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  • Assessment of health needs for additional funding, taking into account the increased efficiency of the use of funds and the diversification of their sources

Assessment of health needs for additional funding, taking into account the increased efficiency of the use of funds and the diversification of their sources

Priority areas of development: economics, management
2019

Objective of the research

To assess the need for additional health care funding in 2019-2024 with the use of various methods of health expenditure evaluation.

Methods

Review of research publications, comparative inter-country analysis, regression analysis, trends extrapolation, direct costing health activities implementation, interviewing experts.

Empirical basis of research

Research publications, health expenditure data for Russia and other countries, general demographic and economic predictions.

Research outcomes

Changes in the population age/sex structure and morbidity rates were considered as a factor of the need for additional health expenditure. The Rosstat’s demographic prediction for 2035 was used. The changes in morbidity rates for the classes of illnesses and age/sex groups were estimated for the period up to 2030.  Then an estimate of health expenditure was made. It indicated that expenditure in constant prices for outpatient, inpatient and emergency care would not change much over the entire period under the impact of demographic and epidemiological factors (decrease of 1%).

The impact of other factors of the need was evaluated. The major one is a political imperative of reaching the objectives of the national development, which were set by the Presidential decree of May 2018. The activities planned by the National Project “Health care” and “Principles of primary care modernization” are not enough to reach the targets of this decree. Additional activities are needed, including:

  • disaggregation of primary care physicians catchment areas (making patient list shorter);

  • a shift to a general practice model of primary care organization;

  • strengthening a network of feldsher-obstetric offices;

  • expanding outpatient drugs coverage;

  • development of rehabilitation care.

A detailed costing of these activities was conducted.

The needed additional expenditure was estimated to fit a cost of a package of medical benefits (a set of guarantees of free care) to the existing clinical standards of service provision.

An important factor of health funding need is an introduction of new medical technologies. A prognosis of additional expenditure for the technologies with a high potential clinical and economic effectiveness was developed.

Activities of enhancing effectiveness of health resources use also became the subject of the evaluation. The ways to reduce the need for outpatient, inpatient and emergency care through strengthening primary health care and decrease in length of stay in hospitals were analyzed.  

The estimates indicate that the need for additional public health funding in 2020-2030 is from 0.5% to 1% GDP annually. It is equivalent to the increase in public health funding share of GDP from  3.2% in 2018 г. to 3.7-4.2%.

Similar estimate was received through comparison of health expenditure in Russia and countries with similar level of economic development.  The average level of public health expenditure in the group of countries with upper middle income, according to the classification of the World Bank, (Russia belongs to this group) amounts to 3.9% of GDP.

Another estimate was made using the method of assessing expenditure to reach the United Nations Universal Coverage Goal. All Russian people can get all necessary medical services without financial barriers when the country spends on health from public sources at least 5-6% of GDP and  reduces a share of private expenditure from 35% of total health expenditure to 20%.

The potential to draw additional sources of public and private health funding was estimated, including:

  • expanding the basis for calculation of mandatory health insurance contributions (MHI) from investment income;

  • introducing MHI contributions for some categories of non-working population and international migrants;

  • reimbursement of health expenditure for road incidents from road insurance scheme;

  • compensation of ecology-related health expenditure from ecological contributions.

Additional health revenue from these sources will amount 100/4 bln. roubles in 2019 prices.

Additional revenue of MHI system is possible from two major sources:

  • introduction of MHI contributions for the working citizens within their income tax;

  • increase of transfers to the Federal MHI Fund from the federal budget.

Extrapolation of private health expenditure to the period up to 2030 (under assumption of constant institutional factors) indicates that in 2030:

  • private expenditure on drugs and medical devices will increase  by1.8 times relative to 2018;

  • -the volume of out-of-pocket and voluntary health insurance payments for medical services will increase by 1,9 times relative to 2018;

  • voluntary health insurance contributions will increase by1.6 times relative to 2018.

The share of private health expenditure in GDP will decrease from 1.7% to 1.5%.

There is some potential for further increase in private health expenditure through the specification of a package of medical benefits and setting more precise limit of free care. There is also a potential for establishing programs of voluntary health insurance for drugs provision with subsidies of the government.  

Recommendations for the use of research outcomes

Research results can be used by the President Administration, Federal Government Office, Federal ministry of health, Federal ministry of finance, Federal ministry of economic development, Federal MHI Fund and Accounting Chamber for the development of recommendations on the size of public health funding.