Document(s) 8 of 14

Introduction

As in many other Latin American countries, the Mexican Sistema Nacional de Salud (SNS, national health system) has undergone considerable change over the last two decades. The reasons for the change were both internal and external, and mostly of an economic nature.

Beginning in 1981, a free fall in oil prices, the consequent decrease in foreign earnings, and rising interest rates made it impossible for Mexico to continue servicing the national debt. The gravity of the crisis was reflected in a general deterioration in all indicators of economic growth. Since 1995, there has been some improvement in the economy, although the effects of 15 years of continuous economic recession have decisively eroded the "social contract." The social contract arose out of the Mexican Revolution and is considered by many to be the basis of social stability in the country over the last few decades.

Some indicators that illustrate the effect of the crisis on the evolution during the 1980s of social spending in general, and health expenditure in particular, are as follows:

• Between 1980 and 1989, public expenditure decreased from 10.1% to 4.3% of gross national product (GNP) (Valenzuela 1992). The social programs most affected were education and health.

• The relative share of social expenditure, including health, decreased from 2.5% of GNP in 1982 to 1.3% in 1988. Over the same period, the proportion of public health expenditure dropped from 6.2% to 2.5% of total public expenditure (López and Blanco 1993). Indeed, total health expenditure in 1988 was 42% less than what it was in 1982 (Valdés 1991).

• Real salaries dropped by more than half in between 1982 and 1990, comparable to 1962 levels, and their share of GNP fell from 37.5% to 24.0% (Valenzuela 1992).

• During the same period, formal employment decreased from 92% to 74% of the total workforce, whereas the informal sector grew from an insignificant 1% to 14% (López and Blanco 1993).

The economic crisis gradually gave way to a political one. Protests against the drop in real wages exceeded the limits of negotiation. In 1983 alone, there were 3 000 strikes, more in one year than during the whole previous 6-year administration (Frenk et al. 1994). The government refused to change its policy on wages, however, and this alienated some sectors of the economy. Several attempts to increase benefits, including health care coverage, proved fruitless as the crisis deepened and the international creditors started putting pressure on the government to reduce unemployment and welfare benefits. The failure of the state to honour its obligations and the relative expansion of the informal sector reduced the government’s credibility and hence its legitimacy. Since the early 1990s, there has been a profound questioning of the corporate pact between the state and various interest groups. The economic and social reforms that are now taking place, including health care reform, thus form an integral part of the process of redefining the roles and responsibilities of the state and the citizens and their representatives.

While political and economic changes have been the most compelling reasons for reforming the health sector, one cannot discount the impact of the profound epidemiological and demographic transition that Mexico has undergone in the last few decades, nor the growing recognition of the need to improve equity and quality in health care.

While there is general agreement on the reasons for health reform, there is less of a consensus on what the reform means and when it actually began. For the purposes of this study, we have identified two key periods that may be considered as the precursors of health care reform in Mexico. The first began in 1983 with the proposed additions and amendments to Article 4 of the Constitution that effectively raised the right to health protection to the constitutional level. The second period began in 1995 with modifications to the Ley del Seguro Social (social security law) and the adoption of the Programa de Reforma del Sector Salud 1995-2000 (PRSS, health sector reform program 1995-2000) (Aboites 1997).

The reform proposed in 1983 intended to radically transform the health care services and clearly establish the strategies to do this. Its success was limited, however, by resistance on the part of various interested parties, as well as a lack of citizen participation. On the other hand, the changes initiated in 1994 originated within a context of changing political process (Fleury 1990)and occurred in response to pressure from various interest groups.These changes aimed to produce a profound transformation in the health care servicesand involved modifying the regulatory framework that governed them. The involvement of different interest groups and their diverging political agendas in the process has generated contradictions and tensions, however. The way in which these are reconciled will affect the future direction of reform.

Background Influences

Antecedents shaping the health care system

The role of the state and its institutions in guaranteeing social rights is enshrined in the Constitution of 1917. But, although Article 3 on the right to education and Article 123 on labour relations apply to the entire population, access to social benefits depends to a large extent on an individual’s place in the labour market. This is particularly so in the case of access to health care services, because the population is divided into two groups: those who are insured by virtue of being employed in the formal sector, and those who are not insured because they are self-employed or work in the informal sector. The origin of this situation goes back to 1950s when the foundations of the privileges accorded to the most powerful groups, such as the military, the public service and some sectors of the working class, were laid (Fleury 1990).

Health care policy from 1917 up until the end of the 1970s can generally be considered to have responded to the needs of the "corporate pact."Under this pact, the institutional mechanisms for providing social benefits served as an efficient means to channel the demands of certain sections of the workforce, but at the same time, to co-opt them for the government’s purposes. The result of this process was the appearance and consolidation of a fragmented public assistance system that failed to cover the entire population. It did, however, improve the lives of some workers and of other segments of the population, as coverage by the social security system grew at a yearly rate of 10% between 1960 and 1970 (Laurell 1996).

Structure of the health care system

At present, the compulsory social security system covers little over 50% of the population (Secretaría de Salubridad y Asistencia 1996) and includes formally employed workers, members of production cooperatives, and various organized groups of small landowners and agricultural workers.

The rest of the population that is not covered by social security is covered by the Secretaría de Salubridad y Asistencia (SSA, department of health). This population is a complete mosaic, because it includes people from all strata of society, from the wealthiest self-employed professionals to the poorest rural workers and indigenous groups. None of the following are included in the social security system: people who work in family businesses; self-employed professionals, craftsmen, and traders; small landowners and agricultural workers who are not organized into associations or credit unions; and individuals (not businesses) who employ insured workers. These people have the option of voluntarily insuring with the Instituto Mexicano del Seguro Social (IMSS, Mexican institute for social security), but the cost and requirements for doing so, as well as the lack of publicity concerning this option, have made it an insignificant one.

Private health care provision has developed at the fringe of official policies, and now accounts for 50% of total expenditure on health. The private sector owns about 30% of hospital beds, employs 34% of doctors, and provides about 32% of medical consultations. Private medical care is very important among those with the fewest resources, covering up to 41% of all contacts with doctors. Private medical insurance coverage, however, is very limited (2%) and the use of managed insurance schemes is even more so (Secretaría de Salubridad y Asistencia 1996). In spite of this wide range of services, there are still about 10 million inhabitants in the country without access of any kind to formal health care services.

Because of this, some authors have classified the Mexican health care system as a "segmented model," and they consider its structure according to two fundamental dimensions — social groups and functions (Frenk et al. 1994). With respect to social groups, there is a clear distinction between the poor and those able to pay. The paying group can be subdivided again into formal sector workers and their families, and the self-employed, mostly urban middle- and upper-class people who are not covered by social security. The latter are usually attended to by the private sector through out-of-pocket payments or prepayment schemes, which are being used increasingly in the voluntary contract system. Finally, there are the poor, both rural and urban, who are excluded from social security because they do not work within the formal economy (Londoño and Frenk 1997).

The main problem in analyzing the health care system by function is that the different social groups are segregated into separate subsystems. The present system can be characterized as being "vertically integrated" but "horizontally segregated" (Frenk et al. 1994). This means that each institutional group (social security, public sector, or private sector) functions separately. The SSA is responsible for the administration of personal health care services for the poor.

Many problems arise from this structure, among which are duplication of effort, waste of resources, and the creation of monopolies serving different sections of the population. Perhaps the most serious problem is the overlap in demand, because a high proportion of those who are covered by social security also use private sector services or those of the SSA. In these cases, the patient pays twice or even three times, a situation that has been described as multiple contribution. Despite many and repeated efforts to encourage decentralization, the system still suffers from the inertia generated by many years of centralization.

In short, the health care system features incomplete coverage, stratification by population group, and excessive centralization, as well as serious problems of duplication, poor quality, and inefficiency. These issues have been used from the beginning of the 1980s in official arguments to justify the need for health sector reform, and they are still being used today.

Reform Process

As was stated in the introduction, to understand the process of reform of the health care services in Mexico, two periods must be analyzed. The first is the period from 1982 to 1988, when the "structural change" that laid the foundation for the subsequent transformation of the health care system was made. The second period covers the changes that have been underway since 1995 and were expressed in the modifications to the Ley del Seguro Social (Social Security Law) and in the points contained in Programa de Reforma del Sector Salud 1995-2000 (PRSS, health sector reform program 1995-2000).

Structural change — 1982-88

Formulation of the proposal for reform

The reform that began in 1983 with the modification of Article 4 of the Constitution sought to respond to these goals through a complete overhaul of the administration of health care services, in what was known as the "structural change."

In formal terms, the reform was sustained by its intention to create the Sistema Nacional de Salud (SNS, national health system). The strategies that were defined for the consolidation of the system were decentralization, administrative modernization, coordination between the different sectors, and community participation. Decentralization was the most important of these strategies.

The creation of different sectors involved establishing the means for determining population groups and designating coordinating entities within each sector. It also regulated the organization, function, and control of state-supported entities and the coordination of others under an arm of the Federal Executive.

The decentralization of health care services was gradual and began in 1984 with the first of two stages: the coordination of programs (1983-84) and the integration of organizations (1985-86). Under this strategy, services were financed by re-ordering federal and state resources and diversifying sources of funding.

Administrative modernization was based on a dynamic reorganization of the system and the institutions that make it up, with a view to making the SNS function better. The process of modernization was carried by the Secretaría de Salubridad y Asistencia (SSA, department of health) in its role as regulator and supervisor of the system.

Coordination between sectors was promoted on the assumption that health care problems arise not only within the different sectors but also between and among sectors. Entities such as the Gabinete de Salud (health cabinet) and the Consejo de Salubridad General (general health council) promoted various coordination initiatives, both at a sector and institutional level.

Community participation was encouraged through several legal instruments that were put in place for interventions in areas such as health promotion, health education, better health care services utilization, and maternal and child health.

Another important modification precisely defined the method of coordination within the sector. The SSA was responsible for coordinating federal health care institutions, including the programs and functions of the social security institutions. This modification also gave the SSA the power to intervene in the planning and budgeting processes of each institution.

According to the Ley de Planeación (planning law), planning would be the ideal instrument for making the SNS effective. This law envisaged the existence of a health sector program to which all institutional programs would be subject. This federal program would cover the whole country, taking in the three levels of government as well as the social and private sectors, and using obligation, coordination, incentives, and harmonization to achieve its ends.

Both the design and implementation of the reform proposals were carried out by the government and the SSA alone. Only afterwards were the public institutions that would be affected by the changes, and the representatives of employers and workers involved, called in. The success of the proposals depended on the support of all the institutions involved, but especially the Instituto Mexicano del Seguro Social (IMSS, Mexican social security institute), which had, since the 1970s, become the most powerful institution of the health sector.

Politically, the reform implied a change in the balance of power between the different institutions, putting the SSA on top, and for this reason it faced serious resistance. Thus, "the corporations that could see their exclusive access to goods and services threatened, along with their share of power, formed, under the leadership of the IMSS, followed by the organized labour movement, a vetoing coalition" (González et al. 1995).

Legal framework — Article 4 of the Constitution and the Ley General de Salud

This section is based on Valdez (1988). Without doubt, the most important legal advance in the area of health care was the inclusion in Article 4 of the Constitution (3 February 1983) of the social guarantee to the right to health protection. This constitutional guarantee established that every person has the right to health protection; the law will define the basis for and methods of accessing health care services; and the same law will establish the role of the federation and federal entities in the health care sector.

Unlike individual rights, which must only be respected by the state, the right to health protection was a social guarantee, like those already established in the areas of education, work, housing, and family planning. This means that the state is responsible for doing whatever is required to see that this right is satisfied.

This right has three characteristics. It is universal and without limits, being accorded to all citizens by virtue of being Mexican. It guarantees access to health care service and will define in law the basis for and methods of obtaining such access. It establishes the way in which the federal government and the states will carry out the decentralization of health care services, with the consequent strengthening of this constitutional right.

Congress approved the Ley General de Salud (general health law) in December 1983, it was published on 7 February 1984, and came into force on the first of July of the same year. This law included additions and amendments to Article 4 of the Constitution with a view to defining the contents and the intentions of the right to health protection; establishing the legal basis that would make that right effective; defining the role and responsibilities of the public, social, and private sectors; establishing an operational basis for the Sistema Nacional de Salud (SNS, national health system); defining the regulations for the provision of services; updating and completing the principles of general health; and delineating the jurisdiction between the various health care authorities.

This legal document was the first attempt to regulate service functions within the health sector under the guidance of a coordinating body, the Secretaría de Salubridad y Asistencia (SSA, department of health).

Sistema Nacional de Salud

Based on the two items of legislation described above, as well as the Ley de Planeación (planning law) of December 1982, which laid the foundation for decentralization, the Sistema Nacional de Salud (SNS, national health system) attempted to implement the right to health by harmonizing federal and state programs and the social security and private sectors.

The objectives and components of the SNS were defined with the explicit purpose of extending coverage to the whole population, giving priority to the least protected, and improving the quality of the services provided. The task of coordination was left to the Secretaría de Salubridad y Asistencia (SSA, department of health).

The most important strategies for consolidation were:

• The creation of sectors was based on the Ley Orgánica de la Administración Pública Federal (federal public administration organization law), 29 December 1982, which grouped all kinds of institutions in the health care sector by programs, functions, and services, and the Ley Federal de Entidades Paraestatales (federal law onstate-owned enterprises), of 14 May 1986.

• Decentralization of health care services for the general population began with a decree published on 8 March 1984, and was based on a model of gradual decentralization.

• Administrative modernization and coordination between sectors.

• Community participation was based on the reform of Article 26 of the Constitution and Articles 7, 10, 13, 57, 58, 59, and 60 of the Ley General de Salud (General Health Law) and several other dispositions.

Implementation of the reform

Administrative modernization of the Sistema Nacional de Salud (SNS, national health system) was achieved in three stages. The first (1982-83) consisted of restructuring the offices of the Secretaría de Salubridad y Asistencia (SSA, department of health), which were top heavy. The second (1983-84) concentrated on organizing the decentralized administrative units by territory. And, the third (1984) attempted to restructure health care services to achieve integrated organizations and functions across the systems of epidemiological surveillance, medical care, and social assistance.

The process of decentralization, one of the main strategies of the reform project, varied in its development from state to state. Official accounts reported positive results in terms of services provided and potential coverage. Nevertheless, only 14 states achieved decentralization and the success of the process depended to a large extent on the economic situation of the state involved. Thus, in the poor states, health care services deteriorated when the federal subsidy was reduced.

With respect to community participation, official sources report the establishment of health care programs in all states, 11 000 health care committees nation-wide, and training activities for 100 000 voluntary health promoters.

Some of the objectives of the SNS were seriously compromised by reduced health care spending. Among these were extending health care coverage to the most unprotected groups; promoting programs to develop infrastructure; and improving the quality of health care services.

During the period 1988-1994, most of the activities undertaken by the previous presidential administration were suspended. The new government put the emphasis on modernizing government departments, favoring social policies featuring high levels of specialization, increased centralization, and harmonization of institutional resources.

Although the SNS retained the features previously specified, some changes were made that affected the lines along which it would develop. The decentralization program was suspended and, in its place, selective programs were introduced that targeted the poorest population groups. Under the aegis of the signing of the North American Free Trade Agreement (NAFTA), regulations were modified to allow international companies to participate in private insurance, which resulted in a considerable increase in prepaid medical insurance (Tamez et al. 1995). Moreover, the growth of an industrial medical complex, based on high technology, service networks, and the consumption of pharmaceuticals, was favoured through economic and legal incentives (Laurell and Ortega 1991).

It was also during this period that one of the most important changes was made, which was to pave the way for a subsequent proposal for the reform of social security. This change was the creation of the Sistema de Ahorro para el Retiro (SAR, savings for retirement system), by which collective funds were replaced with individual ones, and the administration of these funds was transferred from the public sector to private banks.

Evaluation

The evolution of health care financing is fundamental to an evaluation of the process of reform during this period. It helps explain the change of direction in social and health care policy, and to highlight some of its many inconsistencies. During the 1980s, there occurred a continued contraction of public and social expenditure; a financial restructuring of public institutions, with the disappearance of or reduction in subsidies; inconsistencies in reducing expenditure between the various subsectors, which exaggerated inequality of access and kept uninsured groups at a disadvantage; and an imbalance in the distribution of expenditure between different programs, resulting in increased expenditure on treatment and decreased expenditure on prevention.

The policy of reducing public expenditure while attempting to extend coverage caused financial problems that resulted in a gradual deterioration in public services, which in turn was used to justify further and more profound modifications to the Sistema Nacional de Salud (SNS, national health system). One indirect effect of the decline of the public and social security subsectors, intended or not by the reform, was the growth of the private subsector. This was manifested in the proliferation of private, prepaid, medical insurance and an increase in the practice of subcontracting public medical services to the private sector.

Because the changes undertaken during this period were proposed by the state and based on the results of negotiations between government representatives, employers, and labour organizations, they were unsuccessful, and the Secretaría de Salubridad y Asistencia (SSA, department of health) was unable to fulfill its coordinating role. The terms of the reform apparently undermined the basis of the corporate pact. The organized labour movement, under the leadership of the Instituto Mexicano del Seguro Social (IMSS, Mexican institute for social security), felt its interests threatened and obstructed the proposed changes (Martínez 1997). This was made possible due to the lack of participation by the civilian population and other groups affected by the reform.

During the period 1988-1994, the excessive centralization and fragmentation of the public health care subsystem led to duplication of effort, poor coordination, and lack of control, which reduced its efficiency and effectiveness. The strategy of focusing selectively was clearly expressed in the Programa Nacional de Solidaridad (PRONASOL, national solidarity program), which was directed at the poorest population groups, especially those in rural areas. It was a kind of substitute for the process of decentralization begun by the previous administration. The discretionary manner in which the budget was allocated, however, was seen as clearly political, a means for enhancing the credibility of the government.

PRONASOL also corresponded to a new social policy strategy that arose as it became evident that the existing system of alliances between the government and interest groups was failing. Old favorites, some social organizations and unions were abandoned and an attempt was made to reach out to groups that had been demanding inclusion in the arrangement. Thus PRONASOL attempted to reach different population groups, providing public goods and services in exchange for political support.

It was also during this period that the public recognized the need to modify the social security system, due to deterioration of services and financial problems in the institutions involved. PRONASOL also took over the structure of the Instituto Mexicano del Seguro Social (IMSS, Mexican institute for social security)’s Coordinación General del Plan Nacional de Zonas Deprimadas y Grupos Marginados, (COPLAMAR, national program for depressed areas and marginal groups), which kept its government subsidy but changed its name to IMSS-Solidaridad (IMSS solidarity) (González et al. 1995).

Total reform — 1995-1997

A new cycle of changes, directed at reforming the Sistema Nacional de Salud (SNS, national health system), began in 1995. Because the changes that have been approved only came into force a few months ago, this section will focus on the on development of the reform rather than its effects. In the section on implementation, some points of view as to the tendencies observed will be presented by way of conclusions.

Formulation of the new basis for reform

From 1994 to the present, the state has been actively participating in changes to the health care sector. In 1995, President Ernesto Zedillo set out the objectives of the proposed health care reform for discussion in the national development plan (Secretaría de Hacienda y Crédito Público 1995). This document describes the Sistema Nacional de Salud (SNS, national health system) as increasingly expensive and difficult to operate because of its segmentation, centralization, poor coordination, and unclear assignment of responsibility. As an answer to these problems, it was proposed to diversify health care services and financing schemes. The changes are aimed at allowing the user some choice of health care provider and opening up the medical service market. The official document also recognized the need to radically change the financing of retirement pensions by the Instituto Mexicano del Seguro Social (IMSS, Mexican institute for social security), on the basis of the Sistema de Ahorro para el Retiro, (SAR, savings for retirement system) created in 1992.

From the government point of view, the health care institutions — IMSS, the Secretaría de Salubridad y Asistencia (SSA, department of health), and the Instituto de Seguridad y Servicios Sociales de los Trabajadores del Estado (ISSSTE, social security institute for civil servants) — should play a fundamental role in directing and implementing the changes. The Secretaría de Hacienda y Crédito Público (SHCP, department of inland revenue) is also considered to play a key role, by virtue of being instrumental in the creation of SAR.

Two closely related projects came out of these initiatives, reflecting the fact that the segmentation of the health care sector is so marked that it will require two simultaneous reform processes: one to deal with the social security system and the other to deal with public health care services for the general population. These set out the lines along which health care policy is to develop.

The Programa de Reforma del Sector Salud 1995-2000 (PRSS, health sector reform program 1995-2000), although it touches on the general aspects of the system, is specifically concerned with changes that will affect the uninsured population. According to PRSS’ diagnosis, the main problems associated with the current the health care system are poor quality, limited efficiency, segmentation of the population, little coordination, excessive centralization, and insufficient coverage. The proposed changes include decentralization of public health care resources, municipal participation, extension of coverage through a basic health care package, a reorganized structure, and the introduction of mechanisms to increase the quality and efficiency of services.

Federal resources intended for the public health care system will be chaneled through the SSA and IMSS-Solidaridad (IMSS solidarity) in coordination with state health care programs. The intention in the medium term is to concentrate state-level public health care services in the areas of greatest poverty, both rural and urban, and thereby avoid duplication.

Municipalities will participate in health care through the program, Municipio Saludable (Healthy Municipalities). This program involves community participation in the definition of priorities and the design and evaluation of local health care programs.

Extension of coverage will be achieved by means of a basic package of services defined as "… the minimum number of health interventions that must be provided to any population with respect to priority needs (risk factors, injuries and sickness)" (Secretaría de Salubridad y Asistencia 1996). The package will include 12 kinds of public health and health promotion interventions that are easy to implement at low cost and with high impact. This package is to be applied in 380 extremely poor municipalities in 11 states of the Republic, where there are 4 million inhabitants, 30% of whom have no access to any regular source of medical attention.

A new model of health care system is to be created out of the old one, which dividedthe population into four groups: those with access to private insurance; those with access to social security; those with access to SSA and IMSS-Solidaridad; and those with no access to any such services. The new model will divide the population into three groups: those with private insurance, including new forms of insurance plans; those with extended social security; and those with access to state-level public health care systems comprising services from the SSA and IMSS-Solidaridad. The last is expected to extend coverage to the 10 million people currently without it. Under the new model, the SSA will take on the regulating and standard-setting role for the health care sector.

From the government’s standpoint, integrating and decentralizing the public health care services and extending these services through a basic package will promote greater efficiency and a specific focus on efforts aimed at reducing poverty. Also, the separation between formal and informal workers will be less marked.

And finally, the reform calls for the promotion of mechanisms that result in increased quality, efficiency, and cost-containment and the introduction of a system of incentives based on user choice. These mechanisms will be incorporated into urban social security services in particular, where the segment of the population with the most supply options is located. Unfortunately, however, the introduction of user choice threatens the unified character of social security. This is because the mechanism will allow the low-risk, high-contributing population to transfer to private insurance plans, while the high-risk, low-contributing population remains with the public institutions.

Social security reform

During 1995-1996, officials within the Instituto Mexicano del Seguro Social (IMSS, Mexican institute for social security) analyzed their situation and became the main promoters of social security reform. The reasons given for the need for reform were the aging of the population, the increase in chronic, degenerative disease, and the impossibility of raising contributions. Particular emphasis was placed on the aging of the population, as retirement was the main cause of the drop in contributions (IMSS 1995).

Another factor behind the IMSS’ reform proposal was that the way the system was financed was said to discourage job and salary growth. Employers and workers were accused of using sophisticated practices to evade payment of contributions. Also, the excessive number of IMSS employees and their burdensome collective agreement was blamed for much of the institution’s financial trouble (IMSS 1995).

Certain unshakable tenets of the social security system were questioned in the document, Diagnóstico: los propósitos más generales de la reforma del IMSS (diagnosis and proposal for the reform of the IMSS), which advocated such things as improving equity and quality of service, freedom of choice of provider, and incentives for increasing employee productivity. The reform proposal is based on three objectives: making the institution, and particularly services such as sickness and maternity insurance, financially viable; extending social security coverage to workers from the informal sector through "family health insurance"; and improving the quality of services.

IMSS officials believed that the following changes were needed to bring about these objectives: a separation between the financing and provision functions in the insurance plans offered by the institution; an increased state subsidy; and the incorporation of workers from the informal economy. With respect to disability, old age, retirement, and life insurance, the proposal was to link contributions with pension benefits by means of compulsory pension plans funded by private capital.

The proposal for sickness and maternity insurance was to create a single, uniform, indexed contribution that would not be proportional to wages. Those insured whose basic wage was more than three times the minimum wage would pay an additional amount. Moreover, both workers’ and employers’ shares would be reduced by 33%, which instead would be covered by the state. This means that the state will contribute seven times more than under the previous scheme.

The point that caused the most conflict was a change to the return-of-contributions scheme that will allow employers to reclaim up to 40% of sickness insurance contributions as long as they can show that they will provide the service adequately outside the IMSS. It is interesting to note that the amount returned will include part of the government’s contribution. Thus, the private sector will receive a kind of subsidy from the public sector, because it is expected that many of the organizations contracted to provide services will be private. Although, in the end, this change was not approved, the system already established by law is expected to be modified along the same lines.

Contrary to the changes carried out a decade ago, the more recent reform process has been the subject of debate among several of the affected groups. The most important organizations of employers took part in the debate, putting forward their proposals. These organizations basically agreed with the reform plan, although they diverged on the way specific reforms should be implemented. They concurred on the need to separate the different branches of insurance, both functionally and financially, and to completely restructure them, introducing a public-private mix into the system. They placed great importance on promoting the private sector’s participation in the financial management of health care funds and in the provision of services by means of return-of-contribution agreements. They shared the conviction that IMSS must be entirely restructured and that all social security institutions should be united into a single body with one set of guidelines for costs and benefits, and a single collective agreement. On the specific points about the different insurance plans, the employers generally agreed with the proposal put forward by IMSS.

On the other hand, in 1994, the Fundación Mexicana para la Salud (FUNSALUD, the Mexican foundation for health), which is considered to be a group of experts with a real capacity to influence official opinion, presented a restructuring plan for the entire health care sector. The plan was based on a full and detailed analysis of health care services, as well as the epidemiological situation, in the country. It showed the epidemiological profile to be one of polarized morbidity-mortality in a state of transition. It characterized the existing health care as unsafe, inequitable, insufficient, inefficient, poor quality, and over-priced (Frenk et al. 1994).

FUNSALUD advocated the creation of a universal, decentralized health care system that would be organized on the basis of functions and not population groups. The financial part would be the responsibility of the Fondo Nacional de Salud (national health fund), which would in turn be funded out of general taxation. One health insurance system would exist with two forms: the Paquete de Servicios Integrales (complete services package) for wage-earners and the Seguro de Salud Nacional (national health insurance) for others, with individual premiums and a state subsidy for the population with access to the Paquete Universal de Servicios Esenciales (universal package of essential services). The proposal involved several different kinds of management to diversify service provision through public or private organizations, with differences between institutions providing services in rural areas and those in urban areas.

The government’s vision of health reform has been countered by various other proposals for solving the problems of the Mexican Sistema Nacional de Salud (SNS, national health system), in what might be called a "line of opposition" to the official bloc. This line of opposition includes several different organizations, such as pensioners’ groups, the IMSS trade union, and the Partido de la Revolución Democrática (PRD, democratic revolution party).

The opposition sees the deterioration of health care institutions as the result of depressed wages, job stagnation, and cutbacks in social expenditure, factors which are also responsible for the under-financing of social security institutions. In theopposition’s view, health care expenditure must be increased and stabilized, with a target level of 8% of gross national product (GNP). As a means to bring about universal coverage, a Servicio Único de Salud (single health care service) by the Secretaría de Salubridad y Asistencia (SSA, department of health) is advocated. A proposal by the PRD would have a department of health and social security responsible for preparing a technical proposal for the unification of health care services (Laurell 1996). The system would function on four levels — national, state, local or municipal, and institutional — in the workplace to favour a democratic approach to implementing health care policy. Under the Servicio Único de Salud scheme, decentralization would encourage the development of technical, decision-making, and financial capacity at the state and municipal levels.

Before the changes to the law governing the IMSS, were approved, proposals regarding social security focused on recovering growth in affiliation by at least 5% per year; raising the ceiling on contributions (the present limits reduce the institution’s income and restrict the unifying and leveling nature of social security); and increasing state participation to historically maximum levels.

These proposals were based on financial analyses that showed that the content of the new law governing the IMSS would not solve the institution’s financial crisis. It would encourage low-risk, high-contributing workers — the 30% who earn more than three times the minimum wage and therefore pay an additional amount — to take advantage of the return-of-contribution scheme. This would lead to a 50% reduction in the IMSS’ income with 70% of mainly high-risk, low-contributing patients still to be attended to (Barreiro 1997).

Some of the parties who should have taken an active part in the debate on the reform of health care services and social security did not. These parties include the Central de Trabajadores de México (CTM, Mexican workers central organization) and the Congreso de Trabajo (trade union congress), as well as the owners of the big hospitals and the professional associations.

Despite indications of rejection on the part of various sectors, especially IMSS employees, the initiative was approved in December 1995. It was supposed to take effect in January 1997, but was postponed to July of the same year because there were apparently serious obstacles to its implementation. The most serious of these was a shortfall in the government budget, making it unable to cover the subsidy it had committed itself to. The additions and modifications to the law governing the IMSS finally went into effect in July 1997.

The legal framework

The Ley del Seguro Social (social security law) of 1943 was inspired by a concept of social justice and a notion of the welfare state predominant at the time. The law was based on solidarity, state-subsidization, equality, immediacy, inalienability, and the participation of those concerned, and it tended toward universality and integration of social services (health, retirement, workers’ compensation, etc.). In general terms, the concept of Mexican social security was based on the principle of solidarity.

The changes approved in 1995 broke with these fundamental principles. What had been a social security system became a financial mechanism for helping the economic growth of the country (De Buen 1996). Among the important changes in this respect are those relating to pensions and medical services.

In the area of pensions, Articles 167 to 200 of the new law establish individual accounts, thus removing the basic principle of solidarity from the system. For medical services, the way was opened for subcontracting under the return-of-contributions option. These changes also affect the principles of equality, universality, integrity, unity of management, and participation of interested parties, on which the old law was based.

In addition to this, the new law affects such workers’ rights as the amount of basic and disability pensions. It limits the right to contestdecisions regarding sickness or work-related accidents. It introduces disadvantageous mechanisms for revising pension amounts, resulting in an increase in the number of years of contributions required to qualify for old age or disability pensions, and leading to a notable loss of buying power (Saenz 1996).

De Buen (1996) summarized the situation by stating that the new law changed

...the common and redistributing spirit of the system for a new financial structure of an eminently individualistic character, in which the benefits that may be received will be directly related to income and workers’, employers’ and government contributions, that is to say those who earn more will receive more benefits than those who earn and contribute less, forgetting that without solidarity there is no social security.

Conclusions

The process of reforming the Sistema Nacional de Salud (SNS, national health system) may be considered to include changes set in motion during two periods, the beginning of the 1980s and the middle of the 1990s. To differing degrees, both periods occurred in a context of economic crisis and of a questioning of the social contract that had been the mainstay of political stability in the country for decades.

The current chronic situation of economic and political crisis demands a profound transformation of the relationship between state and society, and it is said that the country is in a period of democratic transition. The reform of the Sistema Nacional de Salud (SNS, national health system) is part of this process.

The SNS since the 1970s may be described as a "segmented model," as it divides the population into two major groups, the insured and the uninsured. It also segregates the population functionally, because each institutional group carries out its functions separately. These aspects have led to the sector being characterized as stratified by population group, centralized, and with problems of coverage, duplication, and quality.

In the process known as the "structural change," the reform was fundamentally proposed and carried out by the federal government, which assigned the role of directing and regulating to the Secretaría de Salubridad y Asistencia (SSA, department of health). Its purpose was to create a national health system that would coordinate all health care institutions under the supervision of the SSA. Although the reform was based on clear principles and goals, its success was limited because of the situation of economic austerity and resistance to the changes by some powerful interest groups that formed part of the corporate pact. As a result, coordination between the different institutions, which was considered to be one of the most important goals of the reform, was not achieved.

Some of the things that were achieved during this period were as follows: the right to health protection was enshrined in the Constitution; the right was reinforced in the Ley General de Salud (general health law), which laid out the specific standards and regulations for its expression; and decentralization of public health care services was implemented in 14 states of the country.

The success of these changes was limited, however, because most of the actions related to them were suspended during the following presidential term. This period was characterized by a high degree of centralization, an absence of control, an increase in duplication of effort, and a lack of coordination with respect to the health care system. In place of decentralization, selective programs were set up for the poorest population groups, as a means of increasing the government’s credibility. At the same time, measures were introduced that encouraged the participation of the private sector in the provision of services.

The reform arising from the changes of 1995 can be placed in a context of chronic economic crisis and changing political process, within what has been called the "democratic transition." Starting from a very energetic government initiative, drafting the reform depended fundamentally on the Instituto Mexicano del Seguro Social (IMSS, Mexican institute for social security) and the SSA, with the IMSS playing the most important part. Unlike the changes of the previous decade, which dealt mainly with providing services to the uninsured, the latest modifications aim to change the basis of social security.

Nevertheless, two projects clearly express the objectives of the changes, each being directed at a different population group. The first, the Programa de Reforma del Sector Salud 1995-2000 (PRSS, health sector reform program 1995-2000), involves the SSA and affects the uninsured population. The second arises from modifications to the law governing the IMSS, and affects the insured population. Some of the main tendencies in the implementation of the reform are given in the following paragraphs.

Reorganization of the system is based on the socioeconomic characteristics of the population, making it a model whereby access is stratified by income and place of residence. This aspect, added to the fact that the diversification of options is achieved only by creating new kinds of private insurance, will lead to greater inequity of access to health care services. Selecting a doctor will not be a question of choice, nor of need, but only of economic ability, which will or will not allow access to certain services, depending on the purchasing power of each individual (Barreiro 1996).

Because of the historical segmentation of institutions in the sector, we are in practice faced with two reforms: the reform of social security and the reform of the institutions for the uninsured population. In this situation, it will not be easy for the SSA to regulate, because the changes brought in do not solve the problem referred to at the beginning of this section, whereby the two subsystems function independently with respect to financing, provision, and regulation.

The regulatory bodies will also have to face the problem of an expanding and diversifying private insurance sector and the formalization of options involving a public-private mix. Mexico has almost no experience in this area. Furthermore, although more information is available to the population now than ever before, it is still not enough to avoid an unequal relationship between providers and patients. Although an official arbitration entity has recently been set up to deal with cases of abuse and malpractice, there is at present insufficient regulation in this area to ensure its effectiveness.

The social security institutions will have to overcome serious obstacles if they are to compete with private insurers. At present, leaving aside the official version, there are serious doubts as to whether the measures taken will solve the financial crisis in social security. On the contrary, greater under-financing can be foreseen as a result of the return-of-contributions scheme. As has been noted earlier, the IMSS stands to have its income halved. Furthermore, the funds destined for these institutions will now depend not on compulsory contributions but on the government’s ability to levy taxes efficiently. It has been calculated that social security reform will cost the federal budget the equivalent of 1.5% of the gross national product (GNP) (Barreiro 1996). It should be noted, however, that a heated discussion is underway between opposition parties and the Partido Revolucionario Institucional (PRI, institutional revolutionary party) in the chamber of deputies on the percentage of taxes to be levied, and there is a great deal of pressure to reduce taxes on several basic commodities.

The tax-raising crisis has cast serious doubts on the success of decentralization as a way of redistributing the federal budget. Also, the speed with which decentralization is advancing (16 states have been decentralized in less than one year) raises the question of whether its democratizing effects will become a reality in the near future.

Unlike the reforms of the 1980s, the present one has been the subject of organized opposition and serious debate. Some of the parties involved, such as the organized labour movement, have lost their power with the weakening of the corporate pact, while employers and financial groups have gained a more powerful position. In the context of changing relationships between state and society, a new social pact must be developed and new parties have arisen that are demanding an inclusive policy of social welfare.

In this respect, while some facts are irreversible, such as the approval and implementation of the changes to the law governing the IMSS, the present advance of democratic forces leaves room for the possibility of a more balanced solution to inequity of access to health care services.

 

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