4 GENERAL BACKGROUND Chile is a Democratic Republic. Administrative and politically divided in 13 regions, 51 provinces and 341 districts. The President is the head of the country. In each region the Governor, named by the President, is the head of the executive. The Mayor, elected by the people, is the head of each district. Congress is composed by 38 senators and 120 representatives.
5 GENERAL BACKGROUND Area Continental756.950 sq km Population15.773.621 Annual population growth1.3% Adult Literacy Rate 96% Urban Population86.6% Number of Household 4.141.427 Population in Metropolitan Region 40,1%
6 2005 2005 GDP (MMUS$) 109.992 GDP per capita US$* 6.051 SAVING (% GDP) 24.6 % ANNUAL GROUTH 6.3% EXCHANGE RATE (1 US$) 520 * Per capita in Purchasing Power Parity 11.161 ECONOMIC OVERVIEW
25 THE SOCIAL SECURITY REFORM OF 1981 INCLUDED THREE ESENTIAL ASPECTS WITHIN A WIDER ECONOMIC REFORM: LABOR, PENSION FUNDS AND HEALTH REFORM.
26 LABOR REFORM The Labor Reform eliminated the differences between white and blue collar workers, giving all of them the same treatment and access to the health system. The Labor Reform eliminated the differences between white and blue collar workers, giving all of them the same treatment and access to the health system.
27 PENSION FUNDS Since 1981 the pensions are paid from individual savings accounts accumulated by the workers during their labour life. The mandatory deduction is 10% of the wages and are administered by private enterprises called AFP. Since 1981 the pensions are paid from individual savings accounts accumulated by the workers during their labour life. The mandatory deduction is 10% of the wages and are administered by private enterprises called AFP. At 2004 the accumulated funds were MMUS$ 60.798, a 65% of annual GDP.
28 HEALTH REFORM A compulsory contribution was established ( 7% of wages), to help the financing of health expenditures. This contribution represents the premium with which the worker must buy health insurance either from the NHS (Fonasa) or private health insurance companies (Isapre). A compulsory contribution was established ( 7% of wages), to help the financing of health expenditures. This contribution represents the premium with which the worker must buy health insurance either from the NHS (Fonasa) or private health insurance companies (Isapre).
29 HEALTHCARE SYSTEM Organization Finance Evolution
30 THE HEALTH SYSTEM IN CHILE The Health System in Chile is based on public and private complementary services. The system is financed by a compulsory contribution (7% of wages), with which the worker must buy a health plan from de public sector (Fonasa) or private sector (Isapre). The health plan covers the worker and his or her family. In the private sector the premium is adjusted by risk factors (age, sex) and the family size. Both sectors offers providers of inpatient and outpatient services.
31 THE HEALTH SYSTEM IN CHILE Public Goods are regulated by the Department of Health and financed with General Revenues. Immunization coverage is 98% of the population. Indigents and low income population are subsidized by public funds and are not allowed to demand services in the private sector. Private health plans include a coverage for catastrophic expenses, with a deductible related with the wages of the worker.
32 THE HEALTH SYSTEM IN CHILE Patients must pay out of their own pocket a percentage of the services cost. This co payment depends on the health plan in the private sector and of the income of the beneficiaries of the public sector. As in most of the countries, the continues rise of health cost has the consequence of grater public subsidies needs and premium’s rise in the private sector.
33 PRIVATE HEALTH SYSTEM ISAPRE PUBLIC HEALTH SYSTEM FONASA NATIONAL HEALTH FUND MANDATORY DEDUCTION OF SALARIES 7% máx. US $ 140 monthly máx. US $ 140 monthly $$ SUBSIDIES PUBLIC FUND GENERALREVENUES INSURERS HEALTH CARE FINANCING SYSTEM 73,1 % POPULATION 16.1 % POPULATION 50 % 100 %
34 THE HEALTH SYSTEM IN CHILE PUBLIC SECTORPRIVATE SECTOR Public Goods Immunization Health Promotion Environment Protection Complementary Nutrition Program FONASAFONASA ISAPREISAPRE 16,1% of Population 73,1% of Population Hospitals Outpatient Policlinics Clinics Medical Centers 10,8% of Population belongs to others health systems 20.6% Free Choose
35 Population by income quintile and Health Insurance System POPULATIONPOPULATION INCOME QUINTILE CASEN
47 22 Years after the Social Security Reform of 1981 the Government introduces a new Health Reform in the Political Agenda.
48 Why does we need a new Reform ? Cost issuesCost issues Political issuesPolitical issues Access problem and inequalitiesAccess problem and inequalities Low productivity of public HospitalsLow productivity of public Hospitals Population’s low satisfactionPopulation’s low satisfaction
49 Low Productivity of Public Healthcare Sector Source: Rodríguez, Tokman, 2000
50 Excessive concentration in Hospitals Annual Budget Distribution
51 Population Low Satisfaction The Public Sector, despite of tripling its budget, continues having service problems, as: Waiting list Queues Access to outpatient policlinics Bureaucratic and inadequate processes Impersonal treatment
52 Problems of Private Sector Increases in the utilization of medical services. Annual per capita services was 9 in 1995 and 15 in 2005. About 7% up each year. Increases in the cost of the different treatment, specially chronic conditions and heart disease. Premium rise as a consequence of the other factors. Less people have the income to opt for Isapre.
53 Focus of the Health Reform Health Promotion and Prevention More resources for primary care and increase of its resolution capability. Prioritization of diseases based on epidemiological profile. System decentralization and improvement of management capacity within the public sector. Increase Public and Private Sector collaboration
54 The Laws of the Reform NEW HEALTH AUTHORITY STRUCTURE AUGE CHANGES IN ISAPRE`S LAW
55 New Health Authority Structure Ministry of Health Superintendence Of Health Sub secretary Of Provider Sub secretary Of Public Health Intendance Of Providers Intendance Of Funds FONASA ISAPRE SEREMIS (13)Health Services (25) Public ProvidersPrivate Providers FINANCE NORMATIVE CONTROL & ACCREDITATION PUBLIC HEALTH PROVIDERS
56 AUGE DEFINITION Sanitary instrument which enhances equity and intends to achieve a higher health status for all the population, based on health's priorities and fund restrictions. It is mandatory for Public and Private sectors. It is the minimum health plan that FONASA and ISAPRE will have to offer to theirs beneficiaries. Fixed price without risk adjustment.
58 Gradual Implementation of AUGE Nº Ailments Guarantees 254056 Annual price in US$ per capita
59 Pathologies covered by AUGE (2005) Chronic renal insufficiency Congenital cardiopathies Child cancer Cervical cancer Pain relief and palliative care Acute myocardial infarction Type 1 D Mellitus Type 2 D Mellitus Schizophrenia Breast cancer Asthma (child) Adult testicular cancer Adult lymphoma Cataracts over 15 year Hip arthrosis Scoliosis (surgery) Spinal dysraphia Cleft lip and palate HIV/AIDS Hypertension Dental care (6 year old) Epilepsy Neonatal care
60 New Chilean Healthcare System AUGE CAEC PUBLIC PROVIDER PUBLIC PROVIDER FREE CHOICE 30% FREE CHOICE PUBLICPRIVATE Subsidy 7% Wages Additional
61 How Much does it Cost? The AUGE Plan will increase annual health expenditures in US$230 millions. Most of this money is coming from people's wallet. Taxes
62 CHANGES IN ISAPRE LAW More rigorous financial indicators of solvency Impose a ceiling to health premium annual adjustment. ( 30% of Isapre average increase) Fixed price for the basic plan ( Auge) with compensation fund among them. Beneficiaries are eligible to buy the same health plan as their parents had, when they enter in the labor market.
64 WARNING TO PRIVATE SECTOR Chile has faced several political elections during 2005. This process may favor ideological decisions during the implementation process, leaving out the technical tools and consensus. New regulations and quality programs may increase the cost of private providers pressing the rise of health premiums. Financing of ambulatory drugs will impact the insurers.
65 - Possibility of offering services to public system. Managed Care becomes a useful tool to comply with legal minimum coverage & Catastrophic illness. Public & Private Hospital accreditation will recognize the differences in quality of each competitor. Possibility to transfer management know how. Opportunity For Private Sector
66 CONCLUSIONS In order to obtain significant achievements, private sector will have to work in: Educate the population, so people assume an active role and personal responsibility in taking care and choose providers for their health. Obtain the portability of the state subsidies: “Money follows the patients”. Private investment and administration of Public Hospitals.