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 R Ve ep 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 bi 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) a am n Pa ay gu a r Pa ru Pe D an ic in om R . U ay gu u r a el zu e n Ve 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