Financing Health and Social Protection in
Latin America and the Caribbean:
Organization, Financing and Sustainability of
Social Health Insurance Systems in LAC
Daniel Titelman
Health for All: Can it be financed?
“Fiscal Space and the Financing of Universal Health Care
Systems in the Americas: Issues and Policies”
PAHO/WHO, IDB, RES
29 - 30 November 2007, Washington DC
Outline
• Health subsystems integration and
financing sources
• Perspectives of increase contributory
financing
• Non contributive expenditure
• A necessary discussion on tax burden and
public expenditure efficiency
Health sector is characterized by
 Segmentation between the public, social-security and
private systems:
• Different sources of financing
• Inefficiency, duplications, waste of resource
• Different social contracts and a differentiated perception of
health rights, all of which goes against social cohesion: diverse
basic packages, contributive and non contributive rights.
• Weak public-private coordination in the provision leads to
wrong use of the overall installed capacity
 Moving towards universalization requires more subsystem
integration: different experiences in the region
Latin America: Total public health expenditure by source, 2004
(Percentages)
100%
90%
80%
70%
100.0
100.0
60%
100.0
50%
40%
85.8
83.8
77.2
73.7
66.7
30%
62.6
60.8
58.3
58.0
52.1
50.6
50.1
43.2
20%
40.4
34.7
32.7
10%
9.4
Public expenditure
Source: Core Health Indicators, WHO, 2007
P
ua eru
te
m
a
Pa la
na
Ar ma
ge
n
C tina
ol
om
bi
a
Bo
liv
i
M a
C exic
os
ta o
R
ic
a
G
C
ub
a
Br
az
il
H
D Ho aiti
om nd
u
in
ic ras
an
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ne .
z
N uel
ic
a
ar
ag
ua
C
Pa hile
ra
gu
Ec ay
ua
El
d
Sa or
lv
ad
o
U
ru r
gu
ay
0%
Social security
Different ways of integrating subsystems
depends on history and fiscal stand
Type 1
Public financing expenditure is basically non
contributive: Brazil, Cuba and English Caribbean
Type 2
Different explicit ways of integrationon between public
and social security: Costa Rica, Chile, Colombia, R.
Dom.
Type 3
Systems with low articulation between public and
social securitu: Argentina, Bolivia, Ecuador, El
Salvador, Guatemala, Honduras, Mexico, Nicaragua,
Panama, Paraguay, Peru, Uruguay
Source: Economic Commission for Latin America and the Caribbean (ECLAC)
Latin America: Total health expenditure by source, 2004
(Percentages)
100%
90%
80%
70%
60%
50%
87.8
86.0
77.0
40%
66.9
30%
60.7
54.9
54.1
47.1
47.0
20%
46.9
46.4
45.3
44.4
43.5
42.0
41.0
40.7
38.5
33.7
31.6
10%
C
C uba
ol
om
C
os bia
ta
R
i
Pa ca
na
m
Bo a
l
H ivia
on
du
ra
s
Br
az
N
ic
ar il
ag
ua
C
hi
le
Pe
r
M u
ex
Ar ico
g
El ent
Sa ina
lv
ad
U or
ru
Ve gua
ne y
G zue
ua
l
te a
m
Ec ala
ua
do
r
H
Pa a i
ra ti
D
om gu
in ay
ic
an
R
.
0%
General government
Private prepaid plans
Source: Core Health Indicators, WHO, 2007
Out-of-pocket
Other private
Outline
• Health subsystems integration and
financing sources
• Perspectives of increase contributory
financing
• Non contributive expenditure
• A necessary discussion on tax burden and
public expenditure efficiency
Latin America and the Caribbean:
Social security coverage, total employed population
(Percentage paying contributions, ca. 2004)
Argentina (2005)
Bolivia (2004)
Brazil (2005)
Chile (2003)
Costa Rica (2005)
Ecuador (2005)
El Salvador (2004)
Guatemala (2004)
Mexico (2005)
Nicaragua (2001)
Panama (2005)
Paraguay (2005)
Peru (2003)
Dominican R. (2005)
Uruguay (2005)
Venezuela (2005)
Simple average
a
Nationala
Total-urban areas Total-rural areas
…
44.2
…
14.5
19.2
4.6
47.8
56.1
17.4
64.9
67.0
48.8
65.3
67.7
60.5
…
32.2
…
32.9
38.4
14.5
17.8
28.0
8.5
55.1
60.1
30.8
18.3
25.1
7.6
53.8
57.7
29.3
13.5
20.6
5.0
13.0
20.1
2.6
44.7
34.7
32.7
…
62.1
…
61.5
60.5
…
38.7
43.4
21.9
Source: Economic Commission for Latin America and the Caribbean (ECLAC)
a Figures from previous round of household surveys.
Latin America and the Caribbean:
Social security coverage, only urban wage-based
(Percentage paying contributions, ca. 2004)
Total
Formal sector Informal sector With contract Without contract
Argentina (2005)
62.5
74.4
23.0
71.6
12.5
Bolivia (2004)
28.3
45.8
4.5
65.8
8.9
Brazil (2005)
71.5
76.2
35.3
100.0
33.4
Chile (2003)
82.9
88.5
54.7
96.4
32.0
Costa Rica (2005)
80.4
90.4
40.4
…
…
Ecuador (2005)
46.4
60.8
14.8
76.8
16.0
El Salvador (2004)
58.9
78.2
6.8
92.4
47.1
Guatemala (2004)
48.7
66.0
7.6
79.6
27.1
Mexico (2005)
62.5
76.2
20.1
84.1
23.8
Nicaragua (2001)
41.0
58.4
6.4
…
…
Panama (2005)
76.3
86.3
25.9
87.7
14.9
Paraguay (2005)
32.3
52.1
4.1
65.9
4.5
Peru (2003)
35.2
38.5
2.4
…
…
Dominican R. (2005)
58.7
70.0
7.2
85.5
42.8
Uruguay (2005)
77.3
88.9
44.9
…
…
Venezuela (2005)
Simple average
61.7
57.8
73.4
70.3
15.8
19.6
…
82.3
…
23.9
Source: Economic Commission for Latin America and the Caribbean (ECLAC)
Latin America and the Caribbean: Employed persons’ social
security contributions, by household income quintile (ca. 2002)
Argentina (2002, urban)
Bolivia (2002)
Brazil (2001)
Chile (2003)
Costa Rica (2002)
Ecuador (2002, urbana)
El Salvador (2001)
Guatemala (2002)
Mexico (2002)
Nicaragua (2001)
Panama (2002)
Paraguay (2000)
Peru (2001)
Dominican Rep. (2002)
Uruguay (2002, urbana)
Venezuela (2002)
Q1
Q2
Q3
Q4
Q5
Q5/Q1
15.2
3.2
20.1
50.3
49.6
11.1
11.5
4.7
28.9
6.4
22.3
3.1
2.0
34.9
25.6
36.9
38.3
6.3
36.1
60.0
58.2
18.8
16.8
15.0
46.9
12.0
42.7
5.7
5.7
40.7
48.1
51.9
57.7
10.3
47.2
64.5
63.7
25.1
29.5
17.1
51.8
13.5
54.8
11.2
10.1
37.5
62.7
59.7
66.4
16.2
55.6
68.1
66.2
33.7
36.1
23.3
64.2
23.5
61.0
17.2
15.7
47.6
75.9
68.1
76.1
30.3
63.5
71.4
75.1
54.5
52.9
24.0
73.4
26.9
67.0
22.7
24.9
51.6
85.3
78.9
5.0
9.5
3.2
1.4
1.5
4.9
4.6
5.1
2.5
4.2
3.0
7.3
12.5
1.5
3.3
2.1
Source: Economic Commission for Latin America and the Caribbean (ECLAC)
Latin America and the Caribbean: Social
security contributors
(Percentage of the working-age population, by age and sex)
Source: Economic Commission for Latin America and the Caribbean (ECLAC)
Outline
• Health subsystems integration and
financing sources
• Perspectives of increase contributory
financing
• Non contributive expenditure
• A necessary discussion on tax burden and
public expenditure efficiency
LAC (21 countries): Public social spending, as a
percentage of GDP, 1990-1991 to 2004-2005
35
30
28,7
Regional average
2004-2005: 15,9%
2002-2003: 15,8%
2000-2001: 15,7%
25
22,0
19,4
20
18,6
17,7 17,5
15
Regional average 1990-1991: 12,8%
13,4 13,1
11,7 11,6 10,8
10,2
10
9,9
9,4
8,9
8,0
7,9
7,1
6,3
6,3
5,6
5
2002-2003
2004-2005
Source: ECLAC, on the basis of information from the Commission’s social expenditure database.
El Salvador
Ecuador
Guatemala
Dominican Rep.
Paraguay
Panama
Peru
Jamaica
Mexico
Nicaragua
Honduras
Venezuela
Chile
Colombia
2000-2001
Trinidad and Tabago
1990-1991
Costa Rica
Uruguay
Bolivia
Argentina
Brazil
Cuba
0
Latin America and the Caribbean (21 countries): Public
social expenditure as a percentage of GDP, by sectors,
1990-1991 to 2004-2005a
Source: ECLAC, on the basis of information from the Commission’s social expenditure database.
a Weighted average of countries, not including Nicaragua.
b The information available is such that the two headings cannot be separated. According to national studies,
social security represents around 78% of the resources under this double heading.
Latin America (18 countries): Redistributive impact of public
social spending on income, by primary income quintiles,
1997-2004a
(Percentages)
(Total income of quintile V = 100)
100
9%
Social spending
Primary income
90
Percentages
80
70
60
91%
50
40
16%
30
22%
20
30%
10
0
51%
49%
70%
Quintile I
Quintile II
84%
78%
Quintile III
Quintile IV
Quintile V
Source: ECLAC, on the basis of national studies.
a Weighted average according to the significance of each spending item in each country’s primary income.
Latin America (18 countries): Composition of spending,
by primary income distribution quintiles, 1997-2004a
(Percentages)
(Total social spending = 100)
30.0
1.1
0.9
Percentages
25.0
20.0
15.0
10.0
5.0
3.3
0.8
2.0
1.3
1.4
16.5
2.1
0.9
2.8
1.6
1.1
4.3
6.3
4.7
4.2
4.0
3.7
7.4
6.5
6.3
5.9
5.8
Quintile I
Quintile II
Quintile III
Quintile IV
Quintile V
5.1
0.0
Education
Health
Social security
Housing
Social assistance
Source: ECLAC, on the basis of national studies.
a Weighted average according to the significance of each spending item in each country’s primary income.
Outline
• Health subsystems integration and
financing sources
• Perspectives of increase contributory
financing
• Non contributive expenditure
• A necessary discussion on tax burden
and public expenditure efficiency
Social security as a share of tax revenues,
1990 and 2006
(Percentages)
50
REGIONAL AVERAGE 1990:
16,2%
40
REGIONAL AVERAGE
2006: 15,7%
REGIONAL AVERAGE 1998:
16,3%
30
20
10
ue
la
ne
z
ay
Ve
ru
gu
n
ica
in
U
R
.
u
Pe
r
om
ay
ra
gu
a
Source: Economic Commission for Latin America and the Caribbean (ECLAC)
Pa
ra
ica
Pa
na
m
gu
a
ico
ex
N
2006
D
1998
M
on
d
ur
a
s
al
a
H
te
m
do
r
1990
G
ua
lva
r
Sa
El
a
os
t
C
Ec
ua
do
a
Ri
c
bi
a
m
ol
o
C
il
az
Br
ia
liv
Bo
hi
le
C
Ar
ge
nt
in
a
0
Per capita GDP and tax revenues
as a share of GDP, 2003
(2000 dollars)
Source: Economic Commission for Latin America and the Caribbean (ECLAC)
Latin America and the Caribbean:
The tax burden, 1990-2006
(Percentages of GDP)
40
35
REGIONAL AVERAGE 1990:
12,4%
30
REGIONAL AVERAGE 2006:
18,3%
REGIONAL AVERAGE 1998:
15,7%
25
20
15
10
5
0
a
in
nt
e
g
Ar
l iv
Bo
ia
il
az
r
B
C
le
hi
C
a
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m
o
ol
C
ta
os
R
a
ic
r
r
a
al
do
do
a
a
m
v
u
e
l
t
Ec
Sa
ua
G
El
1990
H
ti
ai
H
as
ur
d
on
1998
o
ic
ex
M
N
a
gu
ra
a
ic
2006
Source: Economic Commission for Latin America and the Caribbean (ECLAC)
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Financing Health and Social Protection in
Latin America and the Caribbean:
Organization, Financing and Sustainability of
Social Health Insurance Systems in LAC
Daniel Titelman
Health for All: Can it be financed?
“Fiscal Space and the Financing of Universal Health Care
Systems in the Americas: Issues and Policies”
PAHO/WHO, IDB, RES
29 - 30 November 2007, Washington DC