Health Insurance Systems and Access to Medicines⁷

^7. The authors appreciate the comments received from various PAHO/WHO personnel in Washington, including Rosario D'Alessio, Matilde Pinto, Alberto Infante, Magaly Pedrique, José María Parisi, as well as those attending the HSE Coordination Meeting - Essential Drugs and Technology Programme - held in Panama October 10-15, 2000, especially Nelly Marín, Sonia Maroto and Alejandro Midzuaray. Obviously, the views expressed in this document are the exclusive responsibility of the authors.

Health system reforms have been in progress since the eighties, with emphasis on different aspects and at differing rates, in almost all the nations of the Americas.

The goal of such reforms has been to establish a framework of public policies to attain better health conditions in countries, thereby establishing the responsibility of the governments to encourage an economic environment favorable for family units to improve their level of health through growth policies and increasing the income of the poor.

More precisely, the special Meeting on Health Sector Reforms held in 1995 defined such reforms as "a process oriented to introducing substantive changes in the sector's different agencies and functions with the goal of increasing equity in health care, efficiency in management and effectiveness in performance, thereby meeting the population's health needs" (IDB, et al., 1995).

Preliminary results, as illustrated by the PAHO follow-up and evaluation (PAHO, 2000), show that only some of the reforms introduced appear to make a contribution, and that very slowly, in reducing coverage disparities in some basic services and programs. Advances have been quite limited in the improvement of overall system efficiency and in line with quality of care objectives. Advances have been made in productivity and in the methods for acquiring necessary raw materials but little has been done to reorient the assignment of resources. Expenditures are more in line with income but the generation of mid- and long-range income has increased very little. Social participation has increased in some countries, although it is an open question whether this will lead to a change in the course of the reforms (López-Acuña et al., 2000).

In the field of public health spending, an attempt has been made to direct public expenditures to more cost-effective programs, an effort to reach the poor through low-cost, high-efficiency actions, focusing on public health programs and essential clinical services.

In this context, governments are expected to facilitate diversity and competition in the provision and functioning of health services, limiting themselves to financing a set of essential public health activities and clinical services, leaving the rest to private financing, in the form of public or private insurance plans. Governments must also regulate the private insurance market, designing incentives to increase coverage and decrease costs. Further, they must encourage competition and private participation in the provision of clinical services financed with public funds. Nevertheless, results observed so far make it clear that reforms have not been sufficiently in step with changing social health processes, making it difficult to reach the most disadvantaged population groups (López et al., 2000).

In dealing with pharmaceuticals, the objective proposed for reforms has been to improve their selection, procurement and use. Public and private sectors in developing countries spend about 44 billion dollars, which is about ten dollars per capita, on pharmaceutical products. In most countries medicines represent between 5% and 20% of health expenditures, while in developing countries outlays by family units represent a much higher proportion of total expenditures on health, and public sector expenses for medicines represent from 10% to 30% of total current spending.

The economic importance of medicines is so great that reforms must seek to have governments formulate policies that improve the selection of drugs. Reforms must also rationalize procurement and production and encourage more rational use of medicines, improve the use of pharmaceutical products and assist the private sector to increase its efficiency. Governments should encourage health systems to buy drugs of proven quality from suppliers who offer the lowest prices by establishing competitive conditions, planning more open, transparent procedures and utilizing basic lists of essential drugs that may be available at all times in appropriate pharmaceutical forms under their international non-proprietary name, in public and private health establishments.

Indeed, ensuring the provision of medicines is the declared goal of reforms in this field, supporting the different forms of financing and distribution in such a way as to improve and facilitate access to essential drugs by the entire population. The matter of financing, then, must not be focused simply on the question of sources - public or private - but on the terms of methods to improve efficiency and ensure that demand be appropriate. Along these lines, the role of governments is expected to be different from the regulator to the direct provider according to the financing scheme used in each country. Nevertheless, the progress of the reforms shows that medicines normally covered by the public sector are frequently not covered, thus increasing exclusion factors (Rosenberg et al., 2000:8).

The Study on Health Insurance Systems and Access to Medicines in the Americas Region, whose results are presented here, set out to analyze in detail the current systems for financing and dispensing medicines available in the health systems of six countries in the Region. And, within the framework of reforms, to establish a general overview that facilitates an approach to evaluating the reforms and drafting future actions to make possible advances towards perfecting them. These have been dubbed the "new generation" of health sector reforms, whose goal is to progress towards creating equitable access to health care (López-Acuña et al., 2000).

A questionnaire was therefore designed and was used during 1999 by experts in health insurance and pharmaceuticals in Argentina, Chile, Colombia, Costa Rica, Guatemala, and the United States of America different to compare systems and different stages of progress in the reform process in the health systems in countries in the Region.

The present document, in addition to constituting the final report of the study, discusses the economic and political aspects of pharmaceuticals, as well as concepts of health insurance systems. To that end, the first chapter concentrates on aspects of the economics and politics of medicines, addresses the particular characteristics that distinguish that market from other current commodities markets, and examines the State's responsibility in relation to pharmaceutical products within the new institutional frameworks of the health sector. The second chapter proposes a typology of the social insurance systems that result from the reform processes underway at the international level. Chapter Three examines the pharmaceutical situation under the different schemes used in the Region, financing and dispensing medicines to patients, the set of problems identified, and the advantages and disadvantages in accordance with the information collected in the questionnaire applied to the six countries. Chapter Four comments on the possible future direction of the systems, and ends with some general conclusions and recommendations.