Universal Healthcare Systems and Fragmentation in Latin America

Until the middle of the twentieth century, healthcare systems in Latin American countries looked similar. Mainly based on the Bismarckian model, the common healthcare was offered to employees in the formal labor market through public health insurance plans, paid for by a combination of an employer, worker, and government contributions. The rest of the population received limited medical assistance provided by the Ministries of Health or, in some countries, by the church, other philanthropic organizations, or universities. However, the general result of such system was fragmented and inequitable. While the wealthy relied on private services, the poor had little to no access to quality medical services.

The Chilean case is interesting in that it carried out the world’s first neoliberal health reform which became a model other countries followed. Political ideology and values were much more influential on the changes in healthcare systems of Chilean history rather than empirical or technical concerns (Laurell & Giovanella, 2018). In 1952, Chile started to build Latin America’s first National Health System (NHS) covering formally employed workers and the uninsured population (Labra, 2002). The rest of the population received services through the social security institute which primarily used private providers or receive direct payments. When Salvador Allende, a physician, became president in 1970, he attempted to turn the NHS into a single unified public system financed by taxes. This effort was interrupted by the 1973 military coup which tried to eliminate any possibility of democratic socialism in Chile. Pinochet allowed a group of neoclassic/neoliberal economists, led by Milton Friedman, to guide his national project. The NHS was formally ended in 1978. The new model established in 1981 called for compulsory health insurance, for which workers alone would pay 7% of their wages, while employer and State contributions were eliminated (Laurell & Giovanella, 2018). At the same time, the ISAPREs (Social Security Health Institutions) were created to manage health funds and procure services on behalf of their clients. While the ISAPREs mainly engaged private providers, there was a single public fund manager, FONASA (National Health Fund) covering the most of the population. Since then, these two institutions as the two-tier structure have been the center of Chilean healthcare system and there has been a major effort to reduce the power of the private system.

The SUS models are found in Brazil, Venezuela, and Cuba. Cuba has historically, both before and during Communist rule, performed better than other countries in the region on health statistics such as infant mortality and life expectancy (Monteiro de Andrade et al, 2014). Although the country has suffered economically from the Soviet collapse and the U.S. embargo and a large exodus of physicians, Cuba began a program of nationalization and regionalization of medical services in 1960. By 1976, Cuba’s healthcare program was included in the constitution which states that “Everybody has the right to health protection and care” and prohibited privatization of healthcare (De Vos, 2016). Yet, it has still been pointed out to lack productivity, efficiency, and management details. Others find statistics published by the Cuban government to be untrustworthy as it does not allow for independent verification of its health data (Jacobson, 2014). Despite these flaws, several Latin American countries and scholars of the U.S. consider the Cuban healthcare successful in protecting every citizen’s right to health.

Another successful case of national healthcare system exists in Costa Rica model since 1974. The country’s single-payers model integrated the social security program—the Caja Costarricense de Séguro Social (CCSS or Caja)—with the medical services offered by the Ministry of Health (McGuire, 2014). The system is financed by the employers, employees and the government with the government subsidizing care for the poor (Unger et al, 2008). The model was perfected in time, experiencing some trial and error. Today, 86 percent of the population has equal access to quality, comprehensive care (Laurell & Giovanella, 2018). Medical services, including transplants, and prescribed pharmaceuticals are free (Ugalde & Homedes, 2009). The 14 percent not served by Caja are mostly the wealthy and the self-employed who chose to pay as they go. Even according to the World Health Organization, the life expectancy of Costa Rican people are the longest in Latin America, 75 years for men and 80 for women.

Following a successful healthcare model like that of Costa Rica, many Latin American countries attempt to unify their existing medical care actors and provide service to as many people as possible. However, countries like Argentina still suffer from the fragmentation of healthcare. Fragmentation is a common trait of most Latin American systems where government health care spending is subject to biased allocation of resources and segmented financial structures (PAHO, 2014). Argentina’s health status indicators perform poorly compared to other countries in the region. For example, the life expectancy at birth (LEB) is 76 years and infant mortality rate (IMR) is at 12 deaths per 1,000 live births in Argentina while Chile (LEB = 80 and IMR = 7) and Costa Rica (LEB = 80 and IMR = 9) with their lower health expenditure have better health standards (Novick, 2017).

One of the structural and functional elements that render the Argentinian system inefficient is the fact that its social security system does not represent a government agency. Rather, a pool of independent workers’ organizations acquired the role of healthcare administrators and providers at one point in history. Thus, as the chart above shows, 36 percent of the population in Argentina does not have any formal coverage and receives healthcare in the public system guaranteed by the constitutional right (Van der Kooy & Pezzella, 2013). The workers’ unions represent the largest part of the social insurance health sector which consists of more than 300 national unions (Obras Sociales Nacionales), each associated with a specific trade or industry. There is also some percentage of the population with a form of duplicate healthcare coverage. A former Deputy Minister of Health of the City of Buenos Aires, Gabriel Novick, explains that although access to healthcare is a constitutional right, the system’s complexity and fragmentation undermines its effort to be more inclusive (2017). He envisions that capacity building and political determination are crucial to making necessary healthcare reforms in the future.

Related Articles

• Asa Cristina Laurell
• Salvador Allende
• Social Medicine in Chile
• Universal Healthcare: the Costa Rican System

Additional Resources

iSAGS-UNASUR (2012). Health Systems in South America: Challenges to the universality, integrality and equity. Rio de Janeiro, Brazil: South American Institute of Government in Health.

Huish, R. (2013). Where No Doctor Has Gone Before: Cuba’s Place in the Global Health Landscape. Waterloo, Ontario: Wilfrid Laurier University Press.

References

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De Vos, P. (2016). ‘No One Left Abandoned’: Cuba’s National Health System since the 1959 Revolution. International Journal of Health Services, 35 (1): 189-207.

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Jacobson, L. (2014). Sen. Tom Harkin says Cuba has lower child mortality, longer life expectancy than U.S. Politifact. Retrieved from https://www.politifact.com/truth-o-meter/statements/2014/jan/31/tom-harkin/sen-tom-harkin-says-cuba-has-lower-child-mortality/

Labra, M. E. (2002). La reinvención neoliberal de la inequidad en Chile. El caso de la salud. Cadernos Saúde Pública, 18(4), 1041–1052.

Laurell, A. C. & Giovanella, L. (2018). Health Policies and Systems in Latin America. Oxford Research Encyclopedia of Global Public Health. Retrieved from http://oxfordre.com/publichealth/view/10.1093/acrefore/9780190632366.001.0001/acrefore-9780190632366-e-60?print=pdf

McGuire, J. W. (2001). Social Policy and Mortality Decline in East Asia and Latin America. World Development, 29 (10), 1673-1697.

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