How to reduce idle money in the compulsory health insurance system?

Balynin Igor' Viktorovich ORCID: 0000-0002-5107-0784 PhD in Economics Associate Professor; Department of Public Finance, Faculty of Finance; Financial University under the Government of the Russian Federation 49 Leningradsky ave., Moscow, 125468, Russia igorbalynin@mail.ru Other publications by this author     Ragozin Andrei Vasil'evich PhD in Medicine Director of the Center for Problems of Organization, Financing and Interterritorial Relations in Health Care of the Institute of Regional Economics and Interbudgetary Relations, Financial University under the Government of the Russian Federation 125468, Russia, Moscow, Leningradsky ave., 49 AVRagozin@fa.ru Other publications by this author

Grizenkova Yuliya Viktorovna ORCID: 0000-0003-3387-468X PhD in Economics V.N.S., Department of Housing Mortgage Lending and Financial Instruments of the Real Estate Market; Financial University under the Government of the Russian Federation 49 Leningradsky Ave., Moscow, 125468, Russia gryzenkova@yandex.ru

Introduction

The relevance of the study of the modernization of the compulsory health insurance system is beyond doubt, since this directly and indirectly affects the achievement of the national development goals of the Russian Federation, defined in the Decree of the President of Russia dated May 07, 2024.

In recent years, the scientific literature has repeatedly raised issues related to the modernization of the compulsory health insurance system.

So, in particular, issues of misuse of funds were raised ^[1], improvement of the activities of territorial mandatory medical insurance funds ^[2], modernization of the work of medical organizations ^[3]. A number of researchers considered the solution of issues of financial support for the compulsory medical insurance system in the context of improving the well-being of Russian society ^[4], as well as in the context of certain narrow issues: for example, in the framework of managing challenges for private investors ^[5] or methodological recommendations for obtaining preventive measures under the compulsory health insurance policy ^[6]. F. N. Kadyrov O. V. Obukhova, P. V. Mitroshin, A.M. Chililov examined the features of the functioning of the compulsory medical insurance system in the Donetsk and Lugansk People's Republics, as well as the Zaporozhye and Kherson regions ^[7].

Given the fact that the compulsory health insurance system has a fairly extensive regulatory framework, scientific researchers in their works pay special attention to them ^[8],[9]. It should be agreed that currently the legal regulation in the field of compulsory medical insurance is extensive, and certain provisions are duplicated in several regulatory legal acts.

The analysis of foreign literature has shown the active concentration of the scientific community on the issues of modernizing the financial support of the healthcare system in the countries of the former USSR ^[10-12], China ^[13-14], Brazil ^[15], Germany ^[16], Japan ^[17], the USA ^[18]. At the same time, the issues of modernization of the compulsory health insurance system by reducing "idle speeds" have not been given sufficient attention in the scientific literature.

L. Z. Buranbayeva, Z. E. Sabirova emphasize the importance of the indicator "national health expenditure" in the context of assessing the social development of the state ^[19]. In turn, E. V. Kostyrin and H. Pinpin note that the increase in the share of financial support for the healthcare system in the country's GDP is not always accompanied by an increase in the number of doctors and hospital beds per 1000 people ^[20]. Indeed, it is extremely important not only to increase the volume of financial support for the healthcare system, but also to ensure the effective use of available financial resources. This process also involves the search for internal reserves in the compulsory health insurance system.

Methodology and research conditions

The research is based on the use of data analysis and synthesis methods, the use of induction, deduction and graphical tools.

In economic dictionaries, there is the concept of "Idle money" ("idle turnover"), meaning unused money that is devalued due to inflation. At the same time, they could be invested and, thus, not only preserve purchasing power, but also increase it. (URL: https://dictionary.cambridge.org/dictionary/english/idle-money , accessed: 07/21/2024), (URL: https://financial-dictionary.thefreedictionary.com/idle+funds , accessed: 08/01/2024). According to the authors of this article, this is also characteristic of funds in the compulsory health insurance system that are idling. Moreover, in this case, administrative and transaction costs are added to inflationary losses, and the diversion of resources to unnecessary turnover creates obstacles to the implementation of financial support for health goals properly. It is important to note that a review of scientific publications has shown the presence of studies on the problem of idle turnover in the economy ^[21], and the absence of scientific papers in relation to compulsory health insurance.

The purpose and objectives of the study

The purpose of the study is to develop recommendations for eliminating idle speeds in the compulsory health insurance system. The objectives of this study:

- identification of idle turns in the compulsory health insurance system;

- formation of proposals for the elimination of idling in the compulsory health insurance system;

- substantiation of the multifaceted significance of the implementation of measures to eliminate idling in the compulsory health insurance system.

The results of the study

One example of "idle turnover" in the compulsory health insurance system is the establishment of the obligation to pay insurance premiums for citizens engaged in work in the field of healthcare. This generates two large-scale counter cash flows. So, on the one hand, medical organizations pay mandatory payments, including insurance premiums for compulsory medical insurance (which they include in the cost of medical services provided). In turn, on the other hand, medical organizations receive money for medical services provided as part of the movement of funds in the CHI system. Accordingly, part of these funds is used to financially ensure the fulfillment of their obligation to make payments of insurance premiums for compulsory medical insurance. As a result, there are two counter cash flows – from medical organizations to the FOMS budget and back along the chain established by regulatory legal acts. Such circulation of funds leads to the diversion of funds from the CHI system.

Due to the fact that the processes of paying insurance premiums for compulsory health insurance and financial support for medical services are ongoing, the only task of this turnover is the senseless movement of money. There is no benefit from this movement for healthcare, the only beneficiaries are banks that withhold fees for payments.

The scale of losses due to the "idle turnover" of the MHI is due to the fact that healthcare is one of the most labor–intensive industries: the main part of its current expenses is wages. In some types of medical care, as well as in northern and remote territories (where there are significant additional salary allowances), the share of labor costs increases additionally.

According to the authors, one of the solutions to the existing problem is the exemption of salaries of employees in the healthcare system from paying insurance premiums for compulsory medical insurance. In this case, there are two possible options for the implementation of this proposal: either exemption from payment of insurance premiums only for payments for the remuneration of medical workers or exemption of payments for the remuneration of all employees in the health care system (both medical and non-medical). The authors believe that it is advisable to extend this initiative to all employees, since the structure of the tariff for medical care contains the costs of paying (with accruals for wage payments) for all employees.

Currently, there are benefits for the payment of insurance premiums for various organizations, depending on their size, industry specifics and territorial location. For example, for a number of organizations, the insurance premium rate is set at 0% (for example, in Skolkovo, etc.) or 0.1% (for example, in special economic zones, territories of advanced development, territories of advanced socio-economic development).

According to the Accounts Chamber of the Russian Federation, the remuneration of labor (with accruals for wage payments) in the structure of the directions of use of MHI funds is 62.7-66.2% (depending on the year). At the same time, regional differentiation was also revealed. In particular, in the Magadan region it is over 91% [URL: https://ach.gov.ru/upload/iblock/c10/1qr2l1q596wcmgfabm5c3fa1egea4usz.pdf , accessed: 07/29/2024].

Based on these data, we will try to calculate the approximate volume of "idle revolutions" in the MHI system. So, in 2022, 1,656.68 billion rubles of funds under compulsory medical insurance were allocated for financial support of wages (with accruals for wage payments). Accordingly, we get that the payment of insurance premiums for compulsory medical insurance accounts for approximately 64.89 billion rubles. In turn, in 2021, their volume, according to the authors' calculations, amounted to at least 62.44 billion rubles. Accordingly, these funds are being used "idly" and in 2022 their growth is observed by at least 2.45 billion rubles.

Discussion of the research results

At first glance, the extension of the preferential tariff of insurance premiums to the healthcare system will require additional inter-budgetary transfers. Indeed, currently the budget of the Federal Compulsory Medical Insurance Fund receives an inter-budgetary transfer from the federal budget for the purpose of compensating for the loss of income due to the use of preferential tariffs. Thus, the figure clearly shows information on the volume of the inter-budgetary transfer from the federal budget to the budget of the Federal Compulsory Medical Insurance Fund in order to compensate for the loss of income due to the application of preferential tariffs. We see that in 2022, the increase in the volume of such an inter-budgetary transfer compared to 2021 amounted to almost 34% (which in monetary terms exceeds 12 billion rubles). Attention is drawn to the lack of an assessment of the effectiveness of each of the grounds for applying a preferential tariff of insurance premiums for compulsory medical insurance.

Drawing. The volume of the inter-budgetary transfer from the federal budget to the budget of the Federal Compulsory Medical Insurance Fund (by year), in billions of rubles.

Source: compiled by the authors on the basis of data from the Federal Treasury, Federal Law No. 331-FZ dated 07/24/2023 "On Budget Execution of the Federal Compulsory Medical Insurance Fund for 2022".

However, the specifics of the issues raised are related to the fact that "idle turnover" is precisely internal reserves and, all other things being equal, their elimination does not require additional inter-budgetary transfers from the federal budget. In this case, reducing the cost of insurance premiums for employees in the compulsory health insurance system will entail a corresponding reduction in tariffs for the provision of medical services. This way we will avoid unnecessary turnover of funds. In conditions of increased inflationary pressure, the importance of implementing only those expenses that are associated with financial support for measures aimed at creating effects is maximized.

Conclusions

Just as idle engine speeds waste fuel and limit the life of the engine, so useless "idle speeds" in the MHI system lead to unnecessary waste of money and labor, reducing the effectiveness of measures to solve urgent health problems, including in the context of achieving national development goals of the Russian Federation. Therefore, the importance of the author's recommendations is multifaceted, since the elimination of idle speeds in the MHI system directly ensures the occurrence of both financial and organizational effects.

Due to the availability of preferential insurance premium rates (for a wide range of reasons; moreover, in the absence of a detailed assessment of the expediency of each of them), an inter-budgetary transfer is provided annually from the federal budget to the budget of the Federal Compulsory Medical Insurance Fund to compensate for the loss of income (in 2022, about 50 billion rubles were required for these purposes). However, in this case it will not be needed, because it is possible to reduce the tariffs for the provision of appropriate medical services. In turn, there will be a gain in time, within which it is possible to allocate funds to financially support the solution of various tasks in the field of healthcare.

Eliminating the problem associated with double oncoming traffic of funds will also make the profession of a doctor more attractive. This is primarily due to the emergence of additional opportunities to increase their wages. Accordingly, there will be an additional indirect effect of a positive nature: a reduction in the scale of personnel shortages in the healthcare sector, the importance of eliminating which has been repeatedly noted in various regulatory legal acts. So, in particular, this is stated in the Decree of the Government of the Russian Federation dated October 9, 2019 No. 1304 "On the modernization of primary health care in the Russian Federation", and in the Decree of the Government of the Russian Federation dated February 13, 2019 No. 207-r "On approval of the Spatial Development Strategy of the Russian Federation for the period up to 2025". In accordance with the Decree of the President of the Russian Federation dated 05/07/2024 No. 309 "On the national Development Goals of the Russian Federation for the period up to 2030 and for the future up to 2036", the need to modernize the remuneration system for employees of state and municipal institutions is fixed, within the framework of which it is possible to modernize the approach to collecting insurance premiums for compulsory medical insurance in medical organizations. The author's recommendations are especially relevant in the context of the implementation of a pilot project to modernize the remuneration system for medical workers starting in 2025.

The article was prepared based on the results of research carried out at the expense of budgetary funds under the state assignment of the Financial University under the Government of the Russian Federation.