Public Spending on Health Care as the Country's Human Capital Investment

5 march 2019

"Life expectancy in our country has increased by 6 years over the past 11 years. The United Kingdom took 21 years to get the same result. The challenge now is to increase life expectancy by another 6 years. This is a more complicated task, and we need to apply complex, comprehensive measures to solve it," said Nelli Naigovzina, Deputy Head of the Analytical Center, at a meeting of the subgroup for cluster policy and territorial-sectoral projects of the Interdepartmental Work Group on the development of a roadmap for sustainable economic growth in the non-resource economy sector.

Health care, medical equipment, pharmaceuticals, white biotechnologies, medical centers and specialized services are combined in the "Happy Longevity Industry" sector of the roadmap.

According to Naygovzina, for the formation of the state policy in the industry it is necessary to determine the health care technological structure. "We need to figure out what we can afford at the district, regional and federal medical institution levels. Such technological structure would help us define the technological cycle and work out the production policy," explained Ms. Naigovzina.

"The medical services sector requires new performance indicators, which should be based on the performance and quality, rather than the number of services provided," added Anastasia Alekhnovich, Head of the Expert Center under the Presidential Commissioner for the Protection of Entrepreneurs' Rights. "Hospitals are focusing on the process, on the number of cases treated, but not on the disease prevention. And to some extent, it is a trap for chief physicians who cannot regroup cost items and direct funds to disease prevention."

She added that achieving the key goals of the sector's development — increasing life expectancy, increasing healthy life expectancy, and reducing mortality — is impossible without increasing health-care spending to at least the world average level. Therefore, spending on health care should be seen as an investment in the human capital of the country.

For the development of the "Happy Longevity Industry", the experts suggest developing and implementing a packaged solution in order to support technological renewal of the system, including tax incentives, state and municipal purchases, affordable financial resources and leasing and banking products. The sector's players talk about the need to bring regulatory standards in line with international requirements and to introduce innovations along the entire value chain. The proposals include the access of private clinics to the Compulsory Health Insurance and cooperative interdepartmental management of the sector.