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HEALTH CARE: BETWEEN POVERTY AND HI-TECH
Andrej Vitushka
Summary
In 2011 the main focus of health care was high technologies; on the other hand, the economic situation stimulated development of paid services and import substitution. The financial crisis resulted in a shortage of resources, administrative pressure, popular discontent; the medical system also felt aggravation of the lack of personnel and impoverishment of the employees. The financial crisis showed how sensitive the medical system is to external effects. If the actual financing and management methods remain this sensitivity is going to increase. The top administration of the sphere has not proposed any program of its systemic transformation except stating certain intentions in this direction.
Trends:
• Despite the announced increase in financing health care, hospitals have to strictly save resources, medicaments and expendables;
• The ratio of paid services in public health care is being increased mandatorily;
• Despite shortage of financing, high technologies are being implemented, in regions as well, and hospitals purchase new equipment;
• The devaluation of the national currency rocketed prices for medicines;
• The total import substitution became the ultimate goal;
• Salary cuts in health care increased the outflow of staff;
• Discussions on health care reforms have flared up.
Financing of health care
In late February, the Ministry of Health stated that despite all economic problems, the state programs in the sphere were financed completely. Each Belarusian citizen was allocated from the budget USD 205 in 2010 and USD 225 in 2011 1 Therefore, the 2009 scenario, when the expenditure for health care after the crisis was reduced by 15%2 did not repeat.
See: http://naviny.by/rubrics/society/2012/03/02/ic_articles_116_ 177043/
Eismont M. Health care: high technologies vs. bad management // Belarusian Yearbook 2009: www.nmnby.eu/content/books/BY_2009_rus.pdf.
These figures cannot but surprise the people working in health care because they remember the year 2011 perfectly well for irregular supplies of medicaments and expendables. Even cardiac surgery, so "nurtured" by the authorities, had problems with irregular supplies of prosthetic valves, even domestically produced3, said the chief cardiac surgeon Yury Ostrovsky. The national centre Mother and Child officially allowed parents of sick children to buy medicaments and milk formulae, something unheard-of in the previous years. And such examples are numerous.
Unfortunately, the crisis affected the plans for reconstructing several national hospitals, including the "long-suffering" centre for neurology and neurosurgery. Its modernization began in 2007 and was to be completed in 2010.
The strict saving of finances is the principle known and observed by every "element" of the health care system. Because of it, the National Calendar of vaccination failed to be expanded in 2011. The chief epidemiologist of Belarus Inna Karaban commented on this situation: "All new vaccines are very expensive, so the economic effect of their introduction into the Calendar is low. If the price were lower the effect would be bigger". The expert mentioned that vaccination of girls of one age group against uterus cancer costs USD 15 mln, whereas the effect would be appreciable only in 10 years4. Just to compare: the "heritage" of the last year Dazhynki (End of Reaping feast) — the "ice palace" in Maladziecna — cost nearly USD 30 mln. The non-economic effect of the expanded vaccination calendar was calculated by Russian experts: the life expectancy increases by 3 to 4 years5.
So why did the sector experience financial difficulties if the level of financing remained the same? The answer lies in the mechanism of its distribution. The key beneficiaries of financing are hi-tech services, new equipment, prioritized reconstructions (for example, the "reincarnation" in the new building and full re-equipment of Minsk hospital № 2, which turned the oldest Minsk hospital into the most modern), the Ministry of Health's projects in pharmacy. Involuntarily, the health care system employees donated to the system with their salaries that reduced significantly because of the devaluation.
See: http://medvestnik.by/ru/issues/a_7965.html. See: http://news.21.by/health/2011/10/06/383418.html. See: http://ria.ru/society/20110523/378569812.html.
At the same time, last year proved that the European level of health care cannot be achieved if the financing is two times less than that in European countries (4.5% against 7 to 9% in the EU). It also became clear that the experts were right: if the actual model of financial distribution remains, the system of health care will be highly sensitive to external effects.
Hi-tech medicine as the focus of development
In the medical service in 2011 the hospitals had 70% of all financing. Among Central and East European countries Belarus hold first place in the number of hospital places per capita. And this bulk requires a lot of finances to be maintained. But, unfortunately, the growing number of hospitals in "free" medicine does not take the burden off the polyclinics.
The WHO experts had more than once drawn attention that this imbalance should be dealt with (in the EU countries up to 80% of financing goes to outpatient departments), but the only response was a promise to make it 50 — 50 in the nearest 5 years. In 2011 the number of hospital places has not been reduced significantly, the idea itself was called unacceptable because of development of high technologies there, despite that on average the hospital place is occupied only 300 days a year. The functionaries of the health care reserved some more time for consideration, but suggested redistributing specialists from hospitals to polyclinics to deal with specialists' shortage in polyclinics, among others using "the administrative tool"6.
Among inpatient services certain hi-tech kinds are established leaders. The number of cardiac surgeries grew by 16.3% over the year (up to 8,795) and the number of transplantations — up to 300 (by 7 times over the last 4 years). Besides, organ transplantation was launched in regional centers (the first one in Brest). Regional centers also saw an increase in cardiac surgeries (by 7.9%), including complicated ones with extracorporeal circulation (by 9.7%)7. These are very inspiring results. But we would point out that the bulk of
Resolution of the Board of the Ministry of Health of Belarus On directions for optimizing medical and economic activities in the modern period: http:// med.by/Normativ/rkmz%5C2011 %5Crkmz10.5.pdf. See: http:// www.pravo.by/webnpa/text.asp?RN = P31100136. See: http://medvestnik.by/ru/issues/a_7965.html.
people still have to go to overcrowded polyclinics. On average, each Belarusian pays 13 visits to the polyclinics annually, which is by 2 — 2.5 times more than in the neighboring countries.
No doubt that hi-tech medicine should be developed: by international standards it indicates the level of health care development. But in Belarus this development is growing more and more imbalan-ced, when one sphere is being developed at the cost of others. At the actual speed of development our transplantation will soon reach the level of Poland. But the "flagship" has left the main "fleet" far behind. Nevertheless, even the actual number of cardiac surgeries is twice smaller than that in Europe. In human terms, for Poles and Lithuanians cardiac surgery is twice more accessible than for Belarusians in Belarus. Moreover, the number of hi-tech surgeries in other spheres (e.g. orthopedics) has dropped. In the first half of 2011 only 1080 of the planned 3800 hip replacements were performed8.
Paid services in public medicine
In 2011 the idea of paid services in public medicine turned into one of the main goals of the sphere. In other words, Belarus said goodbye to free medicine in its conventional form. The Program for social and economic development of Belarus for the next 5-year period binds to increase medical services export by 3.5 times until 20159. One of its targets for 2011 was widening the range of paid services and raising the volume of their export.
The economic difficulties of the spring tempted the branch top managers to "milk" the subordinate organizations — the annual plans for exporting services were adjusted towards bigger figures. For example, the National Center Cardiology was made incumbent to make almost USD 400 thousand instead of the previous USD 320 thousand. The National Center for Oncology and Medical Radiology was bound to export services for over USD 1 mln. Whereas the norms for expendables for these centers remained the same or were even reduced. As Belarusian blogging doctors put it, "every paid medical service is a free service that has not been provided".
Resolution of the Board of the Ministry of Health of Belarus On directions for optimizing...: see above
See: http://www.pravo.by/webnpa/text.asp?RN = P31100136.
The June board of the Ministry of Health declared that «the Ministry's request to expand non-budget proceeds is of top priority for the present moment». The same board adopted a new procedure for offering paid services: if the patient pays for the expendables they will be attended in the first place, if for the whole service — without waiting at all. But several factors intervened with the smooth scenario "the Belarusians can die in peace — the Belarusian medicine is working for the Russians" (the title of an article at www.belarus-partizan.org)10. The export of medical services is not profitable for anyone but the functionaries: the medical establishments receive only 20% of profit that hardly cover the depreciation11. The only exception is transplantation, where profitability sometimes reaches 300%12. Moreover, treating "paid" patients does not add on to the doctors' salaries, which discourages them to do extra work. The administrative resource is the only "motivation" that the functionaries apply. For example, in Marjina Horka the hospital personnel have to "compensate" the missed "sales" targets from their own salaries13.
Moreover, the public medical institutions become commercialized and try to enter new markets without proper marketing. But even paid services are surprisingly inaccessible in public establishments. They are rendered in the same cabinets and in the same hours and free ones; sometimes it is very hard to find at least any information about services on notice boards and websites.
Private medicine
In 2011 the devaluation and the inflation lead to 30% increase of costs in private medical centers.14 It would have been logical to expect that their patients have moved to the free public medicine. True, on the wave of the crisis some medical centers registered a decline in visits by 15 — 40%15. At the same time, such major centers
See: http://www.belaruspartizan.org/bp-forte/?page=100&backPage = 13&news=124163&newsPage = 0.
See: http://www.zautra.by/art.php?sn_nid = 5883&sn_cat = 20.
See: http://www.belarus-tv.by/rus/online.asp?pr = conf&id = 38.
See: http://www.mgorka.by/21789-narodnaya-novost-v-marinogorskoj-crb-
medpersonal-vynuzhdayut-proxodit-platnye-uslugi.html.
See: http://respublika.info/5425/health/article52217/
See: http://www.health.ej.by/healthy-lifestyle/2011/09/12/tseny_na_
uslugi_belorusskih_medtsentrov_vyrosli_na_15_-_60_protsentov.
html.
as Lode and Ecomedservice announced an increase by 20 — 25%16. It means that even in hard times there are people ready to pay for their health.
The authorities could have liberalized the procedure of doing business in the medical sphere thus taking the burden of patients capable of paying for treatment off the public medicine. But no measures were taken. The Ministry of Health still imposes maximum tariffs for different types of services (including private centers), which complicates the procedure of adjusting the costs to the inflation and causes losses in the private sector. Even the simplest way of relieving the public polyclinics — to allow private centers write out sick leaves — was rejected by the management of the sector17.
In mid-2011 the state-owned media started promoting the "Family doctor" service; public polyclinics borrowed the idea from private centers. Their competitive advantage was to be the price: the annual program only for BYR 1.5 — 2 mln while in the private sector the price goes up to BYR 2.5 — 2.9 mln. The difference in figures cannot but cause inquiries about the pricing mechanism and the profitability of services because depreciation expenses are more or less equal and the salaries in the private sector are not much higher. The managers in the private sector have pointed out this inequality of business conditions more than once but have not been heard yet.
Staffing problem: the system of motivation
Little has changed in the issue of staffing over the last years. While in 2005 Belarus needed 3700 doctors and pharmacists, in 2010 the figure became 4500. The rate of job combining is very high — the average 1.4 across the country and 1.5 in Mahiliou region18. The situation with nurses is equally complicated. The Ministry of Health needs 4500 more specialists, and if we count in associated departments the figure would be 5400. Moreover, over 13, 300 (nearly 12% of the total) paramedics and nurses are of the retirement age.
The sector program "Personnel for 2011—2015" shows that annually 800 specialists leave the branch for natural reasons
See: http://www.health.ej.by/healthy-lifestyle/2011/09/12/tseny_na_ uslugi_belorusskih_medtsentrov_vyrosli_na_15_-_60_protsentov.html. Vasily Zharko. Health care of Belarus. Development trends. On-line conference of BelTA: http://www.belta.by/ru/conference/i_170.html. Health care of Belarus. The official statistical book for 2010: http://med.by/ content/stat/stat2011/2010_1.pdf.
(retirement or death) and the total number of people abandoning the profession is over 3,500. Moreover, 20 to 32% of the so-called "young specialists" quit their placement jobs after working off the education cost and move to regional centers, the capital city or abandon the profession.
The economic disasters of 2011 made the issue of emigration topical and the theme of leaving (either temporarily or for good) nested in the doctors' professional discourse. The most popular destinations are Angola, Germany, Czech Republic, Poland, and, naturally, Russia, where the average salary is three times higher and where a lot of clinical centers are being built and modernized. Meanwhile, the top administrator of the sector sees no reason for worrying about doctors emigrating. Last year minister Vasily Zharko stated that only 60 to 70 specialists annually leave Belarus. The annual figures for the "leavers" are going to be higher, but the increase of emigration will not be officially recorded — very few people publicize their plans for leaving when resigning. And in the east there is no border at all.
As for financial motivation, medical workers suffered a significant drop in salaries: from USD 359 in 2010 to USD 256 in December 2011. And the average salary in the brunch is still by 25 to 30% lower than the average national and by 30 to 35% lower than that in industry.19 The country's leader had promised to increase salaries by 25% by the end of the year but this never happened. The only action to improve the financial situation of the staff was the decision to reduce the length of service for the first qualification class by 1 year, which means that the specialist starts receiving bonuses to the salary earlier.
The last year demonstrated that the top administration of the sector pays insufficient attention to motivation and further training of personnel as key elements of sustainable development. The leading method of dealing with the staff deficit is to increase the number of medical graduates (the admission to medical schools has been growing since 2006) and their placement. Doctors are still limited in their contacts with their foreign colleagues; there are administrative barriers for enrolling in courses abroad. The information about educational opportunities is often closed. The employee's enthusiasm for self-education and acquiring extra qualifications does not influence their salary and status in the system.
See: http://www.zautra.by/art.php?sn_nid=10154&sn_cat = 6.
Provision of medicaments and import substitution
The retail market of pharmaceuticals in Belarus in 2011 reached USD 772 mln, 3% lower than in 2010. The inflation increased the sales in rubles; the number of sold packages grew by small 3%20. Together with the exchange rates, the prices of medicaments increased by 2 to 3 times for both imported and domestic medicines (the ratio of imported components in them goes as high as 65%). Nonetheless, the market suffered no drastic fall due to two reasons: inflationary expectations (peoples bought medicines in advance) and restrictive administrative measures. Among the latter were a memorandum between the Ministry of Health and importing companies on restraining the prices and an agreement between the ministry and the pharmacies on restricting markups for pharmaceuticals. The actual prices were not reviewed, the mark-ups were restricted, the suppliers and pharmacies were losing money but all these allowed to "smooth" the price growth. The importers received a kind of compensation in the form of prioritized sale of foreign currency at a "preferential" rate for purchasing medicaments.
The ministry tried to limit the purchasing activity of the public by introducing a tighter control of prescriptions. This stirred scandals in polyclinics and drugstores and the functionaries were forced to postpone the ban for a year.
The ministry insistently recommended the holders of licenses for pharmaceutical activity (read — private pharmacies) to offer domestically produced medicines in the first place21. Another negative consequence of the financial instability was reduced range of and even disappearance of expensive original drugs. The annual figures did not reflect any reductions in the range, but it became possible due to a wider range of cheaper generics.
In 2011 the concern Belbiopharm was liquidated and its plants were transferred under the jurisdiction of the Ministry of Health, namely the newly established Department for Pharmaceutical Industry. The latter hurries to take up "additional commitments": to raise the ratio of the domestic generics up to 50% by 2015, which is far too ambitious. To implement this plan the country would
Lazarevich Yu. Belarusian started buying cheap medicaments: http:// zautra.by/art.php?sn_nid=10202&sn_cat = 4.
See: The Ministry of Health insistently recommended to offer domestically produced medicines in the first place: http://news.21.by/health/2011/11/ 29/417671.html.
need extensive foreign investment, both financial and technological, which has always been a problem for Belarus. Over the last 2 years only the ambiguous Russian businessman Bryntsalov entered the Belarusian pharmaceutical market though many have tried.
To develop import substitutes, a number of production entities were established within the National Academy of Sciences: the plant Academpharm and the association Chemical Synthesis and Biotechnologies with the plant KhimPharmSintez (2011). The latter is to produce drug substances — bases for pharmaceutical production. We should mention that out of 5300 formulations and medicaments registered in Belarus 80% are imported and only 20% are domestic. There are only 59 domestic drug substances. By 2015 the government intends to synthesize 35 more, mostly from the list of the expensive and needed drugs for hospitals - antitumor, antiviral and others.
This idea cannot but arouse skepticism about their competitiveness with the large-capacity, resource-, power- and finance-intensive productions of the few world giants. Even if the scientists do manage to synthesize and purify the substances, will the production of small consignments be profitable? We should underline that pharmaceutical production in Belarus is profitable only if it is export-oriented. All this requires even bigger investments than have been already made. If we recollect Lukashenko's demand to reduce financing of the National Academy of Sciences by 30%, will there be enough finances for pharmaceutical industry? And foreign investors are not swarming into Belarus.
Reforms and modernization: public discussions
The year 2011 will stay in memory by more active public discussions of further development and reforms of the health care sphere. Functionaries of different levels and the civil community discussed this topic. The head of the Central department of the budgetary policy of the Ministry of Finance Mr. M. Ermolovich once again stated the necessity of finding reserves in the health care itself and of drawing external resources. He is also the author of the statement of the probable introduction of the insurance medicine and of more financial freedom for health care managers of all levels.
The medical functionaries also spoke about the necessity to further optimize financing. The head of the Department for planning and economy of the Ministry of Health Ms. A. Tkachyova underlined the necessity to change the principles of financing medical
institutions: from general maintaining to covering particular hospital and emergency help. Besides, it was stated that the financing of outpatient and polyclinic help has to be increased from 30 to 40% of the total branch budget. They also mentioned the necessity for a thorough analysis of the efficiency of the branch's expenses22.
For the first time in the history if the independent Belarus the Internet-project Narodnaja prahrama (prahrama.by) launched a public discussion on the future of health care that produced a lot of rational ideas about reforms of the health care both in the short- and long-term runs. The media also showed more interest in different aspects of medical help.
Conclusion
At the final board of the Ministry of Health in late February 2012 Deputy Prime Minister Anatoly Tozik criticized the branch for overly privacy, lack of critical appraisal of the results and bad financial management. He called to make the sphere more open, to invite the public and experts to discuss problems, to change motivation methods and abolish the egalitarianism in salary23. It is nice that the top executives have a deep understanding of the problems in the sphere. But the functionary's speech also stayed in memory by the proposition to introduce a fee for visits to polyclinics — BYR 5,000 (USD 60c) per visit. The idea might seem great to fill the budget and reduce the work load, but it violates the Constitution, which gives little credit to the functionary of his status. This message can be interpreted in many ways. It might be the beginning of deep transformations. Time will show.
See: http://bel.biz/news/38135.html.
See: http://zvyazda.minsk.by/ru/archive/article.php?id = 94056&idate = 2012-03-01.
