Role of private sector in the quest for Health Universal Coverage

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1 Role of private sector in the quest for Health Universal Coverage The case of three Latin American countries Felicia Knaul, Gustavo Nigenda, Rocio Sáenz, Ursula Geidón, Héctor Arreola Prince Mahidol Conference Bangkok, January 26, 2012

2 Country characteristics Costa Rica 1 Mexico 2 Colombia 3 Health reform 1943 Social Security Fund (CCSS) 1998 Reorganization of health services Cooperatives as Health Care Providers Decentralization of health services from MoH to State MoHs System of Social Protection in Health Seguro Popular de Salud for uninsured population National Social Health Insurance Insurance schemes: 1) contributory 2) subsidized 2003 Ministry of Social Protection Financing CCSS Government Employers Employees Cooperatives CCSS Social Insurance Government (federal) Employers Employees Seguro Popular Government (federal and state) Households Social Insurance Contributory regime Government Employees and Self employees Subsidized regime Government Solidarity fund Local tax revenues Benefits funds Social insurance 86.8% Social Security Fund (CCSS) 75% workers, retirees and dependent 11.8% homeless by the State Social Insurance (2009): 39% IMSS 9% ISSSTE 25% SPSS 2% Others Social insurance (2006) 34% Contributory 39% Subsidized Coverage 15.8% Cooperatives SSPH (2009): 25% SPS Private (2010): 1.78% Sources: (1) (2) (3) The World Bank. Lessons from reforms in low and middle income countries. Good Practice in Health Financing. Eds Pablo Gottret, George J. Schieber, and Hugh R. Waters. Washington 2008 (1) PAHO. La salud de las Américas. Washington 2007 (1) CEPAL. La Reforma de salud de Costa Rica. Nueva York (2) Secretaría de Salud. Boletín de Información Estadistica. Tomo III Servicios otorgados y programas sustantivos. México: SSA; (2) Instituto Nacional de Estadística y Geografía (INEGI) [internet] Censo de Población y Vivienda Consulta interactiva de datos. Available in:

3 Role of private sector in the quest for Health Universal Coverage THE CASE OF COSTA RICA

4 Costa Rica: Health Indicators, Indicator Gross birth rate Decrease Infant mortality rate (per 1,000 live births) Decrease Life expectancy at birth Increase Men Increase Women Increase Maternal mortality rate (per 100,000 live births) Increase Children with low birth weight (%) Increase Dengue per 100,000 inhabitants 9.5a Increase Measles per 100,000 inhabitants Decrease AIDS per 100,000 inhabitants Increase Vaccination SRP-measles (% 1 year) Decrease Vaccination VOP3-poliomyelitis (% 1 year) Decrease Total population served by water system n.a % 99.00%Increase Source: Gottret P, Schieber GJ, Waters HR (coed.) Lessons from reforms in low and middle income countries. Good practices in health financing. Washington: The World Bank; Note: n.a. = not available. a. This rate corresponds to

5 Costa Rica: Health Expenditure Indicators 1998, 2000, and 2003 Sector Total health expenditures (US$ millions) , , Health expenditures (% of GDP) Private health expenditures (% of GDP) Public health expenditures (% of GDP) Per capita health expenditures (current US$) Public health expenditures (% of total health expenditure) Public health expenditure (% of total government expenditure) Private health expenditures (% of total health expenditure) Participation of hospitals in public health expenditures (%) a Source: Gottret P, Schieber GJ, Waters HR (coed.) Lessons from reforms in low and middle income countries. Good practices in health financing. Washington: The World Bank; a. This figure is for 2003.

6 Health Care Reform in Costa Rica Ministry of Health (MOH) Stewardship role of the system Social Security Fund (CCSS in Spanish) Started in 1943/ Reorganization 1998 Financer and provider of health services in the country. With capacity to use its own services network or buy services. Launching of a new PHC model based on management agreements. Policy to strengthen Integral Health Basic Care Team (EBAIS in Spanish), the CCSS hired general practitioners and primary care technicians.

7 Started in 1988 Costa Rica Cooperatives as Health Care Providers Introduction of the first health care cooperatives. Founded by the employees of primary health care clinics Autonomous, legal entities that assumed responsibility for managing the facility. Cooperative assumed full responsibility for maintaining the transferred equipment and buying new equipment. Gauri, Cercone and Briceño (2004) showed an average of 9.7 to 33.8 percent more general visits, 27.9 to 56.6 percent more dental visits, and 28.9 to 100 percent fewer specialist visits than CCSS clinics

8 Costa Rica: Primary Health Care Program Coverage, Source: Gottret P, Schieber GJ, Waters HR (coed.) Lessons from reforms in low and middle income countries. Good practices in health financing. Washington: The World Bank; 2008.

9 Costa Rica: Outpatient Consultations per Inhabitant, by Income Decile, 1998 and Source: Gottret P, Schieber GJ, Waters HR (coed.) Lessons from reforms in low and middle income countries. Good practices in health financing. Washington: The World Bank; Note: Income deciles (Ds) are defined using the 1998 and 2001 Household Surveys.

10 Costa Rica Participation Social Security Sustainability Transparency Complementation and modernization of ethical framework for social security Solidarity Equity Universality Renovation and strengthening of the general principles for social security Reconstitution of the social pact with Costa Rican social security

11 Costa Rica Equity Solidarity FUNDING MODEL INSURED POPULATION Participation Universality HEALTH CARE MODEL Transparency MANAGEMENT MODEL Transparency Sustainability Source: Saenz MR, Acosta M, Muiser J, Bermúdez JL. Sistema de salud de Costa Rica. Salud Pública Méx 2011; 53(2):

12 Role of private sector in the quest for Health Universal Coverage THE CASE OF MEXICO

13 Mexican Health System Public sector Structure ISSSTE SEMAR Insured population IMSS PEMEX SEDENA STC Metro SPS 75% Population Private consultation Private sector Population with capacity to pay Hospitals NGOs Alternative health care Uninsured population University hospitals 10% Population IMSS-Op MoH 15% Population IMSS. Mexican Social Security Institute. ISSSTE. State s Employees Social Security and Social Services Institute. PEMEX. Mexican Petroleum. SEDENA. Ministry of National Defense. SEMAR. Ministry of Navy. SCT Metro. Public Transport System. IMSS Oportunidades. Program of the Federal Government, managed by IMSS. MoH. Ministry of Health. NGOs. Non Governmental Organizations.

14 Mexican Health System Public sector Employe r Employee Federal Government State Government Households Financing SEDENA SEMAR IMSS ISSSTE PEMEX STC Metro Private sector Employe r Households SPS University Hosp. IMSS Op MoH & SMoH NGOs Private hospitals Alternative Medicine Private consultation IMSS. Mexican Social Security Institute. ISSSTE. State s Employees Social Security and Social Services Institute. PEMEX. Mexican Petroleum. SEDENA. Ministry of National Defense. SEMAR. Ministry of Navy. SCT Metro. Public Transport System. IMSS Oportunidades. Program of the Federal Government, managed by IMSS. MoH. Ministry of Health. NGOs. Non Governmental Organizations. SMoH. State Ministries of Health

15 Mexico indicators Key issues Financing (2009) 1 : Out-of-pocket health expenditure (% of total expenditure on health) 47.8 % Out-of-pocket health expenditure (% of private expenditure on health) 92.3 % Health expenditure per capita (current US$) US$ Private health expenditure (% of GDP) 3.3 % Public health expenditure (% of total health expenditure) 48.3 % Public health expenditure (% of government expenditure) 11.9 % Public health expenditure(% of GDP) 3.1 % Total health expenditure (% of GDP) 6.5 % Provision: Public domain in the service Private health facilities (% of total) (2010) % Insurance (2009) 2 : Private institutions % IMSS 39% ISSSTE 9% SPSS 25% Pemex, Sedena, State services 2% Source: 1. The World Bank [Internet] Data Indicators. Available in: Consulted Jan Secretaría de Salud. Boletín de Información Estadistica. Tomo III Servicios otorgados y programas sustantivos. México: SSA; Instituto Nacional de Estadística y Geografía (INEGI) [internet] Censo de Población y Vivienda Consulta interactiva de datos. Available in:

16 Expenditure in reproductive health and gender equity by financing agent. Mexico, 2009 Non-profit institutions serving households (NGOs) 0.2% Direct payments by households 27.0% Private insurance companies 6.0% ISSSTE 3.5% Financing agent Expenditure (thousands Mexican pesos) MoH and State MoH System of Social Protection in Health IMSS-Op % IMSS IMSS 35.0% IMSS-Op IMSS-Op 6.4% 6.4% System of Social Protection in Health 7.7% MoH and State MoH 14.2% ISSSTE Empresas de seguros privadas Pagos directos de los hogares Non-profit institutions serving households (NGOs) Total expenditure on reproductive health * The total health expenditure in 2009 ascended to thousand pesos. Public expenditure was and private thousand pesos. Gross domestic product in 2009 ascended to 11,888,054,013 thousand pesos at current prices. Source: Ávila-Burgos L, Montañez-Hernández JC, Cahuana-Hurtado L, Aracena-Genao Belkis. Cuentas en salud reproductiva y equidad de género. Estimación 2009 y comparativo México: Instituto Nacional de Salud Pública; 2011.

17 Mexico: Healthcare infrastructure and resources 2007 Facilities Public 1 Private 2 Facilities Outpatients care centers NA Hospitals Beds Consultancy rooms Personnel Public 1 SSA Private 2 Physicians Outpatients care centers Hospitals NA NA NA NA Nurses Outpatients care centers Hospitals NA NA NA NA 1/ Includes information from the following institutions: Ministry of Health, State-owned, IMSS-Oportunidades, University hospitals, IMSS, ISSSTE, PEMEX, SEDENA and SEMAR. 2/ Includes only hospitals 3/ Includes facilities and mobile teams. 4/ Includes physicians in contact with patient (general practitioners, specialists, dentists, interns, residents and interns). 5/ Includes nurses, specialists, interns, assistants and administrative activities. NA Not available Source: National Health Information (SINAIS - MoH) [Internet] Numeralia de recursos humanos de los sectores público y privado, Available in: Numeralia de recursos físicos de los sectores público y privado, Available in:

18 Public Financing private provision with primary health units and basic team Jalisco Objective: TO EXPAND COVERAGE OPD Jalisco Health Services Contracting. Basic salary plus productivity payments Public Financing Through contracting Decentralized Public Entity (OPD-Ministry of Health) has set up a network of primary (independent basic team and health centers) and secondary (hospitals) care services in geographical areas (urban and rural) where no MOH units are available. Health care units H. I Ievel of care H. II level of care Package of ambulatory and hospital services Basic Team Doctor Nurse Health Promoter Medical consultation, health promotion and disease prevention activities Private service provision Demand Users Source: Nigenda, González, et. al. (2006): Interacción público privada en la prestación de servicios de salud, México: INSP/Conacyt.

19 System of Social Protection in Health and Public Private participation Federal Ministry of Health Baja California Baja California Sur Campeche Chiapas Coahuila Guerrero Hidalgo Oaxaca Querétaro Sinaloa Zacatecas 3% National Commission for Social Protection in Health Purchase of Services State Ministry of Health Management Agreement 60% 34% State System of Social Protection in Health Without Management Agreement Michoacán Source: Instituto Nacional de Salud Pública. Evaluación de procesos administrativos México: SPSS-SSA; Without management agreements Public Private/Public Aguascalientes Chihuahua Colima Distrito Federal Durango Estado de México Guanajuato Jalisco Morelos Nayarit Nuevo León Quintana Roo Puebla San Luis Potosí Sonora Tamaulipas Tlaxcala Tabasco Yucatán Veracruz

20 Role of private sector in the quest for Health Universal Coverage THE CASE OF COLOMBIA

21 The Colombian Social Insurance Regime Government funds $ Pays on behalf of the poor $ Payroll tax & solidarity contribution, based on capacity to pay National Insurance Fund Population with ability to pay Poor population $ $ Risk based premiums Insurer provides preestablished benefits package, irrespective of payment Identified by proxy means test Contracts health services Health insurers (public & private) Chooses health insurer Providers (public & private) Chooses providers within insurer s network Source: Giedion, 2008

22 Colombia: Health Economic indicators 2005 Source: Gottret P, Schieber GJ, Waters HR (coed.) Lessons from reforms in low and middle income countries. Good practices in health financing. Washington: The World Bank; 2008.

23 Colombia: Insurance Coverage, by Income Quintile, Source: Gottret P, Schieber GJ, Waters HR (coed.) Lessons from reforms in low and middle income countries. Good practices in health financing. Washington: The World Bank; 2008.

24 Composition of health expenditure, Colombia, % 90% 80% 70% 60% 50% 40% 30% 20% 10% 8% 8% 44% 26% Prepaid OOP 45% 40% Other private OOP Payroll taxes Taxes Colombia has radically changed its health financing sources 10% 23% 0% Source: Giedion, 2008 based on Colombian National Health Accounts, Barón, 2006.

25 Impact on barriers of access Subsidized Regime Access barriers, Propensity Score Matching 50% Estimates 40% 30% Demand barriers Supply barriers HI reduces barriers of access 20% 10% 0% 36% 6% Not insured affiliated 7% 18% Subsidized Regime HI changes the types of access problems

26 Impact of insurance on utilization Subsidized Regime Subsidized insurance for the poor increases utilization Use of ambulatory health services in last 12 months Child taken to a health care facility when coughing Child taken to a health care facility when suffering from diarrhea Child being immunized complete schedule PSM estimates +41% +17% +23% +8% Important because diarrhea and acute respiratory infection are still among the first 5 mortality causes in children Interesting because immunization is free for all irrespective of HI status Note: Only statistically significant results are reported on this slide. PSM, Kernel Epanechnikov, bandwidth 0.001

27 Impact of insurance on financial protection Subsidized Regime PSM estimates OOP represent 10% or more of nonsubsistence income -36% Subsidized insurance for the poor mitigates the impact of catastrophic expenditure OOP represents 20% or more of nonsubsistence income OOP represents 30% or more of nonsubsistence income -39% -44% This is important as 5% /30% of all Colombians/health service users have monthly OOP above 30% of their monthly subsistence income OOP represents 40% or more of nonsubsistence income -27% Note: Only statistically significant results are reported on this slide. PSM, Kernel Epanechnikov, bandwidth 0.001

28 Discussion Three different health system models with three different ways of integrating private participation. Colombia integrates at the level of management of funds and provision of services with high regulation. Private sector participates in Insurance coverage and health services coverage. Costa Rica integrates the private sector at the level of primary care provision with specific regulation. Restrics private participation to health services coverage. Mexico allows the contracting of private services but without specific regulation. Opens the possibility of private participation in health services provision but does not encourages it.

29 Role of private sector in the quest for Health Universal Coverage The case of Latin America Felicia Knaul, Gustavo Nigenda, Rocio Sáenz, Ursula Geidón, Héctor Arreola Prince Mahidol Conference Bangkok, January 26, 2012

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