Crisis: the health and health policy aspects of the argentine crisis are less well known than the economic or political ones

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Crisis: the health and health policy aspects of the argentine crisis are less well known than the economic or political ones. Jorge T. Insúa highlights the main aspects of the crisis and briefly essays some perspectives for the area.

Argentinean Crisis and Health policy

Argentinean Crisis and Health Policy:

Jorge T. Insua, MD,MSc.


Argentina entered in default in December 2001. This was well reported worldwide in the media. Still its coverage presents the dramatic situation of the society and the economy1. However, the health and health policy aspects of this crisis are less well known. This lines will briefly address some of these aspects. Its in depth demonstration, however will be left for a future paper.

Argentinean crisis:

Argentine crisis is well covered internationally. Although the true causes seem elusive, with the political factor taking its true preeminence as an etiology of the macroeconomic crisis.

A full analysis of this crisis is beyond our scope. Briefly, some key components of this crisis are: 1) financial crisis and collapse, due to the burden of external and internal debt, 2) collapse of the financial system, and limitations to the use of credit, 3) Devaluation and movement out of the convertibility law, mandating a dollar /peso ratio value of 1:1, 4) deterioration of the social, productive and employment indicators, 5) increasing poverty levels.

Health Crisis:

Health status

Summary data on health care of the country are covered elsewhere2. Some observations are however valid here. First, there is a substantial inequity, widespread regional variation in access, and notable variations in the developmental stage of the health care provision (visible in inefficiency, quality and performance indicators), for example, infant mortality shows a gradient between 15 /1000 in Buenos Aires Capital and 32/1000 in Chaco3. Second, the social, morbidity and mortality epidemiologic indicators point to a severe crisis, still too early to be completely assessed, mostly related to poverty increases, unemployment and social disruption indicators (such as intentional and unintentional violence, drug abuse, and effects on vulnerable populations)4. Since october 2001 5,2 millon people where incorporated into the poor. 54,7% of the population become poor (in one province reaching 78%). Those with unmet basic needs are 24,8% of the population. Among children 70,3% of the group are poor.5 A mortality increase phenomenon similar to Russia´s, leading to reductions in life expectancy is possible to occur according to trends in some indicators, such as widespread hunger among the poor, observed on last 6 months. Also, as in this case this phenomenon goes well beyond the current economic crisis pointing to preexisting failures of the health care system, professionalism, social justice and to poor democratic performance6. Adjustments of this type have proved deleterious to populations health acute and chronic indicators when the set of policy conditions existing in Argentina occurred7.

Health system

A description of health status and health system indicators, structure and functioning of the Argentinean health care system is beyond the scope of the present paper and briefly described elsewhere89.

Current crisis

The Argentinean health care system is complex. 18 millon persons out of 37 millon are covered by the public system. These are essentially the poor. The health care system is close to collapse10. Money received by the system is being reduced due to several reasons. One is internal debt. One of the major payers, the INSSJyP or PAMI (the Argentinean equivalent to Medicare) has debts to providers of 500 millon pesos. PAMI and OS have a debt of 2200 millon with providers. The system is a very tight one in terms of cost, providing care for elders at a capitation rate close to 20$ per ember per month (PMPM). Another reason is reduced public and private insurance collection. Total health care cost of 23.900 millon pesos in 2001 will be 20.300 millon pesos in 2002 (a fall of 15%). The effect of devaluation is also acting upon the system. The total amount of money for health care which was around 650 U$ per capita per year is now close to 184 U$ after devaluation, just due to current exchange rate. Argentina, which was one of the systems with better per capita financing of Latin America is one of the less financed since January 2002. Around 5 millon persons lost health insurance related to OS due to unemployment, job loss or work in the informal economy. The private medicine sector increased premiums by 25%. This affected access. In the private prepaid medicine (close to the HMO system in USA) a 12% reduction in insured beneficiaries occurred, a 20% of those remaining in the system moved within it to plans with less premiums and less services.

Also on the cost side of the equation problems emerge. The cost of dollar related drugs, consumables, infrastructure and technology increased up to 360% since January 2002. Around 80% of the total consumables are of imported origin. Drugs prices increased close to 160% since devaluation occurred. Mortgage of capital and technology investments increased by 260%. Salaries and maintenance outlays of the providers decreased by –68%. The cost of internal debt is putting pressure on providers, employees and professionals, which are bearing the cost of reduced incomes, and having organizational, technical and professional cut-offs, which will have an impact on health outcomes. 11 12

Crisis after crisis

However to assess that this critical situation is a recent one is misleading. The situation of the health care system during and after hyperinflation was critical long before the 90s. With a remarcable deterioration of operations and capitalization. Technology updates where hard to keep and sustain. A country closed to the international economy was out of the benefit of technology improvements occurring world wide13.

Since the 90s, the reform of the system led increased strains to the health care system. The trend to pro-competitive reforms of the OS14 15 by a failed attempt of deregulation of the system, led to an effect similar to the market adaptation to the proposed Clinton´s health reform. The market changed before the normative change occurred. Prepaid medicine adapted to modern managed care techniques and cost management. These changes where superficial, traumatic, and poorly implemented, hitting the provider system. The INSSJyP started a widespread and careless utilization of capitation payments, with disastrous results and high potential for corruption. This occurred even while an enormous increase of total income to PAMI. These two major payment changes had marked effects on providers, straining the structural deformities of the system. Providers where compressed in their income. The reaction of providers was specialist led to upgrade high technology. While social indicators and social change demanded a primary care and integrated system of care. Although capitation payment induced change in that direction, the training, professional, organizational, reimbursement, and incentives components of that change where delayed, poor and traumatic. Today that trend is severely de-profesionalized and resisted as a result 16 17.

Health care system prospects:

Health care system

This health care system strain is a mayor one. This strain will inevitably led to changes and adjustments in al sectors involved, Public, Social Security System and Private, for all actors and all levels of care.

Financing role and population´s health

The major problem of the health care financing scheme is reducing income, increasing costs and increased population risk. To handle the present crisis with a per capita health care spending of 184 U$ will be a real challenge. The economy of the health care system will be inevitable related to macroeconomic growth, unless it occurs, no palliation will work, nothing replaces increased absolute spending in health as the best way to meet health care needs currently poorly served. Every rationale indicates that this will be slow an painful. But this requirement will inevitably need to address that the solution will need a highly targeted allocation efficiency to populations health care needs and a highly developed strategy to design, implement and monitor targeted interventions.

Provider role

The existing set of incentives and organizational forms will require an inevitable solution based on integrated delivery systems. However the crucial issue of systems integration will need to be addressed realistically to avoid the errors observed in USA and other developed countries18. As the conditions required for adequate systems integration require stable organizations, time and brain power, as well as great demands on managerial and clinical performance this solution, being the only possible is however highly unlikely. The present situation of poorly performing and seriously deficient public, private and social security sponsored networks of care is the most likely scenario for the immediate future. Provider clinical and managerial upgrade will be an inevitable requirement19. A possible favorable trend to less high technology scenario of improved performed is possible if political decision making and public management meets the conditions of serious work on this area. Again this scenario is possible and desirable but unlikely under current political and university climate.

Pains and gains

This will sadly led to solutions only gained only with pain20. Under this circumstances the inevitable problems are rationing issues, particularly those related to vulnerable populations21. This rationing problems are related to all aspects of health care: ethical, technical, organizational, economic, and professional. Serious issues of allocation and productive efficiency will emerge22. There is already emerging evidence that widespread unethical rationing occurred in the 90s particularly in the PAMI system23.

Therefore, current situation leads to the conclusion that the strain and challenge of the present socio-political and economic crisis will demand strenuous efforts for every actor in health care sector, and unless serious and highly technical and professional resources are put into that effort, the result will be continuing failure. This objective will not be achievable unless a major turnover in the process, quality, ethics and technical basis of political decision making occurs.

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13 Llach J. Otro siglo, Otra Argentina. Una estrategia para el desarrollo económico y social nacida de la convertibilidad y de su historia. Ariel, Buenos Aires, 1997.

14 Belmartino S. The context and process of Health Care Reform in Argentina. In Fleury S, Belmartino S, Baris E (Eds). Reshapping Health Care In Latin America. A comparative analysis of Heath Care Reform in Argentina, Brazil and Mexico. IDRC, Ottawa, 2000.pp. 27-47.

15 Belmartino S. Reorganizing the Health Care System in Argentina. In Fleury S, Belmartino S, Baris E (Eds). Reshapping Health Care In Latin America. A comparative analysis of Heath Care Reform in Argentina, Brazil and Mexico. IDRC, Ottawa, 2000.pp. 48-77.

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17 Finkelman S. Difícil para médicos. Medicina 1998;58:327-328.

18 Burns LR, Pauly M. Integrated delivery networks: a detour on the road to integrated health care. Health Affairs 2002; 21(4):128-143.

19 Insua JT. Gestión clínica: una dirección medica moderna. 2002. In UNR/I.Lazarte (submitted)

20 Reinhart U.

21 Insua JT. Ethics, Managed Care and the Elderly: Towards an analytic framework on Rationing. CUNY, Master’s Thesis. 1991.

22 Insua JT. Notes on Health Economics: Ten basic notions--a decade later. Rev Col Arg Cardiol 1998; 2: 10-12.

23Insua JT. Costs and Health Services Utilization of cardiovascular Disorders in the Elderly. In Tronge J. Cardiovascular Emergencies in the Aged. (In Press).

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