The Future of Healthcare: Budget Balance


By Strategiya magazine. February 2020.

Summing up the 9th Gaidar Forum sponsored by the Pharmstandard company: "healthcare efficiency" was one of the major topics. CEO of JSC Pharmstandard Grigory Potapov took part in the discussion.

It was mentioned that the new century saw the global increase of the total health expenditure. This is due to both ageing of population, growth of technology, and increase of customer demand. Analysis of key indicators of healthcare capital in many countries displays that efficiency does not always depend on the capital. Correct balance and priorities also allow for achieving better results.

— During the last year's Gaidar Forum, the Health Minister made a meaningful and profound presentation outlining what healthcare will be like in future.  A lot was said about the role of technologies,  discoveries, and science in general in the reconstruction of the current landscape. The increasing importance of preventive measures and a confluence of factors which have nothing to do with treatment was also mentioned. Starting from this point, we face the question: how must the budget be structured? That's fine if we are going to be healthier, wealthier, and happier in the future. But what steps do we take in the present? Stats tell us that the system needs to be changed. Currently, up to 50% of healthcare capital is spent on 5% of patients with severe illnesses. This is why preventive measures in respect of severe illnesses may have a great impact on the whole system.  Another problem is the interregional inequality in the Russian Federation while the requirements imposed on different regions are the same, as stated by Alexander Plakida, discussion moderator, Executive Director of the discussion platform Healthcare Efficiency of RANEPA, CEO of Alyans Consulting, Chairman of the Board of Governors of the Russian Local Network of UN Global Compact.

Natalia Khorova, Russian Deputy Minister of Health, noted that the major health care development technique is the creation of a three-level system. The first level includes prevention and early detection, the second is diagnostics and treatment using determined methods, while the third level implies the implementation of state-of-the-art technologies.

She emphasized, "We need more investments to build this system. According to the stats, the health expenditure in the area of national health insurance has increased from RUB 0.5 Trillion to RUB 2.4 Trillion between 2010 and 2020. The leading funds in the healthcare system show the depreciation of 52.7%. It takes enormous expenses to recover them. This is what our efforts have been focused on since 2011 when we started remodelling the system. It's been a long while since then, and now we find ourselves in almost the same situation as we were 10 years ago. We need capital injections to create the primary setting and supply mobile health platforms to provide services to patients in outlying regions."

According to the presidential decree, the Ministry of Health in cooperation with regional representatives is closely engaged in the stocktaking of the major funds to fulfil the primary care tasks faced by citizens every day. Territorial entities of the Russian Federation are currently completing the stocktaking of the objects. The primary care improvement programme must be approved before 1 July. RUB 500 Billion was appropriated for this purpose.

Natalia Khorova adds, "In order to maintain the balance, the effective siting of medical facilities was prioritised. For this purpose, a dedicated geoinformation system was created in 2016. Our task is to check, in cooperation with governors and local healthcare authorities, what is missing to make medical assistance available to all citizens in different regions of the country. On top of that, the more we invest in the main funds, the more funds the national health system demands. Maintenance of expensive equipment costs a lot.


Strategic Audit

The healthcare system has set many tasks for its development. But how accurately are these tasks performed? Deputy Head of the Accounts Chamber of Russia Galina Izotova touched upon this issue in her speech.

"Today, our agency is closely monitoring national projects and state-run programmes. Early 2020, we have got down to creating project offices for monitoring state activities. Thus, we are engaged in extensive systemic work. Of course, there are certain risks of a failure to reach the objectives. Expenditure management must always be result-oriented. Evaluating these indicators for 2018 and 2019, we can see that a number of tasks will not be performed. Of course, we keep an ongoing dialogue with the Ministry of Health and the Federal Fund for Mandatory Medical Insurance.

Deputy Head of the Accounts Chamber also reminded that the health sector in OECD countries takes a twice bigger GDP share than in Russia.

 According to Galina Izotova, "we need to psych ourselves up for bigger expenses in order to perform the set tasks. We often come across the idea of using non-government funds. But is there any pattern of raising these funds? No, there isn't. It should be noted that over 50% of funds come from the Federal Fund for Mandatory Medical Insurance. And what is the liability? We have no efficiency indicators for these funds.  Today, the Accounts Chamber has to change its course. We cannot be merely supervisors. Now, we have to spend half of our time on the strategic audit. We are working in partnership with the government involving experts from different levels. We attempt to contribute to the creation of a management system which is capable of solving healthcare problems.


CEO of JSC Pharmstandard Grigory Potapov responded,

"I agree with everything said today. But it is highly important to note that the measures stated above are of no use in isolation from one another. Keeping the dialogue is important. But without improvement activities at all levels, without extra budgeting and appropriate private health service providers, the system will not operate. All the mentioned activities must be implemented simultaneously.

Strategic audit is a very good idea. Basically, what we need is constant decision-making driven by provision of the relevant information. That's why digitalisation above all. Be it diagnostics or the end of treatment, efficiency evaluation or calculus, we cannot make effective decisions at any level without up-do-date information.

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