During 2014, we both had a chance to work on an exciting project of analysing inequality trends in Russia as part of Oxfam’s programme on Empowering Civil Societies in an Unequal Multipolar World (ECSM BRICSAM). Through the project, we’ve got to work on the issues of both economic inequality and inequality in access to healthcare in Russia, which are central to Oxfam’s inequality campaign. This blog reflects some of our findings and learning from the project.
According to the 2013 representative population survey, Russians think that the two forms of inequality most strongly affecting the well-being of the country’s population are:
• Income inequality (72 per cent of respondents)
• Inequality in access to healthcare (47 per cent)
The income inequality percentage may not surprise outside observers, as Russia has witnessed one of the most radical increases in economic inequality in the last two decades following the collapse of the Soviet Union, and is now on par with other high inequality G20 peers like Turkey and Mexico. Inequality in access to healthcare may come as a bit more of a surprise, taking into account that Russia formally has universal health coverage and the right to free healthcare is enshrined in its constitution. Moreover, BRICS are now being looked at as important players in the global health arena.
So, what does inequality in access to healthcare actually look like in Russia? What are the main causes of inequality in access to healthcare? And how does economic inequality, ravaging the country is related to the inequality in access to healthcare?
Inequality in access to healthcare Russia has three key dimensions:
Key drivers of inequality in access to healthcare:
Clearly the lack of publicly funded health service makes people’ income the decisive factor in a person’s chances of getting healthcare in Russia. Private expenditure on healthcare of the richest 10 per cent of the Russian population is now eleven times greater than that of the poorest 10 per cent. The combination of lack of investment in health service and rising economic inequality will continue to exacerbate inequality in access to healthcare, which, in turn, will lead to further perpetuation of income inequality at the country enters into this vicious circle.
This is the first of two posts on access to health service in BRICS countries
Jim O’Neill of Goldman Sachs turned the spotlight on the four emerging economies when he dubbed them the“BRIC” countries in 2001. The acronym was extended later — to BRICS — to include South Africa. Although such a grouping may be useful from economic point of view, it sounds awkward and artificial when it comes to global health policy.
While health economists see strong potential roles for the BRICS in the development of universal health coverage, these countries vary greatly in terms of their patterns of disease, healthcare systems, financial interest in the pharmaceutical trade, and engagement in the global arena for healthcare. Although many might be looking to the BRICS for leadership, it is still not clear if these countries have sufficient shared interests or the coordinating mechanisms and processes needed to collectively and cohesively influence or promote global health policy.
The BRICS are also nowhere near economic parity. Russia and Brazil are far ahead in per capita income, outdistancing both India and China by significant margins – nearly $14,000 compared with China’s $6,629 and India’s $1,592; data and figures which were released in 2013 by the IMF. Notwithstanding, the countries in question have for the most part fallen short of successfully addressing inequalities in healthcare. Inequality in the BRICS has come under scrutiny of late, particularly due to their falling behind on Millennium Development Goals.
Despite diversity, the BRICS countries face a number of similar public health challenges, including inequitable access to healthcare and affordable medicines, soaring health costs, rising non communicable and infectious diseases such as AIDS and tuberculosis.
These factors were illustrated by recent findings of a study conducted by Oleg Kucheryavenko, which noted that limited access to healthcare for a significant number of people in Russia is an issue of concern to all social groups, non-governmental organizations and political parties. Inequality has not been given much attention by policy makers.
The Russian healthcare system is characterized by significant differences in demand from the various socioeconomic classes. Social groups with a higher incomes request healthcare more frequently than those with lower incomes. This inequality is reflected by a widespread health service based on cash payments: high-income persons pay 2.5 times more for a visit to a healthcare institution than those with a low income. However, poor people spend 1.5 times more of their household budget on medical care than well-off people.
Since 1990, the material and human resources of the health sector have been reduced. Beds have decreased by 12%, the number of doctors has dropped by 46%, and nursing staff by 10%. Yet, Russia is still among the top countries of the world in terms of the number of doctors and hospital beds per 1000 persons.
While global growth in expenditures for health care is rising, Russian spending continues to decline, which hinders government’ ability to subsidize the most in need. Russian state healthcare expenditures are several-fold lower than the ones in the countries of the European Union; in Hungary, the Czech Republic, and Poland – 6% of GDP, in Germany – 11%.
Russian spending on the health and social sector has slipped as EU and US economic sanctions have taken hold. Cutting public expenditures meant less spending for social services. Moreover, the Russian parliament approved a fragile budget that includes a reduction in healthcare spending by 25% in 2015. These decisions have put the country’s relative position of strength among the BRICS in serious jeopardy.
Between 1995 and 2011, private spending by Russians on health surpassed state spending by 2.1 times. Over half of this private spending is for retail purchases of medicines and healthcare products. Expenditures for paid health care services and unofficial payments amount in total to 87.9% of personal expenditures.
Given the current trends in healthcare financing and the structure of informal payments for health care services, expenditures for prescription drugs are likely to increase. Our study, estimated that the private expenditures will rise from 331.9 billion RUB in 2013 to 1305.5 billion RUB in 2020, considerably outperforming state expenditures on health.
Increasing funding alone will not solve all the problems in the health care system. Current spending is both insufficient and ineffective. Without effective policy changes, additional funding is likely to have a negligible effect. A key change is to adopt a social policy based on recognizing health as a human right and not a commercial product. Adopting universal health coverage as a basis for health policy means that quality health services are publicly financed and publicly delivered to all who need it.
It is evident that the prospects for health care in Russia are directly interwoven with the nation’s future socioeconomic development. What happens in the future depends on the extent to which the government recognizes the inequality that is skyrocketing in society.
A new report published by Oxfam last week calls on governments to reduce inequality by changing the rules and systems that have led to extreme inequality, and by prioritising policies that redistribute money and power. ‘Even It Up: Time to End Extreme Inequality’ firmly presents universal public services – including health and education – as part of the solution to out-of-control inequality.
Health is both a human right and a building block to tackling poverty and reducing inequality. The provision of good quality health care for all – free at the point of use – can mitigate the impact of skewed income and wealth distribution, by closing the gap in life chances between the rich and the rest. Moreover, universal free health care (UHC) with other public services, especially education, puts ‘virtual income’ into the hands of ordinary people, further helping to level the playing field. Between 2000 and 2007, the ‘virtual income’ provided by public services reduced income inequality by an average of 20 percent across OECD countries for example.
In addition, quality health care and education can transform societies, by giving people the tools and ability to challenge unfair rules that perpetuate economic inequality. For example, healthy and well-nourished children are more likely to spend more years at school and to have better cognitive skills that help learning.
But the extent to which public services are able to achieve their inequality-busting potential is heavily dependent on how these systems are designed, financed and delivered. Low levels of public spending and a continued reliance on out-of-pocket payments to fund health services are disproportionately harming poor and marginalised women and men. User fees and other forms of out of pocket payments can push struggling families further into poverty and prevent people from getting the treatment they need.
“I went for a cataract operation. They told me it costs 7,000 Egyptian pounds. All I had in my pocket was seven so I decided to go blind” – a 60-year old woman in a remote village in Egypt”
When health care is not free, poor people are excluded from service or are forced to sell assets and borrow money; leading to debt and thus further perpetuating existing economic hardships. This happens even in rich countries; in the USA, medical debt contributed to 62 percent of personal bankruptcies in 2007.
All too often the amount of money available for governments to spend on public services is limited. Taxation is critical to ensure sufficient public funds can be invested in delivering free healthcare for all. However, the exploitation of tax loopholes, unfair tax rules and tax dodging results in governments’ loss of millions of dollars each year. For example, in 2008/09 the Rwandan government authorized tax exemptions that could have been used to double the health and education spending.
Decent investments in public health services that are free at point of delivery will boost the rights and opportunities of poor people. The growing momentum for UHC – under which all people should get the healthcare they need without suffering financial hardship – has the potential to vastly improve access to healthcare, and drive down inequality.
A lot has been written about the Ebola crisis in West Africa in the last few weeks. Many excellent articles have highlighted the plight of those suffering with Ebola (Newsweek), and the people on the frontline trying to tackle the virus (Time) and the consequences on the affected countries as a whole (How we made it in Africa). However, the real tragedy is how an inherently preventable virus was able to spread like wildfire throughout West Africa and why public health facilities failed on such an enormous scale.
I first heard about Ebola in March 2013, four months after the first patient died of the virus in a small village in south-eastern Guinea, the first ever in West Africa.
With the death toll rising across the border in Guinea, discussions in Monrovia turned to the threat of it reaching the capital: “no previous outbreak has killed more than 300 people”, “it is easy to avoid just don’t go near sick people and you are safe”, and “the disease kills people so quickly it will die out before it reaches Monrovia”. The general message was “it is scary, but we can control it with basic public health.”
Despite these reassurances, everyday you check the news: how many infected? How many died? How many health clinics were beginning to shut due to healthcare workers leaving their posts? Despite the growing chaos, we in Monrovia continued to rationalize the situation. We knew things were getting worse but we didn’t act in time.
So when did it get “out of control”? Was it when MSF declared it to be so in June? Was it when the virus hit Conakry, Freetown and Monrovia, making control of the disease in crowded urban environment increasingly hard? Perhaps it was when the Liberian-American Ministry of Finance consultant died after flying to Lagos, inadvertently putting a planeload of passengers and Africa’s most populous country at risk.
Whenever it was, there is no question that we are now in the middle of an unprecedented crisis. Every day, I dread reading the news. The front page of every newspaper is full of articles discussing the bleak picture of Liberia’s largest slum quarantined like something out of a science fiction novel. I read about the almost complete collapse of the government’s health care facilities and the justifiable fear of the healthcare workers too scared to go to work. We hear terrifying stories of suspected cases being turned away from treatment centres because there is no space to treat them, and bodies left on the street for days without someone coming to pick them up. Most of all, I fear for the secondary threats should countries follow through on plans to impose economic embargoes on the country.
Already five airlines have stopped flying to Liberia through fear of the disease. Earlier reports that West African ports have refused entry to vessels which have docked in Liberia appear false, but raise an alarming prospect of the country cut off from essential imports. This is dangerous given that Liberia is completely dependent on imports with an import bill equal to 60 percent of GDP including two of the most important commodities, fuel and rice. Even without an economic blockade importers are worried.
Early reports suggest for the last four weeks the number of import certificates are down 30 percent from the previous year. Not to mention, the travel restrictions inside the country making movement of agricultural goods from farm to market next to impossible. These developments will raise the price of essential goods necessary for the Liberian economy to function and will harm the very poorest. They also raise the possibility of riots on the street and a return to the days of anarchy last seen during Liberia’s bloody civil war.
So how did this happen? The underlying causes of this outbreak are many and difficult and will be discussed for years to come. Fundamentally, they focus on the fragility of West African states and the failure of emergency planning to tackle the crisis when it was at a manageable level.
What can we do about it? Despite the fear, there are many brave West Africans and foreigners continuing to fight this disease. The Ministry of Health is working to open new treatment centres, MSF continues to fight the battle on the front line and are managing patient care alongside national governments. The World Bank has promised USD200million to fight the disease in West Africa. The African Development Bank has promised USD210million to build West African public health facilities. The World Food Program has begun the process of bringing in food to tackle the secondary crisis. NGOs on the ground, including Oxfam, have begun gearing up awareness campaigns to get the message out that Ebola is preventable. These things are vital to the immediate fight and the world needs to react, and react fast.
Once the immediate crisis is brought under control, we must consider measures to strengthen the state institutions especially the health service in order to effectively deal with health threats in the region.
Civil society groups at the recent World Health Assembly criticized the continued focus on insurance schemes in the push for Universal Health Coverage (UHC), which all too often includes significant private sector participation. Evidence to support the claim for private sector involvement of this kind remains extremely thin and a new study by the Municipal Services Project shows it could jeopardize public health in the South.
The study compares health outcomes in Chile and Costa Rica, two countries that have come to epitomize contrasting approaches to ‘Universal Health Coverage’ in Latin America. Chile’s focus has been on insurance-based UHC while Costa Rica has built a single public health system. The research provides strong evidence to show that there are widespread and consistent advantages to promoting UHC through a strong public system that funds and provides all medical and preventive services to citizens rather than through a fragmented public-private mix.
It is important to note that both countries have achieved the lowest infant mortality rates and the highest life expectancies in the region thanks to major advances in primary care. But Chile’s health ‘market’ has led to inefficient use of resources, with higher administrative costs and more irrational medical procedures (e.g. caesareans) resulting from oligopolies and collusion among private providers.
One of the major goals of UHC is financial protection for poor households when they face illness. Yet Chileans systematically need to make higher out-of-pocket payments to get medical care in comparison with Costa Ricans. This situation is produced in part by the fact that Chileans pay for health conditions, services or products that are not covered by their insurance (e.g. prescription drugs).
In contrast, Costa Rica’s public health care system remains relatively affordable and more efficient, with total per capita health expenditure standing at US$811 compared to US$947 in Chile. Importantly, Costa Rica has also consistently prioritized preventive health care. Expenditure on prevention and public health services from 2002-2006 in Costa Rica is more than double that of Chile (6-7% vs 2-3%). This focus on prevention is more cost-effective and can yield greater public health impacts in the long term.
Using comparable data (Latinobarómetro), the Municipal Services Project study shows that twice as many people reported facing access barriers to health care in Chile compared to Costa Rica, citing distance to hospital, time to obtain an appointment, and cost of seeing a doctor as the major reasons. In addition, lack of access to health services as a result of financial barriers in Chile still stands at 4.2% compared to 0.8% in Costa Rica.
Costa Ricans continue to be largely satisfied with the quality of their healthcare services, more so than Chileans. Interestingly, LAPOP 2012 results show that most people in both countries think that government, rather than the private sector, should be responsible for health care (71.1% in Chile and 67.5% in Costa Rica).
According to the notions of “active purchasing” and “managed competition” – frequently used to promote insurance schemes – the existence of different providers competing for resources should have produced higher levels of quality at lower costs in Chile. The evidence presented in this report shows that such assumptions are not always true.
The Chilean health system is an example of how segmentation produced by the coexistence of private and public insurances is detrimental to efficiency and equity. Collusion among private providers and oligopolies are realities that are ignored in the competition argument.
Debates over the best institutional arrangements to organize universal health care are far from over, but this case study demonstrates that insurance schemes as promoted by some proponents of the UHC agenda are neither the only nor the best option.
Luis Ortiz Hernández is Professor in the Health Care Department, Universidad Autónoma Metropolitana Xochimilco, Mexico and visiting professor at Queen’s University, Canada. His most recent publication, “Chile and Costa Rica: Different roads to universal health in Latin America,” is available here.