Informal Payments: A Side Effect of Transition or a Mechanism for Sustaining the Illusion of ‘Free’ Health Care? The Experience of Four Regions in the Russian Federation

Abstract

AbstractInformal payments for health services are widespread in many transition economies in post-communist Europe and the former Soviet Union. Their existence complements and in some cases significantly contributes to the financing of their health systems. It has been suggested that they are the legacy of planned socialist economies and a temporary side effect of the transition from a planned to a market economy. This article discusses the findings of the study investigating the extent and nature of the informal payments and evaluates the policy options on offer. It asserts that despite the level of declared support for moderate cost-sharing by different population groups, it is unlikely that any legalised form of co-payment will affect or replace informal payments, as the government uses them to sustain the illusion of ‘free’ health care. The study argues that the utilitarian gain maximisation principle, calling for the greatest collective welfare in communitarian egalitarianism, and the satisfaction of individual preferences in libertarian economics enable the acceptance of informal payments as a viable policy option.