own spending of the country’s population, on the other. Impossibility to provide the required medical servicing free to all and everybody is inevitably leading to lesser availability of most good quality medical services for broad masses of the population and a growing degree of paid medical services accompanied with expanding the so called informal payments. And it is usually the poorer population strata that suffer most from such practice. Different social groups are highly unequal in the ability to get good-quality medical aid. Any references to insufficiency of the budget financing or to impracticability of the populistically declared rules for free medical servicing the population are nothing but attempts of healthcare officers to justify themselves for falling quality of medical services which citizens are expected to get with no additional payments. While at the same time the already available means are often spent very and very inefficiently – they are targeted to support unnecessarily excessive number of beds in stationary in-patient units to the obvious detriment of prophylactics and/or out-patients treatment.

An attempt was made in the early 1990s to reform the Russian health service system: there took place some control and management decentralization, compulsory medical insurance system (CMI) was introduced, federal and territorial programs of state guarantees for population medical servicing were developed each year to be officially confirmed and/or approved. These changes were eventually aimed both at improving the economic stability of the field and greater efficiency of its resource potential through respective restructuring the system of healthcare servicing, including new and more advanced methods of financing medical offices. However, this reforming process turned out to be somehow incomplete which, quite unsurprisingly, led to rather ambiguous results.

The set up budget-insurance financing system is exceptionally cumbersome and, accordingly, very inefficient. The CMI system has at its disposal but 1/3rd of the state healthcare financing (instead of the needed 2/3rds at least). This is mainly because the RF subjects, local self-government bodies, prefer not to pay due premiums to the CMI system for non-employed population but rather, like in the good earlier times, to finance their local medical institutions themselves. In the result, these get financial support to cover spending on one and the same activity from two channels simultaneously: budget financing and CMI. The former source supports local medical institutions regardless the respective volumes and/or quality of the medical servicing, payment methods of the latter did tie up financing with the volume/quality of the medical servicing, yet their stimulative effects were to a large extent devalued by the simple fact that the CMI funds compensated but part of the required medical institutions’ expenses. In fact, the existing eclectic combination of insurance and budget financing elements is not stimulating any higher efficiency in the use of the available resources but, on the contrary, rather results in simple reproduction of the traditional expenditure-intensive economic activities.

The insurance principles of population healthcare financing turned out to be practically totally neglected in the financing system really functioning under the Compulsory Medical Insurance name. As of now, the CMI system has already drained itself out and indeed needs either to be fully replaced or at least radically modernized.

Last year, the need in further developing medical insurance did become the subject of acute attention in the higher bodies of power, including even mentioning of this set of problems in the annual Address of the Russian President to the RF Federal Assembly and then, in March 2003, a special meeting of the RF State Council was devoted exclusively to this very area of activity. Following which the RF Government passed Resolution, # 158, dated 17, 03, 2003, On Additional Financing the Expenditures as Connected with Targeted Medical Services to Non-Employed Pensioners in the Year of 2003. Accordingly, beginning from the May month of that year, a number of the so called pilot regions started practically testing the new system of compulsory medical insurance payments of the non-employed population combined with the RF Pension Fund’s participation.

These steps were caused primarily by a steadily growing realization of the need in adequate modernizing of the CMI system, set up in the first half of the 1990s, which was then complemented by the respective activities of the RF Pension Fund which had offered a basically new approach for practical solving chronically degrading problems.

Lack of sufficiently precise and clear-cut rules to make due insurance payments for the country’s non-employed population out of the respective local and regional budgets being the key problem of the existing CMI system, misbalance between the basic CMI program and the CMI accumulated financial funds but only still further aggravates the problem of overall disbalancing between the state healthcare financing and the cost of practical implementing the federal program of state guarantees with regard to providing free medical services to RF citizens.

Methods and approaches to radically change the existing situation have been intensively dwelt on in the RF Government practically during all the recent years. In particular, considerable attention was devoted to detailed discussion of proposals to set up a compulsory medical and insurance system in which the federal budget shall also co-participate with regard to the respective payments for the non-employed population. Yet, no decisions followed, at that mainly because of the RF Finance Ministry’s attitude. While outwardly supporting the practical need in medical insurance as well in modernizing the existing CMI system, this ministry, for such or other reasons, intentionally delayed taking any definite decisions in this area. Hence, the changes under discussion brought no any tangible positive results. Thus, the unbalanced CMI program, a rather eclectic combination of the medical budget and insurance financing principles, quite inefficient budget healthcare spending do not seem to be sufficient priority problems for the RF Finance Ministry if viewed from its own purely departmental interests. On the contrary, the CMI system modernization versions under discussion could mean for the Finance Ministry an additional expenditure item in the federal budget – state financing CMI payments for the country’s non-employed population. Control over the targeted spending within the CMI system seems to the Finance Ministry less efficient than if it were done by the budget framework itself while practical participation of non-state insurers in the system is viewed rather as a prerequisite stimulating their getting richer at the expense of the state than for stimulating the country’s medical healthcare system. Probably, that is exactly why the RF Finance Ministry took a long-time waiting attitude with regard to the said CMI reforming.

Beginning from the second half of the year 2002, the RF Pension Fund became much more active in insisting on the need to reform the existing CMI system. It was the Fund that initiated discussing these proposals at the March 2003meetings of the RF State Council and the RF Government. The gist of the new Pension Fund, as proposed and RF Government approved mechanism, basically is this: the RF Pension Fund through its own funds makes the said additional payments to the CMI for the non-employed pensioners. In the year of 2003, the RF Pension Fund was legally permitted to spend something about 1.5billion roubles on such stated goals.

The RF Pension Fund takes part in financing insurance payments made for those non-employed pensioners in the Russian Federation territories who have duly signed the respective agreements with the RF Pension Fund, the RF Finance Ministry and the Federal CMI Fund on financing such payments. The amount of the said insurance payments, as made by the authorized RF executive power bodies which have legally concluded such agreements, shall not be less than that of the RF Pension Fund. By the end of the year, the number of such pilot regions where this new mechanism had already been practically tested, reached the figure of 18 (eighteen).

The role of the RF Pension Fund in the financing mechanism suggested is by no means limited by allocation of the said funding. The Pension Fund demanded that the pilot regions coordinate with it the respective CMI territorial indicators, legally approve the medical and economic normatives to become the basis for medical aid provided to pensioners by medical institutions, use sufficiently uniform methods of financing various in-and-out-patient medical institutions as well as providing the Pension Fund with the right to make selective control over activities of the insurers and medical institutions within the respective CMI territorial system. The RF Pension Fund also moved forward an initiative to regularly keep the said pensioners informed as regards the real costs of factual medical services provided to each of them by the end of the current year.

Indeed, this experiment is a significant step forward on the way to the CMI modernization progress which will, most probably, stimulate certain positive effects on the growth of its efficiency in the said pilot regions. Yet, the mechanisms being tested so far seem rather insufficient for solving the basic CMI problems. But this will undoubtedly require much more fundamental changes in the functions of both the insurers’ and those insured which, in its turn, will require adoption of a new and, accordingly, a more modern and adequate law on compulsory medical insurance.

In the period from the years of 2002to 2003, the respective bill was being developed in the RF Government under the undoubtedly dominant role of the RF Ministry of Economic Development. The resultant On Compulsory Medical Insurance in the Russian Federation draft law was duly considered at the RF Government meeting in the first reading on January 15, 2004, and was, on the whole, approved.

The most complicated in its preparation was how to overcome the problem of the lack of sufficiently precise and clear rules for paying the due compulsory medical insurance premiums for the non-employed population. The more so since making the RF subjects pay certain amounts of such premiums from their own budgets obviously contradicts our understanding of the principles of federalism. This would be viewed as an attempt of the federal bodies to impose on its subjects additional financial obligations which in fact should be covered through certain sources from the federal budget itself. Yet, in reality, such sources of the federal budget permit financing but only a lesser part of the said CMI premiums and by no means the whole amounts. Analysis of various versions or formats and finding the necessary compromises became the major factor of such a lengthy delay in preparing the new bill.

Finally, a certain mechanism of concluding agreements on insuring the country’s non-employed population between the RF Finance Ministry, the RF Ministry of Health, the CMI Federal Fund, the RF Pension Fund, the executive bodies of the RF subjects and the CMI territorial funds has been developed. Its main contents shall consist of obligations of the parties in co-financing due payments for the non-employed population duly transferred to the respective CMI territorial funds and the federal budget, in its turn, shall provide the necessary funds for such co-financing.

Those RF subjects which have not concluded the said agreement shall independently determine the scheme of insuring the non-employed population as well as that for providing and paying for medical services as stipulated for in the respective CMI territorial program.

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