Different paths towards sustainable universal coverage

 

Statement by Yves Leterme,
Deputy Secretary-General

OECD

 

Mexico, 2 April 2012

 

 

Ministers, Ladies and Gentlemen, distinguished guests

 

It is a great pleasure to be with you today to celebrate Mexico’s move along the  path towards universal health coverage. Your policies to extend health coverage in recent decades have been innovative and successful. Ministers from all over the world want to hear more about your achievements.  This conference gives me an opportunity to reflect upon the experience of Mexico and suggest some lessons that we at the OECD have learnt from you and other countries as we seek to provide health care to all those in need, not just the richest and luckiest people in our societies.

  

Let me first talk about the Mexican experience with universal health coverage.

 

Mexico’s achievement is impressive. Ten years ago, only half of the Mexican population was covered by public health insurance. Over the course of a decade, the Seguro Popular has extended health coverage to the most vulnerable in Mexico. The Seguro Popular is not just an example of good health policy, it is good economic policy too, combining equity and efficiency to get essential services to children and adults. 

Firstly, it targeted those who were disenfranchised from work and social security, and encouraged them to enrol in health insurance voluntarily. Secondly, the reform’s careful design directed funds to areas where it could have most effect.
 
While the achievements of the Seguro Popular are noteworthy, there remain some daunting future challenges. The next step from universal coverage will be to provide affordable care. In Mexico, out-of-pocket payments account for 4.6% of household consumption – the third highest share in the OECD. Disparities in access to health care services persist in poor and rural areas. With 2 physicians per 1000 people – the third lowest proportion in the OECD – there is considerable scope for improving the availability of services to those most in need. The Seguro Popular has put Mexico in a remarkably better position to deal with these challenges on its path to a high quality, high performing health system, but more leadership and policy innovation is needed.

 

Mexico’s experience is not just important for Mexicans: it is inspirational for the rest of the world. The global vision you have set for this conference -- how can we achieve and sustain universal health coverage around the world – is well-timed. China, India, Indonesia, South Africa and many other countries have announced their intention to move towards universal health coverage in the next few years.  If they get their policies right, many hundreds of millions – even billions – of people will be able to receive health care for the first time. Get it wrong, and yet another generation will be condemned to sickness, poverty and destitution.

 

Countries need to find the path that best suits their social and economic starting point. The recent successes of OECD countries like Mexico, Turkey and South Korea in expanding health coverage illustrates  how countries needed strong political leadership to overcome their unique challenges.

 

It is not political will, however, but good policy design that I want to make the focus of my next remarks today. There are some concrete lessons that we have learnt from recent success stories such as that of Mexico, which are applicable to other countries as they embark on their own path to universal health coverage. I would like to share five key lessons with you.

 

First, it is better to start by providing maximum financial support for a small number of the most essential health care services rather than trying to provide too many services, too quickly.  Vaccination, basic pharmaceuticals and primary care in the community most often provide the most significant health gains for each dollar invested. Focusing on such essential services without high financial barriers at the point of care is a hallmark of the Seguro Popular and has been central to the recent expansion of coverage in Chile.

 

Second, thinking about value for money is as important at an early stage of health-system development as it is for mature health systems. How you pay hospitals, health clinics and doctors is more important than the overall financing design of the system – be it insurance-based or government-run. Payment systems that reward providers for the volumes of services provided can lead to public investment being directed to hospitals – because they can deliver a greater range of services -- or simply lead to wage inflation. In Korea, for example, hospital costs are rising at double the OECD average because they got this basic policy choice wrong.

 

Thirdly, if you are embarking on a major new social entitlement, you need room for growth in public spending. Given some emerging economies have substantial ageing challenges to deal with, it is best to avoid contributions that are entirely based on wages, or explicitly linked to taxes that are likely to be a declining sources of revenue in the long term.

 

Sequencing of reforms of utmost importance – my fourth suggestion.  The large private sectors which often characterise countries without universal health coverage are generally more prominent in providing hospital care. This makes it worthwhile to focus public funding on providing primary care first. Primary care and preventive interventions are also likely to offer more health for the money invested.

 

Last, governments must work with, and not against, the private sector. Lack of health care suppliers is the biggest problem countries face in moving towards universal health coverage, so any possible source of health service provision should be considered. Contracting arrangements can provide Governments with a way of using private sector capacity for the public’s benefit.  This will also help efforts to control costs, as medical cost inflation is most likely to occur where the public sector starts competing with the private sector for scarce resources.  Contracting with private providers can also help enforce quality standards across the whole health system. In Colombia, reforms to open the market to private insurers operating under regulated competition have expanded coverage from 70% in the early 1990s to 90% today, and the government now mandates publishing performance indicators and quality rankings for all providers.

 

To conclude

 

The next few years will be crucial in determining global progress towards Universal Health Coverage.  It is the OECD’s hope – and my hope –  that years from now we shall be able to speak of Universal Health Coverage as a norm for countries well beyond today’s OECD members.

 

The OECD today is working to help make this hope a reality. We will continue to support Mexico as well as other countries in the development of “Better Policies for Better Lives”, and we look forward to continuing our support to helping each of you achieve and sustain universal health care.

 

 

 

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