In November 1996, the 16th All-Russian Pirogovsky Congress of Physicians-an event roughly comparable to the annual meeting of the American Medical Association in the United States-symbolized how healthcare has begun to emerge from the debris of the former Soviet Union.
It was a milestone partly because the 15th congress had been held in 1919, two years after the Russian Revolution that installed the Communist regime.
But more important, it was a milestone because it convened without the support of the government, which had dictated healthcare economics and policy during the years of Communist control.
"What it represented was the resurgence of the voluntary profession as a key player in healthcare politics and in its impact on individual clinicians, after a long period in which all of that was controlled or pre-empted by the state," says Gary Filerman, a McLean, Va.-based international healthcare consultant who has done work in the former Soviet Union for the World Bank.
Such is the state of affairs in the healthcare system of Russia, where providers are struggling to modernize a system that customarily was underfunded and highly concentrated on inpatient specialty care (See related story, p. 20).
Since 1992 the Russian government has decentralized much of the healthcare system. It has begun creating a system in which the money follows the patient, not the provider. And it is encouraging experiments with private medicine and new financing tools, such as capitation.
At the same time, however, the population is aging and experiencing more chronic illnesses and the re-emergence of some communicable diseases.
The statistics are telling: plunging life expectancy, rising incidence of such infectious diseases as tuberculosis and diphtheria, and high death rates from cardiovascular disease and cancer.
Those unhealthy trends are challenging a healthcare system that is lurching forward as it tries to catch up with the West.
"There's been some sporadic but nevertheless impressive gains in the last five years," says Jack Langenbrunner, a healthcare economist with the World Bank in Washington.
But, he adds, "some of these things are going to take a generation to make a difference."
The legacy of the Soviet years is a system that was starved for cash because the government's leaders believed the healthcare sector was less productive than defense or manufacturing.
In fact, Russia commits about 3% of its gross domestic product to healthcare, according to a report prepared for International Finance Corp., an affiliate of the World Bank. The U.S., in comparison, devoted about 14% of its GDP to healthcare in 1995. And for Russia and other former Soviet republics, that small share often represents a declining amount of money because they have declining GDPs.
"Everybody is getting a level of care that's being ratcheted down" because of declines in the Russian economy, says Tina Cleland, a senior health reform adviser from the U.S. Agency for International Development.
During their reign, the communists built a bloated healthcare provider network that aimed to be a "glorious expression of Soviet achievement," Filerman says.
They educated more doctors and built bigger hospitals than the West. But in the end, they created a system that consisted of too many underpaid doctors, who often didn't have access to diagnostic technology or modern medical research data. Today a physician's salary in Russia is equal to about 70% of the wage of an industrial worker, according to the IFC report.
Doctors, in turn, fed too many patients into their oversized hospitals, where the financial incentives were to keep patients in the hospital for too long.
"They turned out poorly trained physicians and turned out poorly maintained hospitals," the World Bank's Langenbrunner says.
The Soviet breakup has spurred differing responses to healthcare in the former Soviet republics, so generalities are hard to make. Some regions are modernizing quickly, and others are lagging behind. Filerman said he was optimistic for the future of healthcare in Uzbekistan and Georgia, for instance, but less so for Russia.
The report prepared for the IFC says the potential for private investment in Russian healthcare is favorable in the long term, although there are constraints in the short term. It rates Uzbekistan's investment climate as "developing."
The Russian government, for one, is trying a variety of things.
In an experiment in St. Petersburg, the government prepaid family-practice groups-consisting of pediatricians, obstetrician/gynecologists and internists-to take care of inpatient and outpatient services for defined populations. In this arrangement, known as capitation, if the medical groups provide the care for less money than they are paid, they make a profit. The groups were allowed to negotiate with hospitals for the best prices.
Although that experiment resulted in dramatic drops in hospital admissions, it was stopped after a short time. Because no quality assurance mechanisms were in place, some patients who should have been admitted to the hospital were not.
The Russian national government, meanwhile, has given local jurisdictions authority over about 85% of the money raised and spent on healthcare in the country.
Laws passed in the early 1990s created a government-run health insurance system financed by a payroll tax. The tax, 3.6% of wages, is collected by the 89 oblasts, a governmental jurisdiction roughly equivalent to U.S. states.
That insurance plan covers wage-earners. Healthcare for nonworkers-such as the retired, the unemployed and children-is paid for through the national government's budget, which continues to fund hospitals and pay practitioners' salaries.
The dual system has led to turf battles between providers and the health insurance plan, stemming from differences in benefit packages between workers and nonworkers and cost shifting from the uninsured to the insured.
"In their activities to move things off budget and secure a separate funding stream, there's been a lot of fragmentation," Langenbrunner says.
Russia, however, is working on a plan to guide healthcare through 2005 by pooling the two funding streams and standardizing the benefit packages for the separate programs, Cleland says. The plan is working its way through the government but hasn't become law yet.
Private medicine, meanwhile, is legal but still in its infancy. The report prepared for the IFC notes that while there are few truly private hospitals in Russia, some of the facilities that traditionally targeted select clientele, such as the Communist Party elite, are experimenting with private-pay hospital wings and services. And there is a growing base of people in the bigger cities who are able and willing to pay for private healthcare services.
Further questions are how to bring hospital administrators up to date with new financing mechanisms and clinicians up to date with modern medical practice.
After being cut off from the West for decades, clinical protocols are often 10 to 40 years out of date, Langenbrunner says. Physicians are working to learn Western clinical protocols, often from Western medical journals.
Hospital managers also are working to catch up with their Western counterparts. The hospital management function in Russia traditionally has been handled by a much smaller staff than in the West, typically consisting of a doctor working part time, an accountant, an economist and a deputy administrator.
Both administrators and clinicians have been hampered by a lack of technology, such as computerized information systems or the latest pharmaceuticals.