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Analysis of the role of economic institutions in the process of Russia’s health care modernization

Department: Laboratory of Public Sector Economic Research

Institutional aspects of introducing new medical technologies (innovation subjects, their interests, obstacles on the way of implementation etc) has not previously been thoroughly researched in Russia.

The objective of this research is to find certain economic institutions, the development of which may play a decisive role in increasing the efficiency and quality of work of medical service providers in the Russian health care system.

The tasks of the research are to:

  1. Analyze the possibilities and conditions for patients’ choice of medical organizations and doctors.
  2. Analyze the impact of patients’ choice of medical services supplier on the activity of health care organizations using the system of maternity certificates as an example.
  3. Analyze the impact of innovations in payment methods for medical organizations on their motivation to increase efficiency of health care delivery.  
  4. Analyze the changes in systems of stimulating health care professionals and their relation to the conditions and results of delivering health care.
  5. Analyze the organizational-economic mechanisms of introducing new medical technologies. 

The most important results of these tasks are as follows:

1. From the point of view of the agency theory and theory of quasi-market relations, the connection between consumer choice and efficiency of using resources in health care is not straightforward. On one hand, the widening of choice options clearly benefits both patients and health care system in general. They get the opportunity to receive the required medical service, and competition among providers of medical service for the patient intensifies, which may become one of the factors in increasing the quality of medical aid.

On the other hand, unlimited choice can also have negative consequences. One of them is the high cost of finding a reliable supplier of services, duplication of some services and a loss of a systemic approach to medical and preventive work, weakening of treatment continuity, unjustified enlargement of medical aid volume and an increase of the cost trends in the health care system in general. Also we can expect redistribution effects that aggravate inequality in medical aid availability.

Analysis of foreign experience confirms this theoretical conclusion. The degree of freedom is a strong factor in evaluating health care systems, which forces many governments to construct a health care system enlarging freedom of patients on the one hand and setting certain limits to suppress cost trends without violating consistency in delivering health care on the other hand.

The dominating trend in world health care is expanding options, but some countries still demonstrate the opposite trend – limiting of options.

To obtain empirical data about consumer choice practices in heath care, Levada Center were commissioned by SU-HSE to conduct a representative survey in Russia that included 1600 people of 18-plus age group.   

The majority of the respondents believe that patients should be able to choose a medical institution and doctor within the system of free medical treatment. In practice, only 5% of the respondents changed their medical institution as their provider of out-patient services on their own initiative, 12% of patients in hospitals over the last three years chose the hospital themselves.

The data about consumer choice practices in Russian health care indicate that the possibilities for consumer choice development and intensifying its impact on the efficiency of delivering health care exist, but are still substantially constrained.

In the Russian health care system, the right to choose is declared but is not supported by an effective policy and the everyday practices of medical organizations. Thus the choice-enlarging trend is justified. First and foremost, it should increase the availability of high-quality medical treatment, which may exert pressure on medical organizations forcing them to improve the quality of their service and focus attention on the needs of their patients. 

2.  Analysis of how maternity certificates influence the activity of medical organizations based on in-depth interviews with health care professionals in the Kaluga Region and St. Petersburg demonstrated that this institution really spurred the intensification of competition among maternity hospitals, conferring advantages on those organizations that offer good service and have qualified health care workers. Staff motivation to improve the quality of their service also materially increased. The strongest impact was among doctors who work in maternity welfare clinics, where they are paid individually for each pregnant woman.

Examination of foreign and Russian practices demonstrates that merely paying lip service to choice is not enough, it has to be actually put into practice. It needs a large-scale program consisting of the following key elements: providing information for making the choice, mandatory requirement about doctors’ providing options of medical service suppliers at the following stages of medical treatment while keeping the system of referrals, using the unified tariff of the entire medical organization, improving functions of collective acquisition of medical treatment.

3. Analysis of the impact of payment methods on indicators of the health care system operation was based on data obtained from 28 post-Soviet states. The fee method (bed-day or detailed service payment) makes hospitalization more frequent, while payment for each individual case of hospital treatment has no clear effect. The fee methods have little impact on the length of hospitalization, while payment for each case of hospital treatment reduces this indicator. A decrease in the mortality rate for controlled diseases is observed only when the payment is effected for each completed case. Estimates confirmed our hypothesis about the advantage of the anticipatory principle of reimbursement of expenses.

A similar analysis was made for Russia when broken down into several regions. We have evaluated several options for the multi-factor model, using different payment methods and hospitalization rate, the average duration of hospitalization, the amount of outpatient and hospital treatment, development of paid services etc. The negative results that we obtained may be attributed to the fact that in modern Russian health care, the structural disproportions are so great that it is difficult to overcome them using the new economic motivation of medical service providers.

4. The first results of the new wage system in health care system of Russian regions over the period of 2007-2008 indicate that among the regions that adopted the new system the share of those who made staff redundant is greater compared with regions which didn’t introduce this system. The actual growth of average wages in the leading regions was not as large as expected and differed substantially within this group. It seems that the impact of the 2008 crisis had a bigger impact on medical professional employment rate and growth in their wages than changes in the wage system.

5. Existing studies of motivation and the decision-making process in the area of introducing new technology into medical organizations typically use three groups of models. The first group assumes that the main criterion in estimating new technologies is financial efficiency. The second group is based on the idea that the key factor in evaluating a technology is its ability to improve the prestige of a hospital in order to obtain indirect benefits, strengthen competitive position and achieve technological superiority. The third group asserts that the main criterion in hospitals’ evaluation of technology is clinical efficiency. 

To collect empirical data about the mechanisms of introducing new medical technologies in two Russian regions (Kaluga Region and St. Petersburg), we have carried out in-depth interviews with directors of medical and preventive treatment facility and health care management bodies. Analysis of these results demonstrated that even though all three motives (economic efficiency, prestige, clinical efficiency) exist, Russian MPTs usually act within the framework of the second group of models in making decisions about introducing new technologies. Their main motive is obtaining indirect benefits.


Селезнева Е. В. Факторы оплаты медицинской помощи, in: Российская социология завтрашнего дня: сборник студенческих работ (Вып. 4). Москва : Издательство Мухаметов Г.В., 2010. С. 86-107.