Balancing the state and the market: Russia's adoption of obligatory medical insurance

Russia's challenge in reforming the system of health care it inherited from the Soviet Union has been to preserve the positive elements of the old regime while eliminating inappropriate incentives and structural deficiencies. This article will review relevant details of the Soviet system of health care, trace the recent history of market-oriented reform of that system, outline theoretically the ways in which health care markets are imperfect, and most importantly, analyse the dimensions along which the Russian programme of obligatory medical insurance has failed to compensate for those imperfections with an appropriate balance of market forces and government intervention.