Health and social security reforms in Latin America: the convergence of the World Health Organization, the World Bank, and transnational corporations.

International financial institutions have played an increasing role in the formation of social policy in Latin American countries over the last two decades, particularly in health and pension programs. World Bank loans and their attached policy conditions have promoted several social security reforms within a neoliberal framework that privileges the role of the market in the provision of health and pensions. Moreover, by endorsing the privatization of health services in Latin America, the World Health Organization has converged with these policies. The privatization of social security has benefited international corporations that become partners with local business elites. Thus the World Health Organization, international financial institutions, and transnational corporations have converged in the neoliberal reforms of social security in Latin America. Overall, the process represents a mechanism of resource transfer from labor to capital and sheds light on one of the ways in which neoliberalism may affect the health of Latin American populations.     

The World Bank and pharmaceuticals

Within less than a decade the World Bank has become the largest single source of finance (loans) for health in low and middle income countries as well as a major player in the field of pharmaceuticals. Often 20-50% of the recurrent government health budget in developing countries is used to procure drugs. Drugs are among the most salient and cost-effective elements of health care and often a key factor for the success of a health sector reform. However, pharmaceuticals are frequently being used irrationally, mainly due to market imperfections in health care, such as information asymmetries, leading to serious health problems and a heavy financial burden on the health system. Lending priorities set by the World Bank could be used to promote public health sector reform, leading to the rational use of affordable and available drugs of good quality in developing countries. This report provides the first analysis of World Bank activity in the pharmaceutical sector worldwide. The analysis of 77 staff appraisal reports, describing the planning phase of World Bank country projects, shows that 16% of the total World Bank health, nutrition and population budget, or approximately US$1.3 billion, has been committed to loans or credits supporting pharmaceutical activities in the programme countries between 1989-95. Roughly US$1.05 billion has been committed to procurement of drugs and medical equipment. Only 5% of the total pharmaceutical sector lending is committed to software components such as drug policy work and rational use of drugs. No more than 45% of the projects were developed in collaboration with pharmaceutical expertise. The World Bank is recommended to improve its pharmaceutical sector involvement by promoting drug policy research and development including national and international dialogue on pharmaceutical issues to ensure rational use of both drugs and loans. In this, the World Bank has an advantage given its experience from working with both the private and the public sector, its in-house expertise in health economics, and lastly its ability to be listened to by governments through its power.     

Why neoliberal health reforms have failed in Latin America

This paper reviews Latin American neoliberal health reforms sponsored by the IMF and the World Bank, and analyzes the impact on the region of decentralization and privatization, the two basic components of the reforms. The second part of the paper examines in some detail the Chilean and Colombian reforms, the two countries that have implemented closely the principles of the neoliberal reform. The two case studies confirm that neoliberal reforms do not improve quality of care, equity, and efficiency. In the discussion the authors identify the beneficiaries of the reforms: transnational corporations, consultant firms, and the World Bank's staff. The recognition of the beneficiaries helps to explain some of the reasons behind the Word Bank continuing pressures to implement neoliberal health reforms in spite the growing evidence of their failures.     

Reprivatizing pharmaceutical supplies in Africa

Perhaps no part of the health system is as imperiled by neoliberal economic reforms as the public drug sector. The national bill for pharmaceuticals can claim one-third of a developing country's annual health budget. This article describes the essential drugs program created by WHO in the 1980s to protect financially reduced ministries of health from the high prices charged by multinational pharmaceutical companies. It describes the backlash from the World Bank and UNICEF, which launched the Bamako Initiative and other community financing schemes and revolving drug plans in which individuals, families or community groups buy drugs above the wholesale purchase price; clinics use the proceeds to maintain drug supplies and subsidize other health services. When this plan failed, the Bank proposed outright privatization of drug purchase and supply, returning power to the multinational suppliers. The article ends with a consideration of patents and the new intellectual property rights as they pertain to pharmaceutical production in Africa.     

Balancing health and industrial policy objectives in the pharmaceutical sector: lessons from Australia

INTRODUCTION: Policy-makers worldwide struggle to balance health with industrial policy objectives in the pharmaceutical sector. Tensions arise over pricing and reimbursement in particular. What health plans view as necessary to maintain equitable access to medicines, industry views as inimical to R&D and innovation. Australia has grappled with this issue for years, even incorporating the goal of "maintaining a responsible and viable medicines industry" into its National Medicines Policy. METHODS: This case study was conducted via a narrative review that examined Australia's experiences balancing health and industrial policy objectives in the pharmaceutical sector. The review included electronic databases, grey literature and government publications for reports on relevant Australian policy published over the period 1985-2007. RESULTS: While pharmaceutical companies claim that Australia's pricing and reimbursement policies suppress drug prices and reduce profits, national policy audits indicate these claims are misguided. Australia appears to have secured relatively low prices for generics and "me-too drugs" while paying internationally competitive prices for "breakthrough" medicines. Simultaneously, Australia has focused efforts on local pharmaceutical investment through a variety of industry-targeted R&D incentive policies. DISCUSSION: Despite the fact that policy reviews suggest that Australia has achieved balance between health and industrial policy objectives, the country continues to face criticism from industry that its health goals harm innovation and R&D. Recent reforms raise the question whether Australia can sustain the apparent balance.     

Health sector reform in Argentina: a cautionary tale

In November 2002 the World Bank published a report on the Argentine health sector. The report accurately portrays the complexity and severity of the problems facing the health care system. It stresses that these problems are not purely a product of the country's economic collapse, noting that the system has suffered from long-standing structural problems and inefficiencies. Curiously, the report makes no mention of the leading role played by the World Bank in health reform efforts during the 1990s. This paper demonstrates that these reforms did much to worsen pre-existing weaknesses of the sector. The paper criticises the content of the reform agenda and the manner in which it was produced, arguing that these were reforms in which considerations of public health were less significant than conformity to the wider model of neo-liberal social and economic development prevailing at the time. It also highlights problems of implementing the reform agenda, which reduced the coherency of the reforms. The paper goes on to examine the impact of the crisis, noting links with the preceding reforms. It identifies a number of insights and lessons of potential value to other countries which are pursuing similar policies.     

Managed care in Latin America: the new common sense in health policy reform

This article presents the results of the comparative research project, "Managed Care in Latin America: Its Role in Health System Reform." Conducted by teams in Argentina, Brazil, Chile, Ecuador, and the United States, the study focused on the exportation of managed care, especially from the United States, and its adoption in Latin American countries. Our research methods included qualitative and quantitative techniques. The adoption of managed care reflects the process of transnationalization in the health sector. Our findings demonstrate the entrance of the main multinational corporations of finance capital into the private sector of insurance and health services, and these corporations' intention to assume administrative responsibilities for state institutions and to secure access to medical social security funds. International lending agencies, especially the World Bank, support the corporatization and privatization of health care services, as a condition of further loans to Latin American countries. We conclude that this process of change, which involves the gradual adoption of managed care as an officially favored policy, reflects ideologically based discourses that accept the inexorable nature of managed care reforms.     

Regional initiative on health care reform in Latin America and the Caribbean]

Many countries throughout Latin America and the Caribbean are introducing reforms that can profoundly influence how health services are provided and who receives them. Governments in the region identified the need for a network to support health reform by building capacity in analysis and training, both at the Summit of the Americas in 1994 and at the Special Meeting on Health Sector Reform, which was convened in 1995 by an interagency committee of the Pan American Health Organization/World Health Organization, the Inter-American Development Bank, the World Bank, and other multilateral and bilateral agencies. In response, in 1997 the Pan American Health Organization and the United States Agency for the International Development launched the Latin America and Caribbean Regional Health Sector Reform Initiative. The Initiative has approximately US$ 10 million in funding through the year 2002 to support activities in Bolivia, Brazil, the Dominican Republic, Ecuador, El Salvador, Guatemala, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Paraguay, and Peru. Now in its third year of implementation, the Initiative supports regional activities seeking to promote more equitable and effective delivery of basic health services.     

Argentina: no lesson learned.

This article examines the political, ideological, social, and economic processes by which the Argentinean economy was transformed, the structural consequences, and the policies responsible for dismantling the welfare state. The health care system reform during the 1990s was an important component in accomplishing the last objective. Analyses of the policies adopted after the crisis of 2001 reveal that, despite the discourse against international financial institutions, President Nestor Kirchner, elected in 2002, followed the same approach by accepting and applying the second generation of health reforms recommended by the World Bank and the Inter-American Development Bank with additional pressure from the World Trade Organization and several free trade agreements. This "new reform" furthered business opportunities for multinational corporations while further shrinking the state administration's role in supplying health, education, and other social services to people who need them more than ever. Social movements have emerged that are developing alternative projects and showing that, when the base is solidarity, "another world is possible."     

Non-Medical prescribing policies: A global scoping review

BackgroundAuthorizing health care providers other than physicians to prescribe medicines (i.e., non-medical prescribing, NMP) has been used to improve access to healthcare in many countries. This paper aimed to identify the scope of policies facilitating NMP worldwide and investigate the relationship of such policies with a country’s physician to population ratio and economic status.MethodsA hierarchical search strategy was used. First, we compiled a list of countries and territories (n = 216) based upon World Bank record. Then, we collected relevant information for each country by using country name combined with key terms in PubMed, Google, and World Health Organization (WHO) country pharmaceutical profiles. Countries’ socio-economic status and physician to population ratio were determined using data from the World Bank.ResultsLegislation allowing NMP was found for 117 of 216 (54%) countries and territories. The most prevalent policy identified was that of autonomous prescribing authority (59%). Countries with low or high incomes and those with low or high physician to population ratios (<1/1000 or >3/1000) had the highest concentration of policies for NMP rights.ConclusionDespite the varied scope of relevant policies, NMP has been implemented in countries of varied income levels and physician to population ratios. Future research is warranted to empirically examine its impact on access to care.     

The impact of privatization on access in Tanzania

In the late 1980s, many developing countries were forced to adopt structural adjustment policies as a condition for securing loans from the International Monetary Fund (IMF) and the World Bank. One of the World Bank's recommended policies was to change the mix of private and public health facilities. This study, based on fieldwork done in Tanzania in 1993, examines the impact of this policy on health-care accessibility in two northern Tanzanian districts, one rural and one urban. Accessibility was measured in terms of equality and equity of coverage. The placement of the very few government clinics opened during the years 1985-1993 did much more to improve coverage than the haphazard location of many new private clinics. Equity was not improved as very few clinics were placed in demographically needy areas.     

How International Monetary Fund and World Bank policies undermine labor power and rights.

Based on reviews of hundreds of loan and project documents from the International Monetary Fund (IMF) and World Bank, this article provides detailed evidentiary support for critics who have long claimed that the international financial institutions require Third World countries to adopt policies that harm the interests of working people. After reviewing loan documents between the IMF and World Bank and 26 countries, the authors show that the institutions' loan conditionalities include a variety of provisions that undermine labor rights, labor power, and tens of millions of workers' standard of living. These include downsizing of the civil service and privatization of government-owned enterprises; promotion of labor flexibility: the notion that firms should be able to hire and fire workers, or change terms and conditions of work, with minimal regulatory restrictions; mandated wage rate reductions, minimum-wage reductions or containment, and spreading the wage gap between government employees and managers; and pension reforms, including privatization, that cut social security benefits. These labor-related policies take place in the context of broader IMF and World Bank structural adjustment packages that emphasize trade liberalization, with macroeconomic policies that further advance corporate interests at the expense of labor.     

The health workforce crisis in TB control: a report from high-burden countries

Human resources are the most important assets of any health system, and health workforce problems have for decades limited the efficiency and quality of Latin America health systems. World Bank-led reforms aimed at increasing equity, efficiency, quality of care and user satisfaction did not attempt to resolve the human resources problems that had been identified in multiple health sector assessments. However, the two most important reform policies – decentralization and privatization – have had a negative impact on the conditions of employment and prompted opposition from organized professionals and unions. In several countries of the region, the workforce became the most important obstacle to successful reform.     

Privatization of health services in less developed countries: an empirical response to the proposals of the World Bank and Wharton School.

Academics and World Bank officials argue that, by reducing out-of-pocket expenditures, expanded private insurance may improve access to needed health services in less developed countries. In this empirical response, the authors examine this recommendation through observations from their research on privatization of health services in the United States, Argentina, Chile, and Mexico. Privatization, either through conversion of public sector to private sector insurance or by expansion of private insurance through enhanced participation by corporate entrepreneurs, generally has not succeeded in improving access to health services for vulnerable groups. Although the impact of privatization has differed among the Latin American countries studied, expansion of private insurance often has generated additional co-payments, which have increased rather than decreased out-of-pocket expenditures, thereby worsening access to needed services. Privatization usually has improved conditions for private corporations and has led to higher administrative costs. To address the devastating problems of access to services worldwide, we must find ways to enhance the delivery of public sector services and must move beyond conventional wisdom about market-based policies such as privatization.     

Equity and health systems reform in Latin America

The aim of any health care system is to help improve the people's health, and to do so as efficiently as possible. In order to improve the efficiency and equity of health services provision, many countries around the world have implemented reforms, including several Latin American nations. However similar the objectives may appear, the various ways societies implement such reforms reflect different values and concepts. This article analyzes the egalitarian and neoliberal values underlying different concepts of equity in health care. The authors develop criteria to interpret selected health services funding and provision strategies in Latin American health system reforms. These criteria are then applied to health care financing and delivery policies under the reforms currently being implemented in Colombia and Costa Rica.     

To decentralize or not to decentralize, is that the question? Nicaraguan health policy under structural adjustment in the 1990s.

Since 1990, health services decentralization in Nicaragua has been accompanied by structural adjustment, resulting in reduced equity and accountability. Sandinista efforts in the 1980s to extend access to primary care and reduce class and regional disparities in the delivery of health services were accompanied by modest attempts to increase local-level accountability and responsiveness. The escalation of war in the late 1980s transformed this effort into greater de facto decentralization. Over the past decade, Nicaragua has used decentralization policy to restructure the health system through health spending cuts and the favoring of curative over preventive services; privatization and the promotion of user fees; and confusion of lines of accountability. The authors analyze the 1990s' health policies in Nicaragua, paying particular attention to the blending of decentralization policy with the fiscal and administrative reforms advanced by the International Monetary Fund, World Bank, and other international agencies. They conclude that analyzing decentralization as a sector-specific reform that can be ameliorated through technocratic modifications is insufficient. A full understanding of the problems and possibilities of decentralization requires an analysis of the political and economic context that conditions these policies.     

National pharmaceutical policy in Colombia and social security reform: access and rational use of medicines

Based on the new social security system in Colombia (1993), which establishes equity and mandatory care as the basis for public health care provision, the authors analyze whether the formulation and implementation of pharmaceutical policy promote accessibility, availability, and rational use of medicines, thereby contributing to equity in health. Two approaches were used: a macro approach centered on the legal framework and various actors in the reform process and a micro approach related to the processes and results in the drug supply system. The authors studied the legal instruments backing the country's pharmaceutical policy and evaluated their application, using indicators and a specific disease (diabetes mellitus) as a marker. Although there is a legal framework providing the people's right to access health care services and essential medicines, the country lacks a comprehensive pharmaceuticals policy. Most of the institutions experience problems in distributing the medicines listed under the Mandatory Health Plan, a low percentage of medicines is dispensed at zero cost, and a major portion of patients purchase medicines through associations of diabetics or rely on alternative medicine. The study unveiled several obstacles to equity in health care coverage and access to essential medicines.     

Consumer out-of-pocket spending for pharmaceuticals in Kazakhstan: implications for sectoral reform.

What do consumers pay for pharmaceuticals in a transition economy, and who is hit hardest? Kazakhstan is in the midst of emerging from a Soviet Union state to a market economy. It has seen a significant dip in Gross Domestic Product and available revenues for health as a result. New sources of revenues, such as out-of-pocket payments, both formal and informal, have become widespread. In this paper we use the results of a 1996 Living Standards survey jointly sponsored by the World Bank and the Kazakhstan Government to examine patterns of prescribed pharmaceutical spending. We use a two-part regression model that is utilized to adjust for the skewness of non-spenders and heavy utilizers. Results suggest that upper-income groups spend more in absolute terms, but low-income groups pay a higher share of their income for pharmaceuticals. Pharmaceutical expenditure is positively related to poor health status, chronic illness and rural area residence. Our estimates suggest that on average people in rural areas spend 16% more than people in urban areas. The analysis shows that certain types of illnesses impose significant out-of-pocket burden for consumers - gynaecologic as well as intestinal and cardiac. The findings can be used for developing and designing a new 10-year World Bank-financed programme for restructuring the health sector. They also suggest the need for prioritizing rural care, as well as covering pharmaceuticals for specific types of care interventions and certain demographic groups.