Russian Federation:Russian Federation:Linking Health, Poverty Linking Health, Poverty and Economic Growthand Economic Growth

Jack Langenbrunner

The World BankMoscow

July 2004

2

Why Invest In Health?Why Invest In Health? Poverty and Ill-health are intertwined

Poorer health outcomes in/within poorer countries

Poverty breeds ill-health (due to diet, education, transportation, etc)

Ill health keeps poor people poor

Invest in health: reduce ill health and poverty

3

Why Invest in Health?Why Invest in Health? Impact on Economic Growth Impact on Economic Growth

Macro-Economic Commission on Health 10% increase in life expectancy = 0.35%

growth in GDP Productivity

17% of productivity gains attributable to health status

Poor Outcomes Sick leave, absenteeism, etc.

4

Health Status Varies by IncomeHealth Status Varies by Income

0

10

20

30

40

50

60

Poorest 2ndQuintile

3rdQuintile

4thQuintile

Richest

Good

Bad/Very Bad

5

Russia vs. Canada:Russia vs. Canada: Health Status Health Status

0

10

20

30

40

50

60

70

80

90

Good or Very Good

RussiaCanada

6

Poorer Groups: More Likely to Poorer Groups: More Likely to Engage in Risky BehaviorsEngage in Risky Behaviors

Vodka Cognac Liquers Other Spirits

Several times per week or daily 0

10

20

30

40

50

60

70

80

Poorest 3rdQuintile,

Richest

7

Russian Federation:Russian Federation: General Health Status General Health Status

8

Probability of Russian Probability of Russian Man Dying, Ages 15-60Man Dying, Ages 15-60

0

5

10

15

20

25

30

35

40

45

Probability of Dying, Ages 15-60 (Males)

USDenmarkJapanGermanyUnited KingdomFrancePolandMexicoBrazilRussian FederationTurkeyKyrgz Republic

9

Re-Emergence of Infectious Re-Emergence of Infectious Diseases: AIDSDiseases: AIDS

60% 20-30 Years old 2.3 million by 2010 10% drop in GDP by 2020

Larger drops in labor supply and investments

0

50,000

100,000

150,000

200,000

250,000

300,000

10

Regional Variations GrowingRegional Variations Growing (Infant Mortality) (Infant Mortality)

0

5

10

15

20

25

30

35

40

45

1999 2001

MaximumMinimum

11

Finance and Delivery Finance and Delivery System: Reform Needed System: Reform Needed

Access to Services Social Solidarity/Risk Pooling Efficiency in Delivery Equity Protection of Poor and Vulnerable

Groups• Pensioners

12

Limited and Declining PublicLimited and Declining Public

Sector Funding for HealthSector Funding for Health

13

Selected International Comparisons:Selected International Comparisons:Levels of Funding (% Share of GDP)Levels of Funding (% Share of GDP)

0

1

2

3

4

5

6

7

8

9

10

Public Private Total

DenmarkFranceUnited KingdomRussiaPolandBrazilKyrgz Republic

14

Fragmented Funding Fragmented Funding StreamsStreams

Russia International Best Practice

Doctor Hospital

Budget Fund RayonPooled Funds

Doctor Hospital

15

Inefficiency: Inefficiency: Too Many Beds and PhysiciansToo Many Beds and Physicians

0

2

4

6

8

10

12

Beds/1000 Physicians/1000

DenmarkFranceUnited KingdomRussian FederationPolandBrazilKyrgzstan

16

Too Much Reliance on Hospital Care Too Much Reliance on Hospital Care (admissions/1,000)(admissions/1,000)

120

140

160

180

200

220

240

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

Russian Federation CIS

Eastern Europe EU

17

Geographic Inequity: Over 7-fold Geographic Inequity: Over 7-fold Regional Variation in FundingRegional Variation in Funding

(even after adjusting)(even after adjusting)

-

500

1,000

1,500

2,000

2,500

3,000

Ru

ble

s p

er c

ap

ita

18

Impact on Poor and Impact on Poor and Vulnerable GroupsVulnerable Groups

0%

20%

40%

60%

80%

100%

1994 1995 1996 1997 1998 1999 2000 2001

Out-of-Payments for Pharmaceuticals

Chargeable Health Services

Voluntary Health Insurance Premiums

Public Expenditures

19

NOBUS Survey (1): NOBUS Survey (1): Poor Pay Poor Pay More as % of ConsumptionMore as % of Consumption

0

5

10

15

20

25

30

35

Drugs Hospitals Outpatient Dental Total

TopLowest

20

NOBUS Survey (2): % of NOBUS Survey (2): % of Consumption for Paid ServicesConsumption for Paid Services

0

50

100

150

200

250

OfficialOutpatient

UnofficialOutPatient

OfficialInpatient

UnofficialInpatient

12345

21

NOBUS Survey (3):NOBUS Survey (3):Poor Can’t Afford to Follow Poor Can’t Afford to Follow Treatment RegimensTreatment Regimens

0

5

10

15

20

25

30

35

40

45

Poorest Richest

Only Free

No, Dueto Lack ofMoney

22

RecommendationsRecommendations1. Formalize informal paymentsFormalize informal payments

Standardized co-payment system Explicit protections for the poor and medically

vulnerable groups Inform and educate

2. Restructure financing and delivery systemRestructure financing and delivery system pooling, geographic formula, autonomize pooling, geographic formula, autonomize

facilities, etc.facilities, etc.

3. Improve Measures for Public HealthImprove Measures for Public Health Cross sectoral strengthening Cost-effective practices and behaviors Increase funding for AIDS and lower price of ARVs