Opening speech by Vladimir Putin:

Good afternoon, colleagues,

Today we will discuss regional programmes for developing and modernising the healthcare system.  As you know, these programmes should go into effect beginning in January 2011, and they should be a logical progression of the government’s efforts to improve the healthcare system. Heads of every region of the Russian Federation are involved in today’s meeting, either in person or through videoconference.

I would like to remind you that five years ago we launched the priority national project Health, in which we have already invested 590 billion roubles. And we have always regarded this as the basis of systemic changes in public healthcare. I think that we have managed to make serious progress in this area. The life expectancy has increased by 3.7 years to reach 69 years, the birth rate has gone up by almost 20% and the death rate, on the contrary, decreased by 12%, while infant mortality is 26% lower now. These are direct results of the improvement of primary medical care, clinical examinations and vaccinations, better medical care for patients with cardiovascular disease and victims of traffic accidents. This was also influenced by advanced medical assistance being provided to 900,000 people at the expense of the federal budget, while the availability of such assistance is now four times higher.

It is clear how much the improvement of healthcare is connected to such successes, and the clinic in Ivanovo is an example of this. Since December 2007, when the centre for cardiovascular surgery was commissioned, the death rate in the region fell by 25%. A cardiovascular centre built in December 2008 reduced the rate of deaths caused by strokes by 30% and even more. A trauma centre that opened in January 2010 lowered the rate of deaths from traffic accidents in that clinic by 66.7%. And this was the direct result of improvement in organisation and equipment, as well as of better medical personnel.

We plan to invest 446 billion roubles into the national project Health in 2011–2013, which will allow us to proceed with all the actions scheduled.

That’s what is good, now about the harsher realities. And what are the realities of the situation? Polls show that most Russian citizens, 65%, are still unsatisfied with the quality of hospitals and outpatient clinics because many of them are in bad condition, primarily because of shortages of equipment and even doctors in rural areas. Medical professionals’ expertise, diagnostic and treatment methods as well as healthcare management are often far from modern standards. Unfortunately, the resources available to this sector have in general been utilized inefficiently so far: 41% of the country’s medical institutions are in need of major repairs or renovation. The statistics are deplorable. According to the Federal State Statistics Service in 2008, 2% of medical institutions were in an emergency state,  8.5% had no running water, 32.5% had no hot water supply, more than 10% had no central heating, 11.2% had no sewage and 6.7% had no telephone communication.

We see that improving healthcare is a pressing issue and highly demanded by  society. This year all the regions conducted discussions of healthcare problems attended by non-government organisations and associations of medical workers. Regional administrations performed inventories of the medical institutions and identified the obstacles and issues affecting the quality of treatment.

The regional programmes for improving healthcare are aimed precisely at removing these problems. We have earmarked 460 billion roubles for their implementation in 2011–2012. The funds will be attained by raising insurance premium rates from 3.1 to 5.1%. The decision to increase the fiscal burden was not an easy one, but it will let us address many problems that healthcare is facing now. When I say that it was not an easy one, we should all understand that such a burden will not have the most favourable impact on business. We should keep this in mind. And we will have to think about what will be done in order to support the economy, although, as we have agreed, exceptions will be extended to some areas, primarily high-tech areas, and the burden will be minimized.

I will remind you about our core priorities in modernising healthcare. First, regional programmes should provide for better quality and accessible healthcare in every region.  They will have to determine what new techniques will be applied in our medical institutions so that patients have quality treatment not only in regional hospitals but also at local hospitals, including through the creation of major district-level medical centres. Advanced medical equipment will be purchased and key regional medical establishments will be repaired and put in order to this end. I think that everybody agrees that we don’t need hospitals and outpatient clinics with collapsing floors and leaking roofs, where even first aid is often unavailable. I am sure that people will appreciate our efforts only if real improvement is apparent in the life of each Russian family.

Second, medical institutions should really start improving the standards of medical service by employing skilled specialists and, of course, raising the salaries of medical workers. We will allot an additional 80 billion roubles over the next two years  to increase the rates of mandatory medical insurance  and to fund an increase in the payroll.

Next,  it is necessary to remove excessive paperwork in relations between the doctor and patient and to have the doctor focused on the treatment of the patient, instead of on filling out numerous forms and certificates. Modern information technology has to be applied for this purpose. What I mean is clear to everybody:  telemedicine, electronic paperwork and electronic medical records. It is necessary to give people the opportunity to make a doctor’s appointment online, without having to leave the house.

I would like to address the regional leaders who are present here and who are participating in the meeting from their workplaces. Please think of the preparation and implementation of the healthcare programmes as a major priority of your work. All of us know very well that if you do not attend to it personally, then there won’t be any result or at least not the result that we expect from this effort.

Please provide funding for healthcare from the regional budgets in compliance with the earlier plans without reducing  funding for this sector under the pretext that additional money will arrive from the federal budget. Federal funds should complement your resources, not replace them. I will make a point of it. The Ministry of Health and the Ministry of Finance are instructed to follow this carefully. 

In the next months it is necessary to finalise the regional programmes for modernising healthcare and submit them to the government of the Russian Federation. I am charging Deputy Prime Minister Alexander Zhukov with the coordination of this effort. And I would like everyone to approach this with a positive attitude and work efficiently towards achieving these goals. I have not named all of the tasks yet, there are some other ones now being discussed by the government and they may be effective tools for the improvement of the healthcare situation. We will discuss this later.

I would like to give the floor to the Minister of Health Tatyana Golikova.

Tatiana Golikova: Thank you. Mr Putin, colleagues, continuing with the opening remarks, I would like to provide a little more detail on those aspects mentioned in Mr Putin’s speech, and on those tasks that lie ahead in the foreseeable future, in the medium term – in the next two years and until 2015.

But first I would like to say that, of course – and this was noted in the introduction, – the national project Health has yielded positive results, which were reflected in life expectancy, fertility and infant mortality rates. And also that great preventive work, which continued to be performed in the regions in the framework of the national project, and in the ordinary everyday work of healthcare management, has led to us being able to better chart the general incidence of illness in the Russian Federation, which is to say that we became better at identifying illnesses and were there to assist in the initial stages.

But this still leaves us with a very large gap between the life expectancy of men and women: according to 2009 data, it is 10 years. This is still quite a substantial number. Unfortunately, our average life expectancy for men is 62.8 years at this point.  

I cannot say that we have quite high mortality rates given the very high fertility rates that persist in the countryside – 38,200,000 of our citizens are currently living in rural areas – 27% of the total population. And the loss of rural population is almost 5 times higher than the decline recorded as the national average in Russia.

I cannot help but mention again what a difficult situation we faced in July and August 2010 in Russia. July and August 2010 showed that primary healthcare and related work should be substantially strengthened, especially in unusual and emergency situations, although September showed an improvement in the situation and we are again seeing a decline in mortality in the Russian Federation.

Describing the age structure of population of the Russian Federation, I would say that 62% of the total population is now of working age. The highest percentage of working-age population has been noted in regions such as Murmansk, Tyumen Region, Kamchatka Territory and Magadan Region. A large proportion of the elderly population today lives in Voronezh, Ivanovo, Tambov, Tver, Tula, Pskov and St Petersburg. Accordingly, the continued upward trend in the elderly population is a challenge to the healthcare system and calls for restructuring and the completion of the technology that we are creating today.

I should mention the problems that we have today, and Mr Putin partly touched upon these issues. Nevertheless, I want to note that today the established structure of medical institutions and departments is characterised by a lack of institutions and departments providing primary medical care, particularly in rural areas, and at the same time, by the redundancy of institutions that provide inpatient care.

To date, the number of beds, 114,100, is nearly 10% more than needed, with surpluses or shortages of certain types. On the slide you can see that we lack oncology beds, orthopaedic beds for adults and substance abuse beds. At the same time, there is an excess of the types listed on the slide.

We have a serious excess of beds in some regions. These are the Kostroma Region, the city of Moscow, the Yaroslavl Region, the Tula Region, the Republic of North Ossetia-Alania, the Sakha Republic (Yakutia) and the Amur Region. At the same time, there is a shortage of beds in the Republic of Tatarstan, Ulyanovsk Region, Leningrad Region, Chelyabinsk Region and the Perm Territory.

At the same time, according to statistics – and we see it – there is a shortage of doctors in the Russian Federation of more than 27%, as well as a shortage of mid-level and junior medical staff. As I said, rural populations and rural healthcare are the most affected by this, where there is almost three times fewer medical workers than in the city.

But this shortage in medical staff is as much of a deficit as it seems on the basis of statistical indicators. The structure is marked by an imbalance of doctors in favour of a number of specialities, to the detriment of higher priority ones.  

If we look here on this slide, we see that we have – and this is throughout the regions – a shortage of physicians, rheumatologists, cardiologists and paediatricians. And if we look at the inpatient segment of healthcare, we see an overabundance of individual types of doctors and hospital beds. And at the same time, for example, we see a significant excess of hospital beds for prenatal care departments, 57%, although the supply of doctors is only 38.3%.

I will not repeat those details – they are all on the slides – but I will tell you later how we proposed to eliminate this imbalance. This obviously affects the efficiency of the entire healthcare system and results in illnesses not being diagnosed. We have presented data on the slide on the low number of doctors and, consequently, high incidence of illness and the unfavourable epidemic situation, low incidence of illness, and at the same time, low access to public medical care – here are the regions that these figures represent.

As a result, we are now recording all the flaws that I have already identified, which is what we will work on within the framework of the regional programmes to modernise healthcare.

Now I want to talk about the slides. Currently, we have 55.4% more physicians in hospitals than needed. At the same time, there is a 8.9% shortage of medical practitioners in the outpatient segment. And now we are seeing a shortage of cardiologists, physicians, rheumatologists and endocrinologists in the hospital and outpatient segments. In this regard, in the regional programmes, we offer a separate section that will focus on retraining staff and those same physicians, on one hand, and additional training for new sub-specialities on the other. And except for those funds that the regions invest in this, we would have thought it possible, Mr Putin, within the framework of the regional labour market, to allocate a separate segment, which deals with retraining doctors to become doctors with narrow specialities, if necessary. And these are insignificant amounts of money – it can come from the money already allocated in the budget. We are simply doing this as an independent project. Just yesterday, we did the calculations, and we discovered that a maximum rate of retraining throughout the Russian Federation will yield about 7,032 professionals.

The next slide – I will not focus on it – it's the slide that you described in your opening remarks about the technical state of buildings of medical institutions. All I want to say is that we ask the Russian regions to justify the cost of capital and current repairs when they report them. And in places where capital improvements are being carried out, we have continued construction when facilities under construction or renovation are 80% ready.

The next modernisation challenge that needs to be addressed through these programmes is the provision of new equipment. This slide shows current numbers, updated after new equipment was supplied to medical institutions through the national project. We upgraded 25% of equipment across the country.

Currently over 112,000 pieces of equipment of various types need to be replaced. Understanding that the funds we have are insufficient to carry out this project and that it should be implemented gradually, we outlined several priorities and issued instructions for regions.

This project is intended to help treat more effectively the diseases that account for the highest numbers of cases and the highest mortality rates; the range of such diseases is practically the same in each region. First of all, it is necessary to reequip cardiology, cardiovascular surgery, oncology, obstetric and gynecology units.

When reequipping their facilities, medical institutions base their work on regulations we worked out in 2009. What’s most important is that new equipment is provided to the clinics and hospitals involved in the programme to modernise the healthcare system.  

I think I can skip the next issue, the adoption of information technology since you have outlined key points. I’d only like to add that yesterday we discussed this issue with the Communications Ministry and made a decision to distribute general recommendations to regions within the next few days so that they understand what needs to be done in this area in 2011 and 2012. Technically, this project is part of the state programme for the adoption of information technology, approved at one of the latest government meetings.

Moving to the third part of regional programmes, healthcare standards: essentially the current federal standards – there are a total of 612 of them – are recommendations that regions can use to develop their own healthcare standards, which, in turn, determine prices for medical services. New regulations will overhaul this practice, setting unified standards across the country. At the same time, I’d like to note that the amount of allocations to be used for funding medical services in a particular region will depend on the living standards and prices for healthcare services there.

We have outlined the range of basic healthcare services and developed new standards, taking into account current standards and future standards to be introduced within the next two years. They will be used to develop guidelines for municipal, regional and federal healthcare institutions.

This slide shows the cost of healthcare services on the federal list, which will be introduced within the next two years, and the cost of such services in France, Germany and the United States. You might wonder why the numbers in the first and second columns differ so much. This is because the costs of the services provided through mandatory insurance were calculated based on only five parameters, in particular the average salary, the cost of drugs, food, expendable materials and linen.

The second column features the cost calculated based on draft standards that take into account all parameters, including funding from the federal and local budgets, the funds to be provided starting in 2013 and the 2% which will go toward the mandatory medical insurance system, not modernisation programmes, which is the case now, as well as payments for the unemployed.

Here’s the breakdown of the cost of gastrectomy. This cost is based on five parameters, which you can see on the left. The next chart shows a cost breakdown based on all parameters. This new order will be introduced in 2013.

Here you can see estimated changes in the cost breakdown. These are approximate numbers, which don’t take into account what we will work out with regions. However, we should consider one important factor here, possible salary increases in the industry, which all doctors expect from the government.

I will speak about this factor later, but now I’d like to draw your attention to another issue. So far 483.9 billion roubles have been allotted for funding healthcare services provided through the mandatory medical insurance system. Next slide please. A total of 290.1 billion roubles went toward healthcare services provided for inpatient treatment. Meanwhile, the hospitalisation rate is 31 million; the number of disease cases is 1.6 per person; in 28.6% of cases patients need emergency medical aid, and in 71.4% of cases patients use prearranged medical services. In 2009, the average cost of inpatient treatment for one patient was 9,400 roubles. Clearly, this sum is not enough to provide adequate medical care.

We calculated the cost of treating inpatients based on the standards to be introduced in 2013. In our estimate, a total of 744 billion roubles will need to be allotted here. Given that changes will be introduced in several phases, the main challenge we should address is emergency medical aid since many specialists are involved in it.

The changes will be phased in within three years. By 2013 we expect salaries across the industry to grow by 35% through indexation, as is the case now, not salary increases.

Next slide please. Here you can see current prices for medical services. The green columns show the cost of medical services based on five main parameters. The maroon columns feature estimated costs of the same medical services taking into account all parameters.

As you can see, in some regions the current cost is higher than the cost that will be formed based on new standards. This only highlights the need to supervise the use of budget funds in the mandatory insurance system more effectively.

We have outlined five priority areas that government funds will go toward. By 2015 we will adopt a system of funding services provided to inpatients based on standard diagnosis-related groups.

Our efforts are expected to help sustain the downward trend in disease and mortality rates. It is important that target numbers be taken into account in the budgets at each level and in each regional programme.

Next slide please. As you can see from this slide, the number of outpatient services and appointments and the demand for alternative inpatient services has increased, while the average duration of stay at inpatient facilities and related rates have gone down.

We calculated these numbers for our project, which will span two years, and we should try our best to improve them. It’s just the first step we must make. But even if we compare these figures with those calculated through the OECD methodology for European countries, we’ll see that these are optimal target numbers, and we must achieve them in the medium term, by 2015, as I said.

In closing, let me say that regions have already done a great job reviewing these programmes. But I hope their involvement will not be confined to discussing draft programmes and they will continue monitoring these projects during the implementation phase so as to keep ordinary people updated on the progress on regional programmes. Thank you.

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Prime Minister Vladimir Putin’s closing remarks:

In closing, the problem we have focused on today is one of the major concerns of any government in any state. A few years ago Alexander Solzhenitsyn identified the main objective of a government as being the preservation of its people. This challenge has always been a top priority for any government in the world and has become especially relevant for Russia today.

You are well aware of the current demographic situation in Russia. You know where life expectancy, maternal and infant mortality rates stand, and how many people die of different diseases or in car accidents.

We have given figures that show that the general dynamics are positive. Yes, this is so, but there are many more problems in this area. Demographic problems, be it high mortality rates or life expectancy rates lower than in neighbouring countries, pose a serious threat to our nation. And as I said before, the preservation of our people has become a serious challenge for Russia.

Five years ago we launched the priority national project Health, which has proved to be very effective, showing that good results can be achieved if we concentrate financial and administrative resources on high-priority issues. We mentioned several figures today that support this. This national project has paved the way for the next step in this critical area of government activity, the modernisation of the Russian healthcare system.

In the past five years we allotted 590 billion roubles for the Health national project. In the next three years funding will be kept at 446 billion roubles and an additional 460 billion roubles will go toward the modernisation programme for healthcare.  This is in addition to over 100 billion roubles provided from the federal budget annually to maintain and modernise federal medical centres and also regular allocations to regional and municipal budgets. These are truly ambitious efforts. It is the first time in the history of Russia, and not only modern Russia, that the state has approached this issue on such a large scale and put so much effort into resolving it.

But here’s what I’d like to draw your attention to again. We already mentioned that it is necessary to finish drafting regional programmes as soon as possible. The issues to be addressed here, notably taking inventory, will require a lot of work. The example of the Ivanovo Region shows that it is a very expensive task.  In order to understand what kind of support hospitals and clinics require, it is first necessary to determine what condition clinics and hospitals are in all over the country. And one more point I’d like to stress: I have stated more than once that we will not allocate funds for the renovation of medical facilities indiscriminately or thoughtlessly. We will provide funds only to those clinics and hospitals that have the potential to improve healthcare in a particular region.

In addition, we need to finish developing healthcare standards. Unfortunately, ordinary people have never known what services they can receive for free and where, and what they need to pay for. Also, we need to do away with shady schemes for financing the healthcare system. Clearly, when we raise the issue of the development of new standards, some people panic because they think this will mean that we will uncover the actual sources of funding for particular healthcare services and across the industry in general.

The Ministry of Healthcare has developed 1,170 standards and is expected to submit related cost estimates to the Ministry of Finance this week. But we need to introduce these standards gradually and carefully, and only when we have the necessary funds available for these purposes.

In conclusion, these large-scale activities will have no positive effect unless we cooperate. The federal and regional governments and municipal authorities should understand that we have mounted a major systemic project of crucial importance, which will require that we work together. Government officials at every level, at each ministry and agency, must recognize this. I am asking Mr Zhukov to supervise every stage of work on this project. We need to develop an effective system for supervision and reporting; I agree with what has been said about that here today.

Thank you.