The Chilean private health sector grew in the 1980s. This led to inequalities in the provision of health. Current policies aim to eradicate this problem by strengthening the public health sector. But is this enough? Can this new model of provision address Chile’s health needs? Can it become a successful model for other Latin American countries?

Research carried out by the Institute for Development Policy and Management (IDPM) has found that each socio-economic class in Latin America contributes differently to their countries' health system. Each class also receives different standards of service. This results from long-standing patterns of social exclusion and reflects social and economic inequality. Chile possesses both these characteristics.

In the 1980s, the Chilean government reduced contributions to the public health sector as a way to deal with the economic crisis. As a result, the private sector grew, covering mainly the wealthiest and healthiest groups of the population. The consequence of the reduction in government funding was the deterioration of healthcare provision and an increase in the inequalities of access to health services.

Since the return of democracy in 1990, individual governments have committed themselves to reducing health inequalities by restoring the size and importance of the public healthcare sector. The emphasis is now on extending the access to services to all on the basis of need. This has been achieved through increased funding and modernisation of the service. The research found that:

• In the 1990s, the Chilean public sector has become stronger and better able to compete with private health provision. As a result, the private sector currently only covers 20 per cent of the population from a peak of 26 per cent in 1996.
• There is an increasing public recognition that access to public health services and the quality of provision have improved in the 1990s.
• The government’s latest initiative proposes to cover the cost of providing healthcare for the poor and for those without any form of insurance.
• The problem of public health sector subsidies to the private health sector remains. Two thirds of all health insurance contributions still support services for the better off.

The research argues that this model can address healthcare problems in Chile and become successful in Latin America. It recommends that:

• strengthening the public healthcare sector is the key to addressing the health care challenges facing Chile and Latin America
• the health system needs a radical reform of its funding in order to achieve this objective
• a strong public healthcare sector can help reduce inequalities in health provision and can help make health care available to all
• it is necessary to integrate public and private healthcare in a way that they complement each other, rather than compete.

Source(s):
'Health insurance reforms in Latin America: cream-skimming, equity and cost-containment', Social policy reform and market governance in Latin America, by A. Barrientos and P. Lloyd-Sherlock, 2002
Related sources ‘Getting better after neoliberalism – shifts and challenges of health policy in Chile’, Health care reform and poverty in Latin America, 94-111, by A. Barrientos, 2000
'Reforming health insurance in Argentina and Chile', Health policy and planning, 15, (4): 417-423, A. Barrientos and P. Lloyd-Sherlock, 2000

id21 Research Highlight: 17 December 2002

Further Information:
Armando Barrientos
IDPM
University of Manchester
Oxford Road
Manchester M13 9PL

Tel: +44 (0) 161 275 2811
Contact the contributor: armando.barrientos@man.ac.uk

Institute for Development Policy and Management, University of Manchester, UK

Other related links:
See id21's collection of links relevant to health systems and economics.