Latin America's Lessons for UHC

By Joe Kutzin

More meetings on UHC and health financing (a fact, not a complaint)

I go to a lot of meetings on UHC and health financing (again, that’s a fact, not a complaint). In the past two weeks, I participated in a panel discussion on UHC at the WHO Regional Committee for Africa, and I’m just back from a meeting on the role of the Regional Office for the Americas (PAHO) in supporting its member-states to make equitable progress towards UHC. While neither meeting was focused solely or even primarily on health financing, I almost always am, and as I sat in PAHO’s DC office I began to think about what lessons does Latin America’s rich experience hold for low- and middle- income countries elsewhere in the world. For the sake of argument, I’ll focus on one illustrative country and one main lesson.

Confronting the reality of health systems that were “unequal by design”

Sitting in PAHO, I reminded myself that much of how we now approach health financing globally is derived from the analysis of many Latin American health financing (and overall) system arrangements. An important example of this was a paper written by Julio Frenk in 1995 in Health Policy (, based on a detailed assessment by the Mexican Health Foundation (FUNSALUD, including several contributors who were sitting around the table in Washington last week). The paper included the adjacent diagram (with a slight adjustment of terminology) that greatly influenced my thinking about health financing and is very much at the heart of the “functional approach” to health systems that is widely in use today.

The diagram reflected the reality of the Mexican health system: it was organized by social group, reproducing and exacerbating the underlying social inequalities in the country. For purposes of both efficiency and equity, the FUNSALUD team recommended turning this around – organize the system by function to better serve the entire population, regardless of their income or insurance status. In Mexico and elsewhere in the region, however, it has proven very difficult to overcome the legacy of the segmented health system structure, with reforms such as the Seguro Popular circumventing the problem rather than being able to take it on directly, due to the power of entrenched social security systems to resist integration.

There has been similar experience elsewhere in the world – even the highly regarded Thai reforms were unable to merge the previously established schemes for civil servants and private sector workers with the Universal Coverage Scheme introduced in 2002 (, and while (as in Mexico) great achievements have been realized, there remain inequities and inefficiencies arising from the co-existence of different schemes for different social groups.

UHC: coverage as a right, not an employee benefit

A more recent article on the Mexican reforms ( reminds us of another critical message about UHC – it is fundamentally grounded in a rights-based approach. The linkage observed in many countries between employment status and health coverage is a historical anachronism that derives from the pre-World War II rationale for public policy on health coverage: increasing labor productivity.

In most countries today, however, access to health services is a right of the population, and hence there is simply no reason why countries need to copy the historical pathway of pre-war Europe. Alternative pathways exist. In two ex-USSR countries, Kyrgyzstan and Moldova, significant financing reforms were introduced in which the main funding source was general revenues and persons inside and outside of the formal sector were covered in the same pool from the start ( In Rwanda, explicit coverage programs began with the poor (fully paid from general revenues sourced from tax and donor funds) and later brought in the rest of the population through a subsidized prepayment mechanism ( Burundi is similarly using a combination of tax and donor revenues to pay for free care and thus expand coverage for mother and child services as a critical early step in its reform process (

The strong efforts made by Mexico, Thailand, and others to overcome the legacy of having started with the formal sector reflects the growing willingness of countries to de-link health coverage from employment.

How can we address inequities and inefficiencies?

These experiences contribute greatly to today’s global agenda on health financing for UHC. Remember that UHC embodies a set of specific goals, and thus moving towards UHC means changing the system to improve equity in the receipt of services, financial protection, and quality, for the population as a whole. One of the main messages of my recent paper ( is that the proper unit of analysis for UHC is the entire system and population; what’s good for a scheme isn’t necessarily good for the system. Depending on its design, a scheme may contribute to these objectives, but it may also exacerbate the gaps between the have’s and the have-not’s. A scheme is a means to an end, and policy makers (and those advising them) need to orient reform design to the UHC goals at the level of the entire system/population.

Based on this, and again taking lessons from Latin America’s segmented systems, here are fairly blunt, related recommendations on health financing reforms:

1) If it is does not yet exist, avoid initiating explicit health insurance schemes solely for persons in regular salaried employment (the “formal sector”). 2) More generally, avoid establishing separate coverage schemes for different population groups. 3) Put more positively, seek opportunities to diversify populations covered by the same funding pools as early as possible in the reform process (ideally from the beginning) to avoid creating interests that will resist equitable expansion of coverage. 4) Particularly in contexts of high workforce informality, moving towards UHC will involve moving away from contributory-based entitlement for effective service guarantees. 5) This further implies that, as seen in all of the reform examples cited here as well as in an analysis of recent “health insurance” reforms in 9 African and Asian countries (, the main funding source for a serious effort at equitable coverage expansion in such contexts must be general government revenues rather than direct (either compulsory or voluntary) contributions for health insurance.

More meetings, more lessons? We’ll see.

My next stop is Indonesia, for a meeting on expanding health coverage to the informal sector. It will be my first visit there in about 15 years, and I’ll get a chance to see if there is indeed a political window of opportunity to get past the legacy of having begun with the formal sector and truly move towards UHC rather than continuing with separate and unequal schemes for different population groups.

Excellent blog Joe, I cannot

Excellent blog Joe, I cannot agree more on your take home messages. There is so much pressure (well meaning for the most part) on low income countries to start employee based insurance systems and to fragment the health system further. We need voices like yours to minimize that happening.

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