Background
Latin America is a vast, heterogeneous land, composed of a multitude of cultures and traditions. Nevertheless, a common heritage is sadly persistent: entrenched social and health inequalities. While in 2005 a child in Cuba had a better chance of surviving to age 5 than one living in the United States, a child from Haiti had a worse chance of reaching the same age than one from Namibia [1]. On the other hand, while someone born in 2005 in Costa Rica could expect to live longer than someone born in Denmark that same year, another one born in Bolivia could hardly hope to live as long as someone born in Kazakhstan [1].
Colombia and Brazil, the two most populous countries of South America, face similar struggles within their own borders. Bearing the largest Gini coefficients of the region: 0.564 (Brazil, 2005) vs. 0.5849 (Colombia, 2006), their political leaders decided in the late 1980s and early 1990s to attack some of the underlying causes of those disparities. Many social policies were then instituted. Among them, two of the most profound and far reaching were the reforms of their health care systems. Remarkably, despite the fact that such reforms were initially pursued just 5 years apart from one another, each country ventured in almost opposite directions. While Brazil sought to reestablish a greater level of State control through a public national health system, Colombia embraced the philosophies of employer-based social insurance and market competition.
The present study thus aims to shed some light onto why they pursued different pathways and what that has meant in terms of health outcomes. Some of the questions addressed by this work include: A) How effective have these reforms been in reducing health inequities? B) How do these reforms compare to one another? C) What lessons can be learned from the respective reform processes?
Equity Frameworks
Health inequities have been the subject of a thriving debate in the last few decades, drawing contributions from philosophers, economists, social scientists and physicians alike. Despite the variety of perspectives, they all seem to stem from the empirical observation that while the world is now materially richer than in any other point in known history, thousands continue to suffer and die every day due to preventable and treatable diseases. Furthermore, the widening gap in health status between developed countries and developing countries, as well as between the rich and poor segments of societies within many countries, seems to invoke a sense that something is wrong.
Spurred by such troubling thoughts, several bodies of theories have emerged. Most of them can be grouped into five categories: utilitarian approaches, communitarian theories, egalitarian theories, libertarian (market-based) approaches, and deliberative democratic procedures. Ranging the gamut from consequentialist (concerned with outcomes) to proceduralistic (concerned with the process), each set of approaches has its strengths and weaknesses. In summary, utilitarian theories of health care justice require that resources be allocated in order to maximize net social utility. It is not concerned with individual inequities as long as society as a whole is better off. Communitarian theories express that there are no universal norms of social justice, but rather that those are constructed by each society through a process of social and political evolution. Under this framework, if a given society values other goals higher than health, then it has no overarching responsibility to secure it for its members. Egalitarian theories embed two different approaches: one sees that everyone is entitled to the same level of health achievement while the other believes that everyone is entitle to equal opportunities of achieving good health. While the former has a value preference for the outcomes, the latter values more the means to achieve them. Libertarian perspectives take a more blatant position: society has simply no obligation to address social or health inequalities because any measure to do so would imply redistributive policies that ultimately infringe on individual liberties [2]. Therefore, providing for one's health is an individual responsibility rather than a societal obligation. Deliberative democratic procedures are defended by those who believe that by espousing the principles of autonomy, political equality and due deliberation within an open public process, justice will prevail. However, they offer little guidance over what principles of justice should take precedence over others, if any.
As interesting an exercise as this would be, it is beyond the scope of the present work to further dissect the different ethical perspectives. For the motivated reader who would like to do so, the thorough review presented in the first chapter of "Health and Social Justice" [3] is an enlightening journey. Nevertheless, before we proceed any further, some key issues should be clarified.
First, it is important to distinguish between inequalities and inequities. Are all health inequalities considered inequitable? Not necessarily, unless they can be considered avoidable, unnecessary and unfair[4]. For instance, the observed higher life expectancy for women compared to men in developed countries cannot be construed as inequitable if it is due to intrinsic biologic differences that are beyond the reach of current social or medical interventions to overcome it [5]. Conversely, the observed lower life expectancy for women in many developing countries can be deemed inequitable if is due to social policies that discriminate against women. Such difference is not only inherently unfair, but also avoidable and unnecessary, for if both men and women could equally benefit from societal resources, their life expectancies would tend to be reversed, as seen in the developed world.
Second, although it is widely recognized that social inequities have direct and indirect impacts on health [6], dealing with them alone is unlikely to produce the highest attainable standard of health defined in article 12 of the International Covenant on Economic, Social and Cultural Rights [7]. Moreover, the existence of a universal health care system, based on fair financing mechanisms and quality delivery systems, is seen as an essential tool to tackle the social determinants of health [8].
Third, the false dichotomy pointed out earlier between consequentialist and proceduralistic approaches of justice in health hinders any comprehensive understanding of the complex nature of health equity. Conceptually, health equity is a multifaceted praxis. It includes concerns about achievement of health and the capability to achieve good health [9], not just one or the other. Fortunately, a novel approach has recently emerged as an attempt to bridge this gap: the health capability paradigm. Developed by Jennifer Ruger [10], it draws its core elements from Amartya Sen's capability framework [11] but attempts to further specify it to the health field and provide mechanisms to make it operational.
In essence, the health capability paradigm sees human flourishing - an Aristotelian concept of good life - as the ultimate human goal. In order to achieve it, one needs to be able to enjoy some basic capabilities. Ruger argues that health is one such critical component. Likewise, health capability entails two essential components: health functioning and health agency. Health functioning can be understood as the medical construct of "health" (physical and mental well-being), while health agency can be expressed as the "ability to control personal and professional situations to pursue health." Thus, health capabilities represent an individual's ability to achieve certain health-related functionings and the freedom to achieve them [3].
Universal health insurance is paramount to the health capability paradigm. It requires that the health system ensures access to medically necessary and medically appropriate care. Furthermore, it states that health care resources should be distributed solely on those criteria. As a result, any discrimination based on the ability to pay, gender or ethnicity is unacceptable. Thus, the central ethical aims of universal health insurance coverage are to make and keep people healthy, to develop their health functioning and health agency, as well as enhance their security by protecting them from the physical and economic consequences of ill health. This is not to say that every health intervention must be offered within this perspective. On the contrary, only those that satisfy the above medical criteria, and are of high quality, would be deemed eligible. In addition, when resources are scarce, as it is almost always the case (especially in the developing world), preference should be given to central health capabilities as opposed to non-central ones (e.g. life-saving interventions vs. cosmetic surgical procedures). Besides, the design of any package of benefits should be sought through a scientific and deliberative process that includes individuals, physicians and public health experts in an attempt to reach a reasoned consensus. Such deliberations will facilitate the development of health policy within an institutional arrangement of shared health governance, a modus operandi in which individuals, providers and institutions work together to empower individuals and create an environment enabling all to be healthy [3].
Finally, given the breath of possible approaches inherent in the application of the health capability paradigm to the analysis of any national health policy, it would be unfeasible to address all of them simultaneously. Therefore, it is important to underline that the present work is limited to the evaluation of the achievement of certain health functionings, namely: infant mortality rate, under-five mortality rate, crude mortality rate and life expectancy. These are intended as proxies of central health capabilities concerned with avoiding premature death. Accordingly, intergroup and inter-country differences in those parameters signal underlying health inequities that are not being addressed appropriately.
Health Care Reform in Brazil
Pre-Reform Situation
Established under military rule (1964-1985), the old health care system in Brazil was characterized by a clear separation of functions between classical Public Health interventions (e.g. vaccination and disease surveillance), under the responsibility of the Ministry of Health, and individual care, which was regulated by the Ministry of Social Security. Whereas the Ministry of Health (MS, in Portuguese) saw a decline of its resources from 4.57% of the federal budget in 1961 to 1.38% in 1980, the Ministry of Social Security (MPAS, in Portuguese) gained ground, funded by compulsory social contributions of 8% of wages of formal sector employees. As a result, it accounted for more than 90% of all hospitalizations and outpatient consultations by 1975.
Despite its role as the core of the social insurance model, the delivery of care was, for the most part, left to private providers. In fact, the Constitution of 1967 determined that the State had to support the private sector, and that public provision could only be performed to supplement the role of private providers. Consequently, by the late 1970s, the health care arm of the National Institute of Social Security (INPS, in Portuguese) had contracted out with 2,300 of the 2,800 hospitals then established in Brazil [12]. Notwithstanding its increased reach of the urban masses, the system soon started to fall apart. Dismayed by low reimbursement rates and payment delays, private providers began in some cases reneging contracts with INPS, or gaming the system by either conducting unnecessary procedures that were better paid or up coding them. Fraud became the norm rather than the exception. Meanwhile, in the Public Health arena, malaria continued to scourge the Amazon region and several epidemic episodes of dengue and meningitis (in 1971 and 1974) swept the country, demonstrating the severe budgetary and technical shortfalls in the Ministry of Health. All of this was coupled with the persecution of any media enterprise that dared bring such news to the general public.
Alleging better management practices and modern facilities, private insurers thus emerged as substitutes of INPS in the formal labor market, filling the vacuum left by the crumbling public services. Many of those companies were vertically integrated, similarly to Health Maintenance Organizations (HMOs) in the United States. Not surprisingly, such developments were accompanied by an increased participation of foreign capital, both in the insurance and provision markets of the Brazilian health sector.
In opposition to the forces of privatization, an amalgam of social groups united behind a coalition commonly referred to as the Sanitary Reform Movement (SRM). Born out in the Departments of Preventive Medicine of Faculties of Medicine, most of which hosted by public universities, the SRM had a strong commitment to democratization, decentralization and de-medicalization (i.e. promotion of community-based primary care and opening of clinical practice to health care providers other than physicians). Supported by the Brazilian Catholic Church, academic institutions and popular social movements [13], its greatest challenge was to convince the middle and lower classes that a different approach was possible. To that end, several pilot projects were developed across the country as demonstrations of how the public provision of health care services could be better than what was being offered by INPS and the private sector.
Foundations of the Reform
Greatly influenced by Marxist theory and Foucault's social critique, the Sanitary Movement sought to establish a new model for the Brazilian health care system, which was closely related to the perspective of Social Medicine in vogue in Europe at that time, but adapted to the complex social and political realities faced in Brazil [13]. As such, it was fiercely egalitarian, supporting nothing but the full recognition by the State that health was a universal social right and that it must be provided equitably [14]. It also incorporated communitarian notions of local decision-making and resource allocation, thus the emphasis in decentralization. Moreover, it saw itself as a civil movement whose ultimate goal was to promote social justice and move beyond representational democracy into direct popular participation in policymaking.
Considering the disquieting centralist legacy of the military years and the growing dissatisfaction with the quality of care delivered by INPS and private providers, the SRM was able to build a broad coalition into the debates that eventually culminated in the National Constitutional Assembly of 1987-1988. Conversely, the struggle to create a publicly-funded national health system faced many opponents that thrived in the previous state of affairs. When competing interests within the coalition threatened its collapse [15], a compromise was forged with libertarian forces: a new public Unified Health System (SUS, in Portuguese) was to be created integrating all the public provision and regulation of health care under the auspices of the Ministry of Health. In exchange, the private system would not only continue to exist, but wealthy individuals would be able to deduct a large portion of their premiums and other private health care expenditures from their federal income tax.
Legal Framing
After more than two decades of dictatorship, the democratic Brazilian Constitutional Assembly finally defined health as a right in the National Constitution of 1988. According to Article 196: "health is a right of all [citizens] and a duty of the State, guaranteed by social and economic policies aimed at reducing the risk of disease and providing universal and egalitarian access to actions and services for its promotion, protection and recovery" (author's translation). Article 198 defined that health care was to be provided by a hierarchical, regionalized network of services that would constitute the Unified Health System. Its main principles would be decentralization, integral care and community participation [16]. Conversely, the Constitution did not specify how this right would be made operational. For instance, it did not make it clear how it would be financed, how it would be organized and managed, or what would be the duties and responsibilities of the different federative entities (Union, States and Municipalities).
Thus, a series of federal laws and ordinances were enacted in the following years to clarify those issues. Federal Law 8080 of 1990 defined as attributions of SUS: the delivery of preventive and curative services (including the provision of pharmaceutical drugs), the epidemiologic and sanitary surveillance, as well as the regulation of the entire health care system. It created the National Health Fund, from which all federal transfers to States and Municipalities would be made. It also regulated the participation of private providers within SUS and forbid foreign capital from participating in the domestic health care market. Federal Law 8142 of 1990 created the framework for social participation within SUS, by creating health councils in each sphere of government and mandating that half of its composition be assigned to patient representatives. The Basic Operational Norm of 1996 (NOB/1996) and the Operational Norm of Health Assistance of 2001 (NOAS/2001) specified the duties and responsibilities of each federative entity and how they would relate to one another. They also established the mechanisms of the intergovernmental transfer of resources and the conditions that States and Municipalities must meet in order to receive those funds.
In 2000, Constitutional Amendment 29 attempted to increase the level of public health expenditures by mandating minimal budgetary floors for Federal, State and Municipal health budgets. While State governments were required to assign 12% of their income to SUS, Municipal governments were required to assign 15%. Meanwhile, the Federal government was required to yearly increase their health budget by the nominal variation of the Gross Domestic Product (GDP). Nevertheless, the Amendment had a major shortcoming. It did not define what could be considered as health expenditure. As a result, several state and local governments included in their health budgets expenses that were previously assigned elsewhere (e.g. food stamps and health care for prisoners) in order to meet the new constitutional requirements, instead of incrementing Public Health activities or improving the delivery of care.
Health System Design
The health system in Brazil is mixed and segmented into two subsystems: one public and one private, with separate financing streams. The public subsystem has two segments: one provides free universal access (all citizens have the right), fully financed by public resources (general taxes and compulsory payroll taxes), called the Unified Health System (Sistema Único de Saúde - SUS, in Portuguese); the other is restricted to public employees (mainly military and high ranking civil servants), and it is financed by a traditional social insurance model based on contributions from public employees and the federal government.
The provision of services in SUS is usually carried out by public providers under the control of State or Municipal Health Departments, although it is possible to contract out to private providers. When doing so, laws give clear preference to other public non-governmental entities (e.g. universities) and not-for-profit Non-Governmental Organizations (NGOs). Alternatively, for-profit providers face severe restrictions to provide care under SUS. Another important aspect of current regulations is that regardless of who delivers the services, Health Departments are deemed co-responsible, and therefore liable, for any malpractice by contractors.
The private subsystem is also comprised of two segments, both of which benefit from some form of fiscal incentive: the first is known as the supplementary system and encompasses several modalities of health insurance. Participation is voluntary, and it is financed either with resources from employers and employees (the rates of contribution are freely negotiated between the parties) or exclusively by individual families. The second segment offers direct access to private providers through out-of-pocket payments [17]. It is worth noting that the population covered by the private subsystem also benefits from the public network through public health activities (e.g. vaccination campaigns), and some also use it for more complex or costly procedures not covered by their private health insurance policies.
Since 1999, individual health insurance policies are overseen by the National Agency for Supplementary Health (ANS, in Portuguese), which has standardized three types of benefit packages that insurance companies can offer. The first covers just outpatient care, the second inpatient care and emergency services, and the third covers all of the above. Each package has a required set of diagnostic and therapeutic procedures that have to be covered. Insurance companies are free to define their providers' network and pricing policies, but are forbidden from excluding anyone on the basis of pre-existing conditions (i.e. cream-skimming). They can, however, deny care for pre-existing conditions for up to two-years. Furthermore, every year they must request an authorization from ANS for any increase in premiums. The main caveat of this legislation is that group insurance policies (i.e. those directly negotiated by employers on behalf of their employees) are exempt from most of those requirements, resulting in much greater diversity of coverage.
Health Care Reform in Colombia
Pre-Reform Situation
The old health care system in Colombia was a three-tiered system, comprised of a public sector, a social insurance sector and private insurance. The Public Sector was publicly provided within the National Health System (SNS, in Spanish) and financed through general taxes. It developed considerably between 1975 and 1984, when it experienced a large increase in the number of hospitals, health care centers and personnel. However, the fiscal crisis of 1982 reduced public health care expenditures from 8% of the national budget to less than 4% on subsequent years [18]. Besides being underfunded, the distribution of those scarce resources was based on historical averages and political pressures, thus favoring the developed regions of the country. In terms of coverage, it targeted those who did not participate in the formal labor market and could not afford to purchase private insurance [19]. It effectively reached 27% of the population with an additional 28% covered only partially, exhibiting significant regional differences [18].
The social insurance sector provided coverage to 15% of the population through the Colombian Social Security Institute (ICSS, in Spanish), for those employed by the formal private sector, and the Public Provision Funds (CPP, in Spanish) for the majority of civil servants. This was one of the lowest rates in Latin America and the rate of tax evasion in these segments was fairly high, as only 50% of those required to contribute to the system actually did so [19]. In addition, the armed forces and some public employees (e.g. public school teachers and employees of the state oil company), comprising 5% of the population, had their own social insurance schemes and network of providers. Finally, only 10% of the Colombian population could afford private health care. The rest of the population, about 15%, had no access to acceptable health services [18].
Foundations of the Reform
Colombia's health care reform was as much a product of international influence by actors such as the World Bank and the Pan American Health Organization as it was part of a modernizing agenda brought by the national executive branch. Designed and implement by an external "change team" [20] harbored at the Ministry of Social Protection (MSP), which incorporated the former Ministry of Health. This change team was composed mostly by academic economists, many of which had had training abroad. Their ideological stand closely followed modernization theories promoted by the World Bank and in vogue at that time, such as changing the role of the State in the social sector from provider of services to regulator; promoting the role of the private sector; increasing efficiency, and using mechanisms other than those historically used in the delivery of social services, such as targeting and demand subsidies [20]. By redesigning the health sector, it sought to overcome the policies of the previous decades, which, as mentioned above, had built a fragmented three-tiered system resulting in constrained access to health services for a large proportion of the population, operational inefficiencies at all levels of care, and poor service quality [21].
Legal Framing
The decentralization of the public health sector started with Decree 77 of 1987 and Law 10 of 1990. In 1993 it was further emphasized by Law 60 and culminated with the reform of the entire Social Security System of Colombia enacted by Law 100. The latter were greatly influenced by the Constitutional Reform of 1991, which strongly promoted the decentralization of public services to sub national levels and ended governmental monopoly over public services, including health care [22].
Law 100 changed the organization, financing and delivery of Colombia's health care system, mandated the creation of a new system for the financing and delivery of health care, allocating public funds directly to individuals instead of institutions [21], thereby changing classic social policy from supply-side to demand-side subsidies. It also established the legal basis for separating the delivery of services from the financing mechanism by mandating the separation of public hospitals from the administrative apparatus of local governments and their conversion into semi-public entities referred to as State Social Enterprises (ESEs, in Spanish), allegedly to grant them the financial and managerial autonomy necessary to prepare for competition with the private sector under the new health insurance scheme [21].
Health System Design
Law 100 models individual health care services differently from traditional Public Health functions. Whereas the latter are seen as public goods and as such to be funded by public funds, the former are seen as goods with intrinsic individual value, for which consumers would be willing to pay. As such, individual health care services were reorganized as to become part of a National Health Insurance (NHI) scheme under a market-driven framework, which incorporated principles of managed competition [23].
The most important mechanisms of managed competition introduced in Colombia health care model were: 1) the mandate that all workers in the formal sector participate of NHI; 2) the existence of one single collecting fund to each all resources flow to, called the National Fund of Security and Guarantees (FOSYGA, in Spanish); 3) the establishment of a new payment mechanism to insurers, through a risk-adjusted capitation system; and 4) the definition of a standardized package of benefits to be offered to all insurance beneficiaries, called the Mandatory Health Plan (POS, in Spanish) [23].
Alleging resource constraints, the NHI was in effect designed as a two-tiered system, composed of the Contributory Regime (CR) and the Subsidized Regime (SR). The CR included all formal sector employees or independent workers with ability to pay who were already enrolled in some form of either private or public insurance, extending coverage to their families. Formal workers were set to contribute an equivalent to 12% of their salary, of which 4% was to be paid by the employee and 8% by the employer. Independent workers would pay the full 12% starting from a floor of 2 minimum wages. The SR targeted the poor and indigent population by providing subsidies to the insurance premium from specific public resources and contributions from the CR. For instance, a percentage point from payroll taxes was to be channeled to the SR. Tax revenues from several sources and social investment transfers to municipalities were also to be earmarked for health. Among these were new resources from oil revenues and matching funds by the national government to FOSYGA, the solidarity fund [21].
As resources became available, expansion in insurance coverage for the population eligible for subsidies would be accompanied by gradual additions to the benefits package. It was expected that both regimes would have identical coverage of benefits by 2000, so that a single universal health insurance system could be implemented throughout the nation [21]. However, by 2002 the SR beneficiaries were entitled to only 70% (or less, depending on where they lived) of the standard benefits package enjoyed by CR enrollees [23].
The delivery of services was to be carried out by both public and private providers, which would compete among themselves under the watchful eyes of regulatory authorities. Nevertheless, due to funding constraints and cumbersome administrative structures, public hospitals have lost the upper hand to private providers. Consequently, 14 years later, most of the provision of health care services in Colombia has been de facto privatized.
