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Chile - The health of the Nation
by Newropeans-Magazine
2008-02-27 09:58:56
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Alvaro Vargas Llosa, in the quarterly newsletter of Washington's Independent Institute, recently joined (February 7) the increasing cynicism about Chile's success story with an article that started by saying: "Chile's economy is the envy of Latin America, yet its people are in a funk", adding that it has "an economic environment that is first class and a service environment that for many Chileans is third rate".

Before we get into the health of the people, let us look at the health of the nation.

As the summer holidays are coming to an end, it is not a pretty sight. Mapuches, miners, salmon farm workers and small fishermen are increasingly restless. Even football referees are on strike after not having been paid for two months. Farmers are seeing their animals die from drought across the country, and what they can save has to see with the peso at a 10-year high Tens of thousands of people do not even have drinking water. Forests and historical buildings are burning down with patently insufficient fire-fighting means. One beach after another is polluted with mostly man-made sewage, whilst thousands are poisoned by eating raw shellfish, despite the (low key) warning campaigns. The largest salmon farming venture is closing down after its operations were decimated by the ISA virus. Public transport is a mess, and power cuts of several hours a day might be just round the corner, as the price of staple food continues to go up. The Education ministry became the latest focus of yet another corruption scandal, with an estimated U$ 550 million having been illegally paid out to phantom students in state-subsidised private schools. Someone please tell Germany's Bertelsman foundation, who recently put Chile at the head of 125 developing nations for the "quality of its democracy, adherence to market economy and political management".


For once, it may not be a question of money, but mainly efficiency. This certainly does not excuse the state of cockroach and rodent-infested public hospitals lacking many basic necessities, and having to re-use many times over supposedly "disposable" implements. Friends who have had to go into public facilities in Santiago or the provinces, to visit patients or for their own emergency treatment, unanimously say that comparing them to Africa is in insult to the Dark Continent. Last week, another provincial hospital in Lirquen (8th region) burnt down due to faulty electric wiring.

Hospitals and the public health system are also notorious among suppliers for being late payers, which definitely reflects bad management.

Still, the 2008 expenditure on public health is just over U$ 5 bn (converted by me at 500 pesos per U$- if you think that is ridiculous, be informed that the rate used by Hacienda in its 2008 budget estimates is 555 pesos per U$, a level which only some Pacific War veterans remember). Not all that money comes from the public purse, as nearly 37 % of the total is financed by social security contributions. People pay around 7 % of their gross wages as contributions.

Chile's population in early 2008 must be around 16.7 million. Of these, nearly 70 % are covered by the state scheme known as FONASA, with just under 17 % belonging to the private medical insurance network known as ISAPRES.

The latter used to account for nearly 27 % of the population at their apogee in 1997, when they started to go into a decline which only stabilised in 2004, from which point they have staged a modest recovery. The sector is very concentrated, with the 5 leading ISAPRES accounting for 90 % of membership. Some large companies have their own "closed" ISAPRES or exclusive health service, whereas the active and retired members of the police and armed forces, together with their immediate families, belong to their institutional health systems with their own clinics and hospitals. For obvious reasons, the ISAPRES attract the higher earning segments. As of June 2007, their average subscriber earned U$ 1220 per month, 103 % more than the average Chilean wage at the same date.

Some 71,000 people are directly employed by the public health sector. As unbelievable as it may sound, it is impossible to find a precise figure for the total number of doctors working in Chile. There is no central register or control, either of the profession nor of the education of practitioners. This is the inheritance of the military governments' policy which outlawed compulsory affiliation of professions such as doctors to any network, because "it restricted personal freedom". There is also no state-recognised universal level of medical education (though all courses at Chilean universities have to be approved by the ministry, it is generally a formality). You can imagine the result in terms of the relative quality of graduates.

Older traditional medical training schools, at least in the past, were of high quality, as reflected by the successful careers in Europe and Americas for many exiled Chilean doctors.

The surviving rump association, the Colegio Medico de Chile, has some 15,000 members, but as the total number of practising doctors in the country is estimated at over 25,000, its coverage is 60 % at best. This is not just a statistical curiosity. The Colegio Medico has norms and remedial procedures for complaints, but if you have a problem with a doctor who is not a member of the Colegio, your only option is to go to court. If the problem is within the public system, you can always take the hospital or the regional health authority to justice (assuming of course you can afford it).

Doctors with foreign degrees have to pass Chilean validation exams, with the exception of Ecuadorians who have a bilateral free movement agreement for most professions. A number of Cubans also work in Chile.

For some years, there has been a single regulatory body (the Superintendencia de Salud) to supervise both FONASA and the ISAPRES.


So what is wrong with the Chilean health system today? There are a number of weaknesses, with different degrees of responsibility spread among the players.

In the public sector, there is the perennial problem of queues, overcrowding and lack of some specialist services and equipment, more acutely in provincial hospitals. Even if you ask for an appointment under the FONASA regime to a doctor's private practice, you are often given a low priority in the diary.

With some exceptions at the very low end of the social scale, treatment is not free, even under FONASA. You have to buy a voucher to see the doctor or have a test, the cost of which is a minimum of U$ 8 for the lowest level consultation, and of course much more for a specialist or tests.

On the patient side, there is a tendency for auto-medication and self-diagnosis, not based on culture or internet research but on what the neighbour, the mother-in-law or the cousin's wife said, did, or swallowed. In fact, the main problem for health affordability in Chile is that of medicines. There are more chemist shops in the country than bars in Spanish towns. There are three large chains, plus the growing presence of a Mexican discount variety (though it is not as discounted as it pretends), with a shrinking number of independent chemists. Salespeople in the stores act virtually like drug-pushers. Attracted by various offers and discounts, the transparency of which is often dubious, buyers at the time of paying are "encouraged" to buy other medicines they have no need for.

Marketing of medicines is aggressive to the point of pernicious. A massive campaign in 2007 promoted a drug called FLUICOR ASA 81, described as essential for preventing strokes and hearth attacks. The main TV spot consisted of a father in a chemist's shop buying something else, accompanied by his little boy. He hears the chemist mention the drug in question to another customer, and asks for its uses. When the chemist explains it, the little boy almost pleads with his dad to buy it, "so that nothing happens to you". If such moral coercion was not bad enough, the miracle drug in question is nothing more than a coated version of an aspirin tablet (each 100 mg tablet contains 81g of aspirin and the rest is the inert coating). Did the authorities do anything about all this? Tu parles! It would be an "assault on free enterprise" and the "market economy". Interestingly, both Aspirin and FLUICOR sell at the same price (around 12 US cents a tablet), but though the former is of course made by BAYER, FLUICOR is the brainchild of Laboratorio Pasteur, a Chilean pharmaceutical company (as it happens, also founded by Germans).

Except for in-patient treatment (and neither FONASA nor the ISAPRES reimburse the full cost of anything), all other medicines are basically out of pocket, and medicines in Chile are among the most expensive in the world. Any illness requiring long-term medication can financially cripple or bankrupt a family. Even small illnesses can make a deep hole in your budget. Our maid's 2-year old son recently had chicken-pox. He was prescribed three medicines, the cost of which was U$ 65, and together with the cost of the consultation voucher, transportation to and from the clinic, etc., the total came to U$ 80. That is over a quarter of the minimum wage. Our maid is lucky, because she gets more than the minimum wage, and we were generous with time-off for her to look after the child on the days she had nobody else to do so. What about the rest of the population? In the private sector, there is a cat-and-mouse game (present in other activities in Chile) where the beneficiary wants to get as much as possible out of the system (sometimes fraudulently), and the payer fork out as little as possible. One of the reasons the ISAPRES lost 10 points of market share in as many years is that the complaints against them grew, just as FONASA made its proceedings and coverage more attractive.

Obesity, particularly child obesity, has become a problem in the past 10 years. This is a worldwide problem exacerbated by the new trends in fast food consumption and the replacement of activity games by spending time in front of a computer. Last but not least, the health and security hazard caused by the tens of thousands of stray dogs roaming the streets of Chilean towns. Antofagasta, the second largest town in Chile alone has an estimated 10,000 of them.


If I were one of those expensive international consultants with cheap thoughts, getting my assignments through contacts rather than talent, I would say that what is needed first is better education on eating habits, preventive measures on such simple things as washing your hands after using the toilet and before eating (Mexican TV ran such a public campaign 30 years ago). However, I am a realist and know that in Chile and much of the region, such efforts are largely a waste of time. At the beginning of each summer, the authorities call for caution in eating uncooked seafood. As someone who dislikes eating anything that swims, except pretty girls in bikinis, (sadly, only in my mind), I think the thousands of careless victims (more than US troops wounded in Iraq in a whole year) deserve every painful colic and diarrhoea they get, and will obviously never learn.

The first ministerial job of Ms. Bachelet was as health minister, with the task of cutting down queues at public hospitals. The result was very mixed (though to be fair, waiting times for specialist consultations and non-life threatening operations in the British National Health Service are hardly better).

The greatest novelty has been the AUGE plan, introduced gradually with the aim of taking the uncertainty away from the blank cheque that serious or chronic illnesses meant.

It would be too complicated to explain the system in detail, but it basically guarantees a maximum fixed cost (in some cases, totally free depending on income) for 56 different illnesses, a maximum waiting time for treatment (if necessary patients are derived to private clinics at no extra cost), free drugs for HIV sufferers, and a number of other guarantees.

AUGE has been received with mixed comments, but apart from the recurring criticism that even with the extra resources available, facilities have not been sufficiently expanded to cater for the demand, the main complaint is about the lack of information on applicability and administrative procedures. The treatment itself, once obtained, generally gets a good rating. Additional medical benefits have been introduced for older people, and there is always pressure for more, such as the recent call by dentists to extend free dental treatment to pregnant mother as a way of ensuring healthier teeth for the baby (it seems that the habit of cleaning your baby's dummy (pacifiers as Americans call them, a word whose real meaning that nation long forgot) by sucking it yourself can have the effect of transferring cavity-producing bacteria from your mouth to your child's mouth).

In the private sector, one of the fastest growing segments of insurance is that of complementary policies which cover the difference between what you pay and what FONASA or your ISAPRE reimburse you.

As a foreigner arriving in Chile without a fixed job, nor cover from your embassy, employer or home country (the French have an excellent worldwide cover system for those who have emigrated after contributing a number of years to the Sécurité Sociale?), what should you do? It all depends what you want to cover yourself against. If you have 4 young children whom you like to take to the paediatrician each time they sneeze, most international health policies (who have deductibles say of U$ 100 per illness) probably won't cover you. On the other hand, as you should, you want to protect yourself against a major illness, not just in Chile but when you are on home leave or gallivanting round the world, forget about ISAPRES.

On renewing my yearly family policy this year, horrified that it was costing me nearly a third of my pension, I asked the best ISAPRE to quote me their most expensive cover plan. Though it had many features, it only covered 90 % of hospital stays and 70 % of outpatient treatment (mine covers 100 % with a yearly deductible of U$ 100 per illness). It had limits on the cost of each procedure (mine does not) and only overseas cover of less than U$ 18,000, which does not help much if you have a heart attack in Zurich.. Its cost was similar to what I already paid, and I stuck with my existing policy, particularly as on changing, I and my family would have been uncovered for existing illnesses. Of course the ISAPRE plan did not include drugs, except for 80 % of the cost of medicines made by certain Chilean laboratories, provided they are bought in a specific chain of pharmacies, and for a yearly maximum of just U$ 650.

Armen Kouyoumdjian
Country Risk Strategist
Valparaiso - Chile

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