Inequalities in Mexico Health System

Despite the fact that life expectancy at birth in Mexico has improved from forty-two years in 1940 to seventy-three in 2000, major inequalities persist in health and access to health care. The Mexican health care system has evolved into a series of disjointed subsystems that are incapable of delivering universal health insurance. Fragmentation and administrative complexity are often described as among the greatest weaknesses of the health system in the United States, especially in comparison with other countries such as Canada, our neighbor to the north.

The result is that half of Mexico’s 100 million citizens are uninsured and more than half of the country’s annual health spending is out of pocket. The incentives in this balkanized system tend to reinforce the entrenchment of its several disjointed sectors, impeding efforts to improve performance. Disparities in access and outcomes—a tenfold difference in infant mortality rates between the poorest parts of the country and the richest, for example—make the U. S. system seem equitable in contrast.

The employment-based portion of the Mexican system is particularly problematic, since workers in some sectors of the economy enjoy a hybrid public-private system of coverage, while many others are uninsured and must depend on an uneven system of public clinics. Thecomprehensive federal funding of a core package of services across all social groups must be the basis of universal health insurance. ” Throughout the world, inequity in health status has fallen faster than would be predicted based on changes in economic inequity.

This general improvement has many causes, including the diffusion of knowledge about safer health behavior (such as that related to water quality, sanitation, nutrition, and safer sex) and the diffusion of inexpensive, effective technologies (most importantly, vaccination and oral rehydration therapy, or ORT). Mexico has one of the world’s most successful vaccination programs (coverage rates for many vaccines exceed 95 percent) and has successfully promoted ORT, dramatically reducing morbidity and mortality from childhood nfectious diseases. Unfortunately, few opportunities remain to use these types of vertical, technology-based national programs to reduce large disease burdens. Despite these achievements, gaps in health status are still wide and are especially evident when one compares population groups and geographical areas. For example, infant mortality rates range from nine deaths per thousand live births in the richest municipalities to 103 in the poorest.

Indigenous communities have an infant mortality rate that is 58 percent higher and a life expectancy five years lower than the national average and ten years lower than in Mexico City or Monterrey, the largest urban centers. Forty percent of indigenous women have been shown to be anemic, compared with a national average of 26 percent. In the indigenous communities of Guerrero state, the maternal mortality rate is 28. 3 per 10,000 live births, compared with the national rate of 5. 1 per 10,000 live births. 4 Unfair financing is the third and final equity-related concern of the Mexican health care system.

In Mexico, 52. 9 percent of total health spending is spent out of pocket (for expenses not covered by insurance). This percentage is 16. 6 percent in the United States, 25. 9 percent in Colombia, and 3. 1 percent in the United Kingdom. 7 Even though almost all population groups have high out-of-pocket spending, according to the 1998 National Household Income-Expenditure Survey, 7 percent of families in the poorest decile incurred catastrophic health expenditures in the previous three months, compared with only 3 percent of those in the highest income decile.

The study conservatively estimated that between two and three million (of a total of twenty-two million) households spend more than a third of their income on health care each year—an expenditure that can easily lead to or exacerbate poverty. The government maintains multiple, parallel health systems for different population groups, which end up creating incentives that maintain or increase inequity rather than channeling public resources to the most pressing needs. Structure of the current health system. Mexico’s 100 million inhabitants eceive their health care from a health system composed of three principal subsystems:

(1) a number of social security institutes that provide health insurance for the formally employed and their families (almost fifty million beneficiaries) and are financed by earmarked employer and employees payroll taxes plus legally mandated government contributions (the financing arrangements are further discussed below); (2) governmental services headed by the Ministry of Health and limited services from nongovernmental organizations (NGOs) for the uninsured population (estimated at around forty-eight million); and (3) a large private sector that is almost entirely financed out of pocket, as the private insurance market covers fewer than two million enrollees. 8 Prospects For Achieving Universal Health Coverage In MexicoThe structure of the health sector in Mexico has impeded progress toward universal health insurance coverage (seguro popular) in multiple ways. The current structure creates incentives for building strong separate institutions, even at the expense of the others. In thinking about reform incentives that drive the system, it is useful to consider the perspectives of the management or leadership of the various institutions, the trade unions in the health sector, and patient advocacy groups.

The existence of multiple parallel government-operated health systems is very different from the multiple private systems in other countries (such as HMOs, indemnity plans, and the like). A worker’s health care provider is predetermined by type of employer. By limiting choice, the system removes any incentive for providers to contain costs and increase quality in order to compete for members. Even more importantly, the system gives no voice at all to “nonmembers” (since they cannot choose to join), thus limiting the possibilities to extend insurance coverage to less privileged social groups. The problems of fragmentation are also paralleled among the management of the different public-sector institutions.

Today there is relatively extensive collaboration and joint planning between the two main public providers (Ministry of Health and IMSS), but that is the result of individuals trying to resist the structural incentives to pull in competing directions, not the result of a stable alignment of interests and incentives. The natural competition among institutions for resources has tended to concentrate resources where political and economic power is strongest—exacerbating rather than alleviating inequity. Total public spending on health accounts for about 3 percent of GDP, less than half of overall health spending, and much less than is the case in most other middle-income countries in Latin America. 16 Although we cannot demonstrate causality, it is certainly plausible that the fragmentation of public-sector institutions has interfered with the sector’s collective ability to argue for increased resources. Should Health Care Financing Be Restructured?

Although protection against ill health has been deemed a constitutional right since 1983, more than half of all Mexicans remain uncovered by any explicit form of health insurance, and most pay for health care out of pocket. As a consequence, the Mexican National Health Program proposes as a goal for 2006 that every Mexican should have access to health insurance regardless of ability to pay, risk level, and employment situation. An important attempt to change the financing structure of health care took place in 1997, when new legislation allowed for an equal federal contribution (general tax revenue subsidy) to finance health care for all households covered by the IMSS.

Additionally, an opting-in scheme was devised whereby individuals could buy into the health component of social insurance. Despite its potential to increase insurance coverage, this initiative has not been fully exploited to attract people into the IMSS, because it is widely feared that adverse selection would make the scheme financially nonviable. Aside from this effort, federal appropriations for health care continue to be awarded erratically—mostly to deliver care for the uninsured—and based on a combination of political pressures and budgetary largesse. Comprehensive federal funding of a core package of services across all social groups must be the basis of universal health insurance.

Although no government is capable of providing comprehensive coverage for all health care needs, a list of federally funded, effective core services should be determined by available funds through explicit insurance coverage. Additional services can be financed by complementary sources including local taxation, earmarked payroll taxes, and private insurance. An increase in general taxation funding can reduce systematic disparities in health access, and equitable allocation rules would allow better risk diversification. Additionally, changing the financing structure to provide explicit service packages should promote effective entitlement of previously uninsured beneficiaries, similar to what is now observed for social security affiliates. Previous SectionNext Section

Implementation Concerns And RecommendationsIf equity is to be the major objective of health system reform, then the policy and evaluation perspectives must be long term. Regardless of the speed of change in the financing and organization of the system, greater equity in health status can only be achieved slowly. Experience has shown that it will not be feasible to dramatically expand coverage using an employment-based social security model and that it is perhaps necessary to move toward a national health care system based primarily on a general taxation–funded scheme. Supplemental private insurance as well as social insurance funded through payroll and local taxes should be strengthened as a way to purchase more comprehensive insurance and improved hotel-like amenities.

Different levels of supplemental insurance can accommodate the widely different demand for health care services in a society as unequal as Mexico’s. Universal health insurance, the strategy. Under a single universal health insurance scheme that explicitly covers a basic package of health care for all Mexicans, delivery of services could be organized in new ways that could include the private sector and ensure that existing public-sector capacity is better put to use on patients’ behalf. It is not difficult to imagine arrangements by which patients could choose their providers, given enough information on what their benefits and rights were under the insurance scheme. This type of system could increase social capital insofar as patient choice is promoted through more information.

It would also take the constitutional right of protection of health and turn it into an effective entitlement with explicit rights—something that today’s beneficiaries of the federally funded Ministry of Health subsystem do not have. 17 Unless a substantial federal subsidy is provided to all Mexicans, health insurance coverage will remain dependent upon increased employment and its formalization. With the observed increase in the informal economy, it would be inappropriate to depend once again on employment-related schemes. The creation of a single risk pool for the entire population, unrelated to employment, implies creation of a national health insurance, funded through general taxation and detached from current social security schemes. Financial reform. This strategy requires that the system be structured by functions, rather than by population groups.

In this way, it would be possible to implement a single central funding scheme and subsequently ensure that resources follow the patient, even across institutional barriers. Concerns for responsiveness and efficiency can be accommodated in an organizational design that develops new contractual and payment mechanisms between purchasers (insurers) and providers. This type of system would modify current incentives in order to improve both quality of care and efficiency within the system. Moving away from a vertically integrated insurer–provider model to the separation of insurance and provision functions through the so-called purchaser-provider split can be done gradually with sufficient coordination within each institution.

The introduction of greater choice of providers, cost-effective purchasing, devolved budgets, autonomous hospitals, and some degree of public-private provider mix are all important reforms that can be implemented within individual Ministry of Health or social security institutions but that require a gradual pace to allow for capacity building, evidence-based feedback, and policy reconsideration. Financial reform nevertheless must be formalized through legislation. Without a structural financial reform, a more equitable basis upon which resources are raised, pooled, and directed to different population groups cannot be promoted. The potential for reform depends on whether there is enough fiscal margin to move from a payroll-based to a general tax–based health system. If substantial federal subsidies are to fund the reform, resource flows will be highly dependent on fiscal policies.

In this regard, a major constraint to increased public expenditure is the current low level of fiscal income explained both by a small tax base and by high evasion rates. In 1998 Mexico’s income tax revenue/total tax revenue represented only 4. 7 percent/16 percent of its GDP, as compared with an OECD average of 13. 5 percent/37 percent. 18 Consequently, a major fiscal reform that increased the tax base would be required to make the scheme sustainable in the long run. Political commitment. Unfortunately, health care financing reform is difficult given the current situation of fiscal restraint and fragile new democratic institutions unwilling to upset powerful interest groups and trade unions with clear interests in maintaining the status quo.

Political costs are clear regarding trade unions, since they are not expected to agree to lose independence and autonomy in the face of a unification of financing schemes. Current social security beneficiaries are another group that could see this change as a dilution of its current benefits. Strong efforts to reconcile these competing interests will be required, and the government will need to build a robust consensus among various groups, particularly among potential beneficiaries of the new scheme. However, a clear statement from the current government was made, and both the Ministry of Health and the IMSS are moving to expand health insurance coverage.

Although movement is in the same direction, the long-term convergence of these efforts into a single national fund requires explicit political commitment. This in turn requires deciding whether health insurance should be disentangled from social security or if the ministry’s efforts at providing insurance should later merge with social security. Moreover, it implies that the IMSS and the other social security institutions should integrate in order to unify funds. Otherwise, fragmentation at the funding level will remain. Previous SectionNext Section The political and economic costs associated with these decisions are high, but without a long-term planning horizon on these matters Mexico is unlikely to embark on a sufficiently ambitious reform process.

Any short- or medium-term policies need to be consistent with the desired future for health care financing and its delivery. With pressures rapidly mounting, major changes in the system’s structure will need to be planned and realized sooner than later. Whether these reforms are implemented gradually and incrementally or proceed at a faster pace will, as always, be the outcome of the changing mix of political will, the mobilization of civil society, and chance. OUTSIDE the main hospital in San Cristobal de las Casas, women in traditional multicoloured garb queue up to see a doctor. Many are pregnant or carry infants on their backs. One expectant mother says she fears there will not be a bed for her when she enters labour—all too common in the overcrowded hospital.

Tales of deaths from hypertension, haemorrhage or infection during or after giving birth are common in the second city of the state of Chiapas. In a nearby village, one doctor recalls a woman whose journey took so long that she died on the street outside his clinic. Maternal mortality in Mexico has fallen by 36% since 1990, but it is still higher than in other Latin American countries. The problem is far worse among Indians and in the poorer south. Mothers in Chiapas, Oaxaca and Guerrero states die in childbirth 70% more often than the national average, and indigenous women are three times less likely to survive birth than non-indigenous women. Most of these deaths are preventable. One of the first obstacles for a pregnant woman is transport.

To reach a doctor you need to get a car, a driver, petrol, and someone to take care of the other children. The roads to the nearest town hospital are often slow and dangerous. As a result, many women—including one-third of Indian mothers—give birth without any medical help at all. Another set of problems awaits at the hospital. Laboratory tests and medical supplies are often too costly for the poorest Mexicans. The quality of care is low: 40% of urban maternal deaths are caused by using the wrong medicine, by botched surgery or by other forms of malpractice. Lastly, there are cultural and social difficulties. Many women are scared to go to a male obstetrician, which is frowned upon in areas with a macho, conservative culture.

Those who do may have trouble communicating, since many indigenous women speak poor Spanish. Doctors sometimes make matters worse by denigrating rural patients, discouraging them from seeking medical help. More spending on midwives and contraceptives would help save mothers’ lives. New money is on the way: the Spanish government and the charities of billionaires Bill Gates and Carlos Slim announced plans this month to spend $150m on health care for the poor in Central America and southern Mexico. But the best way to reduce maternal mortality is via investment in infrastructure, health and education—all of which would help the south catch up in general.

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