Seguro Popular

The End of Insurance? Mexico’s Seguro Popular, 2001 – 2007
Jason M. Lakin International Budget Partnership

Abstract

Health system reforms that introduce insurance principles into public health systems (such as national health insurance, internal markets, and separation of purchasers and providers) have been popular in the last two decades. Little is known, however, about the politicalcomplexities of transforming existing health services into health insurance systems in developing countries. Mexico’s Seguro Popular (Popular Health Insurance) program, introduced in 2003, was an attempt to do exactly this: radically alter the country’s existing health service and convert it into health insurance. Popular Health Insurance (PHI) has garnered international attention and has been held upas a model for other countries to follow. Yet little has been written about the political process that led to the reform or the difficulties of implementing it. This article fills that lacuna, offering an assessment of the reform context as well as of the process of formulating, adopting, and implementing it. It argues that, while the reform has improved Mexico’s public health service, it hasthus far failed to transform that health service into a true insurance system. Limited institutional reform has also left PHI severely underfinanced. The Mexican case is a cautionary tale for reformers who want to transform extant health services into health insurance systems.

There are a great many people who have helped me understand the Mexican reform over the years. Some would not want theirnames revealed publicly, other names have been forgotten or were never known. The following list of people helped, in one way or another, to make this research possible, but not all of them would agree with my conclusions, and none of them share responsibility for any remaining errors: Maritza Ordaz, Mariana Barraza, Cristina Gutierrez, Héctor Hernández Llamas, Emmanuela Gakidou, Manett Vargas,Christopher Murray, Gary King, Jorge Domínguez, Steve Levitsky, Torben Iversen, William Hsiao, Norman Daniels, Michael Reich, Gisela Morales, Agustina Giraudy, Nirmala Ravishankar, Ryan Moore, Clayton Nall, and two anonymous reviewers. Journal of Health Politics, Policy and Law, Vol. 35, No. 3, June 2010 DOI 10.1215/03616878-2010-002 © 2010 by Duke University Press

314

Journal of HealthPolitics, Policy and Law

Introduction

Since the end of the cold war, there is no longer serious debate about the inferiority of completely state-run, market-free industries. And yet, particularly in the health sector, few believe that a purely market-based approach is sufficient, given equity concerns and endemic market failures (Arrow 1963). As a result, the focus of most health systems analystsand reformers has been to find a middle ground, one in which the needs of the poor and sick are attended to, but in which sclerotic bureaucracies that drive up costs for low-quality care do not dominate (WHO 2000). Various analysts have suggested that it is possible to maintain a strong government commitment to health care financing while still introducing some market discipline to improveefficiency (OECD 1992; Frenk and Londoño 1997). A number of hybrid approaches that incorporate both equity and efficiency considerations have been tried in the past two decades. These approaches, variously known as “public contracting,” separating purchaser and provider, or creating “internal markets,” have been experimented with in countries as diverse as the United Kingdom, New Zealand, and Colombia.In some of these cases, reformers have tried to convert existing Beveridge-type health services (i.e., systems modeled on the U.K.’s National Health Service) to Bismarck-type national health insurance systems (i.e., systems modeled on Germany’s health system). This kind of transformation is frequently justified on the grounds that it will impart competition, efficiency, and improved quality to...