chernichovsky, d. -- draft -- feb.041 “ decentralization ” of the russian health system - the...

Chernichovsky, D. -- Draft --Feb.04

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“Decentralization” of the Russian Health System - The Perilous Road From Centralism to Federalism

byDov Chernichovsky


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The Challenge

Transition from a highly centralized to a decentralized functional federal system


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The General Context Goals of the Health System (from an investment perspective) :

Health –technical efficiency of medical care in production of health Equity - (includes also efficiency considerations) Cost containment - technical efficiency of medical care in production

of health (and allocative efficiency in consumption of care) Micro-economic efficiency – technical efficiency in the production of

quality care Client satisfaction, mainly through accountability

Systemic Functions --subject to devolution and decentralization:

Policymaking Financing Organization and Management of Care Consumptions Provision of Care Training and medical education Research and development


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General Trends in Key Functions

Horizontally “Centralized” combined with vertically ‘decentralized” approaches – fiscal federalism -- in financing for improved

Health, in case of communicable diseases Equity Cost control

Horizontally and vertically “Decentralized” approaches – development of internal markets – in provision of care for improved

Production efficiency Client satisfaction

Emerging organization and management of care consumption (OMCC) function for potential removal of centralized state control from how care is consumed, and for consumer empowerment

Relatively centralized policy making, research and development, and training


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The Soviet Record and Legacy Health

Eradication of communicable diseases Missing the ‘epidemiological transition’ to non-

communicable diseases that eventually led to inferior health outcomes

Equity Relatively wide access to care

Efficiency In spite of low levels of spending, inefficient especially

when quality of care is considered Client satisfaction

Dismal, not a concern


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The Soviet Ineffective Government

Not setting and maintaining the right priorities over time

Ineffective targeting of resources Not promoting innovation A lack of responsiveness to clients


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Structural Antecedents of Soviet Failure - Centralism

Horizontal amalgamation of responsibilities under the Federal Ministry of Health: Medical care; Medical industry, including pharmaceutical; and Training

Issues: limited span of control Priority give to industry, not to care Medical training a vocation rather than a science

Vertical Integration of all systemic functions Issues:

No checks and balances No scope for internal or any market mechanisms for

efficiency and responsiveness to clients


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The Antecedent of Soviet Failure – Centralism (Contin.)

Rigid top-down allocation of resources and management Issues:

A lack of analysis of local information for policy making

No attention to local concerns and aspirations Depression of local initiatives Accountability ‘upward’ to authorities rather than

‘downward’ to clients and patients ‘Political vacuum’ at the top – detachment from

realities


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The Risky and Unstructured Transition – Major Steps (since 1991-2)

Separation of health promotion and education from Federal MOH (1991), while

Medical Care responsibilities, including financing, delegated to local government

1991 (aborted) legislation tries to base financing on private insurance

1993 legislation establishes a social health insurance system with a federal and state pools


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For The Record

During the Perestroyka period, 1988-1990, the

regime initiated a structured experiment with

decentralization of provision.


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Structure of System in 1996;Dysfunctional Blend of Old and New


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Intended Structure


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Consequences Weakening policy making and leadership

Federal MOH stripped of practical powers Local ministries lack policy making capacity

Undesirable decentralization of finance, with weak equalization mechanisms

Failed devolution and decentralization of care provision – highly centralized local systems with little policymaking and management capacity, and limited accountability to anybody

Failed development of internal markets Lopsided reform – decentralization of finance

and a lack of decentralization of provision


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Reasons A lack of leadership and resolve –

weak Federal MOH Strategy of change not clear to, and

‘owned’ by, at least local authorities Resistance of those authorities to

relinquish control over medical facilities

No real plan for ‘denationalization’ of these facilities


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Risks

Growing regional inequalities Undermining universal access to care No mechanisms for system stabilization

and long term reform through innovation

Growing inefficiencies due to weak mechanisms to deal with externalities and economies of scale


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Conclusion: Tasks to Complete

Clarify the concept of ‘functional federalism’ Re-define the roles of different levels of

government and institutions, mainly government as a non-provider of care

Build policy making, regulatory, and management of mainly local government

Devolve the provision of care to non-state institutions

Provide financial and regulatory measures for a federal system

chernichovsky, d. -- draft -- feb.041 “ decentralization ” of the russian health system - the...

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