Health reform lessons from Chile
Chile’s Neoliberal Health Reform: An Assessment and a Critique
By Jean-Pierre Unger, Pierre De Paepe, Giorgio Solimano Cantuarias, Oscar Arteaga Herrera
PLoS Medicine
April 1, 2008
Summary Points
- The Chilean health system underwent a drastic neoliberal reform in the 1980s, with the creation of a dual system: public and private health insurance and public and private provision of health services.
- This reform served as a model for later World Bank–inspired reforms in countries like Colombia.
- The private part of the Chilean health system, including private insurers and private providers, is highly inefficient and has decreased solidarity between rich and poor, sick and healthy, and young and old.
- In spite of serious underfinancing during the Pinochet years, the public health component remains the backbone of the system and is responsible for the good health status of the Chilean population.
- The Chilean health reform has lessons for other countries in Latin America and elsewhere: privatisation of health insurance services may not have the expected results according to neoliberal doctrine. On the contrary, it may increase unfairness in financing and inequitable access to quality care.
The Impact of the Reform: Efficiency
Here the evidence is clearer. ISAPRES (the private system) has hardly contained costs, and the ISAPRES companies never intended to do so: they have few incentives to be efficient buyers of health services for their clients. Instead, they work hard to be efficient in the selection of their clients (they are allowed to refuse clients). Their focus is on low-risk, high-income patients, with the goal of making a profit. They spend ten times as much on administration per member and about two times as much on health care per member than FONASA (National Health Fund, a public agency), even though ISAPRES members are in better health and need less care. To deliver care, ISAPRES companies rely on a burgeoning private sector, reimbursed on a fee-for-service basis, which induces an increased supply of unnecessary but profitable services.
http://medicine.plosjournals.org/perlserv/?request=get-document&doi=10.1371/journal.pmed.0050079
Comment:
By Don McCanne, MD
This article is worth reading in its entirety because of the important lessons that would apply to reform in the United States.
But do we really need Chile to provide us with these lessons? Just look around. With our $2.4 trillion/year experiment, we’ve already demonstrated the same results here. And yet we keep doing the same thing?