Health and Equity in Latin America

The debate over health care reform in the United States has echoes in Latin America. But across the region, a variety of attempts to improve health care delivery—with Chile, Cuba and Colombia offering starkly different approaches—has resulted in quality care still being largely inaccessible. Some Latin Americans benefit from access to good local and international health care, but the majority struggle to obtain basic care.

Until the middle of the twentieth century, Latin American health care systems were quite similar. Typically, health care was offered to employees in the formal labor market through public health insurance plans paid for by a combination of employer, worker and government contributions. The poor had access to publicly delivered services of variable quality, while the wealthy relied on private services. Private charity organizations—mostly religious groups—attempted to fill the gap. But the result was fragmented and inequitable systems.

In 1952 Chile became one of the first countries to break the traditional Latin American model. The governing Christian Democratic Party organized a single-payer national health system similar to many European systems where the public sector financed health care and all citizens could receive free care. But under the rule of General Augusto Pinochet (1974–1990) the national system was replaced with a public-private approach, opening medical care delivery to the private sector and decentralizing it to the municipal level. This system—criticized for benefiting the wealthy at the expense of other social groups—continues despite changes introduced since the country’s return to democracy.

In Cuba, a government-run health system provides free, universal coverage, which has brought major improvements in the quality of care. But it lacks productivity and efficiency and needed management improvements.

Colombia’s health reform, launched in 1993, offers yet a third model. It dismantled the social security and public-sector services system common throughout much of the region, and replaced it with a system based on neoliberal principles, in which private and public providers compete for clients. Insurance premiums are paid by employers, with the government covering those for the needy. But high co-payments have prevented the poor from gaining access to the system. The results are typically unimpressive: skyrocketing total health expenditures without visible improvements in equity. Studies also indicate that efficiency and quality have deteriorated. On the delivery side, insurance companies report large profits and high administrative expenditures while many hospitals have gone bankrupt.

The Costa Rican Alternative

A fourth, and more promising, model of care has existed in Costa Rica since 1974. It involves integration of the social security program—the Caja Costarricense de Séguro Social (CCSS or Caja)—with the medical services offered by the Ministry of Health. In effect, it is a single-payer model managed by Caja and financed by the employers, employees and the government, with the government subsidizing care for the poor.

The results have been impressive: 86 percent of the population has equal access to quality, comprehensive care. Medical services, including transplants, are free as are prescribed pharmaceuticals. The 14 percent not served by Caja are mostly the wealthy and the self-employed who prefer to pay as you go. According to the World Health Organization, life expectancy is now the longest in Latin America: 75 years for men and 80 for women.

But Costa Rica didn’t get to this point without some trial and error.

In the 1980s Caja organized a handful of health cooperatives and a capitation system (where a set amount is paid for each person in a health plan assigned to a specific provider) that failed to improve the efficiency or coverage of health care. Other experiments have proved to be more successful. In 1974 factories were permitted to hire physicians to work on-site, providing workers with easier access to care. Lab and diagnostic tests, hospitalization, specialty care, and drug provision continue at Caja locations. A similar program has allowed patients to pay low fees and be treated by private physicians of their choosing while still receiving other Caja services.

There is no perfect health system, and Costa Rica has experienced its share of problems. There has been corruption at high administrative levels, and physicians have found ways to take advantage of the system by reducing work load or using public resources for personal gain. But overall many experts consider Costa Rica to have the region’s most efficient, comprehensive, equitable, and affordable health system.

Antonio Ugalde is Professor Emeritus at the University of Texas at Austin.

Núria Homedes is director of global health at the University of Texas-Houston School of Public Health.