Health system performance (2024)

Financial protection

Financial protection from catastrophic expenditure on health is a fundamental health system objective (Smith, Mossialos & Papanicolas, 2012). It measures the extent to which individuals are protected from the financial consequences of illness.

In many former Soviet countries, this has been a major area of concern, due to the drastic decline in government funding for health that occurred in the 1990s that has still not been reversed in many countries when measured as a percentage of GDP. This drop in public financing was most acute in those countries whose economies were worst affected by the dissolution of the Soviet Union, i.e. in central Asia and the south Caucasus, leading to a growing share of private health expenditure in the form of high levels of (often informal) OOP payments by patients. Although some countries, such as Belarus, Kyrgyzstan, the Republic of Moldova and the Russian Federation, have given priority to increasing the allocation of public funds to the health sector, the share of private expenditure remains substantial (see Chapter 4).

The reliance on private OOP payments for health services and pharmaceuticals in many countries of the region, coupled with inadequate risk pooling, has led to a high risk of catastrophic or impoverishing health expenditure, even for higher income households. A study of catastrophic health expenditure (defined as being present when expenditure on health exceeds 40% of income remaining after subsistence needs have been met) in 59 countries found Azerbaijan having one of the highest levels, reaching 7.15% in 1995, only exceeded by Vietnam and Brazil (Xu et al., 2003). A study of 10 countries in eastern Europe and the former Soviet Union demonstrated the scale of the problem, with OOP expenditure increasing the poverty headcount (using a US$ 2.15-a-day poverty line at 2000 prices and purchasing power parities) by 2% on average, with the highest increases in Armenia (3.4%), Georgia (3.6%) and Tajikistan (3.3%) (Alam et al., 2005). A more recent analysis of household surveys in 11 eastern and central European countries also found that a large share of households in post-Soviet countries faced catastrophic OOP expenditure (Smith & Nguyen, 2013). The reliance of these countries on OOP spending had a significant impact on the incidence of catastrophic spending, explaining about half of the cross-country variation. The study also found a high incidence of impoverishing OOP expenditure. Based on a poverty line of US$ 2.50 per day, private OOP expenditure on health increased the poverty headcount by 1.5–3% in Armenia, Azerbaijan, Kyrgyzstan, the Republic of Moldova, Tajikistan and Ukraine (Smith & Nguyen, 2013).

A survey in eight post-Soviet countries conducted in 2010 confirmed that most respondents who used health services paid OOP, although there was substantial variation across countries, with median amounts varying from $13 in Belarus to $100 in Azerbaijan. There were also major differences in terms of what was paid for. Payments for inpatient care and pharmaceuticals were common, but only 5.7% of respondents in the Russian Federation reported payments for outpatient care, compared to 43.6% in Kazakhstan (Balabanova et al., 2012) (Table 11.1).

In addition to the persistence of informal payments, the limited breadth, scope and depth of benefit packages is a major reason for low levels of financial protection in some of the former Soviet countries. Outpatient pharmaceuticals are a particular challenge, as in many countries they are not covered by benefit packages. A secondary analysis of household surveys in 11 eastern and central European countries found that expenditure on drugs accounted for as much as 75% of household expenditure on health in the Republic of Moldova and more than 50% in Kyrgyzstan, Tajikistan and Azerbaijan (Smith & Nguyen, 2013). Many countries of the region have recognized this problem and have attempted to improve financial protection by adopting and expanding state-guaranteed benefit packages, in some cases extending them to outpatient drugs. All countries of the region, except Azerbaijan (which introduced formal user fees but abolished them in 2008) and Belarus, have responded by defining benefit packages of health services guaranteed for free (positive lists), as well as chargeable health services (negative lists), for which user fees were introduced (Rechel & McKee, 2009; Gotsadze & Gaál, 2010; Ibrahimova et al., 2010; Richardson et al., 2013). Particular attention was paid to protecting certain vulnerable groups in the population, such as mothers and children (Rechel & McKee, 2009), although others, such as irregular migrants, remain seriously disadvantaged. Moreover, health facilities in most former Soviet countries were allowed to charge for specified health services.

In some countries, efforts to improve financial protection have yielded positive results. In Kyrgyzstan, the introduction of a single payer system, an expanded state-guaranteed benefit package, the introduction of formal co-payments and patient information campaigns have improved financial protection and reduced informal payments (Kutzin, Jakab & Shishkin, 2009; Falkingham, Akkazieva & Baschieri, 2010). The share of hospitalized patients making informal payments to medical personnel declined from 70% in 2001 to 52% in 2006, attributed in part to greater awareness of patient rights (Ibraimova, Akkazieva et al. 2011). Finally, out-of-pocket payments as a share of household expenditure declined from 7.1% in 2003 in the poorest quintile to 4.4% in 2009 (Ibraimova et al., 2011). However, achieving universal coverage by mandatory health insurance continues to be a challenge in many countries, as exemplified by the situation in the Republic of Moldova, where 20% of the population is not yet covered (Shishkin & Jowett, 2012), with poorer rural populations disproportionately affected (Richardson et al., 2011). In Azerbaijan, the high level of direct patient payments reported in 2010 (Table 11.1) may reflect the lack of a basic benefits package in this country (Ibrahimov et al., 2010), while in Georgia targeting comprehensive cover to only the population living below the poverty line between 2007 and 2013 was an explicit political decision (Chanturidze et al., 2009).

Equity in financing

Financing systems may be progressive, proportional or regressive. The high share of private OOP payments in many post-Soviet countries means that financing tends to be regressive. OOP payments (including informal payments) are often higher in urban areas and for those with higher disposable incomes, which may mitigate the effects slightly, but they remain a highly regressive means of health financing, as poorer households pay a higher proportion of their income than richer households (Falkingham, 2004; Atun et al., 2008; Lekhan, Rudiy & Richardson, 2010; Popovich et al., 2011). This is particularly the case for spending on outpatient pharmaceuticals, which is largely from private funds, leading some policy-makers to consider price controls or include pharmaceuticals in benefit packages, at least for the most vulnerable groups in the population. Equity in financing is further undermined in many countries of the region by widespread tax evasion and the existence of large informal economies. In Ukraine, for example, the shadow economy was estimated to amount to 40% of GDP and many wealthy citizens concealed their income from taxation (Tischuk, Kharazishvili & Ivanov, 2011).

The misallocation of resources to different parts of the health system is another barrier to more equitable health financing (see section Allocative efficiency). Again, Ukraine can serve as an example – 70% of government expenditure there goes to hospitals, specialist facilities and sanatoria, facilities that are used considerably less frequently by poorer sections of the population (Lekhan, Rudiy & Richardson, 2010). This was also raised as a concern in Tajikistan, where the bulk of public financing goes to hospitals and services are expensive and out of reach for the poor (Khodjamurodov & Rechel, 2010).

User experience

Users can report how well health systems respond to their legitimate expectations. However, information on public and patient satisfaction with the health system is still sparse in all former Soviet countries. Comparable household surveys in eight former Soviet countries in 2001 and nine in 2010 found generally low levels of satisfaction with the health system: only in Azerbaijan (56%), Armenia (54%), Belarus (52%) and Kazakhstan (51%) were a slight majority quite or definitely satisfied in 2010. In Kyrgyzstan (47%) and Georgia (44%), only a slight minority were quite or definitely satisfied, while in the Republic of Moldova (32%), the Russian Federation (24%) and Ukraine (17%) only a minority were quite or definitely satisfied. Nevertheless, across all countries, the share of respondents who were quite or definitely satisfied increased from 19.4% in 2001 to 40.6% in 2010 (Footman et al., 2013).

There are few patient satisfaction surveys in these countries, with no systems that can consistently and comprehensively capture their views, as has been noted in Armenia (Hakobyan et al., 2006) and Kazakhstan (Katsaga et al., 2012). Where patient satisfaction surveys have been conducted, their interpretation is not straightforward, as high levels of satisfaction may reflect low expectations rather than high quality (Richardson, 2013). In the Russian Federation, for example, one survey found satisfaction highest in Chukotka Autonomous Okrug, which was the Russian region with the lowest health expenditure per capita (Popovich et al., 2011). Similarly, very high patient satisfaction scores were also recorded in surveys in Kyrgyzstan (Ibraimova et al., 2011), while in Belarus 72% of the respondents were found to be satisfied with the quality of care provided in the public sector (Richardson et al., 2013). These findings indicate the need to complement measures of patient satisfaction with more objectives measures of quality of care.

Equity of access

Two major barriers to equitable access have emerged in the post-Soviet countries: financial and geographical. The financial barriers associated with private OOP expenditure particularly affect the poor. In several countries, including Armenia (Richardson, 2013) and the Russian Federation (Popovich et al., 2011), utilization of health services is higher among richer segments of the population, who typically have the least needs. In a 2006 study of five districts in Azerbaijan, the proportion of people with an acute illness who were able to access health services was 52.4% among the poorest quintile, compared to 68.5% among the richest quintile (Ibrahimov et al., 2010). In Tajikistan, utilization of health services in 2004 was more than double in the wealthiest income quintile compared to the poorest quintile. For those reporting chronic diseases, those in the richest quintile were 2.7 times more likely to seek care in 2003 than the poorest quintile. Furthermore, in 2005, only 43.3% of expectant mothers from the poorest quintile delivered at health-care facilities, compared to 80% of those in the richest quintile (Khodjamurodov & Rechel, 2010). The secondary analysis of household surveys in 11 eastern and central European countries mentioned above found that inequalities in the utilization of health services are particularly pronounced in those countries with high OOP expenditure (Smith & Nguyen, 2013).

As a result of these financial barriers to health care, many in need of health services are not able to access it. In 2009 it was reported from Georgia that 18% of respondents in a survey did not consult health services when sick because they could not afford them (Chanturidze et al., 2009). In Kazakhstan in 2008, 7.4% of the population did not use health services because of high costs (Katsaga et al., 2012). In Ukraine in 2013 about 21.6% of households could not access necessary medical care. A survey conducted in Ukraine in 2010 found that approximately 40% of those paying for hospital services had to borrow money or sell assets, while about 60% of respondents who thought they needed care forewent services. Inability to pay mainly affected those with poor health or low incomes (Tambor et al., 2014). In Armenia, the 2010 Demographic and Health Survey found that 50% of women and 40% of men did not seek primary care services when they needed them because of high costs (Richardson, 2013). In Tajikistan, 54% of survey respondents in the poorest region postponed seeking health care because of their inability to pay the informal costs of services (Khodjamurodov & Rechel, 2010). As a result people may turn to traditional healers or self-treatment (Stickley et al., 2013). However, there are also improvements in some countries. In Kyrgyzstan, for example, the percentage of people who needed health care but did not seek it because it was too expensive or too far away fell from 11.2% in 2000 to 4.4% in 2009 (Ibraimova et al., 2011).

In a survey conducted in 2010 simultaneously in Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, the Republic of Moldova, the Russian Federation and Ukraine, almost half of respondents with a health problem in the previous month had not sought care, most often due to the costs involved. However, unaffordability differed widely across countries, ranging from 69.7% in Georgia and 58.1% in Azerbaijan to only 4.6% in the Russian Federation and 2.9% in Belarus (Balabanova et al., 2012) (Table 11.2).

The second major barrier to equitable access in the region is geographical. Health facilities, workers and per capita financing tend to be unequally distributed, with an oversupply in capitals and major cities and shortages in rural areas and in primary health-care facilities; there are also major regional variations within countries. While in Ukraine per capita government health financing in 2013 only varied between regions by a factor of 1.5, in the extreme case of the Russian Federation, it varied among regions by as much as 6.8 times (Popovich et al., 2011). In Kazakhstan in 2001 health expenditure varied by a factor of 4.2 between the richest and poorest regions, narrowing to 2.1 times in 2008 (Katsaga et al., 2012). These large variations are the consequence of decentralized financing systems, leading some countries to pool resources nationally, as in Kyrgyzstan (Ibraimova et al., 2011). In the Republic of Moldova too, regional differences in per capita funding for health decreased following the recentralization of resource pooling (Turcanu et al., 2012).

Many post-Soviet countries have a very uneven distribution of health workers and facilities and many face staff shortages in rural and remote areas and in primary care. In Kazakhstan health-care utilization varies significantly across regions. In 2010, hospitalization levels varied by a factor of 1.7, while outpatient visits per person per year varied by a factor of 1.5 (Katsaga et al., 2012). In Ukraine in 2013, hospitalizations varied by a factor of 1.4 across the country’s regions. In the Russian Federation in 2009 the number of physicians per 10 000 population varied from 87.4 in St Petersburg to 25.1 in the Republic of Ingushetia, while the number of beds varied from 177.4 per 10 000 population in Chukotka Autonomous Okrug to 39.8 in the Republic of Ingushetia (Popovich et al., 2011). Variation in the availability of health workers and health infrastructure also exists in Ukraine, where in 2012 the number of physicians varied from 34.3 per 10 000 population in Mykolayiv region to 63.5 in Chernivtsi region, while the number of hospital beds varied from 78.7 in Zhitomir region to 111.5 in Chernihiv region (State Statistical Committee, 2013).

In rural areas in the Russian Federation in 2008 there were only an average of 12.1 doctors per 10 000 population, compared to a national average of 49.6, while in 2009 the availability of hospital beds for rural inhabitants was 2.6 times lower than for the urban population (Popovich et al., 2011). Some countries, such as Belarus and Kyrgyzstan, have resumed the Soviet practice of sending new graduates to underserved areas and many countries have introduced benefits for health workers in rural areas, but these initiatives have often failed to achieve the desired results (Lekhan, Rudiy & Richardson, 2010).

Physical geography is a challenge in some countries. The mountainous terrain of Kyrgyzstan and Tajikistan results in major challenges in providing services to particularly remote rural areas, while the Russian Federation, Kazakhstan, Turkmenistan and Uzbekistan have large expanses of sparsely inhabited territory, with little transport infrastructure. In Tajikistan, for example, many communities in remote mountainous regions are cut off for months during winter, and about 75% of babies born in mountainous regions are delivered at home (Khodjamurodov & Rechel, 2010).

Countries all over the region have sought to maintain access to health services across their territories, as in Uzbekistan where the reformed primary health-care system built on a mapping exercise that sought to achieve an equitable distribution of facilities. However, maintaining geographical access to inpatient secondary care was not a government priority and the number of rural hospitals was reduced significantly (Ahmedov et al., 2007). In many cases, such as in Ukraine, these facilities were turned into outpatient facilities or into facilities for social and long-term care. In Georgia, geographical access to health services is reportedly relatively even across the country despite its mountainous terrain (Chanturidze et al., 2009).

Population health

Improving population health is the fundamental goal of health systems (WHO, 2000). However, measuring progress is not easy. One of the key concepts used is avoidable mortality (Nolte et al., 2012). A distinction can be made between conditions that can be prevented through wider public health measures and intersectoral collaboration (preventable mortality) and those for which premature death can be avoided by the presence of timely and effective health care (amenable mortality). Amenable mortality is usually defined as deaths below a specified age (typically under 75), largely because of the difficulties in assigning a single cause of death in older people who tend to have multiple disorders.

However, although the data necessary to calculate amenable mortality are available for most of the former Soviet countries, there are problems with accuracy and completeness of demographic and health data. A comparison of amenable mortality in the Russian Federation and the United Kingdom found that both countries had similar levels of amenable mortality in the mid-1960s but the subsequent steady improvement seen in the United Kingdom did not occur in the Russian Federation, thought to be due to public health measures and the failure of the Soviet system to produce and distribute the treatments that were then becoming available in the west, such as drugs for hypertension, chronic airways disease and heart failure. The study suggested that the achievement of outcomes seen in the United Kingdom would increase male life expectancy in the Russian Federation by 2.9 years (Andreev et al., 2003).

Given the constraints of available data on amenable mortality in the former Soviet countries, here premature mortality (in under 65s) from all causes and from selected amenable causes are used as an indication of how the countries perform in terms of health outcomes. Fig. 11.1 shows directly standardized all-cause mortality rates per 100 000 population for males and females. In 2011 the average rate for males in the 12 post-Soviet countries considered in this volume exceeded the EU average by a factor of three (801 and 269 per 100 000 respectively) and by a factor of two for females (308 and 131 per 100 000 respectively). The inter-country range for males varied from 443 per 100 000 in Azerbaijan to 915 per 100 000 in the Russian Federation, with a decline in post-Soviet countries only being seen in recent years.

In industrialized countries, between 40% and 50% of the decline in ischaemic heart disease in recent decades can be attributed to improvements in health care, while the remainder is due to public health measures addressing main risk factors, such as smoking, diet and physical activity (Nolte, Bain & McKee, 2009). Both of these factors contribute to the growing health gap between the former Soviet countries and those in western Europe since the 1960s. Currently ischaemic heart disease is one of the main contributors to the gap in amenable mortality between the post-Soviet countries and the EU (Fig. 11.2).

The detection and treatment of hypertension is another area where the performance of the health system impacts on population health. Hypertension is one of the leading causes of avoidable mortality in the former Soviet Union (Roberts et al., 2012). However, surveys have shown that only a very low percentage (less than 10% in many post-Soviet countries) of those with high blood pressure take the necessary medication regularly (Roberts et al., 2012) and treatment rates for those with elevated levels of cholesterol are even lower (Smith & Nguyen, 2013) (see Chapter 7). Some improvements were noted in Kyrgyzstan, where attempts to improve the management of hypertension were associated with an increase in the percentage of adults who visited primary health-care facilities and had their blood pressure checked from 63% in 2006 to 80% in 2009, while the share of patients who were prescribed first-line medications increased from 64% to 79% (Ibraimova et al., 2011). Progress was also made in Ukraine, where prices for antihypertensive drugs were reduced and an increased number of patients were provided with diagnosis and treatment. However, even where patients have been given the appropriate prescription, they may not necessarily take the medication daily as required (Roberts et al., 2012).

Another approach to assessing how well health systems perform is to use tracer conditions, such as diabetes, that are common and require a wide range of health system inputs for their effective management. Diabetes exemplifies this, requiring coordinated inputs from a wide range of health professionals, access to essential medicines and a health system that promotes patient empowerment. It thus serves as a useful example for a much larger group of complex chronic conditions (Nolte et al., 2012). Studies in Georgia (Balabanova et al., 2009) and Kyrgyzstan (Beran et al., 2013) have identified failings in human resources (with health professionals lacking necessary skills), physical resources (such as a lack of functioning systems to procure and distribute insulin, unaffordability of glucose monitors and a lack of equipment to provide foot care), and the overall management of resources (with limited follow-up of patients and high OOP payments). Fig. 11.3 shows that, notwithstanding reservations about the quality of data, a few post Soviet countries – including Turkmenistan, Uzbekistan and Tajikistan – have much higher death rates from diabetes among under 50 year olds than the EU.

Failures of infectious disease control can also indicate weaknesses in health system performance. Immunization was a traditional strength of the Semashko health system and, after some disruptions in the early years of independence, most post-Soviet countries have restored high rates of immunization (see Chapter 6). However, the control of TB has proved to be much more challenging and the emergence of multidrug-resistant tuberculosis (MDR-TB) and extensively drug-resistant TB (XDR-TB) is an indication of health system failure (Karmali et al., 2008). Several post-Soviet countries, including Azerbaijan (Ibrahimov et al., 2010) and Georgia (Chanturidze et al., 2009) have some of the highest rates of MDR-TB seen anywhere in the world. Reasons include disrupted treatments (in particular when people leave prisons), inadequate domestic funding and coverage, counterfeit drugs, user fees, easy availability of prescription drugs in pharmacies and the absence of any involvement by primary health-care staff (Mosneaga et al., 2008). Mortality from TB in the former Soviet countries plateaued in the early 2000s and has since been slowly decreasing (Fig. 11.4).

Neonatal (in the first 28 days after birth) or perinatal (stillbirths and deaths in the first week of life) mortality has also been used as an indicator of the quality of health care (Nolte, Bain & McKee, 2009). While international comparisons of neonatal or perinatal mortality can be problematic, changes over time within a country can identify successes and failures (Nolte, Bain & McKee, 2009). In Belarus, for example, neonatal care was identified as an area where considerable progress had been made in recent years (Richardson et al., 2013). Improvements in infant and maternal mortality were also noted in other countries, such as the Republic of Moldova (Figs. 11.5 and 11.6). In Kazakhstan, too, progress was made with regard to maternal and child mortality, with improvements in the management of pregnancy, delivery and complications (Katsaga et al., 2012). In contrast, in Georgia one report failed to identify any discernible improvements in neonatal care since 2000 (Chanturidze et al., 2009).

Finally, cancer survival can be used to assess how health systems perform. However, interpretation is complex because of differences in stage at presentation, itself affected by the quality of primary care and existence of screening programmes (Nolte, Bain & McKee, 2009). Thus, while there are many problems in making international comparisons in these countries, changes in cancer survival rates within a country may be meaningful (Nolte, Bain & McKee, 2009). Information on cancer survival rates in the post-Soviet countries is scarce. In Belarus, five-year survival for patients diagnosed with prostate cancer in 2000–2004 was 43.0%, as compared to 64.5% in Lithuania (Richardson et al., 2013).

It is noteworthy that the richer former Soviet countries, in particular the Russian Federation and Kazakhstan, have very poor health outcomes relative to their resources and health spending (Popovich et al., 2011).

Health service outcomes

In western countries there is increasing use of patient-reported outcome measures (Smith, Mossialos & Papanicolas, 2012). However, these are not yet routinely collected in post-Soviet countries (Richardson, 2013; Richardson et al., 2013).

Quality of care

Despite a lack of robust data, quality of care has emerged as a major concern across the region. The reasons for poor quality are many and include a lack of investment in facilities and technologies, insufficient supply of pharmaceuticals, poor training of health workers, underdeveloped patient rights, absence of systems for quality improvement, the paucity of locally generated evidence, inadequate access to the international literature, widespread OOP payments (encouraging expensive and unnecessary treatments), poor integration of different levels of care and the persistence of incentives to hospitalize patients (Guindon et al., 2010; Rechel et al., 2011, 2013). Consequently, there is considerable over-diagnosis and use of ineffective remedies (Duke et al., 2006). In several countries harmful practices, such as overuse of injections and infusions and persistence of obsolete treatments are common (Ahmedov et al., 2007).

Several problematic areas of medical practice have been identified. One is obstetrics, where expectant mothers with normal pregnancies are often admitted for several weeks and given infusions of vitamins, minerals and other substances with no therapeutic value (Danishevski, McKee & Balabanova, 2008a,b). Many infants in the former Soviet countries who would be classified as normal in international practice are subject to extensive surveillance and, in some cases, multiple treatments. Children with developmental disability are offered exotic treatments, often at high personal cost to the family (Duke et al., 2006). Unnecessary and prolonged hospitalization of children is very common, with widespread use of ineffective therapies (Rechel et al., 2011). Outdated treatment methods for drug addiction are another concern, contributing to the HIV epidemic (Rechel et al., 2011). Existing services for drug users are based on social control and law enforcement but, with rare exceptions, do little to treat addiction (Elovich & Drucker, 2008).

The lack of mechanisms to improve patient safety and quality of care, such as systems of medical error reporting, has been noted in several countries, including Armenia (Hakobyan et al., 2006), Azerbaijan (Ibrahimov et al., 2010), Georgia (Chanturidze et al., 2009), the Republic of Moldova (Atun et al., 2008), Tajikistan (Khodjamurodov & Rechel, 2010) and Ukraine (Lekhan, Rudiy & Richardson, 2010). There have been many attempts to improve quality and establish evidence-based practice, with success in a number of pilot projects (Nugmanova et al., 2008) but they have been difficult to scale up in the presence of entrenched Soviet-era concepts of evidence (McKee, 2007) and outdated training curricula (Asadov & Aripov, 2009). However, there are some encouraging examples. In Kyrgyzstan, involving local communities and NGOs in the development and implementation of quality improvement programmes has proved to be very effective (Ibraimova et al., 2011). In Kazakhstan, a monitoring system for quality in inpatient and outpatient care was introduced in 2009 and there was also significant progress in introducing and promoting evidence-based medicine principles (Katsaga et al., 2012). In the Republic of Moldova, 147 clinical protocols for primary care services had been developed by 2012 within assistance projects supported by USAID, EU and the World Bank (Turcanu et al., 2012).

Modern, evidence-based medicine and clinical practice guidelines are increasingly being introduced in the region, for example by evidence-based medicine centres being established in a number of countries and with the support of bilateral and international agencies, such as USAID or the World Bank. However, many are limited to a few priority programmes, such as mother and child health or primary health care. Even where evidence-based clinical guidelines have been adopted, mechanisms for their implementation may be lacking. Human resources are another challenge. In many countries, health workers lack the training, skills and incentives to improve quality of care and patient satisfaction (Atun et al., 2008; Ibrahimov et al., 2010; Khodjamurodov & Rechel, 2010; Lekhan, Rudiy & Richardson, 2010).

Equity of outcomes

Information on equity of health outcomes is only available for some of the post-Soviet countries. In Kazakhstan there are significant variations among oblasts in terms of life expectancy, infant mortality, maternal mortality and TB morbidity. In this country, life expectancy at birth in 2009 varied from 66.2 in Akmola oblast to 75.7 in Astana city (Katsaga et al., 2012). Large inequities among regions were also noted in the Russian Federation, with three- to fourfold differences in perinatal and infant mortality. Life expectancy in 2009 ranged from 64.2 years in Chukotka Autonomous Okrug to 81.3 years in Ingushetia (Popovich et al., 2011). There were also large differences between urban and rural populations, with life expectancy in rural populations in 2009 being 66.7 years compared to 69.4 years for urban populations, as well as a substantial gender gap (Popovich et al., 2011). In Ukraine significant regional differences can also be observed in terms of life expectancy, infant mortality and TB morbidity. In 2012 life expectancy at birth in Ukraine ranged from 69.6 in Kirovograd region to 74.1 in Kiev. Regional differences in infant mortality rates varied by a factor of 2.2, from 5.7 per 1000 live births in the Kiev region to 12.6 in the Donetsk region, while TB rates varied by a factor of 2.6, from 41 per 100 000 population in Kiev to 108.1 in Kherson region (State Statistical Committee, 2013).

Allocative efficiency

Allocative efficiency indicates how funds are allocated to achieve an appropriate mix of health services. However, given the important role of private health expenditure in many post-Soviet countries, allocation of resources for health is only partly within the power of the government.

One of the main areas of concern has been the over-reliance on hospital care and the neglect of primary health care. All former Soviet countries have embarked to varying degrees on attempts to strengthen primary health care and thus use resources more efficiently (Rechel & McKee, 2009). Most commonly, however, the Soviet model of primary health care, delivered by poorly trained doctors able to treat a narrow range of conditions, has been retained and primary health care based on a model of comprehensive family medicine is confined to pilot sites or rural areas. Exceptions are Kyrgyzstan and the Republic of Moldova (see Chapter 7).

Conversely, most countries still have significant excess capacity in hospitals (see Chapter 8). Faced with an acute funding shortage, countries scaled back the extensive provision of hospital capacity they had inherited from the Soviet era. Bed numbers in acute hospitals dropped substantially in the 1990s but in most countries of the region still far exceed levels in the EU. In all countries bed numbers fell because many small hospitals, especially in rural areas, were closed down. However, in urban areas there was often only a reduction of beds without closing facilities, with specialized hospitals in the capitals largely unaffected, or overprovision in urban areas even increasing. Thus, specialist health-care providers in urban areas have been largely successful in maintaining overlapping services and avoiding hospital closures. Even in the Republic of Moldova, which has been at the forefront of primary health-care reforms in the region, there were substantial reductions in the number of hospitals, but secondary and tertiary care facilities in the capital were largely unaffected and still absorb a significant amount of funding (Atun et al., 2008). Georgia initially opted for extreme privatization but regulation of the privatization process was weak; bids that promised capacity over and above what was required were viewed more favourably and interest from investors focused on prime sites in the capital (Chanturidze et al., 2009). An extreme example is Belarus, which has more hospital beds per capita than any other country in the former Soviet Union or the EU despite the conversion of some beds in rural hospitals into long-term and respite care beds (Richardson et al., 2013). In Ukraine, only small rural hospitals were closed or turned into outpatient clinics, while the number of secondary and tertiary facilities has remained virtually unchanged (Lekhan, Rudiy & Richardson, 2010).

Although there has been a near-universal endeavour to strengthen primary care, hospital care continues to dominate national health systems. In 2009 in the Russian Federation, 59% of expenditure within the programme of government guarantees went on inpatient treatment, 34% on outpatient treatment and 7% on emergency care (Popovich et al., 2011). However, expenditure may be even more skewed towards inpatient care, as only 12% of physicians work as generalists in primary care and 92% of regional budget expenditure goes to inpatient care (Popovich et al., 2011). In Ukraine in 2012, 67% of government expenditure on health went to hospitals, specialist facilities and sanatoria (State Statistical Committee, 2014). In Azerbaijan, in 2008, hospitals received three times more budgetary resources than polyclinics (Ibrahimov et al., 2010). In Kazakhstan in 2008, 53.4% of total public expenditure on health was allocated to inpatient facilities and only 20.3% to outpatient facilities (Katsaga et al., 2012). Reasons include high levels of hospitalization, the hospitalization of patients who could have been treated in outpatient settings, a high average length of stay and a vast inpatient infrastructure (Katsaga et al., 2012). In Georgia, patient preferences for hospital services rather than primary health care were identified as a major reason for imbalances in resource allocation. Even in rural areas, consultations with specialists and hospital doctors account for at least two-thirds of first consultations (Chanturidze et al., 2009). Poor gatekeeping, unnecessary referrals to hospitals, self-referral to secondary and specialist care and generally high rates of hospitalizations, due to perverse incentives, are other reasons for the dominance of hospitals in resource allocations in many post-Soviet countries (Atun et al., 2008; Khodjamurodov & Rechel, 2010). Furthermore, as emergency care is formally free of charge and facilities relatively well-equipped, patients access them directly rather than going to more appropriate levels of care (Ahmedov et al., 2007). Excess hospital capacity remains a challenge across the region (see Chapter 8); yet many people still have trouble in obtaining care when needed (Balabanova et al., 2012).

However, the share of resources devoted to primary health care has increased in several countries. In Belarus, the proportion of total health expenditure spent on inpatient services declined from 60% in 2000–2001 to 44% in 2010 (Richardson et al., 2013), while in Kyrgyzstan an increasing share of public expenditure within the state-guaranteed benefits package is going to primary health care, from 26.4% in 2004 to 37.7% in 2009 (Ibraimova et al., 2011). In Ukraine’s pilot regions, expenditure on primary health care also increased, although from a very low base, from 9.1% of the overall health budget in 2012 to 19.5% in 2013 (Ukrainian Institute of Strategic Studies, 2014).

New mechanisms for paying health-care providers also featured in financing reforms, seeking to provide incentives for rationalization and increased allocative and technical efficiency. In the Soviet period, allocations to providers depended on inputs (beds and staff) and followed strict line items, resulting in structural inefficiencies, excess capacity and very little managerial autonomy. The allocation of resources did not take account of health needs, performance, productivity or quality of care (Atun et al., 2008). This approach is still used for paying health-care providers in Azerbaijan and Ukraine (except in some pilot regions) (Ibrahimov et al., 2010; Lekhan, Rudiy & Richardson, 2010) and for paying hospitals in Belarus, Tajikistan and Uzbekistan, providing incentives to use hospitals irrespective of need (Ahmedov et al., 2007; Richardson et al., 2008; Khodjamurodov & Rechel, 2010).

However, almost all countries of the region have now introduced capitation as the main method of funding for primary care. In the Russian Federation, partial fundholding for outpatient facilities has been implemented in several pilot regions. This has created incentives for providers of outpatient care to increase their effectiveness and has resulted in decreased hospital admissions and ambulance call-outs (Popovich et al. 2011). Mechanisms for pooling and allocating funds have also been revised, with the introduction of a purchaser– provider split and a single payer system in some countries, such as Kyrgyzstan, with others, such as Ukraine, aiming to consolidate their public expenditure on health, starting in the country’s pilot regions.

Hospitals in most post-Soviet countries are now generally paid on the basis of global budgets or cases treated (Fuenzalida-Puelma et al., 2010). In the Russian Federation, provider payment mechanisms were identified as the main obstacle to improved allocative and technical efficiency (Popovich et al., 2011). In order to address these inefficiencies in 2014 the country started to pay hospitals on the basis of DRGs.

Finally, allocative efficiency is undermined not only by regional disparities – with an oversupply in the capitals and major cities and shortages in rural areas – but also by major differences across different regions. In the Soviet period, resource allocations were made on the basis of existing capacities so that the bulk of resources went to urban centres, which housed the largest number of facilities (Atun et al., 2008). These imbalances were inherited by all countries in the region and they are only slowly embracing more equitable forms of allocating resources. In the Russian Federation, for example, there is a very uneven distribution of health financing across regions. The difference between maximum and minimum government health financing per capita across regions in 2009 was 6.8 times, from 2082 roubles per capita in Chukotka Autonomous Okrug to 14 094 roubles in Moscow (Popovich et al., 2011). In Tajikistan, too, there are significant inequities in the level of health expenditure across oblasts and rayons. In 2008, health expenditure per capita was 4.25 higher in Shrabad rayon than in Khamadoni rayon (Khodjamurodov & Rechel, 2010).

However, several countries have established mechanisms for more equitable resource allocations across regions. Examples include Ukraine, Kazakhstan and Belarus. In Ukraine, budgetary reforms in 2001 led to a reduction in inequalities between different regions; the Ministry of Health has also introduced a single unified pool for all local primary care services in the country’s pilot regions. In Kazakhstan, the difference in per capita health financing from public sources between the richest and poorest regions decreased from 4.2 to 2.1 times between 2001 and 2008 (Katsaga et al., 2012). In Belarus, a system of equalization of local budgets has been set up, with reallocation of funds from more affluent areas to poorer regions (Richardson et al., 2013).

Technical efficiency

Technical efficiency means making the best use of available resources (Durán et al., 2012). The continued reliance on inpatient care across the region is one of the factors that undermines technical efficiency, as hospitals are expensive and often fail to provide value for money. However, reductions in hospital capacity in many countries meant that less health expenditure is absorbed by fixed costs and more can be spent on pharmaceuticals, medical supplies and staff. Increasing efficiency in this way does not need to be detrimental to other health system goals and can improve equity and access of low-income groups (Durán et al., 2012).

Yet there continues to be an over-reliance on hospitals for treating conditions that could be treated in primary care. Reasons include poor gatekeeping, poor integration of care, the link between bed occupancy and funding, and the provision of social and long-term care by hospitals (Marx et al., 2007; Raikhel, 2010). In Kyrgyzstan, a study of selected conditions found that half of hospital admissions were inappropriate (Ibraimova et al., 2011). In the Russian Federation and Ukraine, it has been estimated that about one-third of all hospitalizations are unnecessary (Vishnevskiy et al., 2006; Lekhan, Rudiy & Richardson, 2010); in Ukraine it has been estimated that the average cost in an outpatient care setting would be about four times lower, indicating significant scope for improved technical inefficiency (Lekhan, Rudiy & Richardson, 2010).

Low occupancy rates and long average lengths of stay in acute care hospitals indicate that hospitals do not work as efficiently as they could (see Chapter 8). Although the average length of stay has decreased across the region, it is still higher than in the EU, whereas bed occupancy rates in acute care hospitals are much lower in several countries than in the EU, reaching only 41.5% in Azerbaijan and 35.7% in Georgia in 2012 (WHO, 2014a). In Belarus, the average length of stay in hospitals declined rapidly following the introduction of norm-based (rather than capacity-based) provider payment mechanisms (Richardson et al., 2013). However, bed occupancy rates and average length of stay not only suggest inefficiencies, but can also be indicative of problems in accessing hospital care, such as in Georgia which has a very low bed occupancy rate and a short average length of stay (Chanturidze et al., 2009).

The equity and efficiency of post-Soviet health systems are also undermined by the continued existence of another Soviet legacy: parallel health systems outside ministries of health. In some countries, access to these parallel structures is no longer confined to certain employers but there are still restrictions in terms of ability to pay OOP or via voluntary health insurance schemes. Some countries, such as Belarus (Richardson et al., 2013), have begun to integrate them into the mainstream health system and their importance now varies in terms of the role they play in relation to the mainstream health system and the financial allocations they receive. In Ukraine in 2012 they accounted for 8.8% of all hospital beds and 7.5% of total public expenditure on health, while in Georgia less than 1% of total health expenditure is spent in parallel health systems (Chanturidze et al., 2009).

Separate vertical disease management structures, such as for HIV/AIDS, are another source of fragmentation and inefficiencies. In Kazakhstan, for example, there are many narrowly specialized facilities, such as separate paediatric hospitals, maternity hospitals, oncology centres and infectious disease dispensaries (Katsaga et al., 2012). These lead to duplication and impede integration of care.

The issue of pharmaceuticals is another area where the need for greater technical efficiency has been recognized. As discussed in Chapter 9, in several post-Soviet countries, pharmaceuticals account for a large share of private OOP spending. In Belarus, for example, they were estimated to account for 73% of OOP spending in 2010 (Richardson et al., 2013). Reasons include the limited scope of benefits packages, the underuse of generic drugs and the sale of prescription drugs over the counter in pharmacies. Many countries in the region are planning to scale up domestic manufacturing of pharmaceuticals instead of having to use higher cost imports (Popovich et al., 2011; Richardson, 2013).

Finally, the limited use of evidence on effectiveness and cost–effectiveness to inform health policy-making and priority setting is an obstacle to increased technical efficiency in the post-Soviet countries. Health technology assessment is not widely used in the region and evidence-based medicine is still underdeveloped (see section above on Quality of care).