Inside Mexico: Health for a half

By IAN CAMPBELL, UPI Chief Economics Correspondent  |  May 24, 2002 at 1:23 AM
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QUERETARO, Mexico, May 24 (UPI) -- Governments in the developed world are struggling with the rising costs of health care as treatments become more sophisticated and costly. In Mexico, sophistication is not the problem. The challenge is to bring good basic care to more of the population over a vast country and one divided by mountain ranges and deserts, crowded cities and sparsely-populated countryside, but most of all by a gulf between rich and poor.

According to John Scott, an expert in health care at the CIDE research institute in Mexico City, Mexico is in a "somewhat unique position." Progress on relatively cheap-to-solve problems such as gastro-intestinal illnesses, maternal mortality and infectious diseases has helped to raise life expectancy to a very respectable 73 years, according to the World Bank's World Development Indicators 2002, a figure only five years short of that achieved by high-income countries. Yet health care and health standards in Mexico vary enormously between locations and classes.

Mexico's health services, like the nation's geography, are fragmented. The Instituto Mexicano de Seguro Social provides health care to workers who, together with their employers, make contributions to the cost of the scheme. Public sector workers have their own scheme, the Instituto de Servicios de Seguro Social de Trabajadores del Estado. Workers in Pemex, the state-owned oil company, have their own scheme. These different schemes are different territories of their own and, as we shall see, another division to overcome.

Meanwhile, there is a bigger division, between those covered by one of the forms of social security, and those not. A little more than half the nation's population of around 100 million has no health insurance cover. Most of them pay for their care. Yet they are not entirely without government-provided services. The Secretaría de Salud, the health ministry, also provides health services, virtually for free. But the free service has a cost: The quality of the care available may not be high, and many locations lack a free clinic. The ministry's services are used mostly by the poorest Mexicans, those who simply have no alternative.

A research paper entitled "Addressing Inequity in Health and Health Care in Mexico," by Mariana Barraza-Llorens, Stefano Bertozzi, Eduardo González-Pier and Juan Pablo Gutiérrez, published in Health Affairs of May/June 2002, brings out how dramatically health care differs between Mexico's rich communities and its poor ones.

Fewer than one in 10 women from the poorest 10 percent of the population will give birth in a hospital or clinic, as against eight in 10 among the wealthiest 10 percent of the population.

The effect of poorly distributed health care is clearly seen in health. The study asserts that infant mortality rates in Mexico "range from nine deaths per thousand live births in the richest municipalities to 103 in the poorest"; "40 percent of indigenous women have been shown to be anemic, compared with a national average of 26 percent"; and one in 350 women will die in childbirth among the indigenous communities of Guerrero against a national average of one in 2,000.

Mexico's health care presents paradoxes. According to the World Health Organization's 2000 report on health care performance, Mexico's system ranked 144th out of 191 countries in its "financial fairness."

The government spends a very low percentage of GDP on health, an average of just 2.6 percent in 1995-99, less than private spending on health care of an average of 2.8 percent of GDP.

Many developed countries are attempting to attempt a shift in this direction: Encouraging people to pay for their own health care. But in a country such as Mexico, where much of the population is poor, the very low level of public spending on health means little or no care for many.

Mexico's total public and private spending on health care is below the average for Latin America and the Caribbean. Per head of population, the WHO estimates that Mexico spent an annual average of just $235 on health care in 1995-99, below the Latin American average of $264 and far short of the $2,029 per head spent in Europe or the $4,271 per head in the United States. Mexico is not spending enough to provide adequate health care for all.

How can the system be improved without causing its cost to explode? According to Scott, progress needs to be made by bringing more of the population into the social security net and by rationalizing the provision of health care so that duplication of services is avoided and better care is brought to the under-provided, mostly rural areas.

The government is studying various possibilities. One is to use the Opportunidad anti-poverty program, originally launched as Progresa. It already uses a means-tested system to identify the poorest households and direct services to them at low cost. It might be used as a means of bringing social security to the as-yet-uncovered half of the population.

Barraza-Llorens et al. suggest a more radical change: "a single universal health insurance scheme that explicitly covers a basic package of health care for all Mexicans." Both private sector and public sector could provide services to clients under a scheme of this kind, they argue. But a "substantial federal subsidy" would be required. And this in turn faces the problem that Mexico collects an unusually small percentage of GDP in tax revenue, normally some way below a fifth of GDP, which is below the third of GDP commonly taken in developed countries and is also low by comparison with other Latin American countries, not least Brazil.

But there is no use increasing the tax take and spending more on health unless the money is well spent.

The standard of much treatment provided by the IMSS is said to be good. But a common complaint of the poor in Mexico is that the treatment they receive in government facilities is disrespectful. The anecdotal evidence for this is extremely strong. It is educated Mexicans who have pointed out to your correspondent that the uneducated are not well treated by the public system. And so the idea of creating a universal health insurance needs also to tackle the quality of the services that the system provides. It is perhaps for this reason that Barraza-Llorens et al. say that the public insurance system might be combined with choice for users between public and private providers.

The various layers of public health care provision need also to be addressed, and again there are obstacles in the way.

The IMSS has a very large and powerful trade union associated with it. Scott points out that the IMSS has a high level of administrative staff. Pemex, too, has its powerful union. Barraza-Llorens et al. warn that the unions "are not expected to agree to lose independence and autonomy in the face of a unification of financing schemes." Whoever reforms health in Mexico will have to fight politically powerful trade unions.

Health in Mexico is a political question. At present the health of Mexicans reflects their society: The gap between haves and have nots is protected by vested interests. On this as on so much else, it is up to President Vicente Fox to try to clear a new path. It won't be easy.

Inside Mexico is a weekly column in which our international economics correspondent reflects on the country in which he lives. Comments to

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