Prominent actors involved in the decision making

The decision-making process in Russian hospitals usually involved a number of participants. These were (a) health care authorities (federal, regional and local), (b) hospital executives, (c) chiefs of medical departments (senior physicians) and (d) staff physicians. As each group had different incentives and motivations, the technology acquisition process was highly political and variable, with all the actors vying for influence.

(a) The federal health care authority (the Russian Ministry of health) determined the list of the equipment proposed to regional authorities for a choice under federal programmes. Regional health care authorities were the main actors in the decision-making process in the regions because they determined which hospital(s) to include in the federal and regional programmes. Most local authorities depended on regional budget subsidies, and were not able to make investment decisions themselves. Regional authorities allocated the main resources for medical equipment, analysed hospitals’ requests, and organized tenders. They could ban the purchase of equipment even if a hospital planned to buy it from its own resources. ‘If I need to buy a medical device, I should ask the authority for permission […] even if I have earned the money myself’. Hospital executives in both regions reported that they had to justify and reconcile with regional authorities about 80% of their expenditures on equipment, consumables and pharmaceuticals. Therefore, formally the decision space of hospital authorities was very limited.

Regional authorities evaluated regional health indicators and the general level of medical care. Ideally (not taking corruption into consideration), their principle motivations corresponded to the needs of the regional health care system. The main criteria for technology adoption therefore were hospital specialization, technical ability to adopt the technology (e.g. workplace characteristics, staff qualification), and future outcomes. However, regional authority heads mentioned that they had to consider the informal status of hospitals. Privileged hospitals (used by the governmental officials and deputies) had priorities in receiving new technologies over other hospitals: ‘If we ban the purchase of equipment to hospital “N” we’ll have problems as our government and deputies receive treatment there’.

It is important that regional health care authorities were the most prominent, but not the final actor in the decision-making process. Their decisions could be overturned by financial authorities: ‘they either finance our claims for technology adoption 100% or decline them […] they have their own criteria and they don’t care about our estimates if we don’t fit with their numbers’, an authority head complained.

(b) Hospital executives, driven mostly by indirect benefits and image considerations, endeavoured to receive from the state budget the best possible equipment. They often requested technology that would contribute to the positive image of the hospital [like an magnetic resonance imaging (MRI) scanner], even if there were no financial and medical reasons for it. The main reasons for new equipment adoption were: the replacement of old (or out-dated) equipment, the introduction of new (or additional) services and the development of new departments, and the improvement of technological processes in terms of timing and quality. As the process of equipment purchasing was highly variable and often unpredictable over long periods of time, executives tended to overstate their real needs and to request ‘reserves’ because they were not sure about getting new equipment in the future.

(c) Chiefs of medical departments (senior physicians) concentrated on the needs of their own departments, and thus tried to persuade hospital executives to invest in technologies they needed. As all hospital executives had a medical background and sometimes maintained a medical practice, they were usually more aware of technologies used in their specialty. They agreed that priority was usually given to chiefs who were ready and capable to develop their departments and who had enough energy and talent to acquire new technologies.

(d) Our analysis showed a difference between staff physicians in the two regions studied. For example, in Kaluga region there was a lack of specialists, particularly those young and willing to work with new technologies. ‘When a physician wants to adopt new technology, we support this person. I go to the authority head and ask for money. I do that only if I have a person who will use the technology’, said the head of a hospital in Kaluga region. Unfortunately for the Kaluga region, quite often those interested in new methods of treatment and professional development sought positions in other locations, mainly in neighbouring Moscow. Hence, for those rare specialists who kept working in local hospitals, the executives and senior physicians tried to meet all their requirements.

In contrast, Saint Petersburg executives rarely had any problems with finding specialists. ‘I have never had a problem finding a specialist to work with new equipment’, said a head of a specialized hospital in Saint Petersburg. They focused mainly on strategic development and invited specialists capable of using the technology and equipment the executives had acquired for their institutions.

Overall, there was strong evidence that financial staff did not participate in the decision-making process. The key decision makers were regional authority leaders and hospitals executives, with senior physicians and staff physicians having a limited influence on other actors. Therefore, a political context is more important in decision-making compared to organizational.

The decision-making procedure

According to Russian legislation any purchase of equipment and/or technology in public organizations (including hospitals) has to go through a tender procedure. Technology acquisition may be initiated either (a) by an authority (federal or regional) or (b) by a hospital.

(a) If the purchase was initiated from above then the equipment usually was delivered within a federal or a regional programme. Authorities were supposed to aggregate hospitals’ requests and take hospitals’ preferences into consideration. However, such programmes usually were limited by lists of equipment available for purchase. Hospital executives in both regions described dozens of situations in which they were forced to take equipment they did not need. Quite often they received equipment that was incompatible with what they had because the different producers use different technical standards. Often they received only the very basic versions of equipment, so they could not deliver all of the services needed. Sometimes hospitals were forced to take equipment that they could not use because they lacked the appropriate specialists or encountered technological gaps or infrastructure problems. To illustrate this situation, an executive in a Kaluga regional hospital described ambulances received within the National Project ‘Health’. These new vehicles were equipped with the latest features, but they could not handle the rough rural roads in the region. As a result, the hospitals had to curtail the use of these vehicles and go back to their old ambulances instead. The respondents noted that when they received equipment ‘from above’, they valued it as a ‘gift’, even though these were often useless. The hospital was obliged to decide simply ‘to take it or leave it’; it could not change the type of equipment received or apply for another producer/specification.

(b) If a hospital initiated an acquisition, the decision-making process had two steps. First, the hospital itself decided what it needed. There were two primary decision makers: Senior physicians advised, and then medical directors had the final say. There were no standard procedures, and no objective measures or quality comparisons or cost-benefit analyses, formal or informal, making the decision-making process very vague.

Second, when a hospital had set its priorities, it has to decide who would finance the technology and organize tenders. Usually the response depended on the price of the equipment. Both regions had special rules for expensive equipment acquisitions. For example, in the Kaluga region, all purchases above 2 million roubles (~$66,000 USD) were to be approved by the deputy governor of the region, no matter who paid. Typically, the hospital applied to the regional authority for financing and the authority examined the need and its ability to satisfy the request. The negotiation with authorities was a complex process, involving bargaining and compromises, unclear and non-transparent decision making, and informal relations.

Neither hospitals nor authorities used health technology assessment procedures in priority setting; information gathering about particular technologies was poorly organized; authorities often did not estimate the hospitals’ ability to use the new technology properly.

If the authority decided to finance the technology, it was usually responsible for tenders. The hospital representatives could be invited to tender commissions. This depended on the hospital relations with the authority and on many other factors, including corruption. The executives complained that quite often they received equipment from unwilling producers because authorities considered only price, or they received the right equipment, but with inconvenient warrantee terms.

Motivations and criteria for technology adoption

Respondents from hospitals in both regions were asked to rank the importance of motivations for technology adoption from three possible choices: (1) financial efficiency, (2) image and indirect benefits and (3) clinical efficacy.

(1) Economic efficiency was considered by most interviewees as crucial to technology acquisition: ‘The main motivation for acquiring new technologies is connected to an increase in the demand for services, and hospitals of course want to earn money for their doctors’; ‘A physician is human – he needs food, theatres and to buy something. This is the most important thing at the moment’. When respondents were asked to specify economic motivations for adopting new technologies, they named new services, more patients, and personal income increase, formal or informal. Physicians in public hospitals are paid salaries according to their qualifications, experience, etc. If a hospital delivers certain services to patients for a fixed charge, physicians receive additional income, depending on the number of services and patient visits. Both basic salary and additional income (if any) are low, and many physicians implied that their income is supplemented by informal payments and ‘presents’.

Surprisingly, nobody (including hospital executives) mentioned any economic and financial assessments, cost-benefits analysis or profit maximization models. To understand why no financial and managerial calculations were used to evaluate technologies, see Table 2. Different combinations of financing technology adoption and services delivered with the use of this technology existed and the economic motivation for acquiring new technology was different in each case.

Table 2

Financial sources to reimburse medical treatment and technology adoption

When a hospital received new equipment and introduced technologies out of the budget (federal, regional, local), it did not consider the initial costs of the equipment and could request for the most expensive technology (situations 1, 2, 3).

If all the maintenance and servicing costs were fully charged to the budget or compulsory health insurance fund (situation 1), the hospital evaluated only the benefits associated with the new equipment (i.e. the formal and informal payments received for using this equipment). The hospital did not consider post-guarantee servicing of the price of consumables.

If a hospital bore the maintenance and servicing costs (situation 2), it had to take a cost-saving strategy into account. All respondents indicated that this was a very typical situation, causing problems: ‘When equipment depreciates […] it needs renovation/repair. And each time we are in trouble – these expenses […] they are huge. Nobody thinks about that’; ‘we can’t afford consumables and servicing costs – we have to look for cheaper parts and often it’s not good for the equipment’.

Most equipment received under the National ‘Health’ Project or under special federal programmes for cardiology, tuberculosis, etc. did not take into account the full post-purchasing costs of consumables. The tariffs for medical services delivered with the use of the new equipment often did not include maintenance costs, forcing hospitals to search for additional sources of financing, usually from chargeable services (situation 3). This finding suggests that contradictions between the hospitals and the authorities responsible for equipment tenders were inevitable: those who organized tenders were interested in low equipment prices and did not take other considerations into account, while hospitals were likely to acquire technologies that did not need expensive materials and repairs, regardless of the initial price.

When public hospitals acquired new technologies using their own sources, mainly from chargeable services (situation 6), they evaluated benefits and total costs, including technology, consumables, maintenance, etc. In such cases hospital behaviour often corresponded to Greer’s fiscal-managerial model. But, unlike western clinics, Russian public hospital executives considered a narrow range of economic effects (enhancement of services, attraction of additional patients, increase of paid services) and did not take into account such indicators as returns on investment, the payback period, the price potential, or the size of the market.

In the less widespread situations 4 and 5 when hospitals purchased new medical equipment themselves and then used it to deliver free-of-charge medical services and cover maintenance costs fully or partly from the budget and compulsory health insurance funds, they took into consideration future benefits, the initial price of technology and part of the maintenance and servicing costs (situation 5). However, income from chargeable services was limited, so hospitals could not buy expensive equipment.

The respondents reported that hospitals (no matter their status and specialization) were usually in situation 1, 2 or 3, making a financial analysis of acquiring technology useless. In general, hospitals were motivated to introduce technologies that were cheap to maintain and compatible with hospital equipment and infrastructure facilities. However, hospitals were not interested in adopting technologies that decreased the length of hospital stays. Furthermore, the respondents reported that because hospitals were reimbursed according to the number of days that a patient stays, they had a financial incentive to maintain less efficient treatments. Most interviewees agreed that in some cases they could discharge their patients earlier but they would lose money: ‘if we discharge a patient on his 5th day we’ll get only 5000 rubles instead of 20,000. […] We know it’s typical – we could have discharged patients much earlier – in surgery division, in gynaecology, in urology… but it’s unprofitable because of the reimbursement tariffs’.

(2) A number of respondents reported indirect benefits such as image as the most important motivation or at least equally as important as financial efficiency. They wanted to be perceived as cutting-edge. They also said that the desire to have the best possible equipment is common for most physicians and executives. ‘A lot is driven by prestige’, said the head of an authority. ‘A desire to have an MRI scanner in a hospital is often just a matter of prestige and has nothing to do with rationality’.

Among indirect benefits, four main motivations drove hospitals to acquire new technologies even when there were no economic and financial rationales: (a) attracting patients, (b) attracting physicians, (c) the satisfaction of chief doctors and (d) privileges for the hospital.

(a) Attracting patients was a dominant motivation. Respondents understood that patients were often aware of new technology, creating a sort of pressure for physicians. Patients evaluated not only the medical equipment but also the design and ergonomic quality of the furniture and the facilities of rooms and wards, motivating hospitals to invest in a comfortable and patient-friendly environment. The interviewees explained that well-equipped hospitals therefore attracted more patients, and more importantly, upper-class patients with higher incomes.

(b) A positive image attracted physicians. For some specialists, the quality of the medical equipment was crucial (e.g. in surgery, dentistry, ophthalmology, etc.), because they saved time and energy and decreased risks. The majority of respondents agreed that highly qualified physicians were rare in Russia. Hospital executives also reported that acquiring new technologies helped them to get better physicians and primary specialists: ‘Technology and equipment helped me to gather a good team. […] I have invited one physician from Novosibirsk […] good specialists easily join our hospital’.

(c) A large majority of interviewees mentioned personal satisfaction as additional, though not key, motivation. This is how an authority head described it: ‘[hospital heads] want to get an MRI scanner to feel proud of possessing it. […] They also want it to be able to boast’. The executives appreciated when their colleagues and patients admired their hospitals and the technical opportunities available: ‘I’m happy that everybody admires our centre’. Respondents also reported that the physicians who used new technologies and procedures expressed delight and satisfaction, and had high self-esteem. Nevertheless, executives admitted that not all physicians wanted to change their well-established practice and position themselves at the leading edge of medical care.

(d) Finally, we addressed reputation and privileges. A hospital that had a leading and prestigious position built a good reputation and received strong support from local (sometimes even regional and federal) authorities. Some executives explained that hospitals with strong reputations often had special relations with prominent citizens and authorities, and these relations helped them to solve different problems. Those respondents who could not boast about having close relations with the local government indicated that they were often left out of the decision-making process; at the same time, their ‘competitors’ were involved in political life through participation in health care commissions and committees. As a result, a leading hospital had more opportunities to influence the priority-setting process and to receive new medical equipment. ‘Our physicians have privileges in the city. […] Our hospital is special because we are at the leading edge of care’.

(3) Although clinical efficacy was last among motivations, all interviewees cited it as an important rational, explaining that hospitals tended to acquire only clinically efficient technologies, but not always the best in class.

A large majority of respondents said it was impossible to adopt the most prominent technologies in Russian hospitals because of technological gaps, including the quality of other hospital facilities, education/skills gaps, quality of infrastructure (buildings, water supply, electricity, etc.) and sometimes out-dated clinical standards. Further, most technologies needed expensive supporting facilities, therefore, clinical efficacy a priori could not be a dominant motivation in most Russian hospitals. ‘We can’t yet demand the best technologies as the level of overall development is not the same as in developed countries. It’s impossible. We therefore choose those technologies that can be adopted here over; technologies that decrease our losses and facilitate our job’.

Our findings on the motivations of hospitals were similar to those that Teplensky et al. (Reference Teplensky, Pauly and Kimberly1995) obtained to explain MRI scanner adoption in the United States, and that Silva and Viana (Reference Silva and Viana2011) discovered for CT scanner adoption in Brazilian hospitals.

Although the hospitals vary in specialties offered, size, reputation, etc., we did not find any important variations in the decision-making processes which could be attributed to a hospital’s characteristics. The acquisition process was similar for all public hospitals, no matter what dimension was studied (information sources, motivations, key decision makers or bargaining procedures). Hospitals of different type/status, often faced the same obstacles to new technology adoption: technological and environmental gaps, physicians’ qualifications, reimbursement policy, the motivation for using old technology and the negotiation process with authorities.

However we observed two important regional-specific features. The first is that technology acquisition was more likely to be driven by competition for desired patient groups in Saint Petersburg, whereas hospitals in the Kaluga region were more likely to be driven by competition for physicians. The second is that in Saint Petersburg regional authorities were more likely to reject hospitals’ requests, seeking to avoid equipment duplication.