Dr Asa Cristina Laurell. Independent Consultant.
Currently the dominant notion of Universal Health Coverage (UHC) is a health insurance with a defined service package based on a payer-provider split. In the global UHC crusade, the Mexican health reform, particularly the Popular Health Insurance (PHI), is presented as a success case. However the narrative of this reform is usually quite inaccurate and closer analysis reveals a different picture.
The Mexican health system is segmented and fragmented but it is predominantly public. The drive for universal coverage rested during four decades on a social security strategy and by 1982 about 70% of the population was covered by public social security including a large part of the rural population. The Ministry of Health (MOH) attended the rest of the population. Both had their own infrastructure and salaried personal while private insurance and provision were marginal.
The 1983 fiscal adjustment, caused by the debt crisis, impoverished both the social security institutions and the MOH and deteriorated services and working conditions. This fact legitimized the introduction of structural health reform based on the Latin American adaptation of ‘Managed Competition, Structured Pluralism’, with the separation between regulation, administration of funds/service purchasing, and provision of services. This split is essential since it permits the introduction of competition and markets and consequently health system commodification.
The first stage of reform took place between 1995-1997 and its main target was the social security institute for private sector workers (IMSS) that held about 60% of the public health funds. The reform changed the financing of health insurance – it reduced the employer premium and increased the government contribution around five times. Even so the total IMSS health fund diminished. Additionally the IMF conditioned its ‘adjustment loan’ to the introduction of private fund administrators. This part of the reform failed, essentially due to a strong resistance movement and the possibility that social security health care for a majority of the population might have collapsed. The second part of the reform during this period consisted in the decentralisation of the MOH facilities to the state level and the “universal coverage” of a very small service package.
The failure to establish a payer/provider split at IMSS and to introduce private health fund administrators led to a modification of the reform strategy with the arrival of a right wing government in 2000. The new minister of health, Julio Frenk, set about to conclude the health system conversion to full-fledged Structured Pluralism. In 2003 the National System for Social Health Protection was established.
The Popular Health Insurance (PHI) is the operative program of that system. It is a voluntary insurance for people who are not covered by social security insurance and offers an explicit service package of 274 interventions including drugs and eight ‘catastrophic cost’ diseases for adults while the medical coverage for children is broader. The PHI excludes many high-cost diseases among others multiple trauma, cardio-vascular disease, stroke, most cancers, renal insufficiency that patients have to pay. The PHI package corresponds to 11% of what public social security provides for free. The PHI has no cost for the lowest income groups and the rest pay a premium of about 3-4% of their income.
It is financed by federal tax funds, state tax funds and family premiums. The organizational arrangement of PHI is the one of Structured Pluralism and sanitary security is the responsibility of decentralized agencies at federal and state level. The federal government collects, administrates and transfers funds to state fund administrators, according to the number of enrolled, and to a special fund for ‘catastrophic costs’ that purchases personal health services for PHI affiliates from public or private providers. Public health actions and collective health are financed by a special fund and are the responsibility of the decentralized state health services.
The MOH claims that universal insurance coverage has been reached in Mexico adding PHI, social security and private insurance. However this is refuted by other official data sources such as the health and nutrition and the household income/expenditure surveys of 2012 that demonstrate that 21-25% of the population lacks insurance coverage (see here, p. 35; and here). Nor is it true that the main PHI beneficiaries are the poorest part of the population: 37% of the lowest income quintile is uninsured.
Official health statistics also show that PHI is providing much less services than the public social security system to its affiliates: 1,4 consultations compared to 3; 0,07 to 0,43 for emergency room treatment and 2,7 to 4,8 per 1.000 for hospital care. These data show that insurance coverage does not mean access in the presence of a limited service package. The unequal distribution of health facilities and human resources adds barriers to access since the expansion of PHI enrollment was not accompanied by an increase in services facilities.
So far the PHI has only marginally contracted private providers which means that with or without PHI the population is attended at the same MOH facilities but with one crucial difference: the PHI population has preference, at the expense of the non-PHI population in these facilities. Comparing the access to care of the people having health problems between the uninsured, those with PHI and those with social security it was found that 15,9% of uninsured, 12,5% with PHI and 6,4% with social security failed to receive care. According to both the uninsured and PHI affiliates this failure was mainly due to economic barriers. In this context it should be noted that for each peso spent by PHI enrolled, the PHI spent 0.93 pesos while the same data for social security are one to 1,39 pesos. PHI does slightly protect against “catastrophic health costs” as compared to the uninsured. Nevertheless the overall proportions of public and private spending have changed very little.
Another PHI failure is that the financial resources to be delivered and transferred by the federal government to providers are much lower than legally stipulated and not fully applied. The PHI budget has increased by almost 300% since it was started but the health expenditure for the non-social security population is a little less than the stated objective of one percent of GDP. The MOH takes pride in the narrowing between per person expenditure for PHI and social security but disregards that per capita is stationary in social security.
This fact provides a hint on the strategy foreseen for implementing complete Structured pluralism. The present government has announced that during 2014 a ‘Universal Health System’ will be legislated and put into practice. I.e. all Mexicans will be covered by a basic insurance that will grant access to an explicit service package and will freely choose her/his public or private provider. The hidden agenda of this proposal is that the service package is the one of PHI and the free choice of provider means that private providers will be promoted and the social security institutes obliged to attend everybody despite their overcrowded facilities. Since the basic insurance only gives access to basic services a large space is created for complementary private insurance. This means that about 50% of Mexicans will lose most of their present health benefits or will have to contract such a complementary insurance. Finally, not unexpectedly, nobody has proven any positive health impact of the Mexican health reform. In this manner none of the main causes of death have changed their respective trends during the period 2000-2011 with the exception of murder (see here). Commenting on this fact the World Bank argued that health impact was not an objective of this reform! Even its creators recognize that public health activities have been increasingly neglected.