Health insurance reform in four Latin American countries : theory and practice
The author examines public economics rationales for public intervention in health insurance markets, draws on the literature of organizational design to examine alternative intervention strategies, and considers health insurance reforms in four Latin American countries -- Argentina, Brazil, Chile, and Colombia -- in light of the theoretical literature. Equity has been the main reason for large-scale public intervention in the health insurance sector, despite the well-known failures of insurance and health care markets associated with imperfect information. Recent reforms have sought less to make private markets more efficient than to make public provision more efficient, sometimes by altering the focus and function of existing institutions (such as the obras sociales in Argentina) or by encouraging the growth of new ones (such as Chile's ISAPREs). Generally, these four Latin American countries have reformed the ways insurance and care are organized and delivered, have tried to extend formal coverage to previously marginalized groups, and have tried to finance this extension fairly. Colombia instituted an implicit two-tiered voucher scheme financed through a proportional wage tax. Chile's financing mechanism is similar but the distribution of benefits is less progressive, so the net effect is less redistributive. Argentina's remodeled obras system went halfway: the financing base is similar and there is some implicit redistribution from richer to poorer obras, but the quality of insurance increases with income. On the face of it, Brazil's health insurance system is less redistributive than those of the other three countries, as no tax is earmarked for financing health insurance. But taxes paid by higher-income taxpayers are not reduced when they choose private insurance, highlighting the problem of examining the health sector independent of the general tax and transfer system.
|Date of creation:||30 Nov 2000|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (202) 477-1234
Web page: http://www.worldbank.org/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Feldstein, Martin S, 1973. "The Welfare Loss of Excess Health Insurance," Journal of Political Economy, University of Chicago Press, vol. 81(2), pages 251-80, Part I, M.
- Akerlof, George A, 1970. "The Market for 'Lemons': Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, MIT Press, vol. 84(3), pages 488-500, August.
- David M. Cutler & Richard J. Zeckhauser, 1997.
"Adverse Selection in Health Insurance,"
NBER Working Papers
6107, National Bureau of Economic Research, Inc.
- Cutler David M. & Zeckhauser Richard J., 1998. "Adverse Selection in Health Insurance," Forum for Health Economics & Policy, De Gruyter, vol. 1(1), pages 1-33, January.
- David M. Cutler & Richard J. Zeckhauser, 1998. "Adverse Selection in Health Insurance," NBER Chapters, in: Frontiers in Health Policy Research, Volume 1, pages 1-32 National Bureau of Economic Research, Inc.
- Mathias Dewatripont & Jean Tirole, 1994. "The prudential regulation of banks," ULB Institutional Repository 2013/9539, ULB -- Universite Libre de Bruxelles.
- David M. Cutler & Sarah J. Reber, 1998.
"Paying For Health Insurance: The Trade-Off Between Competition And Adverse Selection,"
The Quarterly Journal of Economics,
MIT Press, vol. 113(2), pages 433-466, May.
- David M. Cutler & Sarah Reber, 1996. "Paying for Health Insurance: The Tradeoff between Competition and Adverse Selection," NBER Working Papers 5796, National Bureau of Economic Research, Inc.
- Tirole, Jean, 1994.
"The Internal Organization of Government,"
Oxford Economic Papers,
Oxford University Press, vol. 46(1), pages 1-29, January.
- Wilson, Charles, 1977. "A model of insurance markets with incomplete information," Journal of Economic Theory, Elsevier, vol. 16(2), pages 167-207, December.
- HOLMSTROM, Bengt, .
"Moral hazard and observability,"
CORE Discussion Papers RP
-379, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Le Grand, Julian, 1991. "Quasi-markets and Social Policy," Economic Journal, Royal Economic Society, vol. 101(408), pages 1256-67, September.
- Gouveia, Miguel, 1997.
" Majority Rule and the Public Provision of a Private Good,"
Springer, vol. 93(3-4), pages 221-44, December.
- Miguel Gouveia, 1997. "Majority rule and the public provision of a private good," Public Choice, Springer, vol. 93(3), pages 221-244, December.
- Dixit, Avinash, 1997. "Power of Incentives in Private versus Public Organizations," American Economic Review, American Economic Association, vol. 87(2), pages 378-82, May.
- Uri Ronnen, 1991. "Minimum Quality Standards, Fixed Costs, and Competition," RAND Journal of Economics, The RAND Corporation, vol. 22(4), pages 490-504, Winter.
- Hammer, Jeffrey S., 1996.
"Economic analysis for health projects,"
Policy Research Working Paper Series
1611, The World Bank.
- Rubinstein, Ariel & Yaari, Menahem E., 1983. "Repeated insurance contracts and moral hazard," Journal of Economic Theory, Elsevier, vol. 30(1), pages 74-97, June.
- Zeckhauser, Richard, 1970. "Medical insurance: A case study of the tradeoff between risk spreading and appropriate incentives," Journal of Economic Theory, Elsevier, vol. 2(1), pages 10-26, March.
- Chalkley, Martin & Malcomson, James M., 2002.
"Cost sharing in health service provision: an empirical assessment of cost savings,"
Journal of Public Economics,
Elsevier, vol. 84(2), pages 219-249, May.
- Chalkley, M. & Malcomson, J.M., 2001. "Cost Sharing in Health Service Provision: An Empirical Assessment of Cost Savings," Economics Series Working Papers 9969, University of Oxford, Department of Economics.
- Andrei Shleifer, 1985. "A Theory of Yardstick Competition," RAND Journal of Economics, The RAND Corporation, vol. 16(3), pages 319-327, Autumn.
- Jack, W., 1998. "Controlling Risk Selction Incentives when Health Insurance Contracts are Endogenous," Papers 341, Australian National University - Department of Economics.
- Rothschild, Michael & Stiglitz, Joseph E, 1976. "Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information," The Quarterly Journal of Economics, MIT Press, vol. 90(4), pages 630-49, November.
When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:2492. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi)
If references are entirely missing, you can add them using this form.