Title
Health care reforms in the Americas
by
Jane Lethbridge
j.lethbridge@gre.ac.uk
10 August 2003
This paper was commissioned by PSI Americas to be presented at a Meeting of Health Trade Unions to be held in Cancun, 8-9 September 2003
Health care reforms in the Americas 1
1 Aims and Objectives 3
1.1 Aim 3
1.2 Objectives 3
2 Sources 3
3 Main themes in commercialisation of health care 3
3.1 Corporatisation of health care institutions 4
3.2 Public-private partnerships 4
3.3 Development of diagnostic services 4
3.4 Health insurance 5
3.5 Changing role of government in health care provision 5
4 Main organisational players 5
4.1 International Financial Institutions including World Bank and International Finance Corporation 6
4.2 Pan-American Health Organisation (PAHO) 7
4.3 Inter-American Development Bank (IDB) 7
4.3.1 Multilateral Investment Fund projects 8
4.4 Bi-lateral agencies – international development and trade 9
5 Regional Developments 9
5.1 Overview Latin America 9
5.1.1 Decentralisation 9
5.1.2 Privatisation of social security systems 10
5.1.3 Role of private sector 10
5.1.4 Widening public health care coverage to low income groups 11
5.2 Brazil 11
5.3 Mexico 12
5.3.1 Problems of the ISSSTE and IMSS agencies 12
5.3.2 Recent reforms 13
5.3.3 Processes of expansion and consolidation in private health care sector 13
5.4 North America 14
5.5 Canada 14
5.6 United States 15
6 Multinational health care companies 16
6.1 Aetna/ ING 16
6.2 Cigna 17
6.3 HCA 17
6.4 Tenet 17
6.5 Quest Diagnostics 18
6.6 Compass 18
6.7 Sodexho 18
6.8 Fresenius 19
7 GATS and FTAA 19
7.1 GATS 19
7.2 FTAA 20
8 Trade union action 21
8.1 Focus of action 21
8.1.1 Challenges to proposed health care policies 21
8.1.2 Challenges to privatisation of specific services or agencies 21
8.1.3 Improved wages, terms and conditions 22
8.2 Types of action 22
9 Conclusions 22
9.1 Trends in the Americas 22
9.2 Trade union action 22
9.3 Future action for network 23
Health care reforms in the Americas
This paper has been commissioned to inform discussions at a meeting of PSI health service trade unions to be held in Cancun, Mexico 8-9 September 2003.
Aims and Objectives
1 Aim
• To provide an updated version of the PSI ‘Forces and Reactions’ Report with a focus on the Americas, including an examination of the impact of trade agreements on health services
2 Objectives
• To identify the main themes emerging in the commercialisation of health services worldwide
• To outline regional developments including restructuring of health services in Brazil, Mexico, United States, Canada
• To outline the main developments in multinational health care companies in the Americas
• To discuss the implications of GATS and FTAA trade agreements for health services in the Americas
• To profile the main organisational players
• To outline trade union actions
The paper will be structured in the following sections
• Main themes in commercialisation of health care
• Main organisational players in the Americas
• Regional developments
• Multinational health care companies
• Implications of GATS and FTAA
• Trade union actions
Sources
Information has been gathered from a range of sources. They include:
• World Bank and International Finance Corporation reports and websites
• Multilateral and bilateral agency reports and websites
• Company websites
• Newspaper articles and newsletters
• Academic research on health systems
• Trade union research
Main themes in commercialisation of health care
Public sector and health sector reforms are characterised by several elements: corporatisation of health care institutions; public-private partnerships; development of diagnostic services; expansion of health insurance, changing role of government in health care provision. These have led to changes in the organisation and management of the health care sector.
1 Corporatisation of health care institutions
One of the aims of health sector reform was to introduce more efficient ways of operating and managing health services. This was generally interpreted as introducing commercial business practices to health care institutions. The development of health care institutions within the public sector that operate under business principles has been called “corporatisation”. When introduced over a decade ago, the process was considered a first step towards moving towards the privatisation of health care services. It was assumed that once an institution operated like a business, it could be taken over by the private sector.
In Chile, the proposed health care reform published in June 2002, describes the setting up of hospitals that can operate without the constraints of the public sector. The rationale, again, is that hospitals will be given more freedom to operate as effectively as possible.[i] In Barbados the proposals to take the Queen Elizabeth Hospital out of the civil service and set it up as an autonomous agency, is another example of attempted corporatisation.
2 Public-private partnerships
The private sector is being drawn into operating within the public health sector through a series of mechanisms. One of the most influential, in terms of redefining public and private sector relationships, is public-private partnerships (PPPs). This covers a wide range of possible relationships, from contracting the private sector to supply goods (e.g. drugs) or services (e.g. cleaning), through to arrangements where a private company may manage a public hospital or finance a new hospital in return for a long-term concession to provide services. Although usually developed at national, regional or local levels, they also exist at an international level.
There are three major problems that can arise with public-private partnerships and private finance initiatives.
1. The quality of the services delivered
2. Pay, terms and conditions for workers
3. Length of payback terms for the public sector, which may result in long-term indebtedness of public sector. It also neutralises any “incentive” for the private sector to be efficient.
In many cases, commercial incentives have not led to increased efficiency.
Customer requirements are not always met by the private sector. Business and management expertise from the private sector does not always lead to improved systems, e.g. failure of performance management.
In Canada the development of public private partnerships (PPPs) has led to public sector pension plans being used to finance PPPs across the public sector. One of Canada’s largest pension plans, the Ontario Municipal Employees’ Retirement System (OMERS) has formed a subsidiary company (Borealis Infrastructure Management Inc.) which is a major player in a consortium (The Healthcare Infrastructure Company) that is bidding on two PPP hospitals. This shows the pensions of public sector workers (effectively deferred wages) are being used to privatize jobs. [ii]
3 Development of diagnostic services
The development of diagnostic services, e.g. magnetic resonance imaging (MRI), CT scans and other high technology equipment, to diagnose non-communicable diseases is becoming more widespread. This type of equipment requires large capital investment and highly trained staff to operate it. In many health systems, private companies are already providing the equipment and services. Loans from multilateral organisations are often given for the purchase and establishment of this infrastructure. [iii]
An example of how high technology equipment is being promoted by multilateral agencies can be seen in an investment made by the Multi-lateral Investment Guarantee Agency (MIGA) to Brazil. In 1999, MIGA provided a guarantee for $90 million for MSF Funding LLC (MSF), a joint venture with a US Medical equipment financing company, DVI Inc, to fund financing of medical equipment.[iv]
4 Health insurance
One of the aims of health sector reform is to increase the role of private health insurance in the financing of health care. Health insurance is targeted at middle income groups often portrayed as a “modern” way to pay for health care. Some health reforms have specifically given people the option to choose either paying into a public or private health insurance fund, e.g. Chile. The introduction of co-payments for drugs and certain types of treatment can also lead people to taking out private health insurance to cover these costs. In other cases, the quality of public health services deteriorates so much that people begin to use private sector providers, eventually funded by health insurance.
In many Latin American countries, privatisation of the social security systems, have also forced people to use private health insurance companies, sometimes set up specifically for a new health care system e.g. Chile, or when companies have taken over the social security agencies, e.g. Argentina.
Chile shows some of the limitations of expansion of health insurance. The spread of health insurance is concentrated in younger age groups who are less likely to need health care, aged 20-45. Only 2% of insured adults are aged over 60 years.
5 Changing role of government in health care provision
The introduction of contracting systems and public- private partnerships in the public health system has led to changes in the role of government in the health care system. Moving from being a provider of health services, the public/ government sector has often relinquished direct control over providing health care services and taken on a coordinating and in some cases regulatory role. This is sometimes described as moving from a “provider” to “enabler” role. This process varies from country to country and has been encouraged directly by many health sector reform programmes through technical support from multilateral agencies.
The combination over the last 20 years of under funding in the public health care sector and the changing role of the government has led to changes in people’s perception of the public sector and the private sector. The introduction of user fees to government health care services has also meant that government services are often no longer free. The perception in some countries is that the public sector is under funded leading to lack of staff, overcrowding, long waiting times, and lack of drug supplies. This can lead to both patients and staff moving to the private sector.
In terms of the future of public services, there are questions about what type of policies may help to strengthen the role of the government in the health care sector. One of the main questions is whether governments can develop a regulatory role, which would be strong enough to control the activities of the private sector within the public health sector.
Main organisational players
The following account provides short profiles of some of the main players involved in health care in the Americas. It aims to show how policies of the international financial institutions are implemented at different levels through multilateral and bi-lateral organisations.[v] The links between organisations are not always made explicit.
1 International Financial Institutions including World Bank and International Finance Corporation
The influence of the International Financial Institutions on health and health care is extensive. There are two main types of policy influence in the health sector.
1. Policies relating to structural adjustment, economic growth, debt, trade, public sector reform, private sector development that influence the public sector and labour rights
2. Policies that are specifically targeted at influencing parts of the health care sector, e.g private sector investment, health sector reform programmes that influence accessibility to health care and the types of health care available.
These policies have led to the weakening of health services, labour rights and the public sector more widely.
As part of the process of promoting public, fiscal and health sector reform, the World Bank has influenced the perception of the public sector and emphasised the value of the market for delivering public services. Some of the mechanisms that the World Bank has used to influence thinking about the public sector, include the annual World Development Reports and reports either written by World Bank staff or commissioned by the World Bank.
The draft World Development Report 2004 ‘Making Services Work for Poor People’ deals with the provision of services to poor people. It addresses health and nutrition programmes in Chapter 8 and begins by stating that
“Health and nutrition services are characterised by a variety of market failures; externalities associated with disease, asymmetrical information between professional providers and patients and the failure of insurance market. These market failures – as well as a concern for equity - justify some form of government intervention in health”
It argues that services fail because of a lack of accountability. It recommends that three measures will improve accountability:
• Stronger client power over service delivery
• Strengthening people’s voice to influence public spending
• Strengthening the compact between policy makers and providers, to protect clients and ensure an equitable distribution of services
The report identifies problems of access, affordability, poor quality and insensitivity to client needs in relation to the supply of services. It also adds that
“ensuring regular and predictable availability of qualified health staff and affordability of care compounds the problem of insufficient use of clinics or hospital services”. [vi]
This is one of a number of comments in the report that implies a critical attitude to public service staff, in this case health workers, and this permeates the text. There is no attempt to analyse why health staff are not always available and what conditions shape their behaviour. Instead, apparently simplifying changes in accountability relationships are presented as solutions to the problems of public services.
The report recommends that client power can be strengthened by a wide range of measures some of which are supported by evidence of successful practice. Some examples include:
• Making the income of service providers depend more on the demand from poor clients
• Encouraging people to pay providers directly for services
• Influencing pricing, for example cross subsidising preventive and mother and child services with adult health care together with generic drugs
• Demand side subsidies, which mention some of the problems of targeting
• Co-producing health services, which is a term used to cover self-care, client involvement in health services and community led initiatives.
Information, monitoring, enforcement and regulation are seen as essential elements to control private provision. Whilst making more information available can help service users to make more informed choices about health care services, the focus of all these measures is on the consumption of health care. The rights to health and health care are not mentioned.
The recently revised Private Sector Development (PSD) strategy, launched by the World Bank in 2002, anticipates a wider role for the private sector in providing health and education services. It is anticipated that the International Finance Corporation (IFC), part of the World Bank Group, will increase its lending to private companies working in health. [vii]
The IFC Investing in private health care (2002) (published as an internal document) sees its main role as contributing “to the financial protection against ill health and to strengthening of the middle class”. [viii] The IFC states that
“because of the structure and financing mechanisms of health care systems, (it) cannot directly target the poor but rather gives loans to institutions that work with the lower-middle and middle class groups”. [ix]
Latin America is now the biggest IFC lending region. Most of the IFC investments are in hospital development but there are three new forms of health care investment that are indicative of future directions in health care investment. Two projects involve companies that have been set up to manage investments and services and a third uses new communications technologies and the internet. One example is Innovative Health Services, an IFC investment in Brazil, which supports new ventures and early stage development companies to improve the efficiency and effectiveness of the health care industry. It is 30% owned by the ICATU group controlled by the Almeida Braga family, Brazil and 30% owned by the Jose de Mello Saude company, the largest private Portuguese health care company. [x] This shows how IFIs, local and multinational capital are investing in health care infrastructure projects.
2 Pan-American Health Organisation (PAHO)
PAHO is the regional office of the World Health Organization and aims to strengthen national and local health systems and improve health. It works in collaboration with Ministries of Health, and a wide range of other agencies. It provides technical advice on health and health systems development, including primary health care. Its member states include all countries in the Americas.
PAHO also works closely with other multilateral development agencies. A recent alliance with the Inter American Development and the World Bank, called “Shared Agenda for Health”. Part of this initiatives involved making information available on definitions, concepts, accounting procedures, and results of health accounts and national health accounts studies, through a website (). Health accounts are relatively new techniques for estimating the economic and financial indicators relating to health, health care services and health care systems. They are designed to inform policymaking, providing evidence of what impact certain types of spending have on health outcomes. This is an example of PAHO providing technical expertise on health outcomes in a context, which is strongly driven by the current financial policies of the World Bank.
3 Inter-American Development Bank (IDB)
The Inter-American Development Bank is a multilateral institution set up in 1959, has 46 member countries, 18 outside the Americas region. It uses its own capital, raises funds in financial markets and other resources for financing the development of borrowing member countries; to supplement private investment when private capital is not available on reasonable terms and conditions; and to provide technical assistance for projects. A recent example of an IADB project is an innovation loan for health sector development in Costa Rica health “stewardship” and health promotion. Changes in organisational and financial management are an integral part of this loan, accompanied by a health promotion programme.[xi]
The Multilateral Investment Fund (MIF), also part of the Inter American Development Bank Group, was created in 1993 “to encourage the development of the private sector and to improve the investment climate in the LAC region”. [xii] MIF projects in health care contribute to the development of the private health care sector through supporting infrastructure and organisational changes. In addition, MIF has also invested in human resource projects, some with the explicit aim of reforming labour relations.
An analysis of Multilateral Investment Fund health care projects in the last 5 years shows that the agency provides loans that support new systems of health care delivery e.g. health plans, health franchises, regulatory systems and information systems, which help to develop the private sector to fulfil specific roles in reformed health systems. It also provides support for the development of venture capital which contributes to a growing private sector.
1 Multilateral Investment Fund projects
|Project name |Project description |Budget/ date |
|Regulation of health plans, Brazil |To support a new regulatory framework for private health|MIF $1,550,000 |
| |plans to a)enhance competition and efficiency in the |Total $3,100,000 |
| |private plan market, b) strengthen consumer protection |2000 |
| |organisation c) instil new understanding and acceptance | |
| |of new regulation in Brazilian society | |
|Support for health sector reform, Belize |To create a policy, regulatory and purchasing |MIF $771,650 |
| |environment for the expansion of domestic private sector|Total $1,228,790 |
| |in publicly and privately funded health services |1999 |
|Private enterprise in subsidized health |To encourage private enterprise to become involved in |MIF $630,000 |
|programs, Colombia |managing health care delivery under the subsidized |Total $1,040,000 |
| |health plans |1999 |
|Development of health franchises, Ecuador |To test reform financing models through public-private |MIF $900,000 |
| |partnerships in the provision of health care and to |Total $1,550,000 |
| |improve the quality and capacity of private sector |2000 |
| |provision of primary health services. | |
|Strengthening of private health care |To support / promote private sector participation in the|MIF $1,710,000 |
|services, Nicaragua |health care services market by improving and broadening |Total $ 2,840,000 |
| |existing regulations and creating an investment climate |2000 |
| |to support contracting | |
|Private sector health care providers, Peru |To design and implement sharing health measurement |MIF $2,000,000 |
| |information systems, implement consumer protections |Total $3,400,000 |
| |systems and launch public information campaign |1998 |
|Promoting venture capital industry, Chile |To promote risk capital, reducing market barriers |MIF $10,800,000 |
| | |Total $17,200,000 |
| | |2002 |
Source:
MIF also invests in human resource projects to test innovative approaches involving the private sector. These can then form the foundation for larger national labor reform programs funded by IADB. An example of a human resource project featured a program to modernise labour relations in Bolivia.
4 Bi-lateral agencies – international development and trade
There is a growing awareness of the relationship between the work of bi-lateral agencies involved in international development and trade. This applies to health care as well as other traded products. Trade Departments and Export Credit Agencies play a significant role in supporting national companies involved in export of goods and services.
The US Trade and Development Agency (USTDA) “facilitates developments in emerging markets by promoting US partnerships in overseas projects”. [xiii] It “advances economic development and US commercial interests in developing and middle income countries”. [xiv] It does this through funding technical advice, feasibility studies, training, and business workshops.
Although primarily focused on economic development, the USTDA has recently funded feasibility studies of two hospital projects in Chile. One to evaluate the request for feasibility funding for a project to redevelop the Hospital Salvador in Santiago as well as other health projects. Five small businesses competed for this project, drawn from the USTDA database. Selection of a contractor is currently taking place. A second health care project in Chile was to provide funding for an “orientation visit” for members of the Chilean army who are responsible for buying new equipment for the ‘Nuevo Hospital Militar de la Reina’. [xv]
Regional Developments
1 Overview Latin America
An account of regional developments in the health sector in Latin America demonstrates how national health sector reform, international policy and national and global health care/ insurance companies interact. The implementation of health reforms is a long term process, often characterised by the long destabilisation of the public health sector.
Reforms of the health sector have been taking place in Latin America during the past 10-15 years, often started as a result of structural adjustment policies. The overall aim of these reforms has been to increase the participation of the private health care sector and to reduce the public health sector so that it only delivers care to the lowest income groups, undermining the principles of universality and pooled risk. The reforms often contribute to mounting crises in the public sector, which lead to further attempts at reform e.g. Chile.
1 Decentralisation
Decentralisation of the health system, often as part of wider decentralisation, has been introduced in many countries e.g. Argentina, Brazil, Nicaragua. This has resulted in local administrations/ municipal authorities being responsible for health services. Except for Brazil, where decentralisation can be seen as part of a much wider and more progressive constitutional change, the impact of decentralisation on the health system has resulted in provincial governments being given responsibility for health care and often being unable to either manage or provide adequate resources to maintain the existing system. This has resulted in poorer public sector services. In addition, some form of corporatisation has been introduced to the management of hospitals and health care facilities has often been introduced e.g. Argentina, Nicaragua.
2 Privatisation of social security systems
A second change has been the privatisation of social security systems, which affects not just health care but other forms of social protection as well e.g. pensions. This process often starts as a reaction to a funding crisis, which result from a more general economic crisis and a weakening of the social security systems that support the public health sector.
In Colombia in 2002, it was announced that 65,000 public sector jobs would be cut over the next four years to help cut the fiscal deficit. Some 25,000 public health workers would be laid off from 900 hospitals. However the cuts in the health sector workforce are part of a modernisation plan that aims to expand coverage to 14 million people, from the current 11 million. [xvi]
A year later, in 2003, the Colombian Government is planning to dismantle the Social Security Institute (ISS), a public agency, which provides health and pension services to more than 8 million people. In earlier negotiations, ISS workers said they would contribute to a financial solution through a 10 year freeze on their benefits.[xvii]
3 Role of private sector
Multinational health care and health insurance companies often move into national markets as part of the reform process. However, companies have often been cautious about entering markets and use a range of different entry strategies. They often invest indirectly in new markets before deciding whether to establish a stronger presence.
Two examples of projects, which have received International Finance Corporation loans, illustrate how the interests of the international financial institutions, local companies, US health care companies are linked and the type of investments that are being made in health care.
1) The International Hospital Corporation develops and manages investor-owned health care facilities in Latin America. The International Hospital Corporation works with CIMA Consorcio SA de CV and hospital that operate under the CIMA brand name, a health care management company in Mexico. [xviii] [xix] [xx] It works closely with the Latin Health Fund, a venture capital company set up by Humana Inc, a US health care company. The Latin Health Fund has five strategic partners
• HealthSouth - one of the largest providers of health services in the US which also has a network of health services worldwide for American policy holders
• Humana - a supra-regional managed care company
• Interamerican Investment Corporation (IIC) affiliated to the International Development Bank, which provides “in region” support to Latin Health Fund in the investment process
• UnitedHealthcare – an HMO (also investing through Validus venture capital company)
• Chase Capital Partners - a global private equity investment company.
2) Salutia is an e-health company that has been set up to improve health care through the use of new information communications technologies. It operates in Argentina and Brazil. Set up in 1999, it attracted equity investors Merrill Lynch, Newbridge, UBS Capital as well as IFC. In 2001, Salutia acquired 50% of NetSaude, a Brazilian company. This enabled Salutia to get access to Netsaude electronic billing programme, which allows hospital and pharmacies to bill health care providers via the internet.[xxi]
Salutia shows how new information technology is being used in health care. It is also being used to develop national identification for health care systems. In Brazil, an International Tender for Hospital Care and IT Systems, involving the development of software for the management of integrated information systems to be integrated into the National Identification Health Card system. This is part of an Inter-American Development Bank project. [xxii]
4 Widening public health care coverage to low income groups
New health sector reforms are often focused on the need to include low income groups in some form of public health care coverage as part of an equity policy.
In Chile, after a new private health insurance system took resources away from the public sector, there has been an attempt by the government to introduce a new health care reform (2002). Initially there was wide consultation about the possible new reforms, but after the publication of the AUGE plan, the trade unions have felt excluded from any consultation process. There are anxieties about the financing of the new scheme, the position of health workers and the potential ending of universal coverage by adopting health care for only 53 conditions.
2 Brazil
A decentralised health system (SUS) was introduced in Brazil in 1989 following the adoption of a new Constitution (1989), which recognised that health was a citizen’s right and duty of the state. Health services had to be organised within a single, public and universal system. Federal, state and municipal authorities have responsibility for health.[xxiii] Following an expansion of private health care in the 1980s due to deteriorating public health services, over 70% of hospital beds for the public health system are still provided by the private sector. This has made it difficult for the new health care system to avoid many of the same pressures that other Latin American health systems have experienced, such as expansion of private health insurance.
By 2001, about 26% of the population is covered by private health insurance. [xxiv] The private sector consists of private health companies, private hospitals, health insurance companies, and private clinics. The role of the private sector has grown under the Unified Health System law (1989), even though the aim was to provide universal access. This has been caused by a) the decline in public services and b) the provision of public subsidies for people taking out private health care plans by making insurance premiums tax deductible.[xxv] Private health insurance has been introduced as an alternative to the public health system. Supplementary insurance to complement the public health system, has not been introduced.[xxvi]
Both international and national capital is involved in the Brazilian health insurance market although there are signs that international capital is cautious about its long term involvement in the market. The three largest health insurers in Brazil are Sul America, Bradesco Saude and Amil. [xxvii] Sul America and Bradesco share 1st place in the local health insurance market with 11.4% each. Unimeds (medical cooperatives) have 23.3% of the market.[xxviii]
ING bought 49% of Sul America in March 2002.[xxix] This was a result of a partnership formed in 1997 when Aetna (International) bought a 49% in Sul America Aetna Seguro Saude SA (Sulaet), a health, life, personal, accident and pension joint venture with Sul America. In 2000, ING and Sul America became partners in Sulaet after ING’s acquisition of Aetna International.[xxx]
Both HSBC and Cigna have sold their Brazilian health insurance operations in the last 9 months. In January 2003, Amil purchased Cigna Saude. Amil also operates in Argentina and has a HMO/ PPP plan in the United States (Texas).[xxxi] In March 2003, HSBC sold its health insurance division, with 260,000 affiliates, to Sul Americas Seguros.[xxxii] HSBC said that it did not have a critical mass in the health insurance business.[xxxiii]
The sale of two international health insurance businesses, suggest that international insurance companies do not find it easy to break into the Brazilian market. A report on the Brazilian insurance industry said “Foreign insurers have met difficulties in cultural aspects of Brazil…….. US companies tried to sell managed care products which were not well received by Brazilian consumers. Local banks are in a much better position to sell health insurance. They know the culture”.[xxxiv]
The recent survey reported that Brazilian health insurance industry lacks liquidity to meet short-term demands and has failed grow as a result of new regulation. The new regulator forbids insurers to reject an individual client or to adapt a plan to an individual profile. [xxxv] The Consumer Rights Institute, IDEC, surveyed health insurance companies and found that 8 insurers failed to comply with 30-50% of contact clauses. Amil has raised its premiums for clients aged 60+ by 164% which was over the legal limit of 100%. [xxxvi]
Current privatisation of health services in Brazil can be characterised as taking three forms:
• support services delivered through a private sector contractor
• public services under private management, mainly hospitals
• some hospital beds and highly complex services offered to those with private insurance (and paid by the insurer).
Some general hospitals have been privatised under private management as well as establishing private beds within public hospitals. However primary and psychiatric care remain government services. [xxxvii]
Brazil has been recognised as playing an important role in developing a model of health care for people with HIV/AIDS which allows access to drugs and care as required. Thirty one developing countries have already adopted Brazil’s guidelines. [xxxviii]
The new government has proposed a bill that aims to reform social security for public sector workers. This would raise the retirement age for civil servants. Those already retired with pensions over a certain income level, would have to contribute 11% of their benefits back into the system. The proposal would also de-link pensions to cost of living increases. This measure is a response to a deficit in the pension system.[xxxix] Trade unions are opposing the bill.
In 2002, the IADB approved a loan of $68 million to improve the quality of health care services through the expansion of primary health care in urban areas, using family health providers. It is 7 year project.[xl]
3 Mexico
In Mexico, health protection is a Constitutional right but the Constitution does not specific who should provide this protection.[xli] In 1996 a Program of Health Sector Reform was introduced by the federal government which introduced the private health care sector as a “key actor” in the health sector.[xlii] In the previous decade there had been a process of destabilisation of the public health sector. New systems of financial management impacted on public health institutions by restricting the maintenance and upgrading of equipment and cuts in the wages of health workers. This led to the deterioration of working conditions and in the quality of care provided by the public health sector (Laurell, 2001).
1 Problems of the ISSSTE and IMSS agencies
Health services are delivered through three social security agencies: The Institute of Security and Social Services for State Workers (ISSSTE) for public sector employees; Mexican Institute of Social Security (IMSS) for private sector employees; and the Ministry of Health for those not covered by employer schemes. Workers’ and employers’ pay roll deductions and the government health department fund both the ISSSTE and the IMSS. The rest of the population are covered by government health care but all new admissions are means tested.
In July 2003, the Director of the ISSSTE, which provides pensions and health care for 2 million civil servants, reported a $1.83 billion pension shortfall for 2002. The health care division also has problems of under funding.[xliii] The IMSS also reported that it was short of 15,000 staff, after sacking 8,000 in the last two years. It, too, is struggling to meet its pension and health care obligations.[xliv] It predicted that by 2007, it will not have funds to administer health care services including pension payments.[xlv] These deficits are the result of structural adjustment programs in the 1980s and 1990s that limited funds going to the two agencies.[xlvi]
These reports were made shortly after the IMSS had announced that it would continue to fine local companies for health care payment arrears of $772 million. This is almost equal to the value of the annual IMSS budget.[xlvii] IMSS is also encouraging Mexicans living and working in the US to pay for cover for their families still living in Mexico.[xlviii]
2 Recent reforms
The Fox government is preparing to amalgamate the three public health systems – ISSTE, IMSS and SSA - into one universal service. A loan from IADB for the institutional reform of the ISSTE of $300m has already been allocated for 2004. [xlix]
On 13 May 2003, President Fox signed a law for a new public health plan that will provide almost universal health care coverage to Mexicans who are not covered under either the ISSTE, for government employees and the IMSS, for private sector employees.
Based on pilot schemes of the “Seguro Popular”, the new scheme will cut out means testing currently used in government hospitals. This will provide access to health care for all people with job based health insurance. A new sliding scale insurance programme based on federal and state funding, and monthly payments by individuals will fund this initiative. Monthly payments will depend on the individual’s ability to pay. [l]
A ‘Master Plan’ has also been launched to build new hospitals and facilities. This will lead to increased demand for health care services. The developments will be in three stages:
• Completion of clinics that were unfinished or operating without adequate resources and equipment
• Construction of new clinics and replacement of equipment in some existing clinics
• Building and equipping 55 new specialty units and five regional hospitals.
Costing 8 billion pesos, these developments are due to be completed by 2006. [li]
3 Processes of expansion and consolidation in private health care sector
International companies are reported to see opportunities in health insurance but not in providing health care in Mexico.[lii] However, there are signs that the local private health care sector is expanding. Grupo Angeles was launched in 1986 by Olegario Vazquez Rama and his son, Olegario Vazquez Aldir when they bought a hospital in Mexico City, Hospital Angeles del Pegregal, which was owned by US hospital group Humana. The group now operates 1000 hospital beds with 500,000 patients a year. Grupo Angeles also owns the Camino Real hotel chain, the furniture sore Grupo Hermanos Vazquez as well as coffee shops and car parks. [liii]
In June 2003 Medica Sur, a private hospital in Mexico City had an increase in sales of 14.2% in 2002 from 2001. Medica Sur is owned by a family from Monterrey, Romo Garzas who run Pulsar, which owns a range of business interests including Seguros Comerical America. Grupo Angeles is Medica Sur’s main competitor. [liv]
CIMA (Centro Internacional de Medicina) and Monterrey Capital Partners, subsidiaries of International Hospital Corporation (based in Dallas) acquired Santa Engracia Hospital located in Monterrey, Mexico in early 2003, one of Mexico’s top private hospitals (57 beds). There are plans to open a further 40 beds. [lv]
The new health law which aims to expand coverage to low income groups, is similar to health reforms elsewhere in Latin America, promoted by multilateral agencies in that it aims to expand health care coverage to low income groups. However, the crisis of funding of the two social security institutes shows that there is no underlying financial stability in the public health care system. The private health care sector is expanding.
4 North America
Although the health care systems in Canada and the United States operate in different ways, the countries both have an increasing older population, which is perceived to put pressure on the use of existing health care resources. This has led to extensive debate about the future provision of health care.
In Canada, there has been increasing pressure to include a stronger private sector presence in the health care system through privatisation and public- private partnerships and to make more fundamental reforms to the Canada Health Act that governs the health care system.[lvi] In the United States there has been an attempt to reform Medicare, which is feared to be the first stage in the privatisation of the Medicare program.
There is also a shortage of nurses in North America, which has led to nurses being recruited from Asia, Africa and Europe. There is a worldwide shortage of nurses but the way in which individual countries address these shortages varies. A new trade union campaign in the United States is aiming to change the way in which the nursing shortage is perceived.[lvii]
The growing older population in both countries is leading to an expansion of commercial opportunities for companies involved in residential and home care. For-profit companies involved in home care are expanding. One example is Comcare, the largest home care company in Canada that provides home care to people who can pay for services as well as to those funded by government programmes. The company moves into local home care markets by undercutting existing independent providers when bidding for contracts. Its workers are employed on a casual basis and paid low wages with overtime and few benefits. There have been strikes and struggles to improve pay often resulting in the company moving out of a district rather than improve pay and conditions. [lviii] Labour force involved in home care tends to be female, part time and poorly paid.
Comcare is owned by a diagnostic and laboratory company Gamma-Dynacare. There are several links between home care companies and other health care services e.g. Gentiva, a home health care company was originally a pharmaceutical services company. [lix]
5 Canada
Canada has been experiencing challenges to the way in which its public health care system is run. Two Commissions were set up to explore future models of health care. The Romanov Commission, chaired by Roy Romanov, gathered evidence on different models of health care and health financing from across Canada and abroad. It reported in November 2002 and recommended that:
• federal funding should increase to 25% of the total cost of Medicare,
• the Canada Health Act should be expanded to cover home care and diagnostic services,
• a new drug formulary and national drug agency be established,
• new mechanisms should be set up to ensure access to health care for all citizen and governments to be accountable for health care under the Canada Health Act.
However, although the Romanov Commission recommended an expansion of funding for Medicare, it did recommend the privatisation of cleaning, laundry, food preparation and maintenance services because it feels that it is easier to assess the quality of work of these services. Its recommendations on extending the Canada Health Act to cover home care actually only covers palliative care, mental health and post-acute care. It did not recommend coverage for home care services such as “support services” which are essential for older people or people with disabilities to live independently.[lx]
The recommendations of the Romanov Commission, informed a new a new Canada Health Accord, published on 5 February 2003. The accompanying statement shows that although more money is being made available for the health care system, more health care reforms are still needed.
“First Ministers agree that public health care in Canada requires more money, but that money alone will not fix the system. While all jurisdictions are making progress on health reform, First Ministers agree that significant new investments must address immediate cost pressures and the reforms necessary to achieve timely access to quality care in a sustainable manner. The federal government will continue to work with territorial governments to address their unique challenges.”[lxi]
There will be additional C$34.8 billion dollars given to the health care system over five years. This will be used to set up a new 5 year Health Reform Fund to transfer resources to the provinces and territories for primary care, home care and catastrophic drugs. C$1.5 billion dollars will be used to purchase new diagnostic and treatment technologies and so expand access to publicly funded diagnostic services. A further c$600 million to develop secure electronic patient records.[lxii] These new resources acknowledge that the health care system needs extra money but wider policy questions of what type of new reforms are needed and how the federal government will provide leadership in a process where provinces are still pursuing policies such as public-private partnerships and out of pocket payments, are still unanswered. [lxiii]
In Quebec, which until now has retained a wide range of public sector health services, the provincial government has endorsed public-private partnerships for two hospitals since February.[lxiv] The British Colombia government is proposing to contract out a wide range of surgical procedures to for-profit companies. It is being proposed initially for a health district within the province but with a view to being expanded more widely. [lxv]
Also in British Colombia, in Vancouver Health Authority, the cleaning and infection control service has been privatised and the contract given to Aramark, one of three global cleaning and facilities management companies. This will mean that cleaning of operating theatres and intensive care units as well as other highly specialised parts of the hospital has been contracted out. Current workers are uncertain whether they will retain their jobs. The company is expected to recruit low paid workers.[lxvi]
6 United States
In the United States, the impact of privatisation of health services has been felt for much longer. Health services are delivered by the private or non-profit sector and financing is through private insurance. Workplace insurance is in decline with a move towards medical savings accounts. There are now 42 million people without health insurance. Health reforms promises to be an issue in the forthcoming Presidential campaign.[lxvii]
The quality of health services has continued to decline and there has been an increase in infection rates and drug resistant bacteria. This is partly due to a lack of health workers, especially nurses. There is a shortage of nurses with nurses being recruited from all over the world. However, a recent AFSCME (American Federation of State, Country and Municipal Employees) report argues that there is no shortage of nurses rather a shortage of nurses willing to work in conditions that are currently found in hospitals with high levels of stress, safety risks, and time pressures. It estimated that there were 250,000 nurses ready to work if the conditions were right. Afscme recommends that improving pay and benefits, increasing staffing levels, restricting overtime, giving nurses a voice in workplace policies, access to training and representation through collective bargaining.[lxviii]
The United States illustrates some of the potential problems that privatised systems face, specifically the dependence of private health care companies on government reimbursement schemes. Changes to eligibility for Medicare and Medicaid (Balanced Budget Act) have had a major impact on health care companies leading to a decline in revenue. It has also exposed some of the practices that the companies had established to claim Medicare and Medicaid costs. This had led to several companies filing for bankruptcy. Many of these companies had to sell their international operations. However, there is growing evidence that although many companies sold their international operations, they still became involved in the privatisation of social security systems in some Latin American countries indirectly though investing in managed care companies. This was also at a time when the companies were refusing to provide care for Medicare / Medicaid patients. [lxix]
This year there has been an attempt to reform Medicare. Announced in the President’s State of the Union speech, the reform was presented as a solution for Medicare patients who are not eligible for the costs of prescription drugs. The President’s initial suggestion was that full drug benefits would only be made available to those who enrolled in a “broad, limited-enrolment health care plan, known as a PPP”. A further plan, which has been abandoned in the short term, was to allow younger people to invest some of their social security contributions in a stock market fund.[lxx] Many Democrats viewed these proposals as part of a policy for privatising Medicare.
Currently, Medicare recipients, about 41 million people, are covered for costs of doctors and hospitals care but not for prescribed drugs necessary for their care. As well as not being covered for prescribed drugs, Medicare recipients do not benefit from the cheaper drugs that result from bulk buying of drugs by companies or government. This has resulted in some older people, travelling to Canada to buy cheaper drugs or doing without. Medicaid patients already get access to discounted drugs bought by the government.[lxxi]
Both the Senate and House of Representatives developed plans to address the problem. Neither plan would cover the full $400 billion estimated to cover the full costs of the drugs, only covering about a third of the costs. There were differing attitudes to how much private insurance companies should be involved in providing the new drug benefit or whether it should be paid directly to recipients. The final Medicare bill passed in July 2003, included a universal benefit although there is a means test, which restricts higher drug benefits for those on higher incomes. This attempt to reform Medicare has been seen as an initial step in privatising Medicare because it has introduced some form of means testing which undermines universal coverage, as well as pushing older people to take out drug payment policies with private patient plans or managed care companies. It also threatens employer paid drug coverage because the government will not reimburse employers’ costs.[lxxii]
In May 2003, SEIU and AFSCME reached an agreement with the Tenet Healthcare Corporation which gives workers the right to form and join a union. This is in addition to being able to participate in a national quality initiative, receiving additional training and having a streamlined negotiation process.[lxxiii]
Multinational health care companies
1 Aetna/ ING
Aetna International, a US insurance company with an international division, was taken over by ING, a global provider of financial services in 2000. ING deals with banking, insurance and asset management in 65 countries worldwide. ING provides life insurance and pension products as well as insurance for health, accident and disability. Its core markets are Europe, Asia and the Americas.
ING has consolidated its purchase of Aetna International in Latin America by either consolidating ING branches with Aetna International or leaving Aetna as an established business (See Section 5.2 Brazil)
ING financial results in 2003 show that ING Americas contributes 19% to ING Group pre-tax income. The company reported a strong year in Canada and Mexico. ING Comercial Americas is the largest insurer in Mexico and ING is the largest international insurer in South America. [lxxiv]
2 Cigna
CIGNA International is part of the CIGNA Corporation and offers life, health and employee benefits. The health care insurance products cover government-approved medical benefits and offer an alternative or supplement to governmental programmes. Health care includes life and medical insurance products that are provided through group benefit programmes as well as medical insurance products marketed directly to individuals, including managed care. Supplementary insurance products cover accidental death, medical, hospitalisation and income protection. Health products are distributed through independent brokers and agents as well as CIGNA corporation outlets. [lxxv]
Although CIGNA’s annual financial report (SEC, 2001) said, “CIGNA intends to pursue international growth through acquisitions, joint ventures and other investments.” In January 2003, Cigna announced that it was cutting back its activities in Brazil by selling its health insurance portfolio of Cigna Seguradora to Emil, a Brazilian insurer.[lxxvi]
3 HCA
In 2001, HCA owned and operated 184 hospitals (172 general, acute care, 6 psychiatric hospitals and 6 hospitals included in joint ventures) and 79 freestanding surgery centres. These were located in 24 states of the US, England (6 hospitals) and Switzerland (2 hospitals).
In July 1997 Federal investigation into business practices and the company made changes to executive management and plan to restructure to make a more focused company. Since 1997 it has reduced the numbers of hospitals by 42% (144) and the number of surgical centres by 48% (71). It sold most of its home health operations and non-core assets. It also spun off LifePoint Hospital and Triad Hospital to create 2 public traded companies, which operate 57 hospitals. In December 2000 HCA completed the sale of 116 medical office building to MedCap Properties.
In May 2000 Columbia/HCA changed its name to HCA – The Healthcare Company and in 2001 it changed to HCA Inc.
HCA continues to be the subject of government investigations and litigation in relation to business practices – in relation to Medicare and Medicaid. In December 2000 HCA entered into a Corporate Integrity Agreement with OTG – structured to assure the federal government of compliance with Medicare. In March 2002 it came to an agreement with the Center for Medicare and Medicaid Services subject to agreement with Department of Justice. HCA is still subject to litigation taken out by patients and shareholders.[lxxvii]
4 Tenet
The Tenet Health care Corporation is the second largest investor owned health care company in the United States. It runs 114 hospitals with 27,000 beds in the US with one hospital in Barcelona, Spain. All Tenets hospitals are run by subsidiary companies with 94 hospitals owned by the subsidiaries and 20 owned by third parties and leased to Tenet. California has 30% beds, Florida 16.7% and Texas 12.6%.[lxxviii]
In May 2003 the company entered into an agreement with SEIU and AFSCME (see Section 5.6 United States).
A range of lawsuits is outstanding, from shareholders and from US Department of Health and Human Services investigating Medicare/ Medicaid claims and pharmaceutical pricing.[lxxix] The Chief Executive of Tenet resigned in May 2003, following a federal investigation into billing practices.[lxxx] Further investigations into Medicaid claims in Florida were announced in August 2003.[lxxxi]
5 Quest Diagnostics
Quest Diagnostics is a laboratory testing business that provides diagnostic tests to patients, doctors and health care institutions through a network of laboratories. Quest provides routine tests – blood cholesterol, pap smears, HIV tests, pregnancy, alcohol and other substance-abuse tests. It also provides esoteric tests, which cover less frequent tests for endocrinology, genetics, immunology, microbiology, and oncology. Quest Diagnostics manufactures diagnostic test kits for esoteric testing. The company also runs two clinical trials testing centres in the US and the UK as well working in partnership with two centres in Australia and South Africa.
Quest owns one of the largest privately owned clinical laboratories in the UK, which was developed in partnership with an NHS trust/hospital. In Mexico, Quest owns three laboratories and provides testing services throughout Mexico. There is also a centre in Brazil and Quest is aiming to set up additional laboratory services in Brazil. Quest also provides esoteric testing services to the Nichols Institute, involved in clinical trials, which operate worldwide.[lxxxii]
Quest Diagnostics employed 29,000 people in 2001, the majority in the United States.
Quest took over SmithKline Beecham Clinical Laboratories, the laboratory business of SmithKline Beecham in 2000. In the past year it has acquired American Medical Laboratories, and Unilabs (California). It has also recently established an alliance with Roche Diagnostics to develop gene-based medical testing (Quest Diagnostics SEC, 2001). These recent acquisitions and alliances show the shared interests between the laboratory divisions of pharmaceutical companies and diagnostic testing businesses. The growing demand for esoteric tests, including gene testing, provides opportunities for expansion. These are expensive tests to provide requiring high technology equipment and staff.
6 Compass
Compass Group is the world's second-largest food service company (behind Sodexho Alliance), with operations in more than 70 countries. It provides contract catering and concession services at airports, hospitals, rest areas, and schools. In 2000 Compass merged with UK hospitality giant Granada Group.( sentence deleted) The new Granada Compass decided to demerge in 2001, making Compass Group public again. Compass then sold the leftover Le Méridien hotel chain to Japanese investment firm Nomura International.
In April 2001 Compass acquired Morrison Management Specialist Inc – second largest US health care food services company. In August 2001, Compass acquired Crothall Services Group, which provides housekeeping, portering, and laundry services in the health care sector, in the USA. Both these acquisitions strengthen the position of Compass in the health care market.[lxxxiii]
7 Sodexho
Sodexho is a French company which, like ISS, delivers services – cleaning, catering - to a range of sectors including the health care sector. It provides a range of services (often described as multi-service) to hospitals and to older people’s care homes. These services may include catering, cleaning, housekeeping, building maintenance and management of paramedical staff. Services delivered within the health care sector provide 18% of revenue (Sodexho Annual Report, 2001).
In North America, Sodexho, entered into a partnership with Marriott Services in 1999, after Marriott International spun off its food services. In 2001, Sodexho Alliance acquired the outstanding shares of Sodexho- Marriott. There has been considerable controversy since the merger on issues such as food safety, anti-union labour relations, race relations and anti-competitive practices.
Sodexho is developing partnerships with public and private sector organisations in order to deliver services. In the health sector in the UK, Sodexho has been involved in several Private Finance Initiatives involving hospital building and management. It has recently been criticised strongly for poor standards of cleanliness, particularly in the UK and Canada. Sodexho managed food services at four Vancouver hospitals between 1997 and 2001. There were so many complaints about food safety, quality, administration and staff morale that the contract was brought back into direct hospital management. [lxxxiv]
8 Fresenius
Fresenius is an integrated kidney care company. It provides kidney dialysis equipment, products and services through four divisions. Fresenius Medical Care runs 1,300 dialysis clinics worldwide, Fresenius Kabi, provides products for nutrition and infusion therapy, blook treatments and come outpatient care. Fresenius ProServe, provides management services such as project development, consulting, and staff training to hospitals and other health facilities
Fresenius AG has operations in Asia, Europe, Latin America, and North America. North America and Europe are the main focus of sales with 54% and 34% respectively. South America and Asia-Pacific account for 8% and 4% of sales.
In 2002, Fresenius had subsidiaries in Argentina, Brazil, Colombia and Mexico. All five subsidiaries are involved in selling dialysis products, Argentina, Brazil, Colombia and Mexico are involved in producing these products and in Argentina, Mexico and Colombia, the company runs dialysis clinics. Losses were recorded by the subsidiaries in Brazil, Colombia and Argentina n 2002.[lxxxv]
The company employed 63,638 staff in 2002 with 45% of the labour force in North America. Fresenius Medical Care (clinics) employs 66% of the labour force.[lxxxvi]
Renal care is a growing area of healthcare and part of a very competitive market worldwide. There is growing evidence that companies, which manufacture drugs and / or equipment for the treatment of kidney disease are also involved in the provision of health care.
GATS and FTAA
1 GATS
The General Agreement on Trade and Services (GATS) is an international agreement aimed to further liberalise trade in services. It will impact on trade and health services. There are four modes or types of trade:
1. Mode 1 Cross border supply - neither supplier nor consumer crosses a border but the service is delivered by mail or telecommunications
2. Mode 2 Consumption abroad – consumers travel across a border to obtain health services
3. Mode 3 Commercial presence or foreign direct investment – companies establish operations or make investments within a country
4. Mode 4 Presence of natural persons (temporary cross-border movement of labour) – health professionals travel across borders to deliver health services on a temporary basis [lxxxvii]
The General Agreement on Trade and Services (GATS) current negotiations began in 2000 and will be completed in 2005. There is concern that national governments will not have strong enough systems of regulation in place when foreign companies start to operate within the terms of GATS agreement and that equity of access, scope of services, and quality of services will be affected. [lxxxviii]
Trade in health care services refers to both the import and export of health services. The import of health services in this context may be seen as a way of improving health services through bringing foreign expertise or technology. A country may lower barriers so that qualified health professionals can enter the country. It may send patients abroad for treatment. [lxxxix] The export of health services may involve facilitating health service suppliers who want to establish operations in other countries, using existing health care facilitates for “health tourism” or making it easier for an over supply of health workers to migrate temporarily. [xc]
There are a series of GATS principles that apply to all WTO members even if they have not signed up to sector specific commitments. The ‘Most Favoured Nation Treatment (MFN)’ requires members to treat equally, all services and suppliers of services from all other WTO members. [xci]
One of the most significant principles of the GATS agreement that has long-term implications for the health sector is the “exemptions for services provided in the exercise of government authority and government procured services”. Services provided by government authority (local, regional or national level) or by non-governmental bodies exercising government authority are technically exempt from GATS obligations. However the definition of government authority is “supplied neither on a commercial basis nor in competition with one or more service suppliers”. For health care systems that have an internal market, it is increasingly difficult to argue that government funded health services fit this definition of government authority.
Regulatory reform is seen as an important factor in determining how national governments will control multinational companies. This will be crucial in any attempts to safeguard parts of the health sector e.g. pro-poor policies, cross subsidisation policies, and use of profits. Although within the GATS there is a recognition of the “right of Members to regulate and to introduce new regulation in the supply of services within their territories in order to meet national policy objectives”, the WTO Council for Trade in Services is also required to develop “any necessary disciplines” to ensure that regulations e.g. qualifications, … do not form “unnecessary barriers”. Lipson (2002) points out that service suppliers may challenge domestic health regulations, designed to promote equity, because they might restrict trade.[xcii]
The health sector is not a homogenous sector but is made up of several sub-sectors, e.g. insurance, medical supplies, pharmaceuticals, and laboratories. GATS may affect these sub-sectors before it affects the overall supply of health care. Under GATS legislation, health insurance is classified as “insurance” or “banking and other financial services”. Under insurance, most commitments relating to health insurance fall under “non-life insurance” even though there is a category of “life, accident and health insurance”. Health insurance is seen as part of the financial services sector rather than the health services sector because it is one of many services offered by one company, is affected by regulations relating to other insurance services and requires access to capital markets and reinsurance. [xciii] [xciv] There is a need for stronger regulation. Eighteen countries have liberalised their insurance services sector. Companies are expected to use this as a way into health care systems. [xcv]
2 FTAA
The Free Trade Agreement of the Americas (FTAA/ALCA) was launched in December 1994. Negotiations are due to be completed by 2004 with implementation following in 2005. It has the aim of becoming a “WTO GATS-plus” so its approach draws from existing GATS negotiations. In 2002 the draft agreement outlined how services would be treated. This means that the four modes of supply of services cover:
1. Cross border supply
2. Cross border trade in services
3. Commercial presence companies establish operations within a country
4. Movement of natural persons from one country to another[xcvi]
Mode 3 does not include the supply of a service through foreign direct investment where companies make investments within another country.
The FTAA agreement has similar provisions to GATS in relation to government services.
“Services” include any service in any sector “except services supplied in the exercise of governmental authority”. This means that “a service supplied in the exercise of governmental authority” means any service, “which is supplied neither on a commercial basis, nor in competition with one or more service suppliers”. Once again, the liberalisation of public health systems will make it difficult to argue in favour of exemption of government services.
Trade union action
There has extensive trade union action to defend health services the rights of health workers. Trade union action can be analysed in terms of the focus of the actions and the type of action.
1 Focus of action
1 Challenges to proposed health care policies [xcvii]
• El Salvador SIMETRISSS, STISSS and the Doctors Association took action for 8 months to oppose the plans for privatisation of health services (September 2002 – June 2003). Action involved strikes, marches/ demonstrations, hospital sit-ins, and the development of alternative health policies. A “White March” with the slogan “Health care is a right, not a product” was part of their campaign. The unions successfully overturned proposed legislation in December 2002. In June 2003 they obtained the reinstatement of health workers and doctors who has been dismissed after strike action, and an agreement for an alternative policy to privatisation called the Integrated Health Reform Program.
• In October 2002, Chilean health unions organised strikes to protest at the new proposed health reform, which led to 5 bills being withdrawn from Congress.
2 Challenges to privatisation of specific services or agencies[xcviii]
• In April 2003, Colombian health workers held a national strike to protest against the Government’s plan to dismantle the Social Security Institute (ISS), a public agency, which provides health and pension services to 8 million people. They were also protesting about the lack of investment in the Public Hospital Network, which will soon have to close.
• In 2002-3, National Union of Public Workers (NUPW) threatened an injunction against the Government of Barbados if it removes the Queen Elizabeth Hospital from civil service control, which would be a form of corporatisation. The union also developed broad based support for its actions and developed an alternative proposals for reform of the health and social services sectors.
• Canadian Union of Public Employees (CUPE) produced a report “Cross Country Sell-off” examining the effects of privatisation at community level in Canada and have used this as a basis for campaigning.
3 Improved wages, terms and conditions[xcix]
• A US campaign “A United Voice for Safe Staffing Now” to support federal legislation to establish safe staffing standards. Nurses have also been involved in conferences, lobbying, health fairs, nurse mentor forum.
• Canadian Union for Public Employees (CUPE) launched an on-line campaign to bring international attention to the ILO decision condemning the British Colombia government. The ILO has found that the BC government has violated basic rights and standards through its anti-worker legislation that made contracts with health workers null and void, as a preparation for privatisation.
• In Argentina, health workers have taken over clinics after they closed down due to lack of funds following the economic crisis of December 2001. This is part of a”self-management” movement that has also taken over factories.[c]
2 Types of action
|Types of action |Country |
|Strikes |El Salvador, Chile, Colombia, Honduras |
|Demonstrations/ marches |Chile, El Salvador, Argentina |
|Legal action (or threat of) |Barbados |
|Action with other trade unions/ civil society groups |El Salvador, Honduras, Chile, Argentina |
|Reports on services/ working conditions |Canada |
|Development of alternative health policies |El Salvador |
|Takeover of clinics |Argentina |
Conclusions
1 Trends in the Americas
• Privatisation of social security institutions and health services
• Expansion of private heath insurance – national and international capital
• New health care policies that target service provision for lowest income groups
• Destabilisation of the public health sector
• Changing role of government from health care provider to regulator
• Trade agreements will impact on migration of health workers and public health services
• Health care and health insurance companies show uneven patterns of expansion and contraction
• Future implications of companies receiving government payments for health care delivery
• What do governments need to be strong regulators?
2 Trade union action
• Challenges to health policies including privatisation, which require a wide range of different actions, involving civil society groups
• Challenges to specific privatisation initiatives through strikes and demonstrations
• Demands for improved wages, terms and conditions through campaigns, strikes and demonstrations
3 Future action for network
• Monitor the different forms of privatisation in different parts of the health sector and make links between developments in health care and health insurance
• Monitor actions of health care and health insurance companies and identify the different aspects of company involvement whether direct provision, joint ventures, indirect investment in health care/ health investment
• Gather together and review different alternative health policies developed by trade unions (and other groups) and similarly, share strengths and shortcomings of different types of action, including internet involvement
-----------------------
[i] Government of Chile Ministry of Health (2002) “Hacia un nuevo modelo de gestion en salud” Contenidos del proyecto de ley de Autoridad Sanitaria y Gestion en Salud y Medidas Administrativas Inmediatas
[ii] Correspondence with Stan Marshall, CUPE November 2002
[iii] Lethbridge J.(2002) Private investment and International Finance Corporation investment in health care
[iv] Lethbridge J. (2002) International Finance Corporation (IFC) Health care policy briefing Global Social Policy 2(3): 349-353
[v] PSI (2001) The IDB, the World Bank, Labor Rights and Health Care Privatization in the Americas Washington
[vi] World Bank (2003) ‘Making Services Work for Poor People’Draft World Development Report Washington: World Bank
[vii] Bijlmakers L. And Lindner M. (2003) The World Bank’s Private Sector Development Strategy: key issues and risks Executive Summary ETC Crystal and Wemos, Netherlands also at wemos.nl/prs
[viii] International Finance Corporation (IFC) (2002) Investing in Private Health Care: Strategic Directions for IFC prepared for a joint World Bank/IFC Topical Briefing on Health and Investing in Health Care
[ix] International Finance Corporation (IFC) (2002) Investing in Private Health Care: Strategic Directions for IFC prepared for a joint World Bank/IFC Topical Briefing on Health and Investing in Health Care
[x]
[xi]
[xii] Grover N and Lissfelt J. (2000 ) Labor reform in Latin America and the Caribbean The role of the Multilateral Investment Fund December 2000
[xiii] US Trade and Development Agency website
[xiv] US Trade and Development Agency website
[xv] US Trade and Development Agency website
[xvi] Latin America Healthcare Newsletter November 2002, published by Trade and Business Services, Canning House, London SW1
[xvii] PSI Interamerica Flash April 2003
[xviii]
[xix]
[xx] Lethbridge J. (2002) International Finance Corporation (IFC) Health care policy briefing Global Social Policy 2(3): 349-353
[xxi] Business News Americas 2 October 2001
[xxii] Latin American Healthcare Newsletter August 2002 published by Trade and Business Services, Canning House, London SW1
[xxiii] Fleury S. el al (2001 ) Reshaping Health care in Latin America: a comparative analysis of health care reform in Argentina, Brazil and Mexico
[xxiv] Almeida C. Baptista T.,Travassos C., Porto s. (2001) Health Sector Reform in Brazil from insp.ichsri/country/brazil.pdf
[xxv] Lobato L.(1998) Stress and contradictions in the Brazilian health care reform Paper for the Latin American Studies Association 24-26 September 1999 Chicago
[xxvi] PSI Privatisation of health services survey 2002
[xxvii] Business News Americas 8 July 2003
[xxviii] Business News Americas 16 December 2002
[xxix] Business News Americas 26 February 2003
[xxx] Bestwire 26 March 2002, Bestwire 15 May 2002
[xxxi] Managed Health Care Executive April 2003
[xxxii] Latin America Healthcare Newsletter Canning House March 2003
[xxxiii] Business News Americas 25 February 2003
[xxxiv] Walter Graneiro, Insurance consultant for Capitolio reported in Business News Americas 10 February 2003
[xxxv] Survey by Capitolio, insurance consultancy reported in Business News Americas 10 June 2003
[xxxvi] Business News Americas 25 February 2003
[xxxvii] PSI Privatisation of health services survey 2002
[xxxviii] BBC Monitoring International Reports 20 May 2003
[xxxix] PSI Interamerica Flash April 2003
[xl] M2 Presswire 15 March 2002
[xli] Laurell A.C. (2001) Health Reform in Mexico: the promotion of inequality International Journal of Health Services, 31(2):291-321
[xlii] Laurell A.C. (2001) Health Reform in Mexico: the promotion of inequality International Journal of Health Services, 31(2):291-321
[xliii] Business News Americas 14 July 2003
[xliv] Business News Americas 11 June 2003
[xlv] Business News Americas 12 May 2003
[xlvi] Laurell A.C. (2001) Health Reform in Mexico: the promotion of inequality International Journal of Health Services, 31(2):291-321
[xlvii] Business News Americas 19 May 2003
[xlviii] Business News Americas 4 June 2003
[xlix] Latin America Health Newsletter October 2002 published by Trade and Business Services , Canning House, London
[l] Latin America Health Newsletter July 2003 published by Trade and Business Services , Canning House, London
[li] Business News Americas 29 May 2003
[lii] Business News Americas 29 May 2003
[liii] Latin American Health Newsletter June 2003 published by Trade and Business Services, Canning House, London
[liv] Latin American Health Newsletter June 2003 published by Trade and Business Services, Canning House, London
[lv] Latin American Health Newsletter June 2003 published by Trade and Business Services, Canning House, London
[lvi]
[lvii] AFSCME (2002) Is there really a nursing shortage The critical need to bring nurses back to the hospital industry
[lviii] Puscas D. (2002) Waiting in the Wings: how for profit health corporations are planning to cash in on the privatisation of Medicare in Canada Polaris Institute
[lix]
[lx] SEIU Preliminary analysis of Romanov 5 December 2002
[lxi] New Canada Health Accord
[lxii] Health Canada website
[lxiii] Colleen Fuller 2003 Health Accord is welcome but national standards still in jeopardy Canadian Centre for Policy Alternatives policyalternatives.ca
[lxiv] Cupe News 23 July 2003 cupe.ca
[lxv] Cupe News 23 July 2003 cupe.ca
[lxvi] Cupe News 23 July 2003 cupe.ca
[lxvii] Americans for Health Care
[lxviii] AFSCME (2002) Is there really a nursing shortage The critical need to bring nurses back to the hospital industry
[lxix] UNRISD Workshop ‘Commercialisation of Health care’ March 2003
[lxx]
[lxxi]
[lxxii] SEIU Medicare Drug Plan briefing
[lxxiii] SEIU Historic Agreement with Tenet Healthcare Corp. gives Hospital Employees Greater Voice
[lxxiv] PR Newswire 21 February 2003
[lxxv] CIGNA SEC 10-K, 2001
[lxxvi] Business News Americas 15 July 2003
[lxxvii] HCA SEC 10-K,2001
[lxxviii] Tenet SEC 10-K 2002 Transition Report 7 months to end 2002
[lxxix] Tenet SEC 10-K 2002 Transition Report 7 months to end 2002
[lxxx] Alameda Times-Star 28 May 2003
[lxxxi] State Probing Tenet over Medicaid 9 August 2003 Palm Beach Post
[lxxxii]
[lxxxiii] pass.co.uk
[lxxxiv] Walker Tom (2002) Who is Sodexho? Report prepared for the Hospital Employees’ Union May 2002
[lxxxv] Fresenius Annual Report 2002 fmc-
[lxxxvi] Fresenius Annual Report, 2002
[lxxxvii] Lipson D. (2002) Negotiating Health Services in Trade and Integration Agreements in the Americas Technical Report Services No.81 PAHO, December 2002
[lxxxviii] Smith R. (2003) Trade and Health Services, GATS Mode 3 Commercial Presence- Foreign Direct Investment Draft Working Paper Globalisation, Trade and Health Working Papers Services, WHO
[lxxxix] Lipson D. (2002) Negotiating Health Services in Trade and Integration Agreements in the Americas Technical Report Services No.81 PAHO, December 2002
[xc] Lipson D. (2002) Negotiating Health Services in Trade and Integration Agreements in the Americas Technical Report Services No.81 PAHO, December 2002
[xci] Lipson D. (2002) Negotiating Health Services in Trade and Integration Agreements in the Americas Technical Report Services No.81 PAHO, December 2002
[xcii] Lipson D. (2002) Negotiating Health Services in Trade and Integration Agreements in the Americas Technical Report Services No.81 PAHO, December 2002
[xciii] Lipson D. (2002) Negotiating Health Services in Trade and Integration Agreements in the Americas Technical Report Services No.81 PAHO, December 2002
[xciv] Smith R. (2003) Trade and Health Services, GATS Mode 3 Commercial Presence- Foreign Direct Investment Draft Working Paper Globalisation, Trade and Health Working Papers Services, WHO
[xcv] Hilary J. (2001) The Wrong Model GATS, trade liberalisation and children’s right to health Save the Children
[xcvi] FTAA (2002) Chapter on Services
[xcvii] PSI Interamericas Flash 2003
[xcviii] PSI Interamericas Flash 2003
[xcix] PSI Interamericas Flash 2003
[c]
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