Health sector reforms and crisis in Argentina

During the 1990s, Argentina carried out wide-ranging health sector reforms. In 2001, the country plunged into economic and political turmoil. The capacity of the health sector to withstand this crisis is a useful test of the reforms, with lessons for countries undertaking similar changes.

Analysis by the University of East Anglia shows that Argentina applied many common elements of health sector reforms (HSRs), including:

• separation of provision and financing
• greater participation of non-state players
• more reliance on market forces
• decentralisation
• reform of social insurance funds.

Research globally has cast doubt on the effectiveness of some of these components. The paper looks at their impact in Argentina, especially following the recent crisis, and concludes that HSR advocates such as the World Bank could learn from this experience.

Argentina’s health system consists of the public sector, social insurance funds and private health care. In the early 1990s, health indicators were poor despite relatively high spending levels. There was a breakdown in the functioning of the health system and its institutions, weak or non-existent regulation and a structure strongly biased towards curative care.

The HSR was applied at the same time as wider neo-liberal economic and social reforms. Strategies in the health sector included:

• Introducing competition into the health insurance sector, whilst cutting employer contributions to social insurance funds and insisting on a minimum package of services.
• Promoting the self-management of public hospitals, whilst trying to improve management capacity and culture, increase local participation and recover costs.
• Cutting staff, reducing services, restructuring contracts and improving internal controls and regulation at PAMI, the health insurance fund for pensioners.

The reforms aimed for radical change and claimed to be a strategy for improving the performance of the whole health sector. But the impact was fairly superficial, increasing the overall fragmentation and complexity of the health sector while failing to improve regulation or accountability.

The research suggests that the Ministry of Finance and World Bank made assumptions about market mechanisms, which did not consider problems like regulation and corruption. Reforms that did not contribute to the wider neo-liberal project were not implemented as rigorously as those which did. The HSR viewed the health sector in terms of separate components, overlooking cross-cutting problems.

By early 2002, following economic and political crisis, the health system faced virtual collapse, and effects on public health are predicted to be severe. Many aspects of the HSR in the 1990s conformed closely to reforms being implemented in other countries. But since 2001 the country has provided a less orthodox example. Positive lessons for other countries include efforts to rectify aspects of previous policy, by:

• restoring insurance contribution rates to levels reflecting resource needs
• restricting insurers attempts to select the most favourable individuals with expected losses below the premium charged in order to increase profits
• trying to control and monitor drug use and reduce the curative bias in services.

Source(s):
‘Health sector reform in Argentina: a cautionary tale’, Social Science & Medicine 60: 1893-1903, by P. Lloyd-Sherlock, 2005
HINARI subscribers can access the full-text article here. Full document.

id21 Research Highlight: 20 October 2005

Further Information:
Peter Lloyd-Sherlock
School of Development Studies
University of East Anglia
Norwich
Norfolk
NR4 7TJ
UK

Tel: +44 (0) 1603 59 2327
Fax: +44 (0) 1603 45 1999
Contact the contributor: p.lloyd-sherlock@uea.ac.uk

University of East Anglia, UK

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