ISSUE 1-2005
Томаш Урбанец Александр Куранов
Zdenka Vagnerova Pavel Vitek
Alexander Lengauer Ярослав Шимов Ярослав Шимов  & Павел Вензера
Ярослав Шимов
Зденка Вагнерова Зденка Вагнерова
Владимир Воронов

Disclaimer: The views and opinions expressed in the articles and/or discussions are those of the respective authors and do not necessarily reflect the official views or positions of the publisher.

By Zdenka Vagnerova | Student, Charles University, the Czech Republic | Issue 1, 2005

State of Health in Russia And a Reform of Health Service
     In 1991 considerable interventions in the health care system occurred in Russia as an effect of the political and economical changes. Centrally governed vertical system of health service fell apart which, along with decreasing amount of finance from the state budget, gradually led to a decline of public health care and deepening of problems given by historical inheritance of former Soviet Union.
     Principal changes in health care system were executed very quickly. Already on June 28, 1991 the crucial law „On health insurance of the citizens of the RSFSR“ was passed and changed the system of financing the health service. During the next years, tens of federally effective laws and more than 300 sub-federal laws were accepted. An institution of mandatory health insurance was established, conditions for private-sector activities were created and regions were given extensive powers in governing health care in their territories.
     Already the conception of the health care system reform was problematic. It could be characterized as an unproved combination of various elements taken from other health care systems. This together with precipitancy in passing laws and rapidity in executing the reform didn’t allow a really complex reform of health care system.
     The total underfunding of Russian health care could be indicated as the crucial problem. Like most of the social sectors the health service was impacted by a significant lack of finance caused by unfavorable economic situation in Russian Federation. Expenditures designated for health system (public budget + health insurance money) are in the range of 2.2 – 3% of GDP1 since the 90’s. World Health Organization considers 5% of GDP a minimal amount. For comparison, European countries spend about 6-7% of their GDP on health care. In respect to regional and climatic specifics of RF the percentage should be even higher.
     Insufficient budgetary resources of health care system lead to an incapability of the state to fully meet its obligations given by the articles of the Constitution of Health Protection (article No. 7), the guaranty of free medical help offered in state and municipal medical facilities at the expenses of public budgets and health insurance (article no. 41) and the Right to a Healthy Environment (article no.42).2
     As medical facilities need finances for their operation, most of the RF inhabitants are forced to pay even for the health care guaranteed as free of charge by the state. The term 'free health care' is rather declarative because the estimation says that 20-25% of money given for the health care comes from private payments.
     Therefore the problem is not only the quality of the offered health care but also its accessibility for low-income classes and distant region inhabitants.

State of health of Russian population
     General improvement of inhabitant’s state of health is one of the main priorities of the Russian government3, nevertheless the indicators of the state of health are getting worse or stagnate at best since 1989.
Among the main problems are:

   •   Increasing death rate in all age groups (Average death rate – all ages per 100 000)

Russian Federation
EU average
  Male Female Male Female
1980 1872,86 959,07 1233,48 753,83
1990 1689,3 892,16 1110,88 646,03
2002 2198,77 1054,33 896,08 530,39
Source: Database European Health for All (HFA-DB), WHO/Europe

The most serious problem is the extremely high mortality of men in working age (15-59) which increased two times in comparison with the 80’s.4

   •   Decreasing life expectancy (in years)

Russian Federation
EU average
  Male Female Male Female
1980 61,44 73 70,39 77,36
1990 63,79 74,42 71,95 79,06
2002 58,88 72,03 74,96 81,41
Source: Database European Health for All (HFA-DB), WHO/Europe

   •   High number of infant deaths in comparison with advanced countries. (Infant Deaths per 1000 Live Births)5
Russian Federation
EU average
1980 22,02 13,12
1990 17,64 8,85
2002 13,18 4,94
Source: Database European Health for All (HFA-DB), WHO/Europe

  • Increasing number of people attacked by infective diseases (TBC - 7.7 per cent of inhabitants, HIV/AIDS - very dynamic growth of new occurrences - 5.000-10.000 for a month, hepatitis - 5 million (type B) and 2 mil. (type C)). As regards the sexually contagious diseases, the number of occurrences increased 44 times (from 5.3 cases per 100,000 of the population in 1990 to 234.8 in 2000)

     There is still a question whether increasing the amount of money flow for the health care would lead to a distinctive improvement of inhabitants? state of health. According to many studies one of the main causes of the worsened health indicators are above all poverty, transformational stress and a poor lifestyle (alcoholism, smoking cigarettes)6. Worsening of state of health is therefore not only a consequence of dropping quality and accessibility of health care, it is also a result of a general change of socio-economic conditions and a wrong lifestyle of Russian population.

Heritage of the socialistic health care
     In the years after the World War II Soviet health care achieved considerable success in increasing life expectancy. In 1938 this had been very low - just 43 years. In 1965 life expectancy rose to 64.3 years for men and 73.4 for women which were the same numbers as West European countries could show. A consistent fight against infectious diseases was the reason. Within the 'Semashko' model 1918 many precautions related to a control of epidemic infectious diseases were accepted. Thanks to a general improvement of living and hygienic conditions, massive construction of medical facilities and employing high number of people in health care, a progress in population's state of health followed. Yet this extensive solution contained a snag; medical staff wasn't educated appropriately and hospitals lacked equipment7. Since the 60’s no further improvement in life expectancy occurred because the system based on these fundamentals wasn't able to react to new challenges carried by civilizational diseases.

Among the most serious problems of Soviet health care was:
1. Inability to shift from the system based on epidemic diseases control and prevention to civilizational diseases treatment
2. Insufficient financing of health care (3.5% of GNP in the late the 80’s)
3. Low effectiveness of the system / medical facilities and staff paid according to the number of beds and patients, not according to the success of treatment
4. Inability to react to specific demands given by regional diversity
5. Low motivation of staff, too limited specialization of surgeons; the result was that patient had to be examined by many specialists in order to get a complete diagnose. 8

     Paternalistic approach of the state had a negative impact on peoples' attitude to their health. Until today they don't realize their individual responsibility for their health and the importance of a healthy lifestyle.

The 90’s - reforming of the health service - establishing health insurance system
     Laws reforming health system include two key principles - market mechanisms and decentralization.
     The authors of the reforms hoped that establishing market mechanisms and transition to the health insurance system would make the whole system not only more effective but also of higher quality as the services provided were considered. There would be a competition among medical facilities leading to providing services of higher quality, health insurance companies would assure effective management with finances and the rights of a patient, as a 'health service customer', would be strengthened.
     Besides market mechanism there was inbuilt distinctive element of decentralization. Regions were given considerable autonomy in decision-making and administering health system in their territories. State kept just hygienic service that remained vertically administered. The process of decentralization generally raises the effectiveness of decision-making and distributing finances because people have better control over elected deputies' decisions. Yet nor this projection wasn't fulfilled with regard to huge socio-economic divergence among individual regions and inconsistent, inaccurate distribution of rights and responsibilities throughout single levels of governments and funds.

     In the early 90’s, after the regime shift, emerged a need for changing the system of financing health care and a need for establishing a health insurance institute. Health insurance was codified in 1991 and amended by a law 'On the Health Insurance of the Citizens of the RF' in 1993. These days a mixed two-source model of financing with a significant share of direct payments exists in RF.
     Part of public health care expenses is covered from several public budgets - investments to equipment, buildings, medicine, groceries for patients etc. Health care services and salaries plus insurance of the people working in health care should be paid from the
     mandatory health insurance fund (FMHIF + TMHIFs).

     In the lead of health care system there is the Federal Mandatory Health Insurance Fund (FMHIF)9, and in every subject of the federation there are its 90 subdivisions - Territorial Mandatory Health Insurance Funds (TMHIFs). Employers pay insurance premium for their employees to the mandatory insurance system. Insurance for economically inactive part of population is paid by regional governments.

Main problems related to implementation of financing health care system reform
1. Low payments for health care
According to the original plans the extent of employees' health care payments should be 7-18% of their salary. In 1992 there was established mandatory health insurance in the height of 3.6% of a salary which is collected within single social tax. 3.4% from this amount remained in the region (TMHIFs) and 0.2 per cent went to FMHIFs for balancing interregional discrepancies. Recently there exist a belief these taxes are too high and according to the Law No 314634-3 they should be cut to 3.0%.

2. Payments for economically inactive population are not settled
The law doesn’t explicitly determine the height of payments for economically inactive population that should be paid by regional governments. According to the expense analysis from the year 2002 there came 926.3 RUR for one person to the health insurance system. The differences between regions were big. An average payment for economically active population ranged from 5056 RUR to 221 RUR, for economically inactive population the range was from 2500 RUR to 4.4 RUR10. In reality this means that regional governments set the height of payments for economically inactive population just according to their own decision and budget. In rich regions where high payments are collected from employers, government often makes an agreement with TMHIFs and cuts down payment for a person. The attitude of regional governments is well demonstrated by the following numbers: During 10 years of FMHIFs existence 438 billions RUR came to the system - 63% were paid by employers, while 60% of the population are economically inactive. 11

3. Organizational
Even if there is a standard model of finance distribution set in accordance with law, following variants coexist in regions 12:
a) Insurance model - both the TMHIFs and insurance companies work in a region in accordance with legal standards
b) Funds model - only the TMHIFs work in a region and they have also the position of insurance providers
c) Mixed model - both the TMHIFs and insurance companies work as insurance providers
d) "No" model - payments collected from employers flow to the budget and consequently get distributed. 13
There are also big problems in providing health care for other regions? inhabitants.

4. Insufficient awareness
For a quality implementation of a reform an informational preparation and a whole-society consensus is necessary. Although the health insurance principle is supported by politicians and executives of state administration, neither public nor experts identify themselves with it. According to surveys, only 14% of doctors support the idea of health insurance and most of them reputedly take information just from HSP.

Problem of health care accessibility for low-income groups of population
     One of the main tasks of a modern country is providing all groups of population access to an appropriate health care. In RF so called ?Basic Program MHI? is codified, defining an extent of money and services provided free of charge with no respect to money collected in fact from the insurance.
     In 1999 the costs for the ?Basic Program? were estimated by experts at 104.9 billion RUR, it represents 2.3% of GDP. In fact, funds had only 48.3 billion for their disposition, which means only about 1% of GDP. Excluding non-medical expenses, we realize that the fund had only 43% from the money indispensable for paying the Basic program of the free health care14. From above mentioned it is obvious that the state should either increase the amount of money coming to the health care or re-evaluate inserting individual operations to the Basic Program. One of the possible variants is official establishment of a coinsurance of patients, which in fact exists even if not formally authorized.

Expenses designed for health care - state and private, in billions of RUR

  1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Public finance 302,1 277,0 204,5 206,7 235,1 189,1 190,7 203,0 207,3 234,5
Private health coinsurance15 2,1 3,7 4,2 5,6 7,2 6,3 8,8 12,9 19,4 16,7
Direct payments for health care services 3,9 5,5 10,2 14,3 19,7 18,9 24,2 27,5 30,9 33,2
Payments for medicine   28,4 40,6 45,8 68,2 43,5 60,2 70,1 92,3 102,2
Source: Goskomstat Rossii

     Huge finance shortage in health care results in the fact that most of the medical facilities are indebted, and the share of direct payments from people rises. According to the survey by The Institute of an Independent Politics, the care that should be paid from the Basic, and therefore free, Program, is in fact paid from one third by households as for ambulatory care and from one half as for hospitalization. It is a big paradox that households in economically weak regions have to pay for health care more than in rich ones because they get less money from regional health-care budgets. 16
     It is necessary to mention that there is a high corruption amongst doctors. In comparison with people’s costs for legal payments, shadow expenses form 49% in ambulatory facilities and 69% in stationary facilities in health care. About 10-15% of doctors don’t take bribes from principle, 45-50% of them don’t ask for bribe directly but they are ready to accept it. Yet there are about 20-25% of doctors who don’t work unless they get paid for it. Young doctors and highly qualified specialists most often belong to this group. 17 This situation can be explained by the fact that there have traditionally been low salaries in health care as it’s been considered ?non-productive? sector. Already in the times of socialism salaries in health care reached only about 70% of the average. In 2000 it was only 46%. On the other hand there must be mentioned the fact that high number of employees work only 4-6.5 hours a day, that there are extra bonuses added to the basic salary. Most doctors admit that about 50% of their monthly income is made by ?informal? payments. 18
     The height of direct payments, either formal or informal, indicates that health care expenses are considerable for households. Their percentage in total expenses of households varies, according to several institutions, from 4.2 (Goskomstat, 2000) to 16.2 (Institut socialnykh isledovaniy + Boston University, 1998). Groups with the lowest income give 4.1% of their month income for medicine, while the richest group pays only 3.2%. In the lowest income group people pay 0.2% of their total income for health care services, in contrast to 1.0% in case of the richest group (Goskomstat, 2002). 19

Health care expenses acording to social groups (percent)

Income groups Institut socialnych isledovanij + Boston University Fond „Rossiyskoje zdravookhranenie“ Novgorodskaya obl., 2000 RMEZ, 2000 Goskomstat Rf, 2000
Total 100 100 100 100
Lowest 9,3 10,1 10,4 9,1
2 12,4 8,9 15,7 12,8
3 17,1 8,8 18,7 18,6
4 23,4 27,1 24,8 24,3
Richest 37,8 45,1 34,3 35,2
Source: Shapiro, Besstremyannaya, 200220

     From above mentioned we can presume that only medicine costs represent a considerable burden for the population, as people from low-income groups don’t have sufficient funds to pay extra money for health care. There is still the question whether they can afford it in the required extent and adequate quality. The inaccessibility of required health care was proved by the survey realized by Goskomstat company. According to it, in 2002, 47-50% respondents felt a need of health care, but because of financial reasons they couldn’t have afforded it. 21
     Already in the times of socialism, health care showed certain element of unevenness, as regards the attitude to health care. A chain of medical facilities offering high-level health care existed only for specific ministerial employees (i.e. from the Ministry of the Interior, the Army, the Department of Transportation), which exists so far. By means of the Ministry of Finance the state pays so-called parallel sector of health care represented by 15% of all outpatient facilities and 6% of inpatient facilities.
     After 1990 some private facilities arose; they provide high-level services and are equipped with modern technique and devices, but because of prices these facilities are inaccessible for most of the population.
     High indebtedness of medical facilities (about 40% in 2000) and regional budgets lead to a necessity of seeking alternative sources of money or at least rising mandatory health insurance payments because a significant worsening of accessibility of basic health care could occur for low-income groups of the population. In the long term I don’t consider sustainable the solution, which is applied in some regions, where Retirement Fund contributes to the health care system. Besides, it cannot be considered systemic as well. It is necessary to solve the problem of different accessibility of health care with a respect to various regions, which means creating obligatory rules and commands where free health care would be exactly defined and claimed. There is also a need for establishing more effective mechanisms for leveling socio-economic differences among individual regions because the FMHIF fails in this role.

Problem of low effectiveness - a need of changing the structure of the health care system
     Typical for socialistic health care was that it emphasized quantity of hospitals and hospital beds. Fulfilling a plan was based just on quantitative indicators, not qualitative ones. Medical facilities were funded not according to the effectiveness of treatment, but according to the number of doctor’s visits or days spent in the facility.

In the 90’s the number of all kinds of medical facilities decreased.

Number of 1990 2000 1990-2000
Hospitals 12762 9946 -22%
Short stay hospitals 10901 8931 -18%
Primary health care units 21457 17026 -21%
Source: Database European Health for All (HFA-DB), WHO/Europe

     Shortening the time spent in a medical facility and an effort to treat most of the cases by ambulatory methods is one of the trends in making health care more effective. It is necessary to mention that this procedure shift must be accompanied both by integrating adequate treatment procedures and creating conditions for completing it (inpatient ambulances, more nursing homes for seniors). An average length of stay in a hospital in RF reached 14.7 days in 2002 which is the longest in whole Europe (EU average is 9.79 days). Although we can talk about shortening hospitalization length in this case because this indicator stagnated at 16-17 days in the 90’s. In 2000, hospital beds utilization was at 86%, even though RF has 500 more beds per 100.000 people in comparison with the EU.
     The emphasis was also put on high number of doctors and medical staff. But doctors weren’t appropriately educated nor paid. They were treated rather as ?repairers?, and they were also mostly narrow-specialized which resulted in the situation when they kept sending patients for further examinations to other specialists. For final diagnose each of them had to examine the patient and therefore the system was getting more and more expensive. 22
     Another step for making the whole system more effective lies in increasing the percentage of general practitioners who should be able to diagnose even more complicated cases and therefore reduce the number of visits at specialists. In 2000, there were 21.5 general practitioners per 100.000 inhabitants in RF, and their number is still decreasing (97.2 in EU). If we compare the number of doctors of all specializations, in 2002 there were 115.4 doctors per 100.000 in RF and 119.5 doctors in EU. Also the frequency of visits at general practitioners keeps lowering from 10.1 (1980) to 9.4 (2000) per person, however the average in EU is 6.41. 23 It’s difficult to assess whether patients are more responsible when it comes to visiting medical facilities or whether it comes from the fact that expenses associated with visiting a doctor have increased.

The question is: Will better approach to health care and its upgrading automatically lead to improvement of population state of health?
     Since the 1970’s there has been discussed the vision prevailing after World War 2 that, in case of sufficient financing of health care, the state of health would distinctively improve. There are doubts about the idea that a health care system is the most important component determining the state of health of the population, and a multidisciplinary approach to defining and understanding factors influencing public health is emphasized. A concept of health determinants which reflects social dependence of population state of health turned out to be inspiring. There are four basic health determinants: genetic predisposition, environment, health care system and lifestyle.
     In advanced countries these factors influence the health of the population in the following way: health care - 10%, genetic predisposition - 20%, environment - 20% and 50% influence on the health of the population is ascribed to life style. 24
     This approach could also help to explicate the poor health state of Russian population in comparison with other advanced countries and adverse development trends that continue to increase this difference. Reflection of this information should be expressed not only in the shaping of medical policy, but also other public policies that participate in creating the social environment of an individual. It’s also not possible to neglect media campaigns advertising healthy lifestyle and responsibility of an individual for his own health.

     Huge underfinancing and incapability to face the rise of death rate caused by civilizational diseases can doubtlessly be indicated as the main cause for bad state of Russian health care. It is necessary to increase the amount of money in health care by means of new reform of financing or at least by normative enacting of an adequate height of fees paid to the funds. It is also important to focus on enforcing and ensuring of free Basic Program and therefore also guarantee essential health care for low-income groups of the population. Neither the problem of different economical opportunities of individual regions or providing more effective redistribution of money from the FMHIF which could equalize interregional differences shall be omitted. It is also necessary to increase the effectiveness of the whole system by educating more general practitioners rather than narrow-specialized doctors, by introducing new technologies and institutes of additional social care, which is often substituted by health care. Higher quality of health care can be provided by stronger motivation of doctors and medical staff, and closer interconnection between scientific circles and practitioners can ensure more direct application of scientific knowledge.

1Source: Database European Health for All (HFA-DB), WHO/Europe
3The main aim of modernising the Russian healthcare system is to ensure affordable and good-quality healthcare for broad sections of the population. This means above all that guaranteed free healthcare services should be clear and known to all. Medical treatment standards should be drawn up and approved for each type of illness, along with an obligatory list of treatment and diagnostic procedures and the minimum requirements for healthcare provision. These standards should be applied in every city, town and village in the Russian Federation, and patients should have to pay only for additional medical services and for extra comfort”. -
4Details Da Vanzo, J. Grammich, C. (2001) Dire Demography, p. 37-62 http://www.
5Even if the general tendency of infant mortality is decreasing, it is necessary to mention that in the years after the changeover till 1995 it was rising in comparison with 1990 and it culminated in 1993 when reaching 20.27%.
6V. V. Prochorov assumes that social problems in connection with transformation evidently contributed to worsening of the state of health of the population. According to him these factors influenced rapid accrual of cardiovascular diseases (40% more in comparison with ?80s), number of suicides, murders and rise of mortality as a result of mental problems. Up to 70% of the population experience ?mentally-emotional and social ? stress which, besides direct effects on increasing number of depressions and neurosis?, is also indirectly reflected in rising consumption of alcohol and narcotics. After rapid accrual at the beginning of the ?90s there occurred gradual reduction in 1995 and 1996. On the contrary, the economical crisis in 1998 lead again to increasing the death rate.
7In the words of the Minister of Health, Yevgeny Chazov, in a speech in 1987, “We have striven to achieve the planned number of hospital beds, not caring whether they conform to the requirements of medical technology or even sanitary standards” (44). He also noted that “in only 35% of the rural district hospitals of the country is there a supply of hot water, and in 27% there is no sewerage system, and in 17% no running water at all”, Tragakes, E., Lessof, S. (2003) The Health care system in transition profiles – Russian Federation. , p. 67
8Tragakes, E., Lessof, S. (2003) The Health care system in transition profiles – Russian Federation. =”
10Pidde, A.L. (2004) Problemy medicinskogo strakhovaniya v Rossii, 58 – 67 IN: Problemy zakonodatelnogo obespecheniya obyazatelnogo medicinskogo strakhovaniya v RF. http://
11Kravchenko E.V., Rzhanicyna, L.S. (2004) Zakonodatelnoe obespechenie reform v zdravookhranenii Rossii 44-52. IN: Problemy zakonodatelnogo obespecheniya obyazatelnogo medicinskogo strakhovaniya v RF.
12Payments for ec. active and inactive inhabitants are paid to the TMHIF. From here they go to insurance companies who pay to individual medical facilities and specialists.
13Pidde, A.L. (2004) Problemy medicinskogo strakhovaniya v Rossii, 58 – 67 IN: Problemy zakonodatelnogo obespecheniya obyazatelnogo medicinskogo strakhovaniya v RF.
14Shutyak, E.N. (2004) Finansovye aspekty zdravookhraneniya v Rossii: effektivnost i problemy reformirovaniya ,67- 77. IN: Problemy zakonodatelnogo obespecheniya obyazatelnogo medicinskogo strakhovaniya v RF.
15According to the survey provided by the Institute for Social Research, 5% of the population was covered by health insurance in 1999.
16 Study ?Rossijskoe zdravookhranenie: oplata za nalichnyj raschet? offers interesting typologies of the both formal and informal payments methods, it gives the information which kinds of services people most often pay for and offers also many interregional studies comparisons.
17Shishkin S.V., Bessmremyannaya G.E., Krasilnikova, M.D., Ovcharova L.N., Chernec, V.A., Churikova, A.E., Shilova L.S. (2004) Rossijskoe zdravookhranenie: oplata za nalichnyij raschet, Moscow.
18Stepantchikova, N., Lakunina, L., Tchetvernina, T. (2001) Socio-Economic Status of Health Care Workers in the Russian Federation, Paper presented at the Workshop on Health Care Privatization: Workers Insecurities in Eastern Europe ILO, Geneva, 6-7 December, 2001
19Shishkin S.V., Bessmremyannaya G.E., Krasilnikova, M.D., Ovcharova L.N., Chernec, V.A., Churikova, A.E., Shilova L.S. (2004) Rossijskoe zdravookhranenie: oplata za nalichnyij raschet, Moscow.
20Shishkin S.V., Bessmremyannaya G.E., Krasilnikova, M.D., Ovcharova L.N., Chernec, V.A., Churikova, A.E., Shilova L.S. (2004) Rossijskoe zdravookhranenie: oplata za nalichnyij raschet, Moscow.
21Socialnoe polozhenie i uroven zhizni naseleniya Rossii (2003) Goskomstat Rosssii, Moskva 2003.
22Tragakes, E., Lessof, S. (2003) The Health care syst?m in transition profiles – Russian Federation.
23Source: Database European Health for All (HFA-DB), WHO/Europe
24Williams, D.R. 1990. „Socioeconomic Differentials in Health: A review and Redirection.“ Social Psychology Quarterly 53 (2): 81-89. We have to mention that this quantification is still discussed.

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Александр Куранов
Controversial Interpretations of an Undisputed Anniversary
(An Empirical Study)
Pavel Vitek
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