PUBLIC-PRIVATE MIX IN HEALTH CARE FINANCE IN SELECTED CIS MEMBERS

Transcription

1 Chubarova Tatiana (Russia), Grigorieva Natalia (Russia) PUBLIC-PRIVATE MIX IN HEALTH CARE FINANCE IN SELECTED CIS MEMBERS Paper prepared for the 24 st World Congress of Political Sciences, Poznan, Poland, July Abstract Problems of health care financing are at the forefront of modern health care systems development for many well-documented reasons. The limits of public funds that can be mobilized and allocated to health care in modern capitalist society give rise to the problem of how to find resources to cover raising health care needs of populations and how to use the available funds more effectively. One way is to increase the share of private finance. However, this is likely to increase inequality of access to health care. The problem of health care financing manifests in members of the Commonwealth of Independent States (CIS) in a specific way. Determined by both the common pre-transitional history of health systems development and paths of transition that each country chose, the common trend is less state participation and increased private spending. The paper analyses the existing public-private mix in health finance in selected CIS members including introduction of fee for services in state health services. Taking into account the relatively low level of public health expenditures coupled with high inequality, it is suggested that low-income people in the countries in question are likely to experience problems in receiving medical treatment. This situation provides a new role for governments to control not only public but also private health expenditures as well in the course of public sector reforms with the view of securing people's access to health care. Authors contacts: Dr. Tatiana Chubarova Institute of Economics, Russian Academe of Sciences, Moscow, Russia: t_chubarova@mail.ru Prof. Natalia Grigorieva School of Public Administration, Lomonosov Moscow State University Moscow, Russia: grigorieva@msu.spa.ru Introduction The Commonwealth of Independent States (the CIS) was formed in 1991 to unite the majority of new independent states that emerged after the collapse of the USSR. 12. Though they have always differ significantly in cultural, social and economic terms they did share important common features as before the transition started their health care was organized along the same rules as Semashko model. It was based on the strong role of the state in health care finance and provision for population. 1 Ukraine failed to ratify the CIS Charter and is not an official member of the CIS; Turkmenistan is as associate member starting from 2005; Georgia officially left the organization in August 2009 The specific position is occupaied by the former Soviet Baltic republics - Latvia, Lithuania and Estonia, that later eiond the EU. 2 The Statistical Committee of the CIS publishes data for nine countries -Azerbaijan, Armenia, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, and Ukraine. 1

2 During the transition period all CIS members had to go thought reforms that turned out to be quite painful for people. They in fact participated in a unique experience in moving from a centrally planned to a market economy. This involved the dramatic changes in the role of the state with the emergence of both market mechanisms and market ideology together with the advent of the private sector/property. Definitely, modern health care reforms in CIS members are an integral part of the overall structural changes taking place in these countries that transform entire socio-economic system in society. The main objectives of reforms - improving health status and making health systems more responsive to the expectations of citizens, increase the level of "fairness" of financial contributions to the development and functioning of the health system - are not fully implemented. The question for this paper is to investigate the changing role of the state and private sector in health care bearing in mind the necessity to secure peoples access to health care. For the purpose of comparative studies we tried not to just describe new health reality in the countries in question, but rather highlight and explain common as well as divergent trends in formulating and implementing health reforms. Particular attention is paid on financial issues and their implications for the overall health system performance. Problems with empirical and analytical data should be mentioned. First, statistical data available is often fragmented thus creating problems for a multi-country comparative analysis. In this paper we use two main sources of statistical data, namely Statistical Committee of the CIS and WHO health indicators database. Second, there is a lack of analytical including comparative studies on CIS health reforms and practical implementation of laws, plans or programs adopted in the course of health reforms in countries in question. The most striking example is Turkmenistan, where Medecins Sans Frontieres (MSF) closed its office in 2010 after the Turkmen authorities failed to support its project proposals, thus making it impossible for the organization to carry out its work in the country. According to MSF final report, health care system in the country was not transparent and failed to provide accurate data on population health status that may in turns lead to a serious health crisis (MSF, 2010). As a result it can be speculated that some of the legal requirements might not be implemented in practice. The paper consists of two parts. The first one deals with the overview of health care systems in CIS from the point of view of identifying major important both common and divergent characteristics related to the role of the state in health care. The second part analyses in detail the role of public and private sector in health care financing with the view to identify how it might affect access to health care. And, at last, some ideas are suggested to pick up probable trends for the future based on data presented in the paper. 1. Health care systems in CIS members towards a new public-private mix? CIS members can be classified alongside two basic criteria geographical location and income (WHO-WB classification) (see Table 1). It suggests that the differences between the countries may be explained by their national traditions and attitudes, including policy making and level of economic development. Table 1. CIS members income/regional grouping-2014 Low income Low middle income Upper middle income High income European Moldova, Ukraine Belarus Russia Caucuses Armenia, Georgia Azerbaijan Central Asia Tajikistan Kyrgyzstan Uzbekistan Kazakhstan Turkmenistan 2

3 The results of more than two decades of CIS healthcare reforms are contradictory. Four main phases in the development of the post-soviet CIS countries' health systems can be selected, the current stage started about 2008, when almost all CIS members initiated strategic reform plans (modernization) reflected in relevant strategies or programmes. Kazakhstan approved the Concept of the Unified National Health System (UNHS) and the Code "On people's health and the health care system," (2009), the State Health Development Program "Salamatty Kazakhstan" for (2010).Russia adopted the new federal laws "On Mandatory Health Insurance in the Russian Federation" (2010) and "On the Basis of Public Health Protection in the Russian Federation."(2010) In December 2012, the Russian government approved the State Program of Health until Ukraine at that time only began the first major health sector reforms - health care reform program has become a subsection under "Improving the quality of social services" program of economic reforms in Ukraine for Moldova announced comprehensive health care reform as a part of the National Health Policy for health in and Health system development strategy for the period was adopted. In order to maintain links existed during the Soviet era in June 1992 CIS members (except Azerbaijan) signed an agreement on cooperation in the health field. In accordance with this document, Council on Health Cooperation was established. Its activities aim at specifying mechanisms of interaction between health and other concerted ministries of CIS members on mutully important issues of health protection 3. To improve the interaction of CIS members in health sector the Expert Council on Public Health at the Inter-Parliamentary Assembly of States - the CIS members was created in April Its task is to improve the model legislative framework in the field of health and to identify optimal ways to achieve balanced budgets, reduce costs. The problem is that the multilateral documents approved often fail to keep pace with the changes that are taking place in national health systems, so there is a need for the modernization of the regulation of inter-state relations in the health field. The common health system problems in CIS members are identified as follows: - increasing antagonism between insurance, budget and market health care model with constant growth of health care costs; - insufficient level of family, preventive and high-tech medicine and lack of public commitment to a healthy lifestyle; - increase in the cost of drugs while domestic pharmaceutical plants often fail to comply with international GMP standards; - lack of model legislation governing the general principles and approaches in the organization of the health care system, as well as the state guarantees the citizens of the CIS of affordable and quality health care in the territory of the other Commonwealth entities. Perhaps the main question that is often left beyond the discussions is what better demonstrate the CIS members in health sector today, similarities or differences. One of similarities worse noting is the changing role of the state leading to the growth of private spending. At the initial stage of health reforms, almost all countries set the task of introducing market mechanisms. But the Soviet model laid high level of state social guarantees for population and their sudden cancellation could cause large social costs. Probably because of this, the disproportion between the proclaimed goals (universality and accessibility of health care), and the mechanisms to achieve them (the reduction of public health expenditures, the commercialization of services delivery) can be observed. The use of different technologies for solving similar problems, leads to different outcomes that in fact, can be seen in CIS members. At the same time policy closure distorts the real picture of what is happening and makes it 3 For example, Interstate programme of cooperation in sanitation protection of territories of CIS members from dangiourous infectious diseases (2000). 3

4 difficult to reach correct conclusions, to build a political perspective and develop appropriate action plans. (Sinfield A. 2005) In recent years, interest in research in health policies has increased, especially in terms of the analysis of their changes (C. Clavier and E. de Leeuw 2013).There are attempts to construct a multi-dimensional classification of political systems and political regimes of modern states based on the development and application of complex methods of comparative analysis that would compare the political evolution of the post-communist countries, and changes in the development of health systems and the provision of medical services (Melvil, 2007). However, there are certain difficulties in the political interpretation of the quantitative studies. Health care reforms in the CIS countries, especially in the initial period, had a negative impact on population health status major trends being reduced life expectancy and increased mortality. At the end of the first decade of the twenty-first century, these indicators have improved slightly for selected countries. The rate of decline in mortality vary across countries and categories of settlements. A similar situation is with mortality rates by main causes. However, the data is incomplete ( no data for Turkmenistan and Uzbekistan since 1995 and 2000, incomplete data on Tajikistan; Georgia s data taken into account until 2009), which complicates the comparative analysis. Morbidity from six main classes of diseases: infectious and parasitic [1]; cancer [2]; respiratory [3]; cardiovascular [4]; digestive [5]); injury and poisoning [6]) in CIS members during the past 15 years has increased in almost all classes, except for infectious and parasitic diseases. For example, in Azerbaijan there is an increased in the incidence in the first 5 classes and reduction in the 6th class. In Armenia, the situation is similar. In Belarus, the increase is observed only in the 2,3 and 4. Kazakhstan shows the incidence rate for all classes, except the 1st. Kyrgyzstan - reduction in the incidence of 1 and 3, the remaining growth is observed. Moldova - growth in 2,3, 5. Russia - decrease in the incidence of the 1st, the remaining growth. Tajikistan shows growth in all classes of illnesses. Ukraine shows growth of only cardiovascular diseases (the 4), the rest are decreasing. Thus, there is an increase in morbidity rates for the five out of 6 main classes of diseases. However, in all CIS members number of first registered HIV cases increased, in some countries, in dozens of times: Armenia ( , ), Kyrgyzstan ( , ), Tajikistan ( , ). Not so much, but there is an increase in first registered diabetes in all CIS members in last 15 years, from thousand people in 2000 to thousand in 2014, with almost twofold growth in all countries. Against the background of increasing morbidity it is important to identify those diseases in which there is a decline in the majority of CIS members, or only a slight increase in the rest. For example, the statistic demonstrate that in Azerbaijan, Kazakhstan, Moldova, Russia, Ukraine the incidence of drug and substance abuse (the number of first registered cases) has been a decline for the period (in Russia, perhaps the most significant from thousands to 21.9 thousands) and Armenia (0.02. thousand to 0.06 thousand), Belarus (1.2 thousand and 1.4 thousand), Tajikistan (0.5 thousand and 0.6 thousand). It should be noted that the highest morbidity rates were observed at the turn of , than they began to fall. Therefore, many researchers, despite the higher level of morbidity in 2014 as compared to 2000 consider this to be a positive result. In 2014, almost all countries have improved their morbidity indicators, but it is too early to talk about sustainable trend. The all-cause mortality rates per 1000 population for the period increased in Azerbaijan, Armenia, Belarus, Tajikistan and Ukraine, decreased in Kazakhstan, Kyrgyzstan, Moldova, and Russia. Mortality rates for a wider period between 1991 to 2014 (25 years of reform) have increased in Azerbaijan, Armenia, Belarus, Kyrgyzstan, Russia, Tajikistan, Turkmenistan (most recent data 1995) and Uzbekistan (latest data 2000 ) and decreased in Georgia (most recent data 2009), Kazakhstan, Ukraine and Moldova. In other words, the larger 4

5 the period that is analysed- from the beginning of the reform and to the present day- the higher mortality rates for all CIS members as well as for individual countries. Infant mortality (under 1 year) from main causes over the past 10 years (from 2005 to 2014) decreased, growth was recorded in Azerbaijan, Kyrgyzstan and Ukraine. There have been significant changes in the availability of health services for population. Some countries are considering a universal access as a key principle of health policy, in others it is assumed, but not guaranteed. In some countries, the principle of universal access is declared, but in reality, the state is unable to provide it. In Constitutions adopted after the countries in question declared independence almost all of them fixed the right for health protection. But in three countries, namely Uzbekistan, Azerbaijan and Armenia, the right to free health care was not fixed. However in 2015 in the new constitution Armenia included free health care into constitutional guarantees. Though getting free health care is restricted by either state health services or basic package defined by law. Access is becoming more limited due to the lack of public resources devoted to health and health care. Consequently, expanding private practice, little regulated or not regulated by the state, especially in terms of establishing fee for service. All countries have intended for more efficient use of hospital beds in practice meaning a reduction in their total number. CIS members inherited a large hospital network and the number of beds is still quite high (Table 2), though constantly decreasing. But the question remains open if such a reduction is justified in terms of securing access taking into account space-geographical factor, including ratio of urban to rural population. With 35.9 % as the CIS average the share of the rural population in Central Asian CIS members is significantly high (73.4 % for Tajikistan, followed by 64.5 % for Kyrgyzstan and 63.8 % for Uzbekistan) than in European CIS countries (24.1 % for Belarus), with the exception of Moldova (55.1 %). In the current decade, there is a tendency of the numbers of doctors and nursing staff to decrease (see Table 2). This process is observed in Azerbaijan, Armenia, Belarus, Russia, at the same time, after a decline in 2011, there is a growth in the numbers of medical personnel of various qualifications in Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan. Table 2. Medical personnel and hospital beds (end of the year). Doctors (1) Nurses Hospital beds 000 Per population 000 Per population 000 Per population Azerbaijan Armenia ,2 12, ,5 12, Belarus (2) 89 (2) Kazakhstan , Kyrgyzstan

6 Moldova ,5 77, ,4 77, , Russia Tajikistan Uzbekistan Ukraine (1) For Armenia and Moldova- dentisits are included Source: «CIS Statistics, 2014, 9 (540), С. 48, 49, 50,51 In course of transition the role of the state in society as well as in health care has changed with the emergence of strong individual ideology. (Chubarova, Grigorieva, 2013). On the crest of the democratic up tide of the late 1980's and early 1990 s the notion prevailed that the state should withdraw from direct participation in the economy by providing space for market self-regulation. General principles of market relations have been automatically transferred to the social sector, including health care. In the early years of reform hopes were high that the market will regulate the relationship between all the actors of the health system. Conceptually, this is reflected in the statement of "self-regulation in health care." that led to decreasing role of government in health care in the post-soviet states. The Soviet state was regarded as too paternalistic for the market economy, so the main course had been taken to reduce state intervention in social sector and to increase individual responsibility for well-being and health. However, health care as W. Hsiao mentioned, is a "distorted economy," ie, economy in which market forces can operate, but their influence on the "product" ( volume, prices, and quality) may differ significantly from other commodity markets (Hsiao W. 1995). Most CIS members have decentralised responsibilities for organizations and management of health system transferring them to regional (municipal) governments. Ministry of Health's role in the hierarchy of ministries was low and mostly reduced to regulation, development of clinical protocols and standards, auditing projects and programs. But in the conditions of high social and economic disparities between regions this led to widening regional disparities in access to health care and undermine equity in health financing in regions and municipalities. Though at the beginning of the current decade, there has been a process of re-centralization (new centralization) in some CIS members (Armenia, Kazakhstan, Kyrgyzstan, Russia, Moldova). However such a centralization might does not seem to changes in the role of the state in publicprivate mix in health care. Among the trend that contributed to increased individual responsibility the following should be mentioned. First, the resistance of already established organizational structures in health care, meaning the formation of new system of interests, second the changing role of medical profession that seems to be adopting quite well to modern market realities, and third, stress on behavioral factors in understanding social determinant of health and evident underestimation of such social factors as income, employment, education, housing. (Chubarova 2010). 6

7 2. Public-private mix in health care finance: towards individual financing. What consequences for access? All countries in question in 1990s experienced dramatic drop in GDP due to disintegration processes and resources devoted by the state to the public needs had decreased. This was reflected in government health financing and as a result people have to mobilize private resources. In 2000 the CIS economies started to recover- the rate of GDP growth in most of them was quite high. Did it translated into health expenditures growth? Total health expenditures as a share of GDP in CIS members differ. The lowest are in Turkmenistan (2.5 %), Kazakhstan (4,3%) and Armenia (4,5%); the biggest Moldova and Georgia, up to European standards. It should be noted that there is no strict link between income level and share of GDP devoted to health. Russia (6,5%) is the only high income level country in the group but is somewhere in the middle between CIS members closed to Tajikistan (6,3%), the country with the lowest income. Total health expenditure in CIS members, % of GDP Table Azerbaijan Armenia Belarus Georgia Kazakhstan Kyrgyzstan Moldova Russia Tajikistan Turkmenistan Uzbekistan Ukraine However, what is important for access is how total expenses are split between public and private sources. Below we will discuss in more detail data available on public and private finance in CIS members Public health expenditures The share of GDP devoted to health care from public sources is low in all countries in question according to international standards. During the transition the share of public finance dropped in all countries though to a varying degree. The decrease was the most dramatic in Georgia, Armenia, Azerbaijan and Tajikistan. By 2013 public health expenses amount to more than 50% of total health expenses in Uzbekistan 50,5%, Moldova- 50,6%, Ukraine 55,9%, Russia - 64,3% and Belarus 72,2%. In these countries except Belarus the share of public expenses increased as compared to The share of government expenditure in total health expenditure also vary greatly from 20% in Azerbaijan, 21,5% in Georgia and 30,6% in Tajikistan to 65.4 % in Belarus and 65.5 % in Turkmenistan. Table 4 General government expenditure on health as % of total health expenditure

8 Azerbaijan 24 18,1 26,8 21, Armenia Belarus Georgia 5.2 lowest Kazakhstan Kyrgyzstan ,3 54,0 48, Moldova Russia , Tajikistan , Turkmenistan Uzbekistan Ukraine Source: WHO health statistics The CIS Statistical committee provides data on social spending of consolidated budgets as % of GDP, to include health spending as well. It should be noted that health expenditures apart from being quite low - in all countries in question rank 3 rd among social expenditures after social protection that include various social cash benefits and education. Social spending, consolidated budgets, % GDP Table 5 Health Education Social protection Recreation, culture and religion Azerbaijan ,4 3,5 1,7 0, ,9 3,9 3,0 0, ,9 3,0 2,4 0, ,0 2,8 2,6 0, ,3 3,0 3,4 0,5 Armenia ,0 2,6 2,1 0, ,4 2,5 2,0 0, ,6 2,8 7,1 0, Belarus ,8 5,5 4,4 0, ,0 2 6,2 0, ,6 6,2 4,5 1, ,9 5,1 9,4 1, Kazakhstan ,0 4,5 0,8 0, ,1 3,3 6,6 0, ,4 3,4 4,5 0, ,5 3,5 4,1 1, ,1 3,3 4,2 0,7 Kyrgyzstan ,0 3,5 1,7 0, ,3 4,9 2,8 0, ,9 5,4 5,0 0, ,0 6,0 5,9 0,8 Moldova ,8 0, ,9 4,5 3,8 0, ,2 7,2 11,3 0, ,6 9,1 14,3 0, ,3 6,9 12,9 0,9 Russia ,9 2 4,0 1,5 0, ,1 2 2,9 0, ,7 2 3,7 8,7 0, ,7 2 4,1 13,3 0, ,5 3,8 12,4 1,0 Tajikistan ,9 2,3 1,8 0, ,1 3,5 3,2 0, ,4 4,0 3,5 1,2 8

9 2015 2,0 5,1 1,2 Uzbekistan ,3 6,2 1,8 0, ,8 7,2 2,2 0, ,0 7,1 1,3 0,2 Ukraine ,8 2 5,8 3 6,1 0, ,8 4,0 3,4 0, ,4 5,9 8,7 0, ,0 7,1 9,3 1, ,6 5,8 8,9 0, State budget of Azerbaijan, Armenia and Uzbekistan; in Kazakhstan until Including physical culture and sport. 4 Including basic research. Spiritual and physical development. The composition of public finance in CIS members differs significantly. Methodologically, public spending includes budget and social health insurance money. Some countries - Moldova, Russia, Geogria and Kyrgistan- introduced compulsory health insurance (CHI) and social security contributions amount to a sizeble share of public health funds. Though introduction of CHI is declared by many countries (Russian Federation, Kazakhstan, Kyrgyzstan, Ukraine, Moldova, and Azerbaijan) as aim of health reforms, it seems that most of them are still at the beginnhing of the road. Historically, the situation in the CIS members is specific in a sense that in these countries CHI replaces free services provided by the state rather than private expences as it was the case in Western Europe. Perhaps this explains to a large extent why models of CHI developed in the region might not sit well with the CIS memebrs social and economic realities. Table 6 Social security expenditures on health as % of total government expenditure on health Azerbaijan Armenia Belarus Georgia Kazakhstan 13 (1996) 19.4 (1998)- stop Kyrgyzstan (1997) Moldova (2004) Russia Tajikistan Turkmenistan 6 (1996) Uzbekistan Ukraine 0 0 0,5 (2003) Source: WHO statistics The share of health expenditures in total government expenditures is the lowest in Azerbaijan, and amounts to only 3.5% in 2013, decreasing during the whole transition period. The highest share is in Belarus (13.5%), Moldova (13.4%), Kyrgyzstan (13.2%) and Ukraine (12.2%). However, if look at the dynamics, by 2000s in most countries except Belarus, Kyrgyzstan, Russia and Turkmenistan the share of health in government expenditures decreased and later gained some momentum. It seems that fluctuation in government health expenditures were caused by the adoption of selected health programmers that led to increase in financing at certain periods of time. 9

10 Table 7. General government expenditure on health as % of total government expenditure Azerbaijan Armenia Belarus ,7 9, Georgia 2.5 2,3 4,0 7, Kazakhstan Kyrgyzstan Moldova Russia , Tajikistan Turkmenistan Uzbekistan Ukraine Source: WHO statistics Financial support for health care reform in the CIS members by international organizations is selective. In some cases it is substantial. For example, the total health reform budget in Azerbaijan in 2008 was million, of which $ 50 million - loan from the World Bank. External sources play an important role in the financing of health in Moldova, first of all from the EU. For example, the total budget of European Commission that sponsored Strategy for Health System Development of Moldova only for the period amounted to more than EUR 46 million. Under the terms of the grant a country should implement important structural changes, some of them are controversial as they are typically based on certain ideological preferences of the donor while national (objective and subjective) conditions might not be given a due account Private health expenditures After the decay of the USSR private health expenditures increased substantially in all CIS members. Especially if it is assumed that they were zero in Soviet times. Some fluctuations are observed in all countries in question for the 25 years of transition. But in general, having increased sharply immediately after the transition started, private health expenditures remain quite high in all countries. As a result by 2013 they accounted for more that 50 % of total health expenditures in Azerbaijan (79.2), Georgia (78.5), Tajikistan (69.4), Armenia (58.3), Moldova (54), Russia (51.9). A bit lagging are Uzbekistan (49), Kazakhstan (46.9) and Ukraine (45.5). The lowest share is in Belarus and Turkmenistan (about 34.5). Private expenditure on health as % of total expenditure on health Table Azerbaijan 76 81, ,8 78, Armenia ,7 55,5 47, peak Belarus , , Georgia Kazakhstan Kyrgyzstan Moldova Russia Tajikistan Turkmenistan Uzbekistan Ukraine

11 Source: WHO statistics But what is more important, private expenses in all CIS members mostly consist of out-ofpocket payments (OOP). This means that people pay cash at the moment of receiving medical treatment. What a striking similarity taking into account the fact that after the decay of the Soviet Union the countries in question developed along different paths and had to face globalisation challenges individually, relaying on their own strengths and weaknesses Their share of OOP payments is significant in private expenditure and as a result in total health expenditures as well. In 2013 in five CIS member states Armenia, Belarus, Kazakhstan, Russia, Uzbekistan and Ukraine- OOP constitute more than 90% of private health expenditures. The situation is slightly better as to total health expenditures because of the varying share of the latter in total health budget. As a result the differentiation between countries is more if OOP payments are analysed, from 31.9% in Belarus and 34.5% in Turkmenistan to 71.1% in Azerbaijan and 60.1% in Tajikistan. Table 9 Out-of-pocket expenditure on health % % % % % % % % % % % % % THE PHE THE PHE THE PHE THE PHE THE PHE THE PHE THE Azerbaijan Armenia Belarus Georgia Kazakhstan Kyrgyzstan Moldova Russia Tajikistan Turkmenistan Uzbekistan Ukraine THE total health expenditures PHE private health expenditures Source: WHO statistics At the same time voluntary private health insurance (PHI) is not a success in the region. The share of VHI in health financing is high in Russia 7 % in In the majority of countries in question it is less than 1% (Belarus, Tajikistan 0.1%, Kyrgyzstan 0.2%, Armenia 0.4 %). It should also be noted that PHI is typically provided by large foreign and domestic employers as a supplement to the state system. Table 10 Private health insurance as % of private expenditure on health Azerbaijan Armenia (2001) 0.2 0,4 1, Belarus 0.1 (1998) 0.1 0, Georgia 0.1 (1997) Kazakhstan Kyrgyzstan Moldova (2002) Russia Tajikistan Turkmenistan Uzbekistan (с 2004) % PHE

12 Ukraine 0.8 (1996) Source: WHO statistics The recent collective study analysed health spending by source for 184 countries between 2013 and 2040 to specify general trends in health expenditures, included all CIS members. (Dieleman J. et al 2016). The authors discuss the so called health transition that means that with the growth of national income the health spending also increase as well as the share of pre-paid government or private plans in health financing. The data for CIS counties is presented in table below. It shows that by 2040 the role of OOP payments in total health budget in these countries will not change much and still remain significant as in Comparing OOP projections for individual CIS members with the 2040 prognosis for WHO income groups (see also Table 1) provides information for a further discussion. Let s start with extremes. Russia is the only country in the group that is at present rated by the WB as high income. The predicted share of OOP in total health expenditures is much more higher than average for the relevant income group (42.8 versus 12.6). Tajikistan, the low income CIS member, is also considerably above the low income average (61 versus 49.7). Kyrgyzstan, on the contrary is expected to perform better than low income countries as average.( 33.7). Among upper-middle income CIS members, Belarus and Turkmenistan are likely have low (relatively to other CIS members) share of OOP and fall within the average, for Azerbaijan and Kazakhstan the estimations predict much bigger share of OOP than average. Low middle income CIS members generally comply with the average estimates of 49%- (Armenia 49, Moldova 44, Uzbekistan- 41.2, Ukraine 37.5). Table 11 Health care financing in 2040 High income (HI) Upper middle(umi) 9019 ( ) 1935 ( ) 507 ( ) Lowermiddle (LMI) Low income (LI) 1995 THE, % GDP 2013 THE, % GDP 2040 THE, % GDP ( ( ) ( ) ( ) THE per capita, US$ 164 ( ) Domestic GHE, % THE 56.9 ( ) 56.4( ) 36.6 ( ) 31.2 ( ) Prepaid, % THE 30.4 ( ) 16.5 ( ) 13.2 ( ) 7.4 ( ) OOP,% THE 12.6 ( ) 27.0 ( ) 49.0 ( ) 49.7 ( ) DAH, % THE growth in THE per capita ( ) 0.1 ( ) 1.2 ( ) 11.7 ( ) 3.4 ( ) 3.0% ( ) 2.4 ( ) Armenia (LMI) Azerbaijan (UMI) ( ) ( ) 951 ( ) 1854 ( ) 41.3 ( ) 24 2 ( ) 7.0 ( ) 6.9 ( ) 49.1 ( ) 68.8 ( ) 2.6 ( ) 0.1 ( ) 4.0 ( ) 3.2 ( ) Belarus (UMI) Georgia (LMI) Kazakhstan (UMI) ( ) ( ) ( ) 2703 ( ) 2064 ( ) 1747 ( ) 68.5 ( ) 22.5 ( ) 57.1 ( ) 4.3 ( ) 23.6( ) 0.8 ( ) 27.3 ( ) 53.0.( ) 42.1( ) 0.0 ( ) 0.9 ( ) 0.0 ( ) 3.5( ) 4.2 ( ) 2.5( ) 12

13 Kyrgyzstan (LI) Moldova (LMI) ( ) ( ) Russia (HI) (6.4 Tajikistan (LI) Turkmenistan (LMI) Ukraine (LMI) Uzbekistan (LMI) 8.8) ( ) ( ) ( ) ( ) 441 ( ) 1496 ( ) 3281 ( ) 363 ( ) 668 ( ) 1838 ( ) 849 ( ) 60.0 ( ) 52.9 ( ) 51.2 ( ) 34.4 ( ) 68.1 ( ) 57.9 ( ) 53.2 ( ) 0 1 ( ) 1.1 ( ) 6.0 ( ) 0.3 ( ) 4.9 ( ) 4.4 ( ) 5.0 ( ) 33.7 ( ) 44.0 ( ) 42.8 ( ) 61.0( ) 26.8 ( ) 37.5( ) 41.2 ( ) 6.2 ( ) 2.0 ( ) ( ) 4.3 ( ) ( ) 4.3 ( ) 0.2 ( ) 0.2 ( ) 0.5 ( ) Source: Dieleman J. et al (2016). Kurowski. National spending on health by source for 184 countries between 2013 and 2040 / Published online April 13, Individual health financing and access to health care. The increased role of private finance in health care in CIS members raises concerns about people s access to health care. The idea is that no one is pushed into poverty or kept in poverty because of expenditure on health services. In this context the WHO stresses that any form of prepayment is more equitable that individual payment in case of emerging need.(who, 2000) The basic problem is not that health care is financed privately, but the necessity to ensure that people have money to pay so this does not impede access and are equitable. Two basic concepts in health financing include fairness of financial contribution and financial risk protection. The index of fairness was developed in 2000 WHO health report. Though it is criticized still it provides useful information..the most unfair in relative terms are health systems in Russia, Armenia, Kyrgyzstan and Kazakhstan. On the other side of the spectrum are much more fair Belarus, Georgia and Tajikistan. Table 12 WHO 2000 ranking-cis members Country WHO 2000 rank Rank in CIS WHO fairness of Rank in CIS financial contribution rank 1 Kazakhstan Belarus Ukraine Moldova Armenia Azerbaijan Georgia Uzbekistan Russia Kyrgyzstan Turkmenistan Tajikistan Source: World Health Report, Health systems, improving performance. Geneva, WHO. 3 1 ( ) 3.4 ( ) 3.6( ) 3.4 ( )

14 Financial risk protection indicators are developed within the framework of WHO UHC monitoring to track the level of financial risk in health, namely the incidence of: catastrophic health expenditures (the number of households of all income levels who suffer financial hardship because of relatively large health payments in a given time period); impoverishment due to out-of-pocket health payments. Using CIS statistics we tried to look at two things, namely the household health expenditures and influence of poverty and inequality. Household expenditures on health care increased in most of CIS members quite significantly remaining relatively stable in Kazakhstan and Kirgizstan. Table 13 Household expenditures on health care, % of total consumer expenditures Azerbaijan Armenia Belarus Kazakhstan Kyrgyzstan Moldova Russia Tajikistan Ukraine Source: CIS Statistics The same dynamics can be followed in the role of health services in household expenditures on services, for which they are to pay money directly. Their share increased in 2013 as compared to 2000 in all countries for which such data is available. Table 14 Share of health in services-for-fees household expenditures, in current prices, % of total Azerbaijan Armenia Belarus Moldova Russia Tajikistan Source: CIS Statistics The situation in the CIS members seems to be in line with the results of research on health financing in low- and middle- income countries over the past decades focusing on equity in health financing and delivery that indicates the following. 1. Health care financing in such countries benefits the rich more than the poor but the burden of financing also falls more on the rich (Asante A et al 2016). 2. Poor people might not even try to search medical care if they know they have to pay for them. Thus this item of household expenditures is lower that it should be if all the health needs are to be met (unmet need). 14

15 There is a lot of literature on inequality and access to health care. It discusses social economic factors, including special reference to racial and gender inequality as well as organization of health care, for example role of universal health insurance (Davis K. 1991). It also covers CIS countries (Shalke, Kislisina). The authors generally accept that there is likely to be a link between various inequality dimensions and access to health care. Health inequalities stream documents the structural differences in health status caused by social and economic (income) status of people. It suggests that poor people generally have worse health status that relatively well off people. In 2012 considerable share of population of Tajikistan (46.7 %), Kyrgyzstan (38.0 %) and Armenia (32.4 %) lived below the national poverty line, while the corresponding shares for Kazakhstan (3.8 %), Azerbaijan (6.0 %) and Belarus (6.3 %) were significantly lower. In fact poverty in CIS members is probably the most popular comparative social policy topic, especially for the western researches. The explanation might be in the availability of quantitative data ( in health care qualitative, institutional information seems to be more important). It should be noted that in 2000s all countries recorded the decrease both in poverty rates and absolute numbers of people living in poverty. Kyrgyzstan and Russia recorded the highest levels of income inequality (42.0 in 2012) among CIS countries followed by Armenia Moldova and Azerbaijan (37, 37 and 33.0 in 2014, respectively) The levels of income equality of Ukraine (24.8), Kazakhstan (28.4) and Belarus (28.5) were lower than the EU-28 average (30.6) in 2012 (Eurostat, 2014). The high degree of polarization of income in 2014 was observed in Armenia, Kyrgyzstan, Moldova and Russia, where the share of 20% of the richest population accounted for 43-51% of the total population cash income, while the share of 20% of the least well-to-do amounted to 5-6%. This allows to suggest that taking into account the large share of OOP in health finance the latter group of population might have difficulties in access to health services. The paradox of CIS members is that the high share of private finance corresponds with a high share of population living in poverty. In Tajikistan where 75 % of population lives in poverty private expenses amount to 70.4 %. In Georgia state financing amounts to only 30.9% of total health expenses while private covers 69.1%. The need to pay out of pocket whether formally or informally- makes health services inaccessible to 30% of Georgian population. The practice of informal payments became widespread in the CIS members in early 1990s leading to formation of shadow health economy (Lewis M. 2007).They include institutional or individual payments to suppliers, in kind or in cash, which are made outside the official channels or paid for services that should be covered by the health care system. With the reduction of government spending and low wages paying medical staff directly has become almost a norm. However it changed with the official introducton of - co-payments when patients officially compensate directly a certain share of the costs of medical treatment (Armenia, Kyrgizstan); - right for state health services to charge fee for medical treatment provided extra to a guaranteed package (Russia, Belarus). This usually goes together with the introduction of a basic health package that formally includes services that are provided to the public free of charge and are funded by public means-- social security contributions or taxes. For example, in Russia all public health services especially hospitals have a special department though which a patient can pay and get services not included into free government guaranteed through CHI. However, there is a big concern- supported by evidence- that health services often make patients pay fees for services that should be provided free of charge (to overcome waiting lists, to visit a certain specialist). The situation is even more complicated as the paid services are rendered in the same facility, using the same equipment, etc. Almost all countries have accepted the possibility of open privatization in the pharmaceutical sector and specialized outpatient care. In Azerbaijan, the private practice as well as private pharmacies were legalized in However, there are significant differences between the CIS members in respect to hospital sector: for example, in Armenia, hospitals are semi- 15

16 commercial organizations while in Georgia health care institutions are independent legal entities. They operate as private enterprises or joint ventures, autonomous from the state budget and management. In Russia, private health services are developing fast in certain segments of the industry (dentistry, plastic surgery, obstetrics). Discussion The modern public-private mix in health care financing in CIS members developed from the similar financing structures in the Soviet era. Since that time health systems and health policies in these countries took seemingly divergent paths that to a large extend are routed in national peculiarities; many of them did exist when they were parts of the USSR. However certain common trends are to be stressed, namely: share of private finance in total health expenditures is significant in all countries; OOP expenditures constitute the major share of private health expenditures. Thus, it is suggested here that all countries in question rely heavily on out of pocket payments in health care finance regardless of the GDP level, total amount of health system finance and the concrete organizational structures. One can even speak about individual, rather than just private health care financing. Even more, such a big share of OOP as predicted by some research is unlikely to change dramatically in coming years. As a result, everyone pays for himself/herself and the system itself becomes individualized. An important consequesnce is that virtually no redistribution happens in health financing that in fact undermines the basis of social solidarity, when rich pays for the poor and those who are healthy pay for those who are ill. The problem in a majority of CIS members is aggravated by high levels of inequality and in some countries- poverty. Decline in the share of state financing in many countries has led to negative results for people in CIS members making it difficult for people to access healthy services. In such circumstances, the effective use of public funds is high on the health agenda in all CIS members. However, the programme-based measures that are adopted in many CIS members and aim at solving particular problems in health systems, based either on epidemiological or resource approach, does not seems to contribute much to overall health system performance (lacking systematic vision and proper sequencing, creating gaps). Lack of public resources allocated to health care in poor countries is likely not only to impede assess to health care by a large population segments but to change relevant policies. Therefore, the role of private finance seemed to be institutionalized, or deeply embedded into existing health systems. Even more, it is not just supported by existing delivery structures but such structures are likely to develop based on the notion of individual health finance. Governments seem to be ready to shift responsibilities for health care to people as a way to solve a problem of health financing. Thus, the stress on individual health responsibility based on a behavioral approach. In such a situation building health systems on basic packages opens a possibility for the state to easily change the composition of such a package to increase individual finance. It is argued here that if the modern governments in CIS members still are not prepared to expand their health responsibilities, the development of other collective forms of prepayment need to be developed if universal health coverage is to be a reality. Literature Asante A, Price J., Hayen A., Jan S., Wiseman V. (2016).. Equity in Health Care Financing in Low- and Middle-Income Countries: A Systematic Review of Evidence from Studies Using Benefit and Financing Incidence Analyses. PLoS One.Apr 11;11(4). Fierlbeck K. H. Palley (eds). (2015). Comparative Health Care Federalism. Ashgate, UK. Clavier C., E. de Leeuw (eds). (2013). Health Promotion and Policy Process. Oxford University Press. 16