Professor Ramon Castillo Econ 465 Sara Situ Winter 2011

Agenda: Introduction Overview of healthcare system in Chile Operation of healthcare system Healthcare reforms in Chile before & after Conclusion

Healthcare in Chile

Chile Vs. U.S 009/12/02/chilean-health- care-system-a-possible- model-for-the-us/8707/ 009/12/02/chilean-health- care-system-a-possible- model-for-the-us/8707/ “The best health-care system in the world.” A reputation for cutting-edge medicine, spending more than any other country on medical R&D and totally dominating biotechnology. The US placed 24 th (just behind Chile and just ahead of Portugal) among the 31 countries that are members of the OECD.

Chile: The population of Chile on January 1st 2010 is approximately 17,052,473. Upper-middle income country Best health indicators in Latin America Life expectance: 78 years Public Plan: 75% Private insurance: 25% 7% of employees' monthly income Tax Revenue pays for coverage of poor

Quality Though expensive, high quality health care is available for people who can afford to pay for their own insurance and or medical bills. Well-trained doctors, dentists, and modern equipment are available in Santiago and the other major cities. The quality of healthcare in smaller towns is significantly reduced. Visitors who have an international insurance policy will receive great health care in the best hospitals in Santiago. As with many countries, Chilean medical care varies with the amount of money a person can spend on it. Although the government does provide state-sponsored health care, there are still entire communities and villages without even so much as a working ambulance.

Public (FONASA) sectors Fondo Nacional de Salud The National Health Fund (FONASA), created in 1979 by Decree Law No It is funded by the public (7% of employees' monthly income) FONASA beneficiaries are: Dependents of contributors. Includes children up to 18 years of age or students under 24 years Pregnant women until the sixth month of the birth of son Pension beneficiaries of invalidity and old age People with mental disabilities, any age, provided they are not causing family subsidy (SUF)

Private (ISAPREs) sectors. In 1981, Instituciones de Salud Previsional Relieve the State of functions that can be taken over by the private sector. Receive no subsidies from the Treasury and operate in a free competition system. Provide healthcare services for their clients who Access to financing for their expenditures in case of illness In exchange for the people's making periodical payments or prepayments to their Isapre People can choose a hospital or clinic where to get medical attention

Beneficiaries by December 2009 SystemAffiliates % Fonasa12,504, Isapre2,705, Total pop.17,014,

Before Reform: Social Insurance 1940s and 1950s 1942s, Servicio Medico Nacional de Empleados(SERMENA) created and 1968s curative medical care was added Blue-collar workers were covered by the National Health Service (SNS) created in Blue-collar worker received direct care from the SNS providers, while white-collar worker could opt for direct provision by (SERMENA) institution, or from approved private providers.

Reform: Early 1980s Expand the role of the private sector in provision and financing Improve resource allocation Promote decentralization within the publicly funded sector Blue-collar worker, 27 regional groups ISAPREs, began operating in 1981 The FONASA was established to collect contributions from those affiliated to the public sector, and to allocate these resources to provider.

Table 2: FONASA has retained the low to middle income groups in the formal sector and informal sectors, but it also covers the overwhelming majority of the lowest two quintiles.

Who benefits from healthcare reform? Low- and moderate-income individuals and families who do not have employer-based insurance and who do not qualify for Medicaid or Medicare. Individuals and families who have incomes that are too high to qualify for Medicaid, but below 400 percent of the poverty line will receive “premium credits” to lower the cost of health insurance in the new health insurance exchanges. People at all income levels, as well as employers will benefit from “a number of important reforms to the health insurance market that would greatly improve access to affordable and comprehensive health insurance coverage.” Adult dependents younger than 26 can now be covered on their parent’s policies. People who have existing health problems.

Conclusion: Benefits Increase In Coverage And Access Decline In Hospitalization &Death Rates