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Healthcare in Uruguay, No One Without It
It stands out for being an egalitarian society and for its high income per capita, low level of inequality and poverty and the almost complete absence of extreme poverty.
Uruguay, a beacon of political stability in Latin American, is classified as a high-income country by the World Bank. It stands out for being an egalitarian society and for its high income per capita, low level of inequality and poverty and the almost complete absence of extreme poverty. In relative terms, its middle class is the largest in America, representing over 60% of its population. Institutional stability and low levels of corruption are reflected in the high level of public trust in government. According to the Human Opportunity Index constructed by the World Bank, Uruguay has managed to attain a high level of equal opportunities in terms of access to basic services such as education, running water, electricity and sanitation. In the past 15 years, the country has only recorded positive GDP growth (averaging 4.1% from 2003 to 2018), even despite recessions experienced by its main trading partners, Argentina and Brazil, in 2017 and 2018. Economic openness, prudent macroeconomic policies and a commitment to diversify its markets and products have increased the country’s ability to withstand regional shocks.
For the first half of the twentieth century Uruguay and Argentina had the most advanced levels of medical care in Latin America. Military rule from 1973 to 1985 adversely affected standards with more resources going towards military hospitals, open only to relatives of the members of the armed forces. Nonetheless, Uruguay’s strong economic growth through the last decade has allowed its healthcare sector to flourish again and the system is today run through two types of sub-sectors, public and private. The authority responsible for implementing and enforcing health regulations is the Ministry of Public Health (MoPH). In 2007, the government created an Integrated National System of Healthcare (SNIS) which oversees both the public and private sectors. The SNIS regulates the right to health protection for all inhabitants of the country through a National Health Insurance system, which is financed by the National Health Fund (FONASA).
Public expenditure on healthcare has increased in the years to approximately 8.6-9% of GDP, with the public sector representing over 70% of these expenditures. It comprises two main programs: direct public healthcare for people living in poverty – a program that has existed since the end of the 19th century – and the National Health Insurance System launched in 2007. The National Health Insurance System subsidizes the private healthcare of all workers, their spouses and dependent children under 18 years as well as pensioners and retirees. It currently covers some inactive workers and is moving towards universal coverage. Coverage of the National Health Insurance System increased from 23% of the population in 2007 to over 70%; nevertheless a percentage of the population may still fall outside of the system either because they belong to one of the special schemes, or because they work in the informal sector of the economy and lack the resources to pay for a healthcare provider. Health sector funding is complex, mixed between public and private sources. Multiple funding comes from central government funds, user contributions and state transfers.
Public Health - The Ministry of Public Health (MoPH) provides services through the State Health Services Administration (ASSE - Administración de Los Servicios de Salud del Estado). The ASSE is the principal actor in the public sector, it is mostly funded by the national budget (taxes and nonbudgetary resources from sale of services), but also from healthcare premiums paid by FONASA (which funding comes primarily from employee and employer social security contributions), as well as general revenues covering imbalances. Currently, the ASSE covers a little more than one-third of the country’s population, or about 1.2 million people. Of its beneficiaries, 61.5% are entitled to benefits without making a direct economic contribution; 32.4% are insured by FONASA, that is, they contribute a portion of their salary to fund the sector; and the remaining 6% corresponds to services provided to individuals covered by other public providers, Police Health Care and Military Health Care. The MoPH-ASSE has public health facilities, classified by level of complexity as multiInfomedix International | 2 2020 31 purpose clinics, health centers and hospitals (general and specialized) spread across the country. Most big hospitals under the ASSE are in major cities. Public health coverage is given free of charge to all citizens only for specific medical care such as emergency ambulance service, initial treatment and medication. If any other types of medical treatment or ongoing treatment is needed it requires citizens to pay a fee, which is determined by the level of treatment. ASSE also serves as a social safety net providing comprehensive free care to low-income residents (as per Article 44 of the Constitution for which the State provides services for disease prevention and healthcare free of charge only to the indigent or those who lack sufficient resources).
Transfers to healthcare providers, public or private, are manage by a state-owned fund, FONASA (“Fondo Nacional de Salud” -National Health Fund). FONOSA is an autonomous State entity created by the Frente Amplio government in 2007 to entitle all employees (public, private, self-employed) and pensioners to healthcare outside of the public health system. The public system would still be free but was to be reserved for those outside of these broad categories. FONASA’s task is to coordinate state social welfare services and organize social security. It acts both as an intermediary, receiving worker and employer contributions and contracting collective healthcare institutions. The Fund, as a direct provider of health services, covers care for workers during pregnancy and childbirth, as well as ordinary pediatric care up to age 6; dental and orthodontic care and social welfare up to age 9; and healthcare up to age 13 (or no age limit for persons with birth defects). It owns one hospital and several maternal and child centers in the capital, Montevideo. In other parts of the country, the Fund contracts services to the MoPH or Medical Assistance Institutions (IAMCs). All legally registered employees, sole traders (“Unipersonal”), including the sub-category of “Monotributistas” for very small businesses, public employees, unions, pensioners (state and private) and retirees are entitled to private health coverage under FONASA. Coverage extends to all family members, i.e. spouses and under 18 year of age and over, if they are registered as disabled. While initially private workers were not able to opt for the public health sub-system, all insured citizens can now select from either a private insurance company or the public sector system.
FONASA is a central part of the funding model. As a mandatory pooled public fund, it involves a tripartite mechanism whereby those insured contribute based on income, employers contribute in proportion to wages paid and the State’s general fund supplements these, in order to bring to reality the benefits package for the entire population provided for in the Comprehensive Health Care Plan. Its principal source of financing remains contributions (approx. 90% of total financing) based on the employee’s salary and payment varies from 3 to 8%, depending on the family structure and the amount of their salary. The employer pays a 5% contribution. In 2005, monthly spending per user in the private sector was US$50, versus US$14 in ASSE (a 3 to 1 ratio). In 2016, expenditure per user was nearly the same in the two sectors. Further, FONASA’s National Resource Fund (FNR) has become an important mechanism for centralized, supplementary, and (financially and institutionally) independent insurance, providing coverage for an extensive package of highly specialized medical services.
Private Health – As mentioned, the National Integrated Health System is a mix of public-private healthcare. The private system is comprised of private service providers, including: (i) Collective Medical Assistance Institutions (IAMC - Instituciones de Aistencia Medica Colectiva), private and non-profit medical facilities (with the most known as “Mutualista” and “Cooperativas”); (ii) private healthcare institutions (the so-called partial-health insurance institutions), which are for-profit companies that provide a specific type of care (for example: emergency, dental, multipurpose clinics, etc.); (iii) highly specialized medical institutes (public or private companies that perform some of the 15 procedures funded through the FONOSA (Public Resources Fund); and (iv) private sanatoriums, clinics and physician’s offices, together with residences and nursing homes for the elderly.
The principal actor in the private sector is the group of Collective Medical Assistance Institutions (IAMCs). These are private institutions, but their principal source of financing comes from public funds from FONOSA. The population entitled to care under the IAMC subsystem breaks down as follows: 90% are FONASA members, 5% are individual members, which means that they pay directly out-of-pocket and 5% are collective members, who are entitled to benefits as a result of agreements between the IAMCs and other institutions.
Following the introduction of the private-hospital membership plans by the IAMCs, the most popular being Mutualista (there are also other types of hospital plans), a large number of people moved from the public healthcare system to the private medical care system with currently approximately two-thirds of the population receiving healthcare services from the IAMC sector. Mutualista is an affordable private-hospital membership plan that comprises a monthly membership fee (around $100 per month) and a small co-payment when the insured patient uses hospital’s services. The hospital provides members everything from routine doctor visits to emergency room care and major surgery. A mutualista differs from regular health insurance; there is no middleman between the insured patient and the private hospital that provides medical care, there is no big deductible, no lifetime cap and no complicated terms to decipher. All hospital plans—including mutualistas—have various drug prescription discount programs, too. Non-emergency optometry and dentistry, as well as visits to a psychologist, are not included services with most plans. Hospitals that offer mutualistas are private companies, each setting its own standard regarding age limits and pre-existing conditions for non-employed members. In addition to private health-care options however, a healthcare plan is also available through the ASSE, the public healthcare system, by making monthly payments like a mutualista. The public system in this case is available to anyone, regardless of age and pre-existing conditions. Citizens in Uruguay can thus opt from a variety of healthcare options as those who do not have the conditions or cannot afford treatment in the private sector choose the public healthcare system instead.
The presence of the mutualista model puts less pressure on the public healthcare system in Uruguay, resulting less overcrowded and with improved quality over the years, becoming to acceptable quality. Also, the government has been able to allocate more funds towards the improvement of its infrastructures. Service standards of the public hospitals in Montevideo seem to be generally lower than those in a mutualista but some citizens still use public services to have access to medications that are not available with a mutualista. The university hospital (part of ASSE), which provides care in almost every medical specialty, has top medical specialists for specific diseases or conditions. Outside Montevideo, ASSE hospitals often have a better service reputation, with often more citizens using the public option. The IAMCs are independent organizations that compete with one another. The State exercises some legal and technical control over them; however, they do have a high degree of autonomy. The greatest constraint to that autonomy is that the State sets a price ceiling on monthly premiums. This might force some of them to recover the difference by charging higher prices for other services outside the “basic package”. In addition, in the years, waiting times have become longer, although manageable. The IAMCs are scattered throughout the country.
IAMCs membership premiums are the principal component of health financing in Uruguay either: (i) paid by individuals; (ii) paid through a collective agreement; or (iii) paid by social security. Other sources are member’s copayments for the use of services (11%) and revenues from the sale of services and other sources (14%).
There is no direct public financing for the private sector, social security administers employer and worker contributions and pays for insurance in the private sector. The IAMCs’ involvement with the public sector takes place, especially, through the purchase and sale of services. There is also coordination in areas related to health promotion and disease prevention through ad hoc commissions. The IAMCs continue to be the dominant model in Uruguay however there is a growing trend towards “private medical care” institutions, which are commercial health insurance companies. To a large extent, with the implementation of the Integrated National Health System, social segmentation has been overcome with regard to exercising the right to health, and there have been advances, though still insufficient, in reducing fragmentation. Nevertheless, this process is at a crucial juncture in terms of sustainability. The outcome will depend on how issues of funding, provision, care model, quality, leadership and overall regulation of the system are resolved. The incorporation of groups that were not part of FONASA in 2016 (the military, police officers, municipal personnel and people without formal employment covered by the ASSE) constitutes a fundamental challenge, both for the financial sustainability of the insurance and for realizing the guiding principles of the Integrated National Health System.
Medical Market - Uruguay imports almost all its medical equipment, as there is little local industry. Major market opportunities are for new, technologically advanced supplies and equipment. Medical device imports amounted to $80 million in 2018, 3% directly by the government and 97% by more than 400 companies from the private sector (including hospitals, laboratories and clinics). Future demand should remain stable as, compared to other Latin American countries, Uruguay has an aging society with 15% of the population being 60 years of age and over. Uruguay has a national policy on health technology that is part of the National Health Program. The National Health Technology Management Unit is the department which plans medical equipment allocation. This department must approve any incorporation of new technology, either for the public or private sector, considering the scientific information available, the need for its use and the rationality of its location and functioning.
The USA is the main supplier of medical devices in Uruguay, with 31% of the market share, followed by China (11%) and Germany (9%). Other important suppliers, but with less than 5% of the market share, are Switzerland, Costa Rica, Ireland, Argentina, Mexico, Japan and Brazil. Most international medical device and technology providers do not have subsidiaries in Uruguay and work with local representatives or distributors which serve both hospitals/ clinics pharmacies/wholesalers shops etc. Uruguayan customers are increasingly purchasing through internet, mainly from the eCommerce platform Mercado Libre. In order to export a medical device to Uruguay, the device, needs to be registered with the Uruguay Ministry of Public Health (MoPH) by a local representative (i.e. manufacturers, representatives, distributors and/or importers of the products). The import company must be registered at the MoPH. Importation of medical equipment of high or medium size needs prior authorization granted by the same entity and needs approval to be sold in the local market. The registration can be done either by the manufacturer or the distributor, it takes around 12 months, expires every five years and is renewable with payment of a fee.
Uruguay is a smaller market, compared to other Latin American countries, but with high purchasing power and very little local competition. It has a favorable import climate and could be an interesting hub location for the export to other countries within South America.
Although Uruguay is member of Mercosur and there is a common external tariff (CET) applicable to imports from countries outside Mercosur, the country has its own tariffs on certain products, called exceptions to CET. These exceptions are applicable to medical devices and represent a reduction to the common external tariff and therefore to the importing costs on these products.
Among main sources: -Extracts from Export.gov website a U.S. Commercial Service (U.S. Department of Commerce). For detailed info on Uruguay exports: https://2016.export.gov/industry/health/ healthcareresourceguide/eg_main_116248.asp -“Profile of Health Services System”, Pan American Health Organization: https://www.paho.org/hq/dmdocuments/2010/Health_ System_Profile-Uruguay_1999.pdf https://www.paho.org/salud-en-las-americas2017/?p=4314 -Extracts from “The World Bank in Uruguay”. For full text: https://www.worldbank.org/en/country/uruguay/overview -OECD Development Pathways- Multi-dimensional Review of Uruguay (Volume 1. Initial Assessment). https://books.google.it/books?id=S_tHBAAAQBAJ&pg=PA136&lpg=PA136&dq=what+does+fonosa+cover+in+uruguay?&source=bl&ots=9h0HSviHuz&sig=ACfU3U2s7xJqxG03y78QZCWaG2XCZFlqYA&hl=it&sa=X- &ved=2ahUKEwjMg56lirDoAhWR_qQKHZ_mDjUQ6AEwEHoECAYQAQ#v=onepage&q=what%20does%20 fonosa%20cover%20in%20uruguay%3F&f=false -“Demographic Change in Uruguay, Economic opportunities and challenges Opportunities”: shttps://books. google.it/books?id=PAxbDAAAQBAJ&pg=SA3-PA41&lpg=SA3-PA41&dq=what+does+fonosa+cover+in+uruguay?&source=bl&ots=1DE-xqmtOb&sig=ACfU3U1OyEWSyUIEI42Qqis7cN4TVCBZLw&hl=it&sa=X- &ved=2ahUKEwiK7vWt-LDoAhWNwqYKHRXmBP8Q6AEwCXoECAcQAQ#v=onepage&q=what%20does%20 fonosa%20cover%20in%20uruguay%3F&f=false -https://expatfinancial.com/healthcare-information-by-region/south-american-healthcare-system/uruguay-healthcare-system-insurance-options-for-expats/ -“Healthcare & Healthcare Systems in Uruguay”, by David Hammond: https://internationalliving.com/countries/ uruguay/health-care/ -Quality Health Care at Affordable Price in Uruguay, By InternationalLiving.com: https://www.huffpost.com/entry/ quality-health-care-at-an_b_5621826?guccounter=1&- guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAEm8t6kq6Zpw_ZyClF0g_MXVvBKIJiCil7BjU4f6gLszVSNjR4JslXMx8SbOlsMVDaN_6BZYRWkThcdNcjGA7yIR7GeFQ4-UYY7QI67Mvg69vp7v7Wqv5PyNi4G7sPaLX9M1BHNStvch8Dkg0fSPMcp02g85l4IIcEKdKxkNzhnr