Managed care in Latin America: transnationalization of the health sector in the context of reform

This article presents the results of the comparative research project "Managed Care in Latin America: Its Role in Health Reform". The project was conducted by teams in Argentina, Brazil, Chile, Ecuador, and the United States. The study's objective was to analyze the process by which managed care is exported, especially from the United States, and how managed care is adopted in Latin American countries. Our research methods included qualitative and quantitative techniques. Adoption of managed care reflects transnationalization of the health sector. Our findings demonstrate the entrance of large multinational financial capital into the private insurance and health services sectors and their intention of participating in the administration of government institutions and medical/social security funds. We conclude that this basic change involving the slow adoption of managed care is facilitated by ideological changes with discourses accepting the inexorable nature of public sector reform.     

The impact of the introduction of user fees at a district hospital in Cambodia

Proponents of user fees in the health sector in poor countries cite a number of often interrelated rationales, relating inter alia to cost recovery, improved equity and greater efficiency. Opponents argue that dramatic and sustained decreases in service utilization follow the introduction of user fees, highlighting evidence that user fees reduce service utilization when they fail to result in improved quality of care and/or when services are priced higher than those charged by private health care providers. Utilization of public health services in Cambodia is low. Supply-side factors are significant determinants of such low public sector utilization, including low official salaries of service providers (forcing many to seek additional income in the private sector), and operations budgets which are erratic and often insufficient to cover running costs of service delivery outlets. The Cambodia Ministry of Health (MOH) encourages user fee schemes at operational district level. By allowing revenue to be retained at the health facility level, the MOH aims to improve health care delivery--and consequently service utilization--through increased salaries to health facility staff and increases in operations budgets. This case study of the introduction of user fees at a district referral hospital in Kirivong Operational District in Cambodia, using the findings from empirical research, examines the impact of user fees on health-careseeking behaviour, ability to pay and consultation prices at private practitioners. The research showed that consultation fees charged by private providers increased in tandem with price increases introduced at the referral hospital. It further demonstrates--for the first time that we are aware of from the available literature--that the introduction and subsequent increase in user fees created a 'medical poverty trap', which has significant health and livelihood impact (including untreated morbidity and long-term impoverishment). Addressing the medical poverty trap will require two interventions to be implemented immediately: regulation of the private sector, and reimbursing health facilities for services provided to patients who are exempted from paying user fees because of poverty. A third, longer-term initiative is also suggested: the establishment of a social health insurance mechanism.     

Health sector reforms in Argentina and the performance of the health financing system

In Argentina, health sector reforms put particular emphasis on decentralization and self-management of the tax-funded health sector, and the restructuring of the social health insurance during the 1990s. Unlike other countries in the region, there was no comprehensive plan to reform and unify the sector. In order to assess the effects of the reforms on the performance of the health financing system, this study looks at impacts on the three inter-related functions of revenue collection, pooling, and purchasing/provision of health services. Data from various sources are used to illustrate the findings. It was found that the introduction of cost recovery by self-managed hospitals increased their budgets only marginally and competition among social health insurance funds did not reduce fragmentation as expected. Although reforming the Solidarity Redistribution Fund and implementing a single basic package for the insured was an important step towards equity and transparency, the extent of risk pooling is still very limited. This study also provides recommendations regarding strengthening reimbursement mechanisms for public hospitals, and regulating the private sector as approaches to improving the fairness of the health financing system and protecting people from financial hardship as a result of illness.     

Public and private imperatives of Greek health policies

Health care in Greece has historically developed into a multi-tier system, a mosaic of public and private providers of services covering the members of occupational social insurance organizations. In 1983 PASOK's socialist government established a unified National Health System. The aim was to arrest the growth of the private sector and promote the public sector to a dominant position. The socialist legislation has recently been reviewed by a conservative government that aims at a competitive mixed market of public and private providers. The growth of private health care, however, is not solely a matter of political support but also of new opportunities for profitable investments that arise from a shrinking public sector under economic and fiscal constraints.     

Health technology assessment in Greece

In 1983 a health reform aimed to assure universal coverage and equity in the distribution of services in Greece. The reform implied state responsibility for the financing and delivery of services and a reduction of the private sector. The model was a Bismarckian scheme for social insurance. However, healthcare delivery remains fragmented and uncoordinated and the private sector is getting stronger. The dominant payment system is fee-for-service for the private sector and administered prices and salaries for public hospitals and social insurance funds. The many insurers have their own eligibility requirements, validation procedures, etc. Coverage of services by social security funds, probably among the most comprehensive in Europe, is determined more on historical and political grounds than on efficiency or cost-effectiveness. The system is plagued by problems, including geographical inequalities, overcentralization, bureaucratic management, poor incentives in the public sector, open-ended financing, inefficient use of hospital beds, and lack of cost-effectiveness. There are no specific legal provisions for the control of health technology. Technologies are introduced without standards or formal consideration of needs. There are no current efforts to control health technology in Greece. However, health technology assessment (HTA) has gained increasing visibility. In 1997 a law provided for a new government agency responsible for quality control, economic evaluation of health services, and HTA. The hope is that the new law may introduce evaluation and assessment elements into health policy formulation and assure that cost effectiveness, quality, and appropriate use of health technology will receive more attention.     

The Free Trade Agreement and the Mexican health sector.

This article presents a discussion of the probable implications for the Mexican health sector of the Free Trade Agreement (FTA) between the United States, Canada, and Mexico. The authors argue that the FTA should be seen as part of neoliberal policies adopted by the Mexican government in 1983 that are based on large-scale privatization and deregulation of labor relations. In this general context the health sector, which traditionally has been dominated by public institutions, is undergoing a deep restructuring. The main trends are the decapitalization of the public sector and a selective process of privatization that tends to constitute the private health sector in a field of capital accumulation. The FTA is likely to force a change in Mexican health legislation, which includes health services in the public social security system and recognizes the right to health, and to accelerate selective privatization. The U.S. insurance industry and hospital corporations are interested in promoting these changes in order to gain access to the Mexican market, estimated at 20 to 25 million persons. This would lead to further deterioration of the public institutions, increasing inequalities in health and strengthening the private sector. The historical trend toward the integration of a National Health Service in Mexico would be interrupted in favor of formation of a dual private-public system.     

The people's campaign against health care counter-reforms in Spain

Since 1996, when the conservative Partido Popular was elected in Spain, it has attempted to weaken and dismantle the national health service. It has focused on three areas: privatization of health facilities and services, increasing patient copayments and decreasing publicly financed benefits, and increasing the role of private insurance in health coverage and care. A major role in this neoliberal strategy has been the creation in one of the regions of "Fundaciones," independent substitutes for NHS facilities and services, which are essentially copies of the "Trusts" developed by the Conservative government in the U.K. The paper describes the development of a broad people's movement which campaigned successfully to combat the "Fundaciones"; these were returned to the regional public sector, and the conservative government in Madrid announced they would abandon their previous principal policy of transforming public hospitals into "Fundaciones."     

Are market-oriented health insurance reforms possible in Latin America? The cases of Argentina, Chile and Colombia.

The process of health care reform benefits tremendously from comparing characteristics and performance across nations. This paper studies market-oriented health insurance reforms in three Latin American countries: Argentina, Chile and Colombia. Chile allowed private health insurers to compete for workers payroll contributions in the 1980s, permitting the modernization of the private health sector but relatively impoverishing the public health sector as a consequence of selection practices by private carriers. In the 1990s, Argentina and Colombia started liberalizing the health insurance sector but using policies to avoid the adverse effects encountered in the Chilean experience. These policies are scrutinized while challenges for these and future health insurance reform processes are discussed.     

Mexican health insurance: uncertain universal coverage

The Mexican health system is comprised of the Department of Health, state labor social security and the private sector. It is undergoing a reform process initiated in 1995 to achieve universal coverage and separate the regulation, financing and service functions; a reform that after fifteen years is incomplete and problematic. The scope of this paper is to assess the problems that underlie the successive reforms. Special emphasis is given to the last reform stage with the introduction of the "Insurance of the People" aimed at the population without labor social security. In the analysis, health reform is seen as part of the Reform of the State in the context of neoliberal reorganization of society. Unlike other Latin American countries, this process did not include a new Constitution. The study is based on official documents and a systematic review of the process of the implementation of the System of Social Health Protection and its impact on coverage and access to health services. The analysis concludes that it is unlikely that universal population coverage will be accomplished much less universal access to services. However, reforms are leading to the commodification of the health system even in the context of a weak private sector.     

Health reform in Mexico: the promotion of inequality.

The Mexican health reform can be understood only in the context of neoliberal structural adjustment, and it reveals some of the basic characteristics of similar reforms in the Latin American region. The strategy to transform the predominantly public health care system into a market-driven system has been a complex process with a hidden agenda to avoid political resistance. The compulsory social security system is the key sector in opening health care to private insurance companies, health maintenance organizations, and hospital enterprises mainly from abroad. Despite the government's commitment to universal coverage, equity, efficiency, and quality, the empirical data analyzed in this article do not confirm compliance with these objectives. Although an alternative health policy that gradually grants the constitutional right to health would be feasible, the new democratically elected government will continue the previous regressive health reform.     

Reform follows failure: I. Unregulated private care in Lebanon

This first of two papers on the health sector in Lebanon describes how unregulated development of private care quickly led to a crisis situation. Following the civil war the health care sector in Lebanon is characterized by (i) ambulatory care provided by private practitioners working as individual entrepreneurs, and, to a small extent, by NGO health centres; and (ii) by a fast increase in hi-tech private hospitals. The latter is fuelled by unregulated purchase of hospital care by the Ministry of Health and public insurance schemes. Health expenditure and financing patterns are described. The position of the public sector in this context is analyzed. In Lebanon unregulated private care has resulted in major inefficiencies, distortion of the health care system, the creation of a culture that is oriented to secondary care and technology, and a non-sustainable cost explosion. Between 1991 and 1995 this led to a financing and organizational crisis that is the background for growing pressure for reform.     

Health technology assessment in The Netherlands

The Dutch healthcare system is not a single overall plan, but has evolved from a constantly changing mix of institutions, regulations, and responsibilities. The resulting system provides high-quality care with reasonable efficiency and equal distribution over the population. Every Dutch citizen is entitled to health care. Health insurance is provided by a mix of compulsory national insurance and public and private insurance schemes. Hospitals generally have a private legal basis but are heavily regulated. Supraregional planning of high-tech medical services is also regulated. Hospitals function under fixed, prospective budgets with regulation of capital investments. Independent general practitioners serve a gatekeeper role for specialist and hospital services and are paid by capitation or fee for service. Specialists are paid by fee for service. All physicians' fees are controlled by the Ministry of Economic Affairs. Coverage of benefits is an important method of controlling the cost of services. There is increasing concern about health care quality. Health technology assessment (HTA) has become increasingly visible during the last 15 years. A special national fund for HTA, set up in 1988, has led to many formal and informal changes. HTA has evolved from a research activity into policy research for improving health care on the national level. In 1993 the government stated formally that enhancing effectiveness in health care was one of its prime targets and that HTA would be a prime tool for this purpose. The most important current issue is coordination of HTA activities, which is now undertaken by a new platform representing the important actors in health care and HTA.     

Neoliberal and public health effects of failing to adopt OSHA's national secondhand tobacco smoke rule.

From the early 1980s to the present, neoliberal doctrine has called for government policies of privatization, funding cutbacks, and deregulation of public health and other domestic social programs in the belief that the market rather than the public sector can best organize and distribute crucial societal services. Proponents of a neoliberal and deregulatory mixed approach of command and control and self-regulation argue this approach provides the most adequate means to conduct regulation in the legalistic and adversarial U.S. regulatory process. In April 1994, the Occupational Safety and Health Administration issued a proposed rule to eliminate tobacco smoking in most workplace rooms, arguing secondhand tobacco smoke annually killed up to 13,700 nonsmokers. The tobacco industry purposely delayed public hearing procedures (later halted altogether by Congress and the president) primarily to advance unhindered private property rights and profits rather than submitting to a public command-and-control regulatory framework to reduce deaths due to secondhand tobacco smoke.     

Health care in China: the role of non-government providers

While China's health services are primarily financed by out-of-pocket spending (private financing), health care providers, especially the hospital industry, are still dominated by state ownership and government control (public provision). Even though the private sector plays an increasing role in the ambulatory sector, private services are not included in the social insurance benefit package, and thus, it primarily serves self-paying patients. The ambiguity of the government policy toward private provision stems from concerns that an increasing private sector would drive up costs and its services may be of questionable quality. This paper tries to gather evidence on the relative performance of private and public sector in China. Neither literature review nor our primary data analysis provides any support for the notion that the private sector charges a higher price and they serve primarily the better-off people. Quite on the contrary, available data seem to suggest that not only the private sector tends to serve disproportionately the low-middle income groups (this may well be due to its relative lower direct and indirect costs), consumer satisfaction also seems to be higher with regards to certain dimensions of the private than public sector.     

If they get sick, they are in trouble: health care restructuring, user charges, and equity in Vietnam.

The transition from a centrally planned economy in the 1980s and the implementation of a series of neoliberal health policy reform measures in 1989 affected the delivery and financing of Vietnam's health care services. More specifically, legalization of private medical practice, liberalization of the pharmaceutical industry, and introduction of user charges at public health facilities have effectively transformed Vietnam's near universal, publicly funded and provided health services into a highly unregulated private-public mix system, with serious consequences for Vietnam's health system. Using Vietnam's most recent household survey data and published facility-based data, this article examines some of the problems faced by Vietnam's health sector, with particular reference to efficiency, access, and equity. The data reveal four important findings: self-treatment is the dominant mode of treatment for both the poor and nonpoor; there is little or no regulation to protect patients from financial abuse by private medical providers, pharmacies, and drug vendors; in the face of a dwindling share of the state health budget in public hospital revenues and low salaries, hospitals increasingly rely on user charges and insurance premiums to finance services, including generous staff bonuses; and health care costs, especially hospital costs, are substantial for many low- and middle-income households.     

The political economy of health system reform in Israel

On June 15, 1994, the Israeli Parliament voted to enact the National Health Insurance bill (NHI). The bill marks the end of a process that lasted for virtually as long as Israel's almost 50 year history. Israel's attempts at health reform began long before the current spate of reforms in many Western countries. Faced with many of the same problems of access, equity and cost control common to many of its counterparts, Israel initiated a reform process based on the recommendations of a prominent State Commission of Inquiry into the Israeli Health System (the Netanyahu Commission) which reported to the Government in 1990.² The Commission's proposals were based on a diagnosis indicating that the major problems of the system stem from the lack of clarity regarding the rights of citizens to health care, the lack of a clear allocation of responsibility and accountability among government, insurance or sick funds, and providers in the system, and undue centralization of system operations. This diagnosis led to three major planks for reform: (1) enactment of national health insurance legislation granting a basic package of care to each citizen and hence bringing most of the system's finance under public auspices; (2) divesting the Government from the organization, management and provision of care; hence integrating the management of preventive and psychiatric services provided by the government with the primary and other services provided by sick funds, and granting financial and operational independence to at least government hospitals; and (3) restructuring the Ministry of Health. As is often the case in public policy, more consensus surrounds the diagnosis than the solutions. As a result, nearly four years of implementation efforts have only recently resulted in a major breakthrough. In this paper we make an effort to outline the inherent weaknesses of the Israeli health care system that have led to the crisis in the mid 1980s, summarize the recommendations of the State Commission for structural change in the system, and review the politics of implementing the recommended reforms.     

Access policies and utilization patterns in prenatal and child delivery care in Mexico

In Mexico, people utilize public, private and traditional health providers interchangeably and in contrast to official access policies. Access policies for prenatal and child delivery services are evaluated using data from the National Health Survey of 1988. The study documents significant coverage gaps on the part of public providers with respect to their potential coverage, and especially, large cross-utilization of social security, Ministry of Health and private providers by beneficiaries. Child deliveries in Mexico are attended by a physician in only 66% of cases. The percentages are 85% for social security affiliates, 53% for women within reach of IMSS-Solidarity services (a relief programme for the rural poor) and only 31% for women with official access to private or Ministry of Health care, or beyond the reach of services. Seventy-eight per cent of medical deliveries by women affiliated to social security occur at their pre-paid facilities, while 14% deliver at extra cost with private physicians, contributing to 32% of deliveries so offered. Even though only 7% of insured women deliver at Ministry of Health facilities, this amounts to 20% of the Ministry's relief offer. In all, only 66% of affiliates use social security delivery services. On the other hand, 36% of deliveries by non-insured women are cared for by Ministry of Health providers, and 39% by the private sector; 22% of such deliveries occur in social security institutions, amounting to 18% of these institutions' care offer. These results indicate a wide departure between policy and fact, and the working of distributive and redistributive forces that impinge on the quality and efficiency of health care. Open access to the reproductive health services of all public institutions, with coordination among them and private providers, is suggested as a possible solution.     

Crossing the public-private sector divide with reproductive health in Cambodia: out-patient services in a local NGO and the national MCH clinic

Set within the context of recent literature on the private-public divide in the health sector of developing countries generally and Asia specifically, this study considers the major government and the major indigenous non-government clinics offering out-patient reproductive health services in Phnom Penh, Cambodia. Reproductive health is of critical importance in Cambodia, which has one of the highest levels of unmet need for family planning in the developing world and suffers from what is arguably the most severe STD and HIV/AIDS problem in Asia. The study is unusual in that it examines and compares aspects of service delivery and pricing along with the socio-economic profile and health-seeking behaviour of clients self-selecting services in the two settings. The socio-economic status of clients was much higher than the norm in Cambodia but did not differ significantly between the two clinics. A few service indicators suggested that the quality of care was better in the NGO clinic. Underlying variables--such as the broader mandate of the public sector institution and the significant discrepancy between public and private sector salaries--offer an obvious explanation for these differences. The Ministry of Health in Cambodia has been developing policies related to the NGO sector, which has expanded rapidly in Cambodia during the 1990s, and it is struggling to increase staff remuneration within the public sector.     

Health system reform in Mexico: a critical review.

Last year Lancet published a series of articles on Mexico's 2004 health system reform. This article reviews the reform and its presentation in the Lancet series. The author sees the 2004 reform as a continuation of those initiated in 1995 at the largest public social security institute and in 1996 at the Ministry of Health, following the same conceptual design: "managed competition". The cornerstone of the 2004 reform-the voluntary Popular Health Insurance (PHI)--will not resolve the problems of the public health care system. The author assesses the robustness and validity of the evidence on which the 2004 reform is based, noting some inconsistencies and methodological errors in the data analysis and in the construction of the "effective coverage" index. Finally, some predictions about the future of PHI are outlined, given its intrinsic weaknesses. The next two or three years are critical for the viability of PHI: both families and states will face increasing difficulties in paying the insurance premium; health infrastructure and staff are insufficient to guarantee the health package services; and the private service contracting will further strain state health ministries' ability to strengthen service supply. Moreover, redistribution of federal health expenditure favoring PHI at the cost of the Social Security Institute will further endanger public health care delivery.     

Mental health and health insurance plans in Brazil

The article examines the regulatory regime of mental healthcare implemented by the National Health Agency (ANS). It describes the conditions observed between the provision of mental health services in the private healthcare sector in relation to the international experience and the Unified Health System (SUS). The article shows that the mental healthcare provision by the sector has the failings associated with the health insurance market. The health insurance companies have recourse to copayment mechanisms, set limits for outpatient use, emphasize short duration hospitalizations for the treatment of severe cases and residually offer support services to the patient after discharge. Since the decade of 2000 the expansion of the number of psychiatric hospitalizations that resulted in high rates of admission compared to the public sector has been observed in Brazil.