Russia embarks on £10bn reform of its “deplorable” health system

Russia is embarking on the biggest reform of its troubled healthcare sector—described by Vladimir Putin, the prime minister, as “deplorable”—by making radical changes to the compulsory medical insurance system that was introduced in the early 1990s.

Major changes in the way that health care is delivered across Russia are also planned, and the government has promised more money for the chronically underfunded sector in general.

Under the reforms, compulsory medical insurance contributions paid by employers on behalf of their employees will be increased from 3.1% of salary to 5.1% in the next two years to raise money for improvements.

Tatyana Golikova, Russia’s minister for health and social development, explained: “In 2011 and 2012 Russia’s compulsory health insurance fund will receive extra funds because of the 2 percentage point increase in insurance rates. The sum raised is expected to be about 460 billion roubles [£9.8bn; €11.8bn; $15.1bn].”

Most of that windfall will be spent on renovating hospitals and buying new equipment. Some will also be used to help set up a unified database for outpatient electronic records.

Regional authorities will also be able to bid for the extra funds to buy drugs, improve hospital food, or raise doctors’ wages.

Russian MPs approved the necessary legislation in a preliminary vote in the Duma (lower house of parliament) in July. It was the first of three votes, and amendments may yet be made, especially as the reform is controversial and has been fiercely criticised by big business.

Russian employers have complained that the government is forcing them to finance a major upgrade in the quality of hospitals and medical equipment to avoid dipping into its own budget funds. They have also argued that the new system would place too much power in the hands of inefficient government officials and said it looked like a partial return to a Soviet-style centralised health service.

In a major shake-up the new bill will also make free medical care at the point of delivery available nationwide for the first time since the 1991 collapse of the Soviet Union. That right exists already in theory, but in practice many Russians have been able to access medical care only in the area where they were registered as resident.

The new law would solve that problem by issuing people with an insurance policy that would be valid nationwide, including at participating private clinics. Patients would be free to choose exactly where they are treated from a nationwide register of facilities posted on the internet, a mini-revolution in itself for Russia.

But though the extra funding is welcome, the reform has failed to impress experts.

Yevgeny Gontmakher, of Russia’s Institute of Contemporary Development, said, “It essentially involves tinkering with the general system of healthcare financing, but there is no overall reform.”