The government encouraged fee-for-service polyc1inics and physician-owned group practices by giving some tax breaks and permitting profits, to be retained as income, which were generated through private or group practice. In 1986, Moscow had 20 self-financing clinics which registered 2 percent of all outpatient visits out of an annual total of 126 million ambulatory visits. But, as Schultz and Raffeny (1990) point out, the enormous growth rate of cooperative clinics in 1988 was curtailed by state regulations concerning profits and types of services permitted. The government reasserted control, thus generating revenue for the state from the 74 percent of the population who paid for private medical services. As a result, an estimated 1350 clinics or 30 percent of cooperative clinics closed, pending the enactment of health reform legislation (Schultz and Rafferty 1990).