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Universal Health Coverage

There is wide and growing enthusiasm for Universal Health Coverage (UHC), which is increasingly seen as a silver-bullet solution to healthcare needs in low and middle-income countries. Although confusion still exists as to what exactly UHC means, international development agencies typically define it as a health financing system based on a pooling of funds to provide health coverage for a country’s entire population, often in the form of a ‘basic package’ of services made available through health insurance.

Under this model, there is a clear split between health financing and health provision, allowing for the growth of private health care while steering policy-makers away from universal health options based on building better public systems. Yet, the evidence to support the implementation of these public-private programs remains thin.

The MSP, by contrast, demonstrates that finances need to be channeled through well-designed public systems if they are to be spent efficiently and equitably. We further argue that, in glossing over the importance of public provisioning of services, many proponents of UHC are actually interested in the creation of health markets that can be exploited by private capital (see UHC: Beyond rhetoric). We have summarized these arguments in one of our short animated videos.

Growing private pains in India

There has been an impressive roll out of government-funded insurance schemes under the UHC model in India (UHC in India: Making it public, making it a reality). In theory, treatment covered under these schemes can be provided by any accredited facility. But in practice the majority of providers are found in the largely unregulated private sector which already accounts for 80% of outpatient and 60% of in-patient care, making India one of the most privatized systems in the world.

What the majority of Indians lack is comprehensive primary care. In contrast, current health insurance ‘packages’ only insure beneficiaries for ailments that require hospitalization. They cover a very small portion of the burden of disease, excluding, for example, out-patient treatments for tuberculosis, diabetes, hypertension, heart conditions, and cancer. Evidence from the first such scheme in India – Arogyasri – suggests that it consumed 25% of the state’s health budget but addressed only 2% of the burden of disease.

This situation ends up distorting the very structure of the health system by starving primary care facilities while benefiting profitable secondary and tertiary care. In 2009-2010, direct national government expenditure on tertiary care was slightly over 20% of total health expenditure, but if one adds spending on the insurance schemes the total would be closer to 37%. In Andhra Pradesh, following the implementation of Arogyasri, the proportion of funds allocated for primary care fell by 14%.

Instead, a good universal health system should be built like a pyramid: the largest numbers should be treated at the primary level where people live and work. It is therefore necessary to recast the UHC debate and propose alternatives that strengthen the public health system to allow it to build integrated, comprehensive services with strong mechanisms of accountability (read about community-based monitoring in Maharashtra).

Comparing Chile and Costa Rica

We also released a case study comparing health outcomes in Chile and Costa Rica, two countries that have come to epitomize contrasting approaches to UHC in Latin America. The research provides strong evidence to show that there are widespread and consistent advantages to promoting UHC through a strong public system that funds and provides all medical and preventive services to citizens rather than through a fragmented public-private mix based on insurance.

It is important to note that both countries have achieved the lowest infant mortality rates and the highest life expectancies in the region thanks to major advances in primary care. But Chile’s health ‘market’ has led to inefficient use of resources, with higher administrative costs and more irrational medical procedures (e.g. caesareans) resulting from oligopolies and collusion among private providers.

One of the major goals of UHC is financial protection for poor households when they face illness. Yet Chileans systematically need to make higher out-of-pocket payments to get medical care in comparison with Costa Ricans. This situation is produced in part by the fact that Chileans pay for health conditions, services or products that are not covered by their insurance (e.g. prescription drugs).

In contrast, Costa Rica’s public health care system remains relatively affordable and more efficient, with total per capita health expenditure standing at US$811 compared to US$947 in Chile. Importantly, Costa Rica has also consistently prioritized preventive health care, which is more cost-effective and can yield greater public health impacts in the long term.

Using comparable data from Latinobarómetro, the study shows that twice as many people reported facing access barriers to health care in Chile compared to Costa Rica, citing distance to hospital, time to obtain an appointment, and cost of seeing a doctor as the major reasons. In addition, lack of access to health services as a result of financial barriers in Chile still stands at 4.2% compared to 0.8% in Costa Rica.

Costa Ricans continue to be largely satisfied with the quality of their healthcare services, more so than Chileans. Interestingly, LAPOP 2012 results show that most people in both countries think that government, rather than the private sector, should be responsible for health care (71.1% in Chile and 67.5% in Costa Rica).

According to the notions of “active purchasing” and “managed competition” – frequently used by the World Health Organization to promote insurance schemes – the existence of different providers competing for resources should have produced higher levels of quality at lower costs in Chile. But the Chilean health system is an example of how segmentation produced by the coexistence of private and public insurances is detrimental to efficiency and equity.

Debates over the best institutional arrangements to organize universal health care are far from over, but this case study demonstrates that insurance schemes as promoted by some proponents of the UHC agenda are neither the only nor the best option.