1 RUSSIAN HOUSEHOLD EXPENDITURES ON DRUGS AND MEDICAL CARE:

A December 1997 survey of 3,000 Russian households found that an average of 14 % of monthly expenditure goes for drugs and medical services. Out-of-pocket expenditure for health care is regressive, the lowest income group spending 27 % while the highest group spent 9%. Drugs account for just over half of private health-care expenditures, or slightly more than 7 % of total monthly household expenditure. Dental care consumes 2.4%, outpatient care 1.5 % and inpatient care 2.6%. The private 2 health sector is still small, and the bulk of payments for outpatient and hospital care is for service in government facilities; some of these payments are official and some unofficial. Extrapolation of the survey results suggests that out-of-pocket payments constitute 43 % to 55 % of total health expenditure in Russia. This finding suggests that the nation’s total health expenditure is between 6.43 % and 8.13 % of GDP, rather than the official estimate of 3.49 % attributed to government entities and mandatory health insurance. BACKGROUND Since 1990, Russia has undergone tumultuous economic changes. Markets have expanded, but economic statistics show a continuing decline in economic activity. The failure to pay wages to employees of local governments and parastatal organizations has captured international news coverage. Meanwhile governments at the national, oblast (equivalent to a U.S. state or German lande, budgetarily largely autonomous since the breakup of the Soviet Union) and local level have been forced to cut health expenditures. In 1997, spending for health care by all levels of government and mandatory health-insurance funds was reported to be 3.49 % of GDP, or approximately 634,000 3 roubles ($109) per capita, a reduction of 31 % in seven year