1. Constraints on Universal Health Care in Russia: Inequality, Informality, and the Failures of Insurance Reforms Linda J. Cook Prepared for presentation at: Financial University under the Government of Russia Moscow, December 18, 2015 1

2. Soviet Health Care System Centralized, universal, stratified, state- funded Overstaffed by international standards Origins in extensive model of economic development and socialist ideology? Effective at basic care, screening, control of infectious diseases Moved life expectance and infant mortality toward OECD norms to 1970s Poor in adapting to chronic disease care; Growing disparities with OECD from 1980s 2

3. Soviet health care system (2) Effective at basic care, screening, control of infectious diseases Moved life expectancy and infant mortality toward OECD norms to 1970s Poor in adapting to chronic disease care; Growing disparities with OECD from 1980s 3

4. Differences in Levels of Deaths between Russia, EU Countries by 2007, EU Countries by 2004 Source: WHO Europe, European HFA Database, Jan., 2012 4

5. Reforms of 1990s Decentralization and devolution of responsibility Private practices legalized Mandatory Med Insurance (MMI) Health Insurance Companies and Competitive Contracting Limited effects of reforms 5

6. Financing, 1990s Source of Finance 19921993199419951996199719981999 Federal Budget11.38.98.66.44.97.74.64.9 Regional health budgets* Budget contributions or mandatory health insurance for non-working population 88.7 -- 75.3 0.5 64.7 4.5 60.6 6.7 58.6 6.3 53.1 5.1 47.1 5.6 44.7 5.2 Mandatory health insurance contributions for working population -- 15.614.715.714.516.015.9 Private contributions to voluntary health insurance 00.91.52.02.52.73.03.5 Household payments for medical services** --1.62.24.76.37.39.18.4 Household payments for pharmaceuticals -- 7.813.213.715.621.124.9 Corporate payments for medical services -- 1.10.30.71.72.11.2 TOTAL100 6 Changes in Main Sources of Healthcare

7. ELITE POLITICAL CONTENTION OVER HEALTH REFORMS: LIBERAL PROMOTERS, STATIST RESISTERS LIBERAL ELITE PROMOTERS WANT: -transfer of welfare responsibilities away from state -increase efficiency of service provision -diversify sources of social sector financing 7

8. ELITE POLITICAL CONTENTION 1990s Outcomes of contention: -system mixed, institutionally- fragmented -formal and informal provision -predominant state, some private provision 8

9. SPONTANEOUS PRIVATIZATION’ AND ‘SHADOW COMMERCIALIZATION’ Impoverished providers and administrators use informal income- generating strategies; combinations of formal ‘cash register’ and informal ‘shadow’ payment requirements = informal brokers of access to care 9

10. COMPONENTS OF RUSSIA’S POPULATION CHANGE (IN THOUSANDS OF PEOPLE) (Ioffe and Zayonchkovskaya, 2010) 10

11. ‘ SPONTANEOUS PRIVATIZATION’ AND ‘SHADOW COMMERCIALIZATION ’ Growth in payments, mostly to providers in public facilities Mostly for hospitalization and pharmaceuticals 11

12. Some preliminary evidence on access to health care in Russia Structure of medical services provided in public outpatient Treatment facilities in Russia circa 2002 12

13. Proportion of population paying for various types of medical care 1994, 2000, 2004 13

14. Growth in Inequality of Access to Health Care formal private system used mainly by upper income Large disparities in public system: -by socio-economic status -urban-rural -regional 14

15. Inequality in access: Underclass without access to care- exclusion and abstention; -pharmaceuticals as main issue, comp Unregistered labor migrants – no access except emergencies in transnational space 15

16. Economic Recovery and Health Care From 2000, economic growth, stronger state, more regulation, higher public health expenditures, stronger state administration Health as priority – raised providers’ official incomes, insurance reform revived 16

17. PUBLIC HEALTH EXPENDITURES AND GDP 1995-2011 17

18. Economic Recovery (2) 18 Major government concern about demographic decline -National Priority Health Project -Pro-natalist campaign -Health subsidies for pregnant women

19. Health Expenditures Total health expenditure as % GDP = 5.2% (for 2008, WHO) Public Health Expend as % total: 65% (for 2008, WHO) Private expend growing since 1990s, 35% of total; most directly OOP 19

20. 2005-2026 Dynamics of Russia’s Working-Age and Total Population in the Absence of Immigration (in Thousands of People) (Source: Ioffe and Zayonchkovskaya, 2010) 20

21. Health Sector Workforce Total doctors per 10,000 pop 2009: 50 (of which 32 are pediatricians) -No. of nurses per 10,000 pop 2009: 74 steady increase in no. of nurses -All mid-level personnel: 107 -Outpatient contacts per person 2006: 9 21

22. ‘OUT-OF-POCKET ‘PAYMENTS AND ‘SHADOW INCOMES’ PERSIST By 2002 ‘quasi market’ in health services prevalent (Shishkin) Practices and prices varied by: -specialties -hospital departments -income of patient -urban-rural -other parameters 22

23. Main Reform Outcomes Re-establish central controls Expand legally paid services Raise wages in state sector Some prosecutions for corruption Limited effects of reforms 23

24. Overall performance of system Russian system has poor public health outcomes relative to expenditures High private and out-of-pocket expenditures relative to public Inefficient use of resources -over-reliance on in-patient care, specialists - high provider-patient ratio - poor distribution of provisions 24

25. Greatest Improvements since 2000 Mothers and Children 25 Greatest health improvements for priority groups -Infant, Maternal, Child Mortality -Stunting, children under 5 -Increases in life expectancy

26. Under-5 Mortality and Stunting 1990-2010, RF (WHO) 26

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28. Less Improvement in other areas of adult health Persistent high adult mortality, esp. men, low healthy life expectancy – both genders -Improved but persistent high rates of infectious diseases- - TB, MDR TB HIV/AIDS 28

29. TB IN RUSSIA, 1990-2010 29

30. DISTRIBUTIONAL CONSEQUENCES Contributes to inequities of access and quality, exclusion and abstention from care Burden of OoP expenditures income- regressive, reports of higher costs in poorer regions 30

31. CONCLUSION: Consequences for Health Care Provision, State Capacity, Citizenship Health Care Provision Formal legal sector small; insurance works poorly in most regions High proportion of private vs. public health expenditure in international comparison Comparatively poor public health indicators Underclass without access to many health services. 31

32. CORROSIVE EFFECTS ON STATE CAPACITY Entrenched informal payment system hurts state’s capacity to - tax and distribute expenditures social expenditures -implement policies that would improve equity and efficiency 32

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34. Effects of informal payments “Informal payments undermine the shift toward more transparency in governance and public services and pose challenges to policy-makers seeking to regulate health markets according to public health goals.” (Thompson and Witte 2000) 34

35. What system does well: Aspires to universalism All citizens covered by MMI Commitment to control of infectious diseases Right to free emergency care universal Health needs of newborns, mothers, children prioritized Biggest failure – de facto exclusions 35

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