1. Organizational Barriers and Equity: Lessons from Decentralization in LAC Daniel Maceira, Ph.D. danielmaceira@cedes.org Center for the Studies of State and Society Buenos Aires, Argentina

2. LAC Context During the ’80s and ’90s Highly Volatile Economies, Profound Gaps in Income Distribution, Implementation of Macroeconomic Adjustment Policies with Negative Effects on Social Sectors (Education and Health), Social Sectors have been subject to a Series of Reforms. Goals: Achieve Social Objectives s.t. Financial Restrictions (WDR93).

3. Two Dimensions of Health Care Systems in LAC

4. Political Economy of Health Care Reforms Executive Power – Ministry of Health – Ministry of Finance Congress Local Governments Multilateral Organizations International Donors Social Security Institutions Private Health Care Plans Health Providers´ Chambers Physicians´ Prof. Organizations Health Care Workers Drugs & Input Producers Patients Consumers´ Associations Goals Strategies Actions Beliefs Political Level International Level Sectoral Level

5. Framework: Organizational Barriers Reforms trigger Changes in the Structure of the Sector. Policy Markers should select clear Goals to contrast them against others´Action Plans, identifying potential Partners & designing Mechanisms to align Interests. Decentralization requires: – Willingness to Distribute Political & Financial Power. – Strong Investments in Management and Social Control at the Local Level. Any reform should forsee a complete Action Plan considering: – Spillovers over other sub-sectors (private, social insurance) – Cross subsidies to avoid increasing equity gaps. History Matters (federalisms, socialisms, authoritarisms).

6. Financial Reforms in LAC

7. Bolivia Structural Reform + Health Care Strategy (Maternal&Child Insurance) Law of Municipalities (´85)/ Popular Participation Law (´94): – Coparticipation Funds: New rules of Distribution, based on Population at Departament Level. – Popular Election of Municipal Authorities. – Decentralization of Resources (Broken production function). – Social Control (Popular M&E Commitees). Actors: – “Neoliberal” reforms (Sanchez de Lozada) – New economic and political Stakeholders, Municipalities vs. Departments (Santa Cruz – Tarija), Declining Union´s Political Power (post 1985) Strong influence of Intl. Donors and Multilateral Organizations. Results: – HC Coverage Increased, – Strong non-planned Subsidies, – Empowerment of Local Leaders, – Weak effects on equity gap in resource allocation.

8. Distribution of Resources, by quintile of UBN and by Source

9. Econometric estimation I: TFR 2001 (with and without constant) and IMR 2001

10. Decentralization in Bolivia: Some Conclusions Administrative/Managerial expertise of major political parties are significant “Quality Shifters” in some Public Policy Outcomes. Urbanity proves to be a relevant issue when planning Health Care Strategies. Financial Resources, as proxy of Decentralization Commitment have a significant, positive and similar effect on Social Outcomes. Local Managerial Capacity has significant and similar effect on Health and Education Outcomes. Community-type variables do not show influence on Social Sectors´Results.

11. Argentina Federalism + Decentralization (late ´80s). Provintial Authorities kept ownership & control of Health Care Resources (human, fiscal, & infrastructure), defining own Public Health Strategies. COFESA: Federal Health Council – Deliverative Body with no enforcement power. 60% of Population covered by Transversal Social Health Insurance Plans. – Main Social Security Institution: PAMI (Public insurance for edlery), – Unions and Provintial Public Bureaucracies control circa 50% of formal health coverage, divided into 300 social funds: Fragmentation of resources – weak risk pooling mechanisms. Limited solidarity among funds. Provision of care is mainly contracted to Private Providers (no VI financing-provision of care). Therefore: – Limited capacity of National Ministry of Health to align interests, – Results: Increasing financial gaps in HC among provinces, Inefficiency in Resource Allocation, Crisis 2002 : Alignment of National and Provintial Goals helped to support partial reforms (Remediar, Law of Generics).

12. Out-of-pocket in Health Care, by Component (in %), By Household Income Quintiles (Indec-EGH98) Household Income 190 3204 0 15 Pharmaceuticals Health Care Services + Private Insurance Total Health Care Expenditures % 1794 Q1Q1 Q2Q2 Q3Q3 Q4Q4 Q5Q5 7.5

13. Provincial Expenditures in Health per Capita, 2003

14. Health System Indicators: Supply and Needs

15. Health Care Expenditures, by Source

18. General Policy Implementation Issues Scarce Empirical Literature on Decentralization in LAC. Lack of M&E Mechanisms affects Documentation of Results. Limited Institutional Capacity at Public Level provokes Organizational Constraints in Policy Implementation. National Governments do not coordinate Health Care Strategies with Governors and Municipal Authorities. Rules/Reforms´Main Actions are defined by Actors with strong bargaining power, implying: – Financial and Epidemiological Risk Transfers, – Poor Equity Indicators, leading to inefficient allocation of resources, – High Transaction (administrative, bargaining) Costs, – Poorly Effective Reforms, – Lack of Sustainable M&E Tools to improve feedback and Sound Advocacy Agenda.

19. Income, Expenditures and HC Needs