The Russian travel insurance and assistance market has flourished in recent times, but how does the country’s healthcare provision compare? Arthur Zulficarov gives an honest insight into doing business in the former Soviet Union

First published in ITIJ 89, June 2008

The Russian travel insurance and assistance market has flourished in recent times, but how does the country’s healthcare provision compare? Arthur Zulficarov gives an honest insight into doing business in the former Soviet Union

Prior to the 1990s, the country beyond the ‘iron curtain’ was glimpsed in all its glory on rare but notable occasions such as the Friendship Festival in 1957 and the Olympics in 1980, when the Soviet Union showed the rest of the world that it existed not just on the map. Such events, despite their joyful nature, were the country’s first taste of treating foreign visitors who fell ill whilst staying in the Soviet Union.

Before the ‘golden 90s’, any medical problem relating to a foreign visitor was dealt with by the State. In such cases, the State would mobilize redundant resources pretending to be the best provider of care, shunning the alternatives – which were few and far between anyway – and terming them a threat to national security due to their ‘competitive nature’ and thus their sympathies with ‘brutal capitalism’. But despite the best efforts of the State, an ill foreigner would still come up against significant language barriers, poor nursing and accommodation, broken beds with dirty linen, and wards with eight or more patients. ‘Perestroika’, then the ‘Wind of Change’ in the 90s, changed everything. So what do ‘medical care’, ‘travel insurance’, and ‘medical assistance’ mean in this part of the world today?

Assistance players

The first local assistance provider appeared in this region in 1989, under the guise of Delta Assistance, when a group of like-minded people got together after recognizing the demand for a more individual approach to helping foreign visitors who ran into trouble in a country very different to their own. This rather amateur, yet very devoted, group became a local correspondent for international assistance companies, who were by then becoming recognized elsewhere as an industry in their own right. One international assistance giant, namely International SOS, had in fact already established a presence in the USSR, but its activity was limited to its own foreign portfolio, where the local boys’ ‘open to all’ policy saw them gain rapid progression into the market. In fact, Delta was extremely successful for almost 10 years until being merged with another assistance provider.

The USSR ceased to exist in 1991 and, as a result, the assistance industry became fragmented, with the rules in each new independent country governing its own assistance market. Covering such a vast area – almost one sixth of the Earth’s land mass – the region naturally encountered various political, cultural and logistical challenges with regards to business in general and, of course, the assistance and travel insurance market specifically.

Nevertheless, in Russia, the local assistance market was properly established in 1993, when another international assistance group – Europ Assistance – came into the market, this time with its own travel product for the native population, which had by that time begun to gradually to explore the West. There were several reasons for starting such a business in Russia, but the biggest pull was foreign embassies’ insistence on Russian visitors having sufficient travel insurance before they were issued with a visa. Immediately, the travel insurance market in Russia boomed, and a new array of travel policies emerged, aimed at the new travelling individual, and later at major tour operators.

90 per cent of the assistance market is shared between Europ Assistance, Global Voyager Assistance and International SOS

Due to the differing nature of rules, regulations and travel patterns in the various countries making up the former Soviet Union (FSU), assistance services in the region are not evenly represented in terms of geography, or expertise. Apart from the three Baltic countries that are a part of the Schengen Agreement, the most developed independent countries of the FSU – the Russian Federation, Ukraine and Kazakhstan – contain the majority of the region’s travelling public, and hence house the leading assistance players. In Russia, assistance companies are generally based in Moscow, St Petersburg, Kiev and Almaty.

The market in Russia is not yet mature, however. Some teams that were present in the field of travel assistance a decade ago have now vanished from the market, including TIM Assistance, INKO Assistance, and RussAssist. Today, 90 per cent of the assistance market is shared between Europ Assistance, Global Voyager Assistance (GVA) and International SOS. These three have annual case volumes of around 20,000 each, with Europ Assistance occupying a more technical assistance niche, GVA being more medically oriented, and ISOS providing services for the corporate client.

A word of warning

Alongside these is a specific group of so-called ‘assistance providers’ who are quite a curiosity in the market. A number of medical facilities, namely in Moscow and St Petersburg, have desks offering foreign insurers – in addition to medical services – an assistance component consisting of claims processing and patient escort back to their home country for an instant cash payment. However, they have a reputation for exaggerating diagnoses or indeed fabricating them, and billing accordingly.

There is an example of one such ‘assistance’ team whose business was to track down foreign patients in public hospitals across the country in order to issue them with a small bill to reimburse the state facility for services received. The team would subsequently re-invoice the patient’s insurance company for outrageously inflated amounts. Needless to say, these rogue assistance providers did manage to deceive insurers of reimbursements – at least until they were exposed by legitimate players in the market.

There is yet another group of people who claim to offer assistance services, and whose ambitions are endless. Their capabilities, however, are limited to a laptop, a world map on the kitchen table, a phone directory and a cellphone! Such people share their time between shopping malls, family commitments, soap operas, and their ‘assistance hobby’. The most obvious flaw is that such emergency numbers totally depend on the cellphone’s battery capacity, so they had better keep their charger nearby!

EMS in Russia

State and non-profit public organisations in the FSU are the main providers of crisis management and rescue operations related to large-scale catastrophes, as well as general life-saving missions. Taking Russia as an example, the Ministry for Emergency Situations of the Russian Federation (Emercom) has, over the last 18 years, gone from being a small state-run association of rescue teams to becoming the most powerful organisation in the region, with almost unlimited resources to draw on in case of massive catastrophe or casualties. In cooperation with the regional and district rescue services organizations in the 85 regions of Russia, professional volunteers, the army, the frontiers and the local police, this conglomerate controls all search-and-rescue, lifeguard and coastguard operations, including rescue missions involving foreign travellers. However, strange as it may seem, such power is sometimes excessive and inefficient when used on a smaller scale; such as was the case when a traveller became ill in the Arctic ice and his assistance company was forced to take on the rescue evacuation of the client themselves. Nevertheless, similar Ministries have been created in all former USSR republics.

Their capabilities, however, are limited to a laptop, a world map on the kitchen table, a phone directory and a cellphone

Whilst Russia’s stock of heavy aircraft, such as that used by Emercom and the army, is improving year on year, the role of light aircraft in medical evacuation and individual rescue operations has been stagnating. It is a sad fact that despite Russia and some of its neighboring countries operating a fleet of around one hundred corporate and private jets and other aircrafts – including such luxury models as Challenger and Gulfstream – not one of these countries has channeled its abundant funds into the provision of a dedicated air ambulance similar to what we see in other countries with a more developed air ambulance culture. There are many reasons for this, the most important being the low volume of travellers whose coverage would be enough to pay for a $30,000 aeromedical flight.

Every known attempt to have a ‘business-medical’ convertible jet over the past 10 years has failed, since the operators do not see any business potential in providing medical flights. The situation with helicopter craft is even worse. The work horse of the former USSR’s copter fleet has always been (and still is!) a famous MI-8 flying tank with a four-stretcher capacity that is normally used for one patient, with the rest of the space occupied by his or her family members, medical crew, various equipment and spare fuel. Modern helipads near major hospitals are available in Moscow, St Petersburg and some other cities, but access to such diamonds as Eurocopter medical transport is strictly limited to the local police or is expressly at Internal Affairs authorities’ permission.

Healthcare facilities

The healthcare structure in the FSU has not changed significantly over the last 20 years of ‘free economy’, although slow progress has been made in the main economic and most populated areas. The hierarchy of the system remains the same: medical facilities are divided along solid administrative-territorial lines and include Village Infirmaries, District Polyclinics, District Hospitals, City Policlinics, City Hospitals, Regional Hospitals or Diagnostic Centers, and Federal Hospitals or Scientific Centers. Medical technology and expertise is concentrated in the Regional Hospitals/ Diagnostic Centers, keeping District medicine in a state of decay.

The provinces

Provincial medical facilities are starting to become ‘commercialized’ as a direct result of an increased number of wealthy members of the population buying private medical cover. However, the percentage of wealthy living in such areas is low, so the majority of the population is serviced by state-run medical care. Such facilities are allowed to treat private patients, but at relatively lower rates than they would have to pay at a private medical facility i.e. doctor visit at $20, bed at $30 per day, and treatment for acute appendicitis at $300.

The cost of treatment at medical facilities that are purely private reflects the purchasing capability of the population, with doctor visits costing up to $50. No in-patient care is provided at such establishments, but dental care, urology and gynecology are leading the way, with rates as high as $100 per tooth prosthesis, $400 for a laparoscopic ovarian cyst extraction, and $80 for gonorrhea treatment. These clinics do not normally have hard currency accounts, are quite slow at billing and sometimes quite greedy (we remember a case in Novosibirsk where a German patient was billed $40,000 for a three-week stay. The hospital even tried to bill the insurer for the labor tax of the nurses, a year’s supply of linen, and the salary costs of the janitors). Provinces are also famous for randomly housing state-of-the-art equipment: in the most unexpected places, you could stumble across a 21st-century MRI scanner and an operation room kitted out by a local oligarch or governor.

Moscow and the central area

Moscow is a unique city, with a wide variety of medical options. Rates for medical care can range from nothing for a state-run ground ambulance or treatment for local people to $1,000 or more a day in the ICU of the most advanced neurosurgical facility. Foreign patients involved in accidents or requiring emergency treatment are treated from the legal point of view as ‘sans abri’ and are usually taken to a municipal hospital. The cost of treatment in these facilities is still a mystery (since sometimes it is billed, sometimes not, and we still do not understand their payment principles), but assistance companies still need to ask if there is a bill to be settled. And in every case, of course, ‘consideration’ is essential to secure adequate care. If this principle is adhered to, the quality of treatment in state hospitals is acceptable, although the accommodation is below standard, private rooms a curiosity, and shower non-existent. The most advanced accommodation in a state facility would be a two-bed room with a bathroom dusted with powder chlorine.

The private sector is booming however, with numerous private out-patient clinics. Most of these house dental, URO, GYN and cosmetic rooms. Established private facilities offering out-patient treatment are limited in number to around six, and they vary in both quality of care and price.

in the most unexpected places, you could stumble across a 21st-century MRI scanner and an operation room kitted out by a local oligarch or governor

At GVA, we carefully select the appropriate out-patient facility for the problem needing treatment, of course, but can recommend the American Medical Center of Moscow, Medincenter and AO Medicina as facilities in this area offering a good standard of medical care. Each of them is equipped to attend to serious medical and surgical problems; however, ICU care should still be outsourced to more appropriate institutions depending on the care required. To give an idea of rates, a house call costs $120-180, a bed costs $200-450 per day, an acute appendectomy costs $1,500-2,500 depending on the nature of the appendicitis. In each and every case, careful monitoring of the rates and final bill is essential.

St Petersburg and the North-West area

The tourist season in the North Western region of Russia turns the medical fraternity in St Petersburgh into an ambulance-chasing safari. The four large Western-standard medical facilities – so called the ‘Alliance of Four’ – fight over patients and often bill their travel insurers for excessive amounts. We have seen medical facilities here billing at a 1,000-per-cent profit margin for an outsourced district facility (not a joke!), and the creation of an assistance division at a clinic targeting Western patients. Rates for treatment are similar to those in Moscow.

The current advice for case management in this region is to take firm control in dealings with the hospital. Unfortunately, too many of the clinics and hospitals here suffer unhealthy ambitions and totally lack respect for a proper travel insurance culture. GVA is now working hard to list a selection of preferred providers among the medical and logistical establishments it works with in the area.