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The Perilous Road From Centralism to Federalism

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Title: The Perilous Road From Centralism to Federalism


1
The Perilous Road From Centralism to Federalism
  • The Case of the Russian Health Care System
  • by
  • Dov Chernichovsky -- HNP

2
The Challenge
  • Transition from a highly centralized and failed
    system (at the end), to a decentralized
    functional federal system

3
The Risk
  • Atomization and fragmentation of the health
    system with potentially worst consequences than
    the centralized system

4
The Basic Issue (Especially in Health Care)
  • Not the states involvement in the system, but
    the nature of this involvement

5
The General Context
  • Goals of the Health System
  • Health
  • Equity
  • Macro-economic efficiency contain
    uncontrolled rising cost of care
  • Micro-economic efficiency efficiency in the
    production of quality care
  • Client satisfaction, mainly through
    accountability
  • Systemic Functions --subject to devolution and
    decentralization
  • Policymaking
  • Financing
  • Organization and Management of Care Consumptions
  • Provision of Care
  • Training and medical education
  • Research and development

6
The Soviet Record
  • Health
  • Eradication of communicable diseases
  • Missing the epidemiological transition to
    non-communicable diseases that eventually led to
    inferior health outcomes
  • Equity
  • Fairly equitable system with relatively wide
    access to care
  • Efficiency
  • In spite of low levels of spending, inefficient
    especially when quality of care is considered
  • Client satisfaction
  • Dismal, not a concern

7
The Soviet Failure - Ineffective Government
(ala Weaver and Rockman 1993)
  • Not setting and maintaining the right priorities
    over time
  • Ineffective targeting of resources
  • Not promoting innovation
  • (Of course, to a substantial extent by not
    eliminating market forces)

8
Structural Antecedents of Soviet Failure -
Centralism
  • Amalgamation of responsibilities under the
    Federal Ministry of Health Medical care Medical
    industry, including pharmaceutical and Training
  • Issues
  • limited span of control
  • Priority give to industry, not to care
  • Medical training a vocation rather than a science
  • Vertical Integration of all systemic functions
  • Issues
  • No checks and balances
  • No scope for internal or any market mechanisms
    for efficiency and responsiveness to clients

9
The Antecedent of Soviet Failure Centralism
(Contin.)
  • Rigid top-down allocation of resources and
    management
  • Issues
  • A lack of analysis of local information for
    policy making
  • No attention to local concerns and aspirations
  • Depression of local initiatives
  • Accountability upward to authorities rather
    than downward to clients and patients
  • Political vacuum at the top detachment from
    realities

10
The Risky and Unstructured Transition Major
Steps (since 1991-2)
  • Separation of health promotion and education from
    Federal MOH (1991), while
  • Medical Care responsibilities, including
    financing, delegated to local government
  • 1991 (aborted) legislation tries to base
    financing on private insurance
  • 1993 legislation establishes a social health
    insurance system with a federal and state pools

11
Structure of System in 1996Dysfunctional Blend
of Old and New
12
Intended Structure
13
Consequences
  • Weakening policy making - leadership
  • Federal MOH stripped of practical powers
  • Local ministries lack policy making capacity
  • Undesirable decentralization of finance, with
    weak equalization mechanisms
  • Failed devolution and decentralization of care
    provision highly centralized local systems with
    little policymaking and management capacity, and
    limited accountability to anybody
  • Failed development of internal markets
  • Lopsided reform decentralization of finance and
    a lack of decentralization of provision

14
One Outcome Worsening Regional Distribution of
Health Resources
 
  Figure 1   Lorentz Curves of for Regional
Health Exepnditure and Product per Capita
Legend a - simulated 'need-based' local health
expenditures, 1992 b - local health
expenditures, 1990 c - local health
expenditures, 1992 d - GDP estimate, 1992.  
15
Reasons
  • A lack of leadership and resolve weak Federal
    MOH
  • Strategy of change not clear to, and owned by,
    at least local authorities
  • Resistance of those authorities to relinquish
    control over medical facilities
  • No real plan for denationalization of these
    facilities

16
Risks
  • Growing regional inequalities
  • Undermining universal access to care
  • No mechanisms for system stabilization and long
    term reform through innovation
  • Growing inefficiencies due to weak mechanisms to
    deal with externalities and economies of scale

17
Conclusion Tasks to Complete
  • Clarify the concept of functional federalism
  • Re-define the roles of different levels of
    government and institutions, mainly government as
    a non-provider of care
  • Build policy making, regulatory, and management
    of mainly local government
  • Devolve the provision of care to non-state
    institutions
  • Provide financial and regulatory measures for a
    federal system
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