Prime Minister Vladimir Putin's introductory remarks:

Good afternoon, ladies and gentlemen.

We planned to gather in Kaliningrad today, but are unable to do so because of bad weather. As a result, we'll have a video conference instead. The topic of our discussion remains the same: the modernisation programmes for regional healthcare systems. We have been addressing this issue sequentially with the following considerations: modernising the healthcare system, improving the quality of medical services, and making them more affordable.

We have recently completed a major phase of this work and have adopted a new law on mandatory medical insurance. This is really a very important step. Without this legislation, we'd be unable to implement the healthcare modernisation programmes as planned. We approached a line beyond which we needed to take concrete steps.

We have created an effective mechanism to ensure that people can receive medical services for free, as guaranteed by the state. I'd like to emphasise that these services are of the appropriate quality, or at least so it should be.

Starting January 1, 2011 we will implement modernisation programmes that are designed to upgrade regional hospitals and clinics – providing them with new equipment and promoting the adoption of new technology and new medical standards. We will have the additional opportunity to raise salaries in the industry.

The regions are drafting their programmes as we speak. Incidentally, we discussed them at a recent meeting in Ivanovo. However, given the importance and scale of the problems in question, we'll need to bring these issues back up at future meetings. The government is allotting significant funds for these purposes, and they must be used rationally.

Today we will review the progress made on these programmes together with the heads of the regions in the Northwestern Federal District. In particular, we'll focus on the situation in the Kaliningrad Region. This approach will allow us to look closer at the actual problems faced by each region.

We understand that the Kaliningrad Region is a unique region – an enclave. Local hospitals and clinics must provide all necessary services and meet the most advanced medical standards since people here do not always have the opportunity to go to hospitals or clinics in other regions.

Last year a prenatal centre was opened in the Kaliningrad Region, and next year we'll finish construction on a federal centre for cardiovascular surgery. The region received 455.8 million roubles through the national "Health" project. This is in addition to the 635 million roubles and 2.3 billion roubles that the federal government allocated for the prenatal centre and the surgery centre, respectively. The funds allotted through "Health" were used to raise the salaries of lower-level medical staff and to purchase over 100 ambulances, including ones that can be used to provide emergency medical aid on roads.

I'd like to reiterate that birth rates in the Kaliningrad Region have increased by almost 30% since 2005, while mortality rates have fallen by some 20% – and in particular by 38% in the able-bodied population. These are good figures. Nevertheless, many people in the Kaliningrad Region are dissatisfied with the local healthcare system, and I can understand why.

Most of local medical facilities need renovation or even reconstruction. Hospitals and clinics don't have enough equipment and sometimes even lack sufficient doctors or nurses. Kaliningrad is number two on the list of regions facing a shortage of medical personnel. All these problems will be addressed through the regional modernisation programme.

I’d like to focus on major shortfalls that were revealed during the drafting of this programme. While looking through the figures for the Northwest Federal District before this meeting, I found that its regions had requested over 140 billion roubles from the federal government. Clearly, if we allot a quarter of our funds to one federal district, there won’t be enough left. Our estimates should be realistic. More to the point, this programme should be co-funded by the regional government.

Basically, the programme has three key targets, which I would again like to name. These are the modernisation of medical facilities, the broader adoption of information technology in the industry, and the provision of adequate funds to clinics and hospitals so that they meet modern standards.

Clearly, the distribution of funds should be well balanced. However, almost 70% of the funds have been budgeted for cosmetic and major repairs of medical facilities and the purchase of new equipment, while only a quarter of the funds will be used to improve the quality of their services. Several regions, such as the Nenets Autonomous Area, haven’t budgeted anything for it at all.

For some reason, the adoption of IT technology in the industry is regarded as the lesser priority. Its funding is determined only after assets have already been distributed between the other two priority fields. In the Northwestern Federal District, it accounts for only 4.2% of total funding. I’d like you to review all expenditure items again and overhaul several parts of the programme.

It is also necessary to understand which medical facilities need renovation and what equipment they need. But first of all, we must analyse the pattern of diseases in the region in order to concentrate resources on priority areas.

In his State of the Nation Address, the president emphasised the imperative to provide children with everything they need. In this regard, I’d like to say that a quarter of the funds budgeted for the reform of the healthcare system will go toward children’s healthcare system.

Regions allot different sums for these purposes and use different mechanisms, but you should keep in mind that this issue is one of our top priorities and this sector should receive adequate funding.

I’d also like you to see to the issue of improving staffing policies in healthcare – in particular training and retraining programmes for doctors and lower-level personnel. It is necessary to create decent working conditions in the industry, including the use of salary raises.

In the Kaliningrad Region, doctors receive three and sometimes five times less than administrative personnel and even less than maintenance workers. Clearly, this is not right. This is not the approach we should have if we want to create strong professional teams. In the final analysis, the patients will suffer.

I am asking the Ministry of Healthcare and Social Development to review the situation regarding salary payments in the healthcare industry of the Kaliningrad Region and across the country.

Let’s get down to discussion.

Tatyana Golikova: Thank you, Mr Putin.

Mr Putin, colleagues. The meeting in Ivanovo was not so long ago. Nevertheless, since then all regions of the Russian Federation have submitted their programmes on healthcare modernisation, and it is worth noting that we have completed the first stage of consideration. This stage was absolutely necessary because the regions have done a great deal of work, regardless of the costs that you have mentioned, and I would like to talk about that a bit. However, it is important to point out something else as well: based on the information that the regions collected and supplied to the higher authorities, we have obtained invaluable data on the state of healthcare at all levels. By analysing the scope of funds allocated by the Russian regions for the modernisation of their healthcare programmes, I can say that at the first stage they earmarked over 1.14 trillion roubles for two-year programmes, where 778 billion roubles are requested from the Federal Mandatory Medical Insurance Fund. It is about 41.2% more than provided in the fund’s budget for a two-year term. Later, I will tell you how and in what detail we considered this issue.

Now I want to tell you that we have drafted methods for distributing funds toward regional programmes as a result of such consideration and bearing in mind that in Ivanovo, you instructed us to develop such methods. Yet, in order to give our distribution proposals to you and our other colleagues, we have to complete one more task – verifying the initial indicators that are to be used for the calculation of subsidies from the Federal Mandatory Medical Insurance Fund. I want to tell all the regions that this information was made available yesterday on the website of the Ministry of Healthcare and Social Development, the notices have been sent to the Russian regions, and within a week, that is by the next Tuesday, we expect complete verification of the initial data and on its basis will calculate the amount of subsidies. And I now want to say that, in general, given the excessive demand that I have mentioned, the funds for the programmes’ implementation will, naturally, be reduced, proceeding from the amount that we have available in the federal budget.

A couple of words about the northwest and the situation in the Northwestern Federal District: at present its population is 13.4 million. Over recent years, its indicators have been rather favourable, yet they nonetheless lag behind the Russian average. For example, despite a birth rate higher than in previous years, it remains lower than in the Russian Federation as a whole; the death rate in the Northwestern Federal District has significantly decreased, but it is still 6.6% higher than the average.

This mortality structure, as in the Russian Federation on the whole, is predominately predicated upon circulatory illnesses, neoplasm, and external causes. In this respect, I want to say that the share of external causes, being preventable, still exceeds the Russian average by 5%. The rate of accidental alcohol poisoning is 25% higher than in Russia as a whole, traffic accidents are 6.5% more common, despite the fact that a fairly large number of regions in the Northwestern Federal District participated in the national project “Health” and more specifically in its traffic programme. Finally, the suicide rate here is 3.4% higher than the national average.

As for the morbidity pattern, it does not differ here from that of the Russian Federation in general, with respiratory diseases prevailing, although their growth rate is 12.6% higher than the national average. Here, as in some other Russian regions, oncological diseases are widespread, but the rate of incidence is 3.1% higher. I must emphasise that the efforts we have made as part of the national project were largely aimed at prevention, and additional clinical examinations are worthy of note. However, and I want to draw the attention of the governors of the Northwestern Federal District to the fact that in five of its regions, clinical examinations are left more than 50% incomplete. This shows that at the fundamental level, work is not carried out with due efficiency – hence the low detectability of diseases and the concomitant morbidity rates that I have just mentioned.

With this understanding and after analysing regional programmes from all over Russia, we hope that the regions will focus their efforts on overcoming the negative tendencies that are currently present in the Northwestern District.

Speaking of the capacity and activities of health institutions in that district, I must say that based on the reports and programmes we have received from its regions, in virtually all of them there is a trend toward substituting primary healthcare services with costly emergency medical care.

The current quota, established under the state guarantee programme, is 318 ambulance calls for every 1000 residents. In the Northwestern District, that figure reaches 320 to 380, indicating that emergency operators have been providing primary care services that should be provided by outpatient clinics.

There are not enough primary care physicians in the Northwestern District, however, to fulfil the demand. Therefore, the rate of outpatient visits in the district is 7 to 8 visits per person per year, which is significantly lower than the national average of 9.4.

There is also an imbalance in the Northwestern District between available inpatient care facilities and the low occupancy of special care wards. This is due to the fact that in some regions, there is a lack of medical specialists, including cardiologists, pulmonologists, nephrologists, thoracic surgeons, urologists, and others. But we hope to train and provide additional opportunities for professional development for such specialists as part of the Health Care Modernisation Programme.

As you mentioned here, the regions of the Northwestern Federal District submitted programmes worth 141.5 billion roubles. Of that amount, 102.8 billion are from the Federal Mandatory Medical Insurance Fund.

After analysing the situation thoroughly and examining the programmes in the regions of the Northwestern District alongside other Russian regions, we have identified those areas that need to be reworked.

Some of these have already been mentioned here (next slide, please), including the need for programmes to reflect the morbidity and mortality rates in the region.

Secondly, and I would like to stress this, all regions need to take advantage of the services and capacities offered by state facilities, including those under the Ministry of Health and Social Development and others that operate within the framework of mandatory medical insurance. The Northwestern District has a great number of such facilities.

Today, virtually all inpatient facilities are underutilised. We have very good facilities, so please take advantage of them. There is no need to spend money on major repairs and maintenance or purchase expensive equipment. You can focus exclusively on improving the standard of medical care, including increasing salaries, improving the supply of medications, etc.

There is another field to which I would like to draw your attention. This field should be financed not by the Federal Mandatory Health Insurance Fund and territorial allocations, but by the regions themselves through modernisation programmes. I mean healthcare institutions outside the mandatory health insurance system – tuberculosis, neuropsychiatric, and addiction hospitals and clinics. I call on the Northwestern Federal District and other regions to keep them in mind because many of these institutions are underequipped and dilapidated.

I would also like to mention the order you gave as you were rounding off your introductory remarks – I mean clinic and hospital salaries. Certainly, wages grow as standard healthcare improves. But since the costs of visits to outpatient clinics and standard hospital treatment differ from region to region, we addressed ourselves to the regions for more extensive information. Our analysis of healthcare programmes shows that specialists’ remuneration in clinics and hospitals remains an acute problem. Whatever we might say, and however anxious we might be to overlook this problem, it has to be addressed within the limits of healthcare modernisation programmes. Wage hikes will certainly differ from region to region as well, but they must be made as early as next year.

Mr Putin, there is yet another issue – the national project targets you have approved. The project will be implemented through regional healthcare modernisation programmes due to two primary factors (there are more, in fact, but I will mention only two). First, Russia is shifting to world standards of live birth as of 2012, and we should prepare obstetric services to nurse underweight and premature babies, including extremely grave cases. The second factor concerns teenager health screening.

A third consideration, with which I would like to finish my report, involves what Mr Putin was just saying. The new law on mandatory health insurance is coming into effect on January 1, 2011. Amendments to several other draft laws related to the mandatory health insurance law have also been endorsed. It is a comprehensive law, so the decision was made to introduce its norms gradually over the period of 2011-2015.

I would like to address its nine basic norms in brief. It envisages the delineation of federal, regional, and municipal duties on mandatory health insurance. Concessions will be granted for next year. Regions have the right to choose whether to implement the new protocols in 2011 or launch them on January 1, 2012. Everyone is granted free choice in the transition year. Second, according to the new legislation, the basic programme of mandatory health insurance will be funded by grants from the Federal Mandatory Health Insurance Fund. All funds will be preserved in the regions during the transition year, so the programme will be funded just as it was this year.

Grants will not be paid in full in 2012, however, because we are not yet shifting to the full tax and the modernisation programme will not yet have been completed. From 2013 on, however, we will achieve the full scope of grants to implement the basic programme. As I have said, the transition to healthcare fees on the full tax will start in 2013. In 2011 and 2012, the regions will have the right to independently choose whether to preserve funding through the mandatory health insurance system according to the current five position model or gradually shift healthcare institutions to funding on the full tax.

As the law stipulates, mandatory health insurance fees for the nonworking population will be decided in 2011 according to this year’s rates. In the first half of next year, we will endorse a federal law gradually establishing a tax for the nonworking population nationwide.

The choice of health insurers and healthcare institutions will start in 2011. Understandably, the public will most probably cling to the insurance companies and healthcare institutions to which they currently belong, but the choice will be made within next year for the goals set for 2012. For this, we should endorse the law on the fundamentals of healthcare in the Russian Federation within the first quarter of 2011. The draft law is undergoing final consideration as the legislative procedure stipulates, and I hope it will be submitted to the government in December.

Next, all medical institutions, government and private alike, must be involved in the mandatory health insurance system. The funding of emergency aid is due to join the system in 2013, and the funding of high-tech medicine in 2015. The deadlines have been put off due to serious preparations necessary to include these kinds of healthcare in the system.

Such are the principle changes that healthcare will undergo. The list is not exhaustive but it comprises the pivotal changes that we will implement next year.

Vladimir Putin: Thank you very much.

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Vladimir Putin’s closing address:

Ladies and gentlemen,

We have gathered today to discuss preparations for introducing new standards of work and implementing plans to upgrade healthcare in the Russian regions on the model of Kaliningrad and the rest of the Northwestern Federal District.

I hope very much that we were not merely listening to each other, but have also heard each other. I hope that the regional governors understand the position of the Ministry of Healthcare, the Finance Ministry, and the Economic Development Ministry and that this will help you in the very important work that we begin on January 1, 2011 as we upgrade the national healthcare system.

In conclusion, I’d like to draw your attention to the following points. First, this is not our last meeting on this issue. We will continue this discussion and analysis and make only well-justified decisions on the expenditure of federal funds. I’d like to speak about these funds at the end of our current meeting. This year we will spend a total of about 658 billion roubles on healthcare in the regions, including federal funding. This is very big money. In the next two years we are planning to spend 2.2 trillion, plus another 400 billion on federal health centres. Just imagine what those sums represent. We will have more than doubled the funding. Therefore, you should be very careful with it. Let me repeat for a third time that you must put these funds to good use.

The example of the Kaliningrad Region prompted me to pay attention to one point. I think, Mr Suzrikov (Vladimir Suzrikov, chief physician at Guryevsk regional hospital –Ed.), that the governor and some other colleagues said here that sometimes it makes more sense to build or purchase something new than to repair the old. Perhaps this is the right approach in some cases, and it seems sensible to follow this road.

At the same time, we should not launch enormous projects from scratch all over the country and dump all our money into capital construction. We should be highly attentive to the expenditure pattern. This is the first point that I wanted to make.

I asked Mr Valery Serdyukov, head of the Leningrad Region, to take the floor for a reason. To my knowledge, he plans to spend a little over five billion roubles on healthcare each year beginning with this one and wants to receive 11 billion roubles from the federal budget over the next two years to help cover his expenditures. Well done, Mr Serdyukov, but this will double healthcare spending at the expense of the federal budget. I don’t think this is a plausible idea. You must look for your own financial resources to increase healthcare spending and consider support from the federal government an additional assistance. It is clear that if we were to double financial aid to the regions, there would be nothing left after the St Petersburg and Moscow regions alone received their shares.

And now I’d like to speak about those who work in the healthcare system – 3.1 million people who account for almost 10 million people if we include their family members. It goes without saying that while upgrading the healthcare system, we should not forget about their standard of living. You should take this into account when drafting spending patterns for hospitals and outpatient clinics. Their funding will be increased substantially – the former will receive an additional sum of about 76 billion roubles and the latter 60 billion roubles. The salaries of medical workers should be increased automatically. Please, pay serious attention to this goal as well.

Many thanks.