Research Article: Chile’s Neoliberal Health Reform: An Assessment and a Critique

Date Published: April 1, 2008

Publisher: Public Library of Science

Author(s): Jean-Pierre Unger, Pierre De Paepe, Giorgio Solimano Cantuarias, Oscar Arteaga Herrera

Abstract: In spite of serious under-financing during the Pinochet years, Chile’s public health system remains the backbone of health provision, responsible for the impressive public health status.

Partial Text: The Chilean health system has been studied extensively [1]. Its current form is the result of a major reform undertaken by the Pinochet government following the coup d’état in 1973. Pinochet’s reform established competition between public and private health insurers and promoted private health services, following neoliberal principles. Neoliberalism is an economic and political movement that gained consensus in the 1980s among international organisations like the International Monetary Fund and the World Bank. This movement demands reforms such as free trade, privatisation of previously public-owned enterprises, goods, and services, undistorted market prices, and limited government intervention. After the publication of the World Bank’s 1993 report, “Investing in Health” [2], Chile became a model for neoliberal reforms to health services.

Chile has been a social laboratory, having experienced democratic liberalism (1958–1964), Christian Democratic reformism (1964–1970), democratic socialism (1970–1973), neoliberal authoritarianism (1973–1989), and three democratic coalition governments from 1990 to the present (see Glossary for definitions) [3]. The neoliberal reforms were not limited to the health system, but were also made to the pension system, in education, and through the privatisation of state industries. Many of the changes in the health system were later conceptualised in World Bank–supported documents [4].

Here the evidence is clearer. ISAPRES has hardly contained costs, and the ISAPRES companies never intended to do so: they have few incentives to be efficient buyers of health services for their clients. Instead, they work hard to be efficient in the selection of their clients (they are allowed to refuse clients). Their focus is on low-risk, high-income patients, with the goal of making a profit. They spend ten times as much on administration per member [9] and about two times as much on health care per member than FONASA (Figure 3), even though ISAPRES members are in better health and need less care [4]. To deliver care, ISAPRES companies rely on a burgeoning private sector, reimbursed on a fee-for-service basis, which induces an increased supply of unnecessary but profitable services.

Chile’s health indicators are good, compared with countries with a similar gross national product, such as Colombia and Argentina. These results are due in part to Chile’s high economic growth rate and a spectacular reduction in poverty [12,28,32]. Further significant factors are the high proportion of the population with access to drinking water and sanitation, and the high adult literacy rate and education level. But relatively equitable access to health care, mainly through public health insurance and public health services, which cover 80% of the population, played a major role in this achievement, as did maternity and child health protection programmes implemented through the public health network.



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