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The Necessity of Universal Health Care

The biggest health challenge for Latin America and the Caribbean isn’t a single disease or condition, and it won’t be solved by aiming money at a single risky behavior. The biggest challenge is that people do not always get the healthcare they need.

Many people live far from a health care provider, and distance costs both time and money. Moreover, cultural barriers reduce the wellbeing of those who do not speak the dominant language, especially indigenous communities. In other cases, people don’t realize they need care, or don’t follow a doctor’s directions when they do. Similarly, mistaken beliefs are often a problem: for example, diabetes is referred to colloquially as “sugar,” and diabetics can erroneously believe that curbing sugar intake is the only thing they need to do.

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Finance is another great barrier. In Mexico, before recent reforms, 2-4 million households either spent 30% or more of their disposable income or fell below the poverty line because of catastrophic health spending. Others simply do without needed care.

When care is available, it is often inefficient or of substandard quality. Medical errors are so frequent that the World Health Organization has designed guidelines to ensure patient safety. A Mexican survey shows that in private care, poor patients (particularly indigenous women) receive worse care than the wealthy, although there is little difference in public institutions. However, the reverse sometimes is achieved, as another study in Paraguay shows.

The best – and most expensive – solution to these challenges is to provide universal insurance coverage.

Subsidized services should be delivered by qualified providers, regardless of their public or private, for-profit or non-profit status. This means rejecting the idea of expanding only the network of public facilities. The reasoning is practical, not ideological: private providers are often available in places lacking public facilities.

Chile, Mexico, and Colombia all have different approaches. Chile requires all wage and salary earners to contribute 7% of their pay either to the National Health Fund or to a private insurer. The lower-paid tend to register with the public system, which is also financed from general revenues so that the poorest are fully subsidized. When the Ministry of Health guarantees to provide a medical intervention, private providers must do the same.

Mexico has chosen a targeted insurance scheme for households that are not covered by social security scheme and are too poor to afford private insurance. Enrollment is voluntary and expanding gradually; the poorest, who are fully subsidized, have preference and are required to participate in health promotion activities. Wealthier households contribute up to 5% of their disposable income.

Instead of a specific insurance scheme, Colombia created conditions for a new class of insurers to compete for clients and a new funding mechanism to finance them. Though political resistance and financial limitations have slowed expansion, this is arguably the most far-reaching universal coverage scheme, because it creates competition among all kinds of insurers and health care providers.

These three countries’ experiences make it clear that there are different paths to universal insurance, and that a serious attempt to enroll the uninsured can have dramatic results. The Mexican scheme enrolled 1.7 million families by its second year, while the Colombian scheme signed up 13 million people within its first decade.

Another solution is to improve the quality of care. It is difficult to prescribe an approach for a single country, let alone all of Latin America and the Caribbean. However, research shows that where health care is of low quality, training providers on basic protocols for diagnosing and treating common illnesses is very cost-effective, saving children’s lives for as little as $14.

The third option to consider is a public information campaign about diseases, symptoms, and risk factors. But, while an expensive campaign to combat a particularly dangerous, communicable disease like HIV/AIDS makes sense, it is less clear that this approach works well when aimed at providing the public with general, health-related information.

Even so, providing universal health care access would almost certainly lead more people to consult doctors about their symptoms, and therefore would reinforce any education campaign. The effect would be even greater if training is improved so that health care quality is improved.

Concrete cost assessments for any of these proposals are difficult to make. Indeed, universal insurance is the only solution for which even approximate estimates are possible.

The Colombian insurance scheme costs around $164 for each person covered, or $83 for fully subsidized coverage with a less generous benefit package. Roughly eight million Colombians eligible for the subsidy are already covered; since these include the poorest, the gain in health is almost surely greater than the 11% increase in real cost so far. Including the remaining 14 million who are eligible would cost about $ 1.16 billion.

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The impact of universal access on how health care is paid for is perhaps larger than its impact on health status: the Colombian reform has dramatically reduced the share coming from households. Out-of-pocket spending on health care today is one-fourth the level of ten years ago, and the reform has at least partly eliminated the old distinction between the insured rich and the uninsured poor.

Even without detailed cost-benefit analysis, it is clear that universal insurance coverage is vital. Being born poor or in a remote village should not consign anybody to the misery of going without decent health care.