Why the Russian Federation is not the Soviet Union

Путин: Я люблю здравоохранение!

In grad school my thesis was a rather wonkish (and to most people, horrifically boring) study of Russian healthcare reform from 1985-2008. What I enjoyed most about the process of researching and writing my thesis was the opportunity to learn how utterly unfounded the protestations, from people like the Commissar of Transitology Michael McFaul and his eager sidekick Katherine Stoner-Weiss, of “Putin hasn’t done anything for the average Russian!” were, are, and will remain. After delving into the data and the relevant (Russian-language) documents it was pretty that, whatever else he had done, Putin had overseen a stabilization and modest rehabilitation of the healthcare system, something which positively impacted the lives of tens of millions of people. It is certainly possible to overstate the degree to which things improved, United Russia does this on a daily basis, but it is simply not possible to state, as many people bizarrely insist on doing, that things have gotten worse since Putin came to power. They haven’t, and Russians themselves are very well aware of this.

As I think has become increasingly clear as this blog has grown, I am a bought-and-paid-for FSB flack. Indeed, right at this very moment I am using some Russian petrodollars (which are a lot slipperier and harder-to-handle than you might think) to buy some Gazprom stock, surely the most freedom-hating activity in the whole wide world. But don’t worry dear readers, there is good news! You don’t have to take my authoritarian and Russophile word that Russian healthcare has recently improved. All you have to do is look at the most recent analysis of the late Yegor Gaidar’s think tank, the liberal-leaning Institute for the Economy in Transition. From its report on the Russian economy in 2009:

В 2009 г., несмотря на экономический кризис, расходы на здравоохранение из федерального бюджета выросли в номинальном выражении на 25% – с 231,4 млрд руб. до 289,5 млрд руб. Расходы из бюджетов субъектов Российской Федерации остались практически на прежнем уровне: 518,7 млрд руб. против 520,1 в 2008 г. С учетом взносов на обязательное медицинское страхование работающего населения государственное финансирование здравоохранения увеличилось в 2009 г. на 5,6% (2,9% в реальном выражении), достигнув 1060 млрд руб…Это отличает ситуацию 2009 г. от кризиса 1998 г., когда сократились и расходы государства на здравоохранение, и затраты населения на лекарства и медицинские услуги

In 2009, despite the economic crisis, expenditures on healthcare from the Federal budget grew 25% in nominal terms  from 231.4 billion rubles to 289.5 billion rubles. Expenditures from the budgets of the subjects of the Russian Federation remained practically at the previous level: 518.7 billion rubles against 520.1 billion in 2008. Taking into account investments to obligatory medical insurance of the working population, state financing of healthcare grew in 2009 by 5.6% (2.9% in real terms) having reached 1.06 trillion rubles. This differentiates the situation in 2009 from the crisis in 1998* when state expenditures on healthcare and spending by the population on medicines and medical services all declined.

В начале 2009 г. правительство приняло решение о продолжении реализации национального проекта «Здоровье» на период до 2012 г. Его финансирование осуществляется из средств федерального бюджета и государственных внебюджетных фондов: Федерального фонда обязательного медицинского страхования и Фонда социального страхования. Несмотря на экономический кризис и обусловленное им существенное сокращение государственных доходов, расходы на национальный проект не только не были подвергнуты сокращению, а увеличились на 20,2% по сравнению с 2008 г. Это свидетельствует о реальной приоритетности данного проекта в бюджетной политике.

At the beginning of 2009 the government made a decision to continue the realization of the national project “Health” until 2012. The project’s financing still comes out of funds of the federal budget as well as off-budget funds: the Federal fund of obligatory medical insurance and the Fund of social insurance. Despite the economic crisis and the significant reduction in government income, expenditures on the national project not only weren’t subject to reduction, but grew by 20.2% in comparison with 2008. This attests to the real priority of this project in the government’s budget policy.

В 2010 г. расходы на национальный проект в целом и на его основные компоненты запланированы примерно на том же уровне, что и в истекшем году. Это свидетельствует о реальной приоритетности данного проекта в бюджетной политике.

In 2010 expenditures on the national project in general and on its basic components are planned to  remain at about the same level as 2009. This attests to the real priority of this project in the government’s budget.

It goes without saying that, in the bad old days of the Soviet Union, healthcare was essentially the lowest priority of the state: whenever money had to be saved or a budget had to be cut, healthcare always stepped to the front of the queue. Additionally, the budget constraints faced by health providers were always “harder” than those faced by heavy or defense industrial enterprises, meaning that the government wouldn’t simply bail them out if they utilized their budget allocation too rapidly. The result of these stingy funding norms was that the healthcare sector was even more dysfunctional, ramshackle, and generally decrepit than virtually any other major sector of the economy, which, when considering the broad dysfunctions of the Soviet command economy, is really saying something.** The idea that the healthcare budget would grow in real terms during a nasty economic contraction would have seemed not laughable but entirely incomprehensibly to those chinovniks unfortunate enough to have labored in the All-Union Ministry of Health and used to the barest of bare-bones budgets. Yet that is exactly what happened during the “year of crisis.” At a time when tax receipts were plunging and its finances were in flux, the Russian state saw fit to spend more money on health services for the population. I don’t think it’s a particularly radical to note that that is a rather important reflection of the current priorities of the political leadership.

Now, oh easily-outraged ones, am I saying that Putin is a saint, or that the current Russian government is perfect? No. I am not saying that, by virtue of its increased spending on  healthcare, the Russian government is beyond reproach. I am simply drawing attention to the plain and incontestable fact that the Putvedev team has emphasized social protection in a way that significantly distinguishes them from their predecessors. Maybe this makes them “good,” or maybe it doesn’t; people are, of course, free to draw their own conclusions. But what I hope this post demonstrates is that it is simply impossible, factually impossible, to argue that Putin and Medvedev are utterly indifferent to the welfare of Russia’s citizens. They aren’t, and the relevant data show as much. I would even meekly suggest that the continued growth in pensions and healthcare spending even does something to explain the continued popularity of Russia’s political leadership and the continued feebleness of the opposition to it.

*But Kathryn Stoner-Weiss told me that Yeltsin defended Russians’ welfare better than Putin!!

** Soviet apologists will note the massive number of doctors churned out by the USSR’s medical educational system. However, many of these “doctors” received training so spotty, inadequate, hackneyed that they bore as much relationship to a real doctor as I bear to a novelist. Look at the mortality trends, and particularly the death rates for cancer and heart disease, and you’ll see that the Soviet health system was deeply incompetent when compared to those of Western countries.