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Welcome to Soviet-style healthcare…in America.

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July 13, 2012 in Health


Healthcare; a centralized, integrated, and hierarchically organized government system providing “free” care to all the country’s citizens, a mixed model with joint private and state financing and provision. Everyone shall have the “right” to health protection and medical aid which shall be rendered to individuals gratis, at the expense of the corresponding budget, insurance contributions, and other proceeds including a heavy progressive or graduated income tax on those who can afford it.

Sound familiar? Welcome to the new American healthcare system courtesy of the Russian Federation. That’s right, just as our public schools are fashioned on the soviet polytechnic model of training good little worker-bees to produce and perform for the state, our new healthcare law is nearly identical to the one developed by the Soviet Union and tweaked under the Russian Federation. The only problem? It’s a failure over there, as it will be here.

Before the 1990 “collapse” of the Soviet Union, the centralized healthcare system described above was fast deteriorating. Even with the doubling of hospital beds and an increase in doctors and nurses, by the early 1980s it was in a steady decline. Few medical facilities had adequate heating or water, in fact, 1989 found 20% of Soviet hospitals without piped hot water and 3% lacking even cold water plumbing. Many hospitals did not have radiological equipment to test for something as simple as a bone fracture. The hierarchal priority of healthcare was due to the fact that the system could not afford to give everyone in the country free (as in, paid-for with income tax) healthcare. The common belief is the Soviet Union collapsed because the U.S. outspent them militarily, but this is not entirely accurate. In actuality, the reason was a combination of unsustainable military and social welfare programs; mainly healthcare costs. It was simply impossible to fund Russian socialized healthcare.

The difference in how healthcare will be funded, between Russia and the United States, is that the approx. 50% of Russians who pay taxes have healthcare built into their income taxes to pay for 100% of the citizens, whereas the future model in America will be the approx 50% who pay taxes, most of whom have health insurance anyway, will be eventually funneled into Medicare, a mandatory tax coming out of every paycheck as a tax to pay for 100% of Americans. Medicare will be the single-payer universal government socialized system to complete the transition of the US healthcare system to the Soviet model, all admitted and in the open.

After the feigned collapse of the Soviet Union, Russian leaders were forced to give their healthcare system an overhaul and divided it into federal, regional (oblast-level), and municipal (rayon-level) administrative levels. The new Russian Federation changed to a mixed model of healthcare with private and state financing and provision, achieved through compulsory medical insurance (OMS) rather than just tax funding. Ring a bell? The reality of what is to come should send a chill up the spine of every American.

We are constantly told by our politicians (the state) that healthcare is a “right,” but where did this philosophy come from? Article 41 of the 1993 Constitution of the Russian Federation (an update of the 1977 Constitution of the Soviet Union) reads:

1) Everyone shall have the right to health protection and medical aid. Medical aid in state and municipal health establishments shall be rendered to individuals gratis, at the expense of the corresponding budget, insurance contributions, and other proceeds.

The Soviet healthcare system post-1993 saw the introduction of new free market providers meant to promote both efficiency and patient choice. A purchaser-provider split was also expected to help facilitate the restructuring of care, as resources would migrate to where there was greatest demand, reduce the excess capacity in the hospital sector, and stimulate the development of primary care. Finally, the intention was for insurance contributions to supplement budget revenues and thus help maintain adequate levels of healthcare funding.

However, the OECD (Organization for Economics Co-operation and Development) reported that none of this has worked out as planned and the reforms have made the system worse. The population’s health has deteriorated on virtually every measure and the reforms have proven to be woefully inadequate at meeting the needs of the nation. There are 143 million Russian citizens to our 311, by the way. Private healthcare delivery has not managed to make much inroads and public provision of healthcare still predominates. The resulting system is overly complex and very inefficient. Although more than 300 private and public insurers exist in the Russian market, real competition for patients is rare, leaving most patients with little or no effective choice of insurer, and in many places no choice of healthcare provider either. The insurance companies have failed to develop as active, informed purchasers of healthcare services. Most are passive intermediaries, making money by simply channeling funds from regional OMS funds to healthcare providers.

When Vladimir Putin began his first term as president in 2000, he significantly grew spending for public healthcare and in 2006 it had exceeded the pre-1991 level with billions more promised. As Prime Minister, Putin announced a large large-scale health-care reform in 2011 and pledged to allocate upwards of 300 billion rubles ($10 billion) in the next few years to improve healthcare in the country. He also said the obligatory tax paid by companies for compulsory medical insurance will increase from current 3.1% to 5.1% starting from 2011. There’s that word compulsory again!

Even our friends at the Rand Corporation state that despite the increased government funding and large number of hospitals and doctors, “…negative trends are developing…specifically, in health indices and in the healthcare system. Uneven development of the healthcare system has become more apparent, and popular dissatisfaction with medical personnel and the quality of delivered services has grown.” They go on to say, “many of Russia’s healthcare problems have been rooted in the accepted political model of state-paternalistic social system development. From this approach follows an inattentive government attitude to the problems of healthcare, a reliance on primitive investment in extensive growth of healthcare delivery facilities, manpower, and other resources and supplies, and a lack of attention to the quality of care or its effectiveness in improving people’s health. One of the characteristics of the Soviet period was the complete absence of incentives for improvement of services in all kinds of medical institutions,” and “the paternalistic approach manifested itself in the slogan; The State cares for the health of its citizens.”

So here we are, the Hegelian Dialectic in action once again; thesis, antithesis, and synthesis. As with the military, ideology, schools, and now healthcare, we had the thesis of the U.S. system (privatization) and its perceived opposite, the antithesis healthcare in the Soviet Union (socialized) combining to form the synthesis of the two – a quasi private-socialized system forcing citizens to pay, or be fined, for the greater good, where the insurance companies (through the megabanks) take a backseat to care, writing the laws, bribing supportive politicians with campaign funds, and raking in the cash while the middle class is covertly eliminated with unsustainable debt and a lower quality of healthcare. And all the while the banks will be the true winners in the insurance racket, reaping the benefits as unelected bureaucrats determine who is worthy of the rationed treatments. Welcome to the new American-Soviet system, it’s going to be a wild ride.

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1 response to Welcome to Soviet-style healthcare…in America.

  1. Hi,
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