# **3.6. In-kind transfers (health care and education)**

Health care in Belarus is dominated by the government, which remains the main provider of health services. The public health system is a Soviet-style centralized _Semashko_ system, with an extensive network of state-owned polyclinics and hospitals providing comprehensive health care. Health care in the public system is free to every citizen of Belarus, independent of income, employment or any other socioeconomic characteristics. No contributions are necessary to gain access to health care.

According to the official data (Ministry of Finance, 2016), total health expenditure in the government budget amounted to BYR 34,977 billion in 2015 (4.0% of GDP). Around 40% of the total public health expenditure is spent on primary and secondary care through polyclinics, and the rest covers tertiary care through hospitals (World Bank, 2013).

While health care expenditure is universal, and it would be tempting to distribute health expenditure (and benefits) equally, we prefer to assign health expenditure to the actual beneficiaries. In this case we would attribute expenditure to actual receivers of services. This approach would allow us to capture differences in needs, for example, by gender and age. Moreover, despite the universal system, de-facto access to health services is very different for rural and urban residents.

HBS stopped reporting doctor’s visits and hospital stays since 2008. We use the 2008 data set to model the number of doctor’s visits and the probability of a hospital stay, and then use the model to predict those variables in the 2015 data. We use the Poisson model for the number of doctor visits, and a probit to model the probability of a hospital stay. In both cases the explanatory variables are age, age squared, gender, a child dummy, smoker status, self-reported health evaluation, region, residence type, body mass index, and level of education.

**Figure 12. Health and education expenditure by disposable income deciles**

<!-- Start of picture text -->
1.8 USD PPP Share of  14% 3.5 USD PPP Share of  35%<br>disposable  disposable<br>1.6 income 12% 3.0 income 30%<br>1.4<br>10% 2.5 25%<br>1.2<br>1.0 8% 2.0 20%<br>0.8 6% 1.5 15%<br>0.6<br>4% 1.0 10%<br>0.4<br>2% 0.5 5%<br>0.2<br>0.0 0% 0.0 0%<br>1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10<br>Primary and secondary healthcare Terciary Healthcare Preschool, primary school Secondary school Higher school<br>(a) Incidence of health expenditure,   (b) Incidence of education expenditure,<br>by disposable income decile, USD PPP (bars) and % (lines) by disposable income decile, USD PPP (bars) and % (lines)<br>Source : own estimates.<br><!-- End of picture text -->

After using the estimated models to predict the number of doctor’s visits and the probability of a hospital stay in 2015, we allocate primary and tertiary care expenditure on health care proportionately to them. In absolute values health expenditures are allocated rather flatly across different disposable income deciles, although there is a slight upward slope. _Ceteris paribus_ one might expect a negative relationship between health expenditure and income (with poorer people usually having lower health). However, in Belarus the lower income deciles are largely represented by rural non-retiree households, which have lower access to health care. Hence, the expenditure schedule across deciles looks flatter than expected. In relative terms, however, health expenditures are clearly progressive, reflecting the free universal access to health care (see Figure 12a).

Public education expenditure amounted to 4.8% of GDP in 2015: 1.1% of GDP was spent on pre-school and primary school education; 2.24% of GDP on general secondary (school) education; 0.56% on continued secondary education (vocational and specialized non-college education) and 0.90% of GDP on higher (college) education (Ministry of Finance, 2016).

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