Transforming Post-Communist Political Economies (1998) / Chapter Skim
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12 Health Reform in Russia and Central Asia
12 Health Reform in Russia and Central Asia
Pages 322-350
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From page 322... ...
The findings, interpretations, and conclusions expressed herein are entirely those of the authors and should not be attributed in any manner to the World Bank, its affiliated organizations, or members of its Board of Executive Directors or the countries they represent. An earlier version restricted to Central Asia was presented at a World Bank/EDI Senior Policy Seminar held in Ashgabad, Turkmenistan, in June 1996, and was revised in light of comments from national participants.
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From page 323... ...
Because rising average incomes tend to reduce poverty, there is generally a strong link between incomes and health status. World Bank analysis suggests that more than 75 percent of the difference in child mortality across countries is associated with income differences, and that the relation is causal rather than merely associative: in a sample of 58 developing countries, a 10 percent increase in income per capita, all else being equal, reduced infant and child mortality rates by between 2.0 and 3.5 percent (World Bank, 1993c)
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From page 324... ...
Since 1989, mortality rates have tended to increase, and life expectancy has declined dramatically throughout the region (Klugman and Schieber,1996~. Most of Central Asia experienced significant population increases between 1989 and 1995, while all the Central Asian countries except Turkmenistan had a combination of high natural increase with outmigration.
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From page 325... ...
C 1989 Russia 14.7 10.7 3.92.0 17.8 47.4 69.6 Kazakstan 23.0 7.6 15.42.9 26.0 53.1 68.7 Kyrgyz Republic 30.4 7.2 23.23.9 32.4 42.6 68.5 Tajikistan 38.7 6.5 32.25.2 43.3 38.9 69.4 Turkmenistan 35.0 7.7 27.34.4 54.8 55.2 65.2 Uzbekistan 33.3 6.3 27.04.2 38.1 42.8 69.2 1994b Russia 9.4 15.6 -6.21.4 18.6 51.6 64 Kazakstan 18.2 9.6 8.62.3 27.4 49.6 65.8 Kyrgyz Republic 24.6 8.3 16.33.3 29.6 44.5 65.4 Tajikistan 28.2 7.0 21.24.3 45.9 74.0 67.7 Turkmenistan 32.0 7.9 24.14.0 42.9 44.4 63.9 Uzbekistan 29.4 6.6 22.83.8 32.7 24.1 67.9 Percent change, 1989-1994 Russia -35.4 44.4 -259-30.0 2.8 6.7 -7.9 Kazakstan -20.9 26.3 -44.2-20.1 5.4 -6.6 -4.2 Kyrgyz Republic -19.1 15.3 -29.7-15.6 -8.6 4.5 -4.5 Tajikistan -27.1 7.7 -34.2-17.7 6.0 90.2 -2.4 Turkmenistan -8.6 2.6 -11.7-9.1 -21.7 -19.6 -1.8 Uzbekistan -11.7 4.8 -15.6-9.1 -14.2 -43.5 -2.0 aThe total fertility rate (TFR) is a synthetic measure of the number of children a woman would have if she passed through her childbearing years at the current age-specific fertility rates.
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From page 326... ...
Russia appears largely to have passed through the demographic transition, although reports of infectious disease outbreaks have been fairly frequent in recent years. In Central Asia, however, pre-epidemiological transition conditions, such as a high prevalence of infectious diseases and high infant mortality, coexist alongside health problems such as ischemic heart disease, emphysema, and motor traffic accidents, which are typical in richer industrial countries (Phillips et al., 1992~.
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From page 327... ...
The systems are discussed in the context of the goals of health system reform: improving health status, ensuring access and equity, achieving microeconomic and macroeconomic efficiency, improving clinical effectiveness, and ensuring quality and consumer satisfaction. The systems in Russia and Central Asia are based on the centrally planned national health service model of the former Soviet Union.
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From page 328... ...
The disruptions associated with the breakup of the Soviet Union exacerbated these problems (Table 12-2~. As a result, there is a broad range of problems in the health-care financing and delivery systems in all these countries: · Declining health status of the population due to environmental risk factors and socioeconomic trends that have drastically increased mortality from heart disease, violence, injuries, and suicides · Poorly structured or nonexistent public health programs for health promotion, disease prevention, family planning, adult health, occupational health, and environmental health · Chronic underfunding (as an "unproductive" service sector)
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From page 329... ...
. · Outdated treatment norms that promote ineffective medical practice, inefficient facility configurations, and staffing norms that restrict facility managers from making rational staffing decisions · A lack of modern quality assurance systems · Inefficient and outmoded production, procurement, distribution, and management systems for pharmaceuticals; outmoded lists of essential drugs; and coverage/reimbursement policies that encourage individuals to be hospitalized to receive free drugs · Little or no consumer choice · No accountability on the part of consumers or medical care providers for the consequences of their decisions · Confusion about roles and responsibilities at the national level as responsibility for financing and delivering health care has been decentralized · Hospitalization used as a safety net to compensate for inadequate referral systems, poor transportation and housing, the high costs of food and pharmaceuticals, and the health sector's generally being relied on by governments as an employment maintenance mechanism These problems are fundamental and affect almost every aspect of health care at all levels.
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From page 330... ...
Although the health expenditure-to-GDP ratio is the most commonly used measure of expenditure performance, one must also analyze real per capita health spending to get a complete picture. For comparisons of the absolute levels of spending across countries, spending must be converted into one numeraire currency, as in Table 12-3.
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From page 331... ...
) 183 203 86 86 56 Kyrgyz Republic Health Expenditure to GDP Ratio 4.1 3.6 3.2 2.6 3.2 Real per Capita Health Spending as % of 1990 100 77 57 39 36 Per Capita Health Spending ($US [PPPs]
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From page 332... ...
SOURCE: Adapted from Klugman and Schlieber (1966:18~. an 8.7 percent change in health spending.3 In other words, in countries with elasticities below 1.0, health expenditures increased less rapidly than GDP (which, in inflation-adjusted terms, declined significantly in all countries, as shown in Table 12-2~.
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From page 333... ...
However, other survey data from the Kyrgyz Republic and Kazakstan indicate that out-ofpocket payments by individuals for pharmaceuticals, as well as for many normally publicly covered inpatient services, are quite high. Household survey evidence from the Kyrgyz Republic shows that between 1993 and 1994, formal charging for medical consultations increased significantly, from 11 to 25 percent of the population.
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From page 334... ...
, per capita health spending ranges from $56 in Kazakstan to $183 in Russia. This compares with health expenditures of $149 in Egypt, $185 in Turkey, and $374 in Jordan, for example (World Bank, 1997~.
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From page 335... ...
16.0 16.0 16.3 16.3 16.8 Occupancy rate (%) 79 79 78 76 74 Kyrgyz Republic Physicians per 1,000 population 3.4 3.4 3.3 3.1 3.1 Hospital beds per 1,000 population 12.0 12.1 11.9 10.7 9.6 Admission rate (% of population)
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From page 336... ...
It is evident that basic public health programs and treatment norms are not well targeted to dealing with the population's underlying health needs, especially given sharply reduced funding. The reforms being initiated now, at different stages in all six countries, address these problems.
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From page 337... ...
The basic principles of the Russian reforms in terms of use of insurance funds and decentralization of financing and delivery are generally being emulated by the Central Asian countries. Russia passed health insurance legislation in 1991, which was modified before being implemented in late 1993.
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From page 338... ...
There have been allegations and investigations of fraudulent use of funds by some THIFs and their managers, and MOH has been attempting to gain control over the health insurance funds. Given the vagueness of certain aspects of the enacted legislation, such as the benefit package and the contribution levels of local governments for the nonworking population, as well as the significant economic difficulties de scribed above, the system in many oblasts faces severe financial problems.
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From page 339... ...
These developments are being watched closely by the Central Asian countries as they grapple with many of the same problems resulting from their common legacy. Reforms in Central Asia are thus focusing on health insurance funds as a source of new nonbudgetary revenues, decentralization and separation of financing and provision, and measures to encourage efficiency through the use of new incentive-based health-care provider payment mechanisms.
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From page 340... ...
1ave arisen: · Adequacy of financing from both state and employer sources under the various health insurance approaches · Ability of regional and local governments to finance their shares · Administrative costs of such approaches · Roles and responsibilities of national and subnational health authorities and insurance funds Depressed economic activity in the region has effectively precluded raising additional revenues from both public and private sources. The extensive infrastructures that existed before the economic decline have become unaffordable.
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From page 341... ...
Whatever approach is chosen, the financing base must be actuarially sound; that is, the revenues from the designated sources must be sufficient to pay for the individuals and benefits that are covered under the program. There is a need to clarify the roles of the various levels of government, health-care providers, health insurance funds, and health insurance companies.
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From page 342... ...
Individuals always made informal payments to providers for preferential treatment, and, as discussed earlier, many now pay for certain services out of pocket. For example, survey evidence from the Kyrgyz Republic indicates that the ability to pay is a major problem: the total costs of one episode of ill-health exceeded the monthly income of the entire household in 20 percent of cases, while nearly half of all patients reported severe difficulty finding money to pay for their hospitalization.
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From page 343... ...
Such studies enable ranking of health interventions on cost-effectiveness grounds, and provide an empirical basis for deciding which services are to be covered for the entire population as basic public health services, which are to be included in the publicly funded insurance benefit package, and which will not be covered by public programs because they are not affordable and/or of low priority (World Bank, 1993~. This is especially important for Russia because of the large declines in male and female life expectancy, and for Central Asia because of the large burden of pretransitional diseases.
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From page 344... ...
for the employed through a payroll tax and capitation payments from the state budget for those not working; established primary-care groups as fundholders who received capitated budgets for their services, including bonus payments to adjust salaries based on economic performance; gave hospitals a case-mix-adjusted flat payment per diem based on historical costs; and instituted contracts between all facilities and the TMO, which then signed a contract with the health insurance fund. The results of the experiment were generally consistent with expectations: primary-care visits increased, the ratio of general-practice physicians to specialists in polyclinics increased, hospital admissions declined by over 25 percent, and the number of hospital beds decreased from 14.7 to 10.7 per 1000 population.
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From page 345... ...
Without reform, both rich and poor countries will continue to get poor value for the money expended. Delivery System Reforms There is a recognized need in Russia and Central Asia for restructuring service delivery systems, reducing and retraining health staff, adopting modern medical treatment protocols, better targeting public and environmental health programs, and rationalizing the pharmaceutical sector.
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From page 346... ...
Quality of care could also be significantly improved by adopting modern quality assurance systems rather than the current systems, which rely on sanctions. The former systems are necessary concomitants of provider payment changes and have accompanied the provider payment reforms currently being developed and implemented in Russia, the Kyrgyz Republic, and Kazakstan.
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From page 347... ...
CONCLUSION The challenge to Russia and the Central Asian countries is to improve the health status of their populations at a time of economic decline while maintaining the strengths of the old system in terms of equity and access. Countries need to maximize the efficiency and effectiveness of their systems, subject to the limited funding available.
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From page 348... ...
Perhaps most important in terms of direct improvements in health status is the need to restructure current public health activities. This includes maternal and child health programs, family planning, school health, occupational health, environmental health, adult health promotion and disease prevention, substance abuse, and road safety.
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From page 349... ...
Paper prepared for the EDI Senior Policy Seminar on Health Reform Implementation in Central Asia. Abt Associates, Bethesda, MD.
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From page 350... ...
1996c Kyrgyz Republic: Health Sector Reform Project. Staff Appraisal Report.
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