A new report notes that private healthcare expenditure in Russia has been constantly increasing, as the standard of services provided by the public sector falls.

According to Frost & Sullivan, the Russian private healthcare market was worth about $8.3 billion in 2009 and is expected to reach almost $20 billion in 2016, which includes insurance and direct out-of pocket payments. This growth is driven by "obsolete equipment and inefficiency in large public hospitals", plus difficulties of over-staffing and doctors are usually hired at below-average salaries. This is why patients "who can afford treatment in private facilities tend to avoid the troubled public sector", the consultant notes.

The report notes that the recently-introduced 2020 Healthcare Development Programme has set "ambitious goals to increase quality and affordability of healthcare and improve the overall health status of the Russian society". Because of the obligatory health insurance covering 100% of the Russian population, the public healthcare expenditure is much higher than private costs but there is "an existence of a grey zone, because of which citizens end up paying much more".

As a result, some 42% of Russians pay on an out-of-pocket basis and "such a situation further discourages patients from using public healthcare services and is likely to continue over the years". However F&S notes that "even though a small fraction of Russia’s population (especially living in large cities) is becoming increasingly affluent, the majority still cannot afford private healthcare services. Also it is considered "a socially vital service that should be provided free of charge, as it is guaranteed in the Russian constitution, or at least be strongly subsidised by the state,” claims F&S analyst Dominika Grzywinska.

Nevertheless, "the demand for private healthcare in Russia is on the increase, in spite of the factors hampering its growth," the report notes. The largest demand is likely to be in areas such as dentistry, gynaecology, diagnostics and cosmetology.