Free and Public

Contrasting plans for Universal Health Coverage: Chile and Costa Rica

Civil society groups at the recent World Health Assembly criticized the continued focus on insurance schemes in the push for Universal Health Coverage (UHC), which all too often includes significant private sector participation. Evidence to support the claim for private sector involvement of this kind remains extremely thin and a new study by the Municipal Services Project shows it could jeopardize public health in the South.

The study compares health outcomes in Chile and Costa Rica, two countries that have come to epitomize contrasting approaches to ‘Universal Health Coverage’ in Latin America. Chile’s focus has been on insurance-based UHC while Costa Rica has built a single public health system. The research provides strong evidence to show that there are widespread and consistent advantages to promoting UHC through a strong public system that funds and provides all medical and preventive services to citizens rather than through a fragmented public-private mix.

It is important to note that both countries have achieved the lowest infant mortality rates and the highest life expectancies in the region thanks to major advances in primary care. But Chile’s health ‘market’ has led to inefficient use of resources, with higher administrative costs and more irrational medical procedures (e.g. caesareans) resulting from oligopolies and collusion among private providers.

One of the major goals of UHC is financial protection for poor households when they face illness. Yet Chileans systematically need to make higher out-of-pocket payments to get medical care in comparison with Costa Ricans. This situation is produced in part by the fact that Chileans pay for health conditions, services or products that are not covered by their insurance (e.g. prescription drugs).

In contrast, Costa Rica’s public health care system remains relatively affordable and more efficient, with total per capita health expenditure standing at US$811 compared to US$947 in Chile. Importantly, Costa Rica has also consistently prioritized preventive health care. Expenditure on prevention and public health services from 2002-2006 in Costa Rica is more than double that of Chile (6-7% vs 2-3%). This focus on prevention is more cost-effective and can yield greater public health impacts in the long term.

Using comparable data (Latinobarómetro), the Municipal Services Project study shows that twice as many people reported facing access barriers to health care in Chile compared to Costa Rica, citing distance to hospital, time to obtain an appointment, and cost of seeing a doctor as the major reasons. In addition, lack of access to health services as a result of financial barriers in Chile still stands at 4.2% compared to 0.8% in Costa Rica.

Costa Ricans continue to be largely satisfied with the quality of their healthcare services, more so than Chileans. Interestingly, LAPOP 2012 results show that most people in both countries think that government, rather than the private sector, should be responsible for health care (71.1% in Chile and 67.5% in Costa Rica).

According to the notions of “active purchasing” and “managed competition” – frequently used to promote insurance schemes – the existence of different providers competing for resources should have produced higher levels of quality at lower costs in Chile. The evidence presented in this report shows that such assumptions are not always true.
 
The Chilean health system is an example of how segmentation produced by the coexistence of private and public insurances is detrimental to efficiency and equity. Collusion among private providers and oligopolies are realities that are ignored in the competition argument.

Debates over the best institutional arrangements to organize universal health care are far from over, but this case study demonstrates that insurance schemes as promoted by some proponents of the UHC agenda are neither the only nor the best option.

Luis Ortiz Hernández is Professor in the Health Care Department, Universidad Autónoma Metropolitana Xochimilco, Mexico and visiting professor at Queen’s University, Canada. His most recent publication, “Chile and Costa Rica: Different roads to universal health in Latin America,” is available here.

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Let’s be clear: Universal Health Coverage must mean health coverage for all

A growing consensus for Universal Health Coverage (UHC)

The patchy progress towards meeting the health-related MDGs underlines the urgent need for countries to build free, universal health care systems. Cost is a major barrier for people to access healthcare. 150 million people facing catastrophic healthcare costs every year, while 100 million are pushed into poverty because of direct payments.

There is a growing consensus that UHC should be included in the post 2015 framework. During the 67th World Health Assembly in May 2014, UHC was one of the most discussed topics, from side events to technical briefings, including in the official meeting agenda.  UN member States adopted a resolution on Health in the post 2015 agenda that states clearly that UHC is one of the core components of the post-MDGs.

But do we agree on the definition of Universal Health Coverage?

During the World Health Assembly, another important thing happened: the World Bank and WHO launched the final version of a monitoring framework for measuring progress towards UHC at country and global levels. The monitoring framework is a technical instrument, aimed at providing tools for countries to monitor their own progress towards UHC. But in the context of the intense initial negotiations on defining the health goal in the post 2015, it gives a clear political indication on what is understood by UHC and how we can measure it. The monitoring framework sets out clear commitments to reduce out-of-pocket payments and improve access to health care for the poor with two new targets:

  • By 2030, everyone has 100% financial protection from out-of-pocket payments for health services.
  • By 2030, all populations, independent of household income, expenditure or wealth, place of residence or gender, have at least 80% essential health services coverage.

Having clear targets and deadlines is welcome, so is the fact that the framework recognises the need to disaggregate data by gender, wealth and place of residence. This will make it possible to measure equity although a more comprehensive disaggregated data should also include age.

    Abolition of user fees

    We welcome that the financial protection indicator is no longer just focusing on preventing people being pushed into poverty, but on protection from out of pocket payments. Indeed, out of pocket payments are not just a problem because they push people into poverty but because they prevent people from accessing services altogether. But reducing direct payments does not automatically make health care affordable – especially if these are replaced with prohibitive health insurance premiums where membership is linked to contributions or if medicine prices remain high.

    UHC should be based on the principle of social solidarity in the form of income cross-subsidies – from rich to poor – and risk cross-subsidies – from the healthy to the ill – so that access to services is based on need and not ability to pay. This means that health services must be provided free at the point-of-use. Health user fees are the most inequitable way of paying for health care – they prevent poor people from accessing lifesaving treatment and push millions of them into poverty each year. In the words of Jim Yong Kim, President of the World Bank Group “Even tiny out-of-pocket charges can drastically reduce [poor people’s] use of needed services. This is both unjust and unnecessary”

    Universal health coverage must mean health coverage for all

    Oxfam cannot possibly support the coverage target proposed by the World Bank and WHO. Let’s take a step back. For Oxfam, UHC is anchored in the right to health and an answer to people’s asks for Health For All. For Oxfam, UHC means Health Coverage For All.  Therefore, we need a strong commitment of the international community in the post 2015 agenda on this goal.

    By stating the coverage target at 80%, the monitoring framework gives to the international community the signal that UHC cannot, in fact, be universal, because it is unrealistic. We disagree.
    UHC means that ALL people are able to access ALL the health services they need, without fear of falling into poverty. It doesn’t mean that all people will use the services, but that people are able to access good quality services when they need them.

    Strong public services and public financing

    Scaling up health care services to achieve UHC requires a strong public health sector providing the majority of services. Governments should therefore ensure that adequate proportions of national budgets are allocated to health, in line with the 15 per cent target agreed in the Abuja Declaration. It is essential that steps are taken to ensure that domestic tax collection becomes progressive, and robust, and that both individuals and companies pay according to their means. Tackling tax evasion and tax avoidance must also be a crucial priority within the new framework.

    A focus on UHC in the framework provides an opportunity to accelerate progress on the health related MDGs, and address the burden of non-communicable diseases. Most critically, it is an opportunity to move towards a more comprehensive approach to deliver on the right to quality, affordable, and equitable health care coverage for all. The new framework must include a standalone goal on achieving Universal Health Coverage for all by 2030.

    Charlotte Soulary works for Oxfam International as a Health and Education Policy Adviser


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    Global Health Check is edited by Anna Marriott, Health Policy Advisor for Oxfam GB, and welcomes contributions from different authors. If you would like to write an article for this site or if you have any queries please contact: amarriott@oxfam.org.uk.