HEALTH POLICY IN RUSSIA

Part 2.

Irina Campbell, PhD, MPH ivm1@columbia.edu

www.CampbellHealthAssociates.com

Macro health measures such as mortality and morbidity rates were applied in the human capital model

of health for assessing the social and economic costs of illness,

disability, or death within Soviet society.

Soviet health policy was limited in maximizing national economic output

by demographic changes in the structure of the working population:

there were twice as many pensioners in the Slavic and Baltic Republics of the

1980s as in the 1970s, but twice as many births in the Asian Republics of the 1980s as in the Slavic Republics of

the 1970s (Feshbach, 1982b).

The problem for Soviet decision-makers became even more apparent

when almost two-thirds of all industrial output was centered in the Slavic Republics, where demographic

projections indicated a population decrease of two million in 1981-1995

compared with 1971-1975.

The regional variation in fertility and mortality rates by republic also

affected the skilled labor supply. Skilled workers were located

primarily in the urbanized European republics, like the Russian

Federation, which also had the lowest fertility rates (Brui 1991).

PERESTROIKA HEALTH POLICY

Two other major health problems, which became more acute during

Perestroika (and after the explosion of the nuclear plant at Chernobyl in 1986), were alcoholism and mental

illness.

Women's health issues received greater recognition during

Perestroika, primarily because of declining fertility and population growth rates, projected to fall 75

percent below 1980 levels in 1995.

For all the ideological bravado of Perestroika, health spending was not

appreciably increased.

The politically tumultuous period of Perestroika interfered with the

implementation of several proposals: increasing GNP spending on health from 3.6 percent to 6 percent by the year 2000; increasing funding for medical equipment by 25 percent; construction of diagnostic

c1inics and over 1.4 million beds; and annual preventive health exams for

children, veterans, pregnant women, and agricultural workers.

In regulating resource allocation and costs, policy during Perestroika

followed previous health plans by altering input factors without

adequately evaluating concomitant changes in health status as output.

Although the organizational impediments to preventive care were recognized as serious drawbacks to

implementing health policy, no immediate recommendations were

made until the provisions of the first Health Insurance Act in 1991.

POST-PERESTROIKA HEALTH POLICY

In their search for private medical care, Russian health reformers

rejected the monolithic British health bureaucracy that gave government

control over providers, financing, and public administrative decision-

making.

Private insurance medicine was seen as a major cause of escalating costs.

A draft law was published in October, 1990, entitled “The Principles of

Legislation of the USSR and Union Republics on the Financing of Health

Care”.

The deputies of the Supreme Soviet of the Russian Republic moved

swiftly to propose their own version of insurance medicine.

A series of conferences with American and other international

health care experts was organized in the Soviet Union.

The health care crisis facing Russia after the 1991 Coup was one of cost

and access, as much as the sharp decline in population health status,

quality of medical services, and availability of pharmaceuticals and

health-related goods.

1991 HEALTH INSURANCE ACT OF RUSSIA AND LIFE

CHOICES

As an initial step toward decentralization and privatization of government medicine, a network of

health insurance agencies was authorized, similar to the Clinton

Administration's proposal for market-based health alliances.

Insurance plans were divided into two categories: mandatory and voluntary.

The HIA made health insurance compulsory for all employees.

Financing of the health care system with direct taxation to the central

budget was replaced by local government budgets and premium

payments to health care and insurance funds.

The health care funds were responsible for financing

professional medical education, biomedical research, catastrophic

insurance, geographic redistribution of medical care for under-served populations, and public health

programs in the case of epidemics or natural calamities.

Given the cumbersome bureaucratic heritage of socialized medicine that

the insurance legislation was designed to replace, the drafters of

the HIA acknowledged the difficulty and complexity of encouraging market forces, regionalization of services,

decentralized decision-making, and individual choice and responsibility.

Given the provisions of universal coverage in a basic benefits package of mandatory insurance, the medical

professionals were empowered to run medical facilities and group

practices based on consideration of health needs and quality rather than

minimizing expenditures.

The structure of insurance plans varied in the size of the insurance

premiums and the domain, duration, and quality of medical services

provided under specific benefits.

The provisions of the HIA assumed that competition between financial

packages offered by insurance plans and between different

organizational forms of delivering medical care offered by private

providers would contain the cost of premiums.

The health care market is not one of self-regulated, unconstrained supply and demand between providers and

consumers.

Legislative mandates notwithstanding, progress in public health improves quality of life to a

point partly dependent upon individual choice in taking health

risks.

Under the market incentives provided by the HIA, an insurance

plan had the option of changing premiums based on the changing health needs of the patient after a

three-year period.

The insured was obligated to eliminate voluntary risk factors that could adversely affect health status

or, alternatively, pay higher premiums.

Despite the preventive health habits provisions, the HIA mechanisms did not encourage consumer well-being

or market competition between providers as much as it fostered the

expansion of the health care industry.