Can a government get private businesses to take over an enterprise that ran at a loss for 70 years and is forbidden by law to turn a profit?Don't bet on the answer.The Russian government did it last year when it abandoned the communist principle of free healthcare for everyone in favor of obligatory medical insurance by private insurance companies.The insurance companies have since been competing to take part in the program, though the obligatory health insurance law states that it is to be run on a non-profit basis.Irina Ispolatova, the head doctor of Polyclinic 21 in north Moscow, serving 38,000 outpatients, rejected four insurance companies that wanted to do business with her before she finally made a deal last December."They all turned out to be unreliable," Ispolatova said. "They were out to make a profit."The obligatory insurance system is financed by a 3.6 percent tax on workers' earnings, paid by employers into a centralized fund, which exists in most cities. There is a tariff on every medical service, which in Moscow is established by an agreement between the city government, the medical association, the obligatory insurance fund and the insurers. The companies use the fund's tax money to pay doctors according to the tariff. "Our profit from this is long-term and indirect," said Leonid Melamed, deputy chairman of the board at ROSNO insurance company with which Ispolatova signed a contract."Everybody goes to a polyclinic," he said. "We will be unsinkable if we are there at each of them to offer people insurance on their cars, property and life."In a bid to get access to a greater number of clients, ROSNO has struck up deals with 40 percent of Moscow's roughly 200 polyclinics, Melamed said. Ispolatova says her Polyclinic 21 has benefited from the new system. "The insurance company treats us as equals," she said. "When we dealt with the City Health Department, they'd yell at us to show they were the boss."Ispolatova said that ROSNO has installed computers at the polyclinic to keep a better record of how many patients came to see doctors on any given day and what the doctors did to help them.The computer records are used to figure out how much a doctor earns a month. Ispolatova said that since the switch to obligatory insurance, doctors at her polyclinic have received 20,000 to 80,000 rubles ($10 to $40) more a month than they got under the budget-financed healthcare system. Considering that a doctor's average monthly salary used to be 120,000 rubles, it's a significant raise, she added.More importantly, Ispolatova said that the new system helped improve the quality of the care the doctors gave their patients."Before, a surgeon could just tell one patient after another to put a cabbage leaf on an aching joint," she said. "Now he knows that he will be paid more if he examines a patient more closely and operates on him."The doctors have to submit a report at the end of each day stating how many patients they saw and what procedures they performed. Ispolatova said the system generally works, though there have been some abuses.When a neuropathologist at her polyclinic made a million rubles one month, Ispolatova decided to check the records. It turned out that the tariff put a high price on the testing of a patient's nervous system."So what some doctors did was ask some superficial questions instead of using complicated equipment for in-depth analysis, and then put it down as testing," Ispolatova recalled.She went on to complain that the tariff on some services was illogical and in many cases ridiculously low."A visit to a surgeon is listed at 640 rubles," she said bitterly. "What's that -- six trips on the metro? But fashionable stuff like acupuncture pays a good deal of money."Despite these shortcomings, Ispolatova said the system worked "practically without a hitch." City health officials also said it was better than the old system of budget financing."Through the tax, we get money for every potential patient," said Igor Nadezhdin, a spokesman for the City Health Department. "The old system -- when we got what was left in the budget after everyone else got their share -- is gone."But insurers say they cannot pay doctors much more than they earned under the free healthcare system."Of course they'd like to charge for their services as much as doctors in the United States do," said Melamed of ROSNO. "But that is not going to be realistic in the foreseeable future."As a consequence, healthcare is still ridiculously cheap for foreigners at an ordinary Russian polyclinic. Though Russian tariffs do not apply to them, a foreigner can be treated on a one-time insurance policy available from the polyclinic, Ispolatova said."We've had some foreigners undergo medical tests for a driver's license here," she recalled. "We charged them 15,000 rubles and they laughed and offered us $15."Russian patients hardly noticed the switch to health insurance, apart from the need to obtain an insurance policy from the polyclinic."Could you at least explain what's different about this system, son?" an elderly woman waiting to see her doctor questioned a reporter in the lobby of Polyclinic 21.