Neoliberalism in Latin America: effects on health system reforms

Göttems, Leila Bernarda Donato; Mollo, Maria de Lourdes Rollemberg

doi:10.11606/s1518-8787.2020054001806

Brasil

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Review • Rev. Saúde Pública 54 • 2020 • https://doi.org/10.11606/s1518-8787.2020054001806 linkcopy

Neoliberalism in Latin America: effects on health system reforms

Authorship SCIMAGO INSTITUTIONS RANKINGS

ABSTRACT

OBJECTIVE To analyze the recommendations of international organizations based on the Washington Consensus on health system reforms of selected countries in Latin America and the Caribbean in the 1980s and 1990s and to investigate the effects of the competitive market logic on public action in the health system.

METHODS Comparative analysis of the characteristics of health system reforms conducted in the 1980s and 1990s, still seen in Brazil, Argentina, Chile, Colombia, Mexico and Peru. Data were collected by documental analysis and literature review. The systems were described based on the characteristics of: co-payment, privatization mechanisms, decentralization, fragmentation of the system, integration of funding sources and coverage of the population (universal or segmented).

RESULTS The reforms were implemented differently, worsening inequalities in health service delivery systems. Changes related to the neoliberal idea of transforming public action in the direction of private logic point to the predominance of competition rules and the reduction in economic costs in all countries analyzed, contrary to the logic of universal health systems.

CONCLUSION The reduction in economic costs, the fragmentation of systems and inequalities in the provision of health services, among others, may mean other future costs resulting from low protection to the population’s health. A striking and multidimensional counter-reform is essential to make health a right of all again, in a solidarity system that can lead to the reduction in inequalities and a more democratic society.

Health Systems; Health Care Reform; Health Policy; Latin America

	Meaning	Effects
Co-payment	Mechanism, in which it is mandatory for the patient/insured/user to bear part of the costs of health services at the time of use. This mechanism of mandatory direct participation in costs has other denominations, such as moderating rate, participation in costs (cost-sharing), co-participation or user counterpart²⁷. Fixed rate imposition for each medical service, introduction of a variable rate representing a percentage of the total cost of a service, combinations of fixed amounts and percentage rates or “annual deductible” system, i.e. setting a minimum annual level for medicine or service expenses per patient, below which no reimbursement is granted. System mainly used in private insurance.	State cost reduction: Transfer costs to the user. Increasing inequality: Increased out-of-pocket spending, leading to reduced access to promotion and prevention measures; worsening in treatment adherence; waiver or postponement of the use of services, especially by the older adults, chronically ill and low-income people; and increasing social inequalities. Cost increase in the medium and long term: Additional administrative expenses and higher subsequent costs with less health.
Privatization mechanisms	Three main mechanisms: promotion of the State for the expansion of the private sector (purchase of private services by the State, encouraging the participation of private entities in the management of resources and provision of services), tax exemption for users of health plans and private services.	State cost reduction: Transfer of costs to the private sector and increased competition. Increasing inequality: Provision of differentiated services related to access and quality. Cost increase in the medium and long term: Increased costs of high technology or deprivation of those that cannot afford access to available technology.
Decentralization	Subnational or local governments assumed greater responsibility with the planning, budgeting and execution of public health activities.	Central government cost reduction: Transfer of costs from national governments to subnational and local ones. Although it reduces the distance between the population and immediate managers, expanding the pressure power of users, it reduces the responsibility of national governments and their financing. Increasing inequality: Differentiated treatments in terms of quality and availability, according to different possibilities among regions and localities. Cost increase: Loss of economies of scale in purchases and public procurement.
Segmentação	Subsystems with different modalities of financing, affiliation and provision, each of them “specialized” in different strata of the population, according to their labor insertion, level of entry, ability to pay and social class. One or more public entities coexist, social insurance and several funders, guarators and private providers.	State cost reduction: Transfer of costs to the various funders. Increasing inequality: Worsening of the inequality in access and quality of services between different population groups.
Fragmentation	Coexistence of non-networked units and services or establishments that do not mutually cooperate, ignore and/or compete with other providers. Multiple agents operating without integration prevent the standardization of content, quality and costs of service provision. Generates increases in transaction costs and inefficient allocation of system resources.	Cost reduction: Exemption of the State from the provision of the public service. Competition among service providers. Increasing inequality: Reduction in universal access to the health service, lack of coordination increases the risk of some segments of the population being discovered, loss of solidarity of the system accentuates segregation of groups of the population and inequalities in access and use of services. Cost increase: Inefficient transaction and allocation costs generate larger resources.

Co-payment	Privatization mechanisms	Decentralization	System fragmentation	Integration of funding sources	Population coverage (universal or segmented)
ARGENTINA
No	Yes It incorporated competition among entities through the choice of workers between social work and private insurance and stimulated the expansion of prepaid medicine companies.	High decree High degree of decentralization for 24 provinces and some municipalities.	Tripartite Low coordination among the three subsectors: social insurance (which covers most of the population), the public sector (in charge of the provinces) and the private sector, each with its own financing and provision of services with universal coverage.	Low Low or zero integration of general incomes and social security contributions.	Segmented Social security for workers’ health is operated by social works and charges 6% of workers’ wages (6%) and employers (3%) by payroll. Includes domestic workers, pensioners and dependents (children and spouse). It does not include informal or self-employed.
BRAZIL
No	Yes It stimulates privatization through the purchase of more complex services from the private sector, which has the largest number of hospital beds, in addition to exemption for users of health plans and private services.	High decree Very high degree of decentralization: federal government, 27 states and 5,507 municipalities (90% of them control primary care).	Dual Some coordination between the public subsector divided into federal, state and municipal levels (financing and provision functions) and the complementary private subsector.	High General rents and integrated systems from non-contributory financing.	Universal It includes all formal, domestic and agricultural workers, pensioners and dependents (children and spouse) and informal or self-employed workers.
CHILE
Yes	Yes It stimulated the privatization of the assurance and boosted private medical care.	High decree High degree of decentralization: 28 regions and 342 communes (municipalities).	Dual Coordinated, combining the public (social insurance) and private subsectors, with separate financing and provision functions (this majority of the public subsector, i.e. universal insurance).	High Low or zero integration of general incomes and social security contributions.	Universal for PHC and segmented for curative care It preserved the choice by formal workers between contributing 7% of salaries to private insurance (Isapres) or public insurance (Fonasa) through social contributions. Includes domestic workers, pensioners and dependents (children and spouse). Excludes informal or self-employed ones.
COLOMBIA
Yes	Yes It stimulated privatization by promoting the participation of the private sector in the administration of social insurance resources and in the provision of health services.	High decree High degree of decentralization: 32 departments and 524 municipalities (not complete).	Quadripartite Coordinated, with a public subsector (social insurance, divided into contributory and non-contributory regime), a private subsector and a public (linked) subsector.	High Low or zero integration of general incomes and social security contributions.	Universal for PHC in implementation The Mandatory Health Plan was created (POS), consisting of a single package of health services for each individual. Includes domestic workers, pensioners and dependents (children and spouse). It does not include informal or self-employed and agricultural workers.
PERU
Yes	Yes The Aseguramiento Universal en Salud (AUS), created through Law No. 29,344 2009 and implemented in the same year by a new Plan Esencial de Salud (PEAS –Basic Health Plan). The law established mandatory insurance and free access to health care residents of the country through the PEAS. The plan also determined the dissociation of safe functions and provision of health services, promoting the participation of private entities in the health system.	Low degree Low degree of decentralization, from central government to 24 departments (20% in 2001); new plan decentralisation in 2005.	Tripartite: Public, social and private insurance, lacking adequate coordination among the three subsectors, without or with low separation of functions.	Low Low or zero integration of general incomes and social security contributions.	Segmented The public sector, through the ministry of health and integral health insurance (SIS) network, predominantly serves the poor population that that is uncovered by a health insurance (about 54%). EsSalud serves formal workers, for optional individual insurance or collective insurance (made by the employer), covering 7 to 11 million people. It offers both services of high complexity and primary care. It includes all formal, domestic and agricultural workers, pensioners and dependents (children and spouse) and informal or self-employed workers.
MEXICO
Yes	Yes Purchase of services by the public sector and incentive to hire private (still limited).	Median degree From the federal government to all states, little for municipalities; decentralization	Tripartite: social and private insurance, segmented without coordination.	Low Low or zero integration of general incomes and social security contributions.	Segmented In 2003, they created popular insurance with insufficient federal funding and a restricted package of services. It includes all formal, domestic and agricultural workers, pensioners and dependents (children and spouse) and informal or self-employed workers.

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Faculdade de Saúde Pública da Universidade de São Paulo Avenida Dr. Arnaldo, 715, 01246-904 São Paulo SP Brazil, Tel./Fax: +55 11 3061-7985 - São Paulo - SP - Brazil
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[TFN1] PHC: primary health care