1. UNIVERZALIZATION OF SOCIAL PROTECTION IN HEALTH COVERAGE Daniel Titelman Chief, Development Studies Unit

2.  The Welfare State based on a “working society” has been an unmet promise.  Low coverage, which impacts social exclusion  Inequality in income distribution, which transfers over to social protection.  The reforms during the 1990s sought to improve financing and access through:  A stronger relationship between employment and protection, through the formalization of the labor market  Emphasis on incentive and efficiency mechanisms, more than on solidarity mechanisms HISTORICAL BACKGROUND AND REFORMS IN THE 1990s

3.  The design of the reforms was not the most appropriate for the problems in the region.  Growth, which was low and volatile, was not favorable.  The dynamic of the labor market was not as expected:  High unemployment  Informality and precarization of work  Fiscal restrictions implied low, non- contributory coverage. CONTEXT OF THE REFORMS OF THE 1990s

4. IN SPITE OF THE REFORM, CONTRIBUTORY COVERAGE HAS NOT INCREASED SINCE 1990 COUNTRIES IN WHICH COVERAGE IMPROVED COUNTRIES IN WHICH COVERAGE WORSENED LATIN AMERICA: COVERAGE IN 1990 AND 2002 (% of employed that contribute)

5. Urban Rural Formal Urban Infor- mal Urban Men Women (% of working age) Q5 Q1 (rich) (poor) INEQUITY IN THE CONTRIBUTION STRUCTURE

6. SECTORAL DISTRIBUTION AND COMPOSITION OF SOCIAL SPENDING, BY INCOME STRATUM 16%16.3% 17.9% 29.1% 20.7%

7. IN SUMMARY On average,  4 out of 10 workers  4 out of 10 workers that are employed contribute to social security.  4 out of 10 people over age 70  4 out of 10 people over age 70 receive retirement or pension income.  4 out of 10 people  4 out of 10 people live in poverty conditions. There is great heterogeneity among the countries in the region.

8. SOCIAL PROTECTION: A CHANGE IN FOCUS  Work is not perceived as the exclusive mechanism for accessing social protection in the short and intermediate term.  Requires a better balance between incentives and solidarity.  New pressures due to demographic and epidemiological changes and changes in the family structure. A new social consensus is required in order to universalize social protection

9.  Explicit, guaranteed and compulsory  Definition of financing levels and sources (solidarity mechanisms)  Development of social institutionality CONTENT OF A NEW SOCIAL PACT

10.  Three dimensions of rights:  ethical  procedural  contents ECONOMIC AND SOCIAL RIGHTS IN PUBLIC POLICIES Advancing toward the construction of a true social citizenship

11. DEVELOPMENT OF SOCIAL INSTITUTIONALITY  Attributes of institutions that help to improve spending efficiency:  Continuity over time  Transparency and evaluation  Coordination within the public sector  Participation of civil society (local and national)  Geographic decentralization (with health care visits, institutions and training)  Regulation of private sector service providers

12. SOURCES OF FINANCING  The challenges of social protection require:  Increased non-contributory financing: increased collections and reallocation of spending  Increased contributory financing  A solidarity component without contributory financing.

13. PUBLIC SPENDING: GREAT DIVERSITY OF SITUATIONS Tributary income a/ Other income b/Capital income Contributions to soc. sec.LA: Trib. Inc. + Soc. Sec. LA: Total (20.8%) OECD Average (36.3%) Dom. Rep.

14. CHALLENGES TO SOCIAL PROTECTION IN HEALTH  Strong inequity in access to health services in the region

15. INEQUITY: OUT-OF-POCKET SPENDING ON HEALTH

16. CHALLENGES TO SOCIAL PROTECTION IN HEALTH  Strong inequity in access to health services in the region  Demographic, epidemiological and technological transition

17. INCIDENCE OF DISEASES DALYs per 1,000 inhabitants

18. CHALLENGES TO SOCIAL PROTECTION IN HEALTH  Strong inequity in access to health services in the region  Demographic, epidemiological and technological transition  Problems in the articulation of financing and service provision among sub- systems Advancing toward universalization

19. SEGMENTATION OF HEALTH SECTOR

20. DUALITY OF FINANCING SOURCES IMPOSES CHALLENGES ON SOCIAL PROTECTION IN HEALTH SYSTEMS  Overcome traditional segmentation between contributory social security and the non- contributory public system:  Gains in macro-efficiency due to better utilization of the available capacity.  Greater and better management of social risks.  Reduces incentives for “cream skimming.”  Strengthens solidarity mechanisms.

21. HEALTH: INTEGRATION OF THE PUBLIC AND SOCIAL SECURITY SUB-SYSTEMS  Universal Insurance by combining contributory and non-contributory sources.  Define benefits with universal coverage and guaranteed fulfillment (of health needs).  Rationalization of the use of the existing capacity.  Quality of the services is a fundamental incentive.  Purchasing and payment mechanisms.  Strengthen Primary Care.

22. IN SUMMARY  Universalizing and improving social protection is an unfinished task  Employment is not enough for universalizing coverage  Solidarity mechanisms should play a fundamental role, combined with improvements in the incentive systems  Reforms should integrate contributory and non-contributory schemes. Reforms in the context of a social consensus where rights are the normative horizon and economic restrictions are limitations to confront

23. UNIVERZALIZATION OF SOCIAL PROTECTION IN HEALTH COVERAGE Daniel Titelman Chief, Development Studies Unit