Costa Rican
Health Care
A Maturing
Comprehensive System
Greg Connolly 12/8/02
Global Health Council
A history
of commitment to health and social reform has yielded for Costa Rica the best
health outcomes of any country in Latin America. These outcomes are the result of a well-developed publicly funded
comprehensive health care system built on the principals of universal coverage
and equity. While the fundamentals of
this system were becoming entrenched, several predictable challenges
arose. Costa Rica is confronting those
problems with outside aid in a period of reform, which began in 1994. Now, the World Bank has decided to support
Costa Rica with its Second Health Sector Strengthening and Modernization
Project, which will build off of existing initiatives and trends toward
improvement of the health care system.
While Costa Rica occupies a tight niche as a small country of middle
wealth and high social solidarity, the development of its health care system
still holds lessons for some of the most complex nations of the world.
The Costa Rican Health Care System
Framed by Nicaragua to the north,
Panama to the south, and the Pacific Ocean and Caribbean Sea, the small country
of Costa Rica (area 51,100 sq. km)[i]
stands out from its neighbors with a deep history of commitment to social
reform and a thriving economy. With a
population of only 3,810,179, 59% of which live in urban areas,[ii]
the nation is not only small, but also it has been able to hold social
solidarity. This solidarity arose from
the nation’s agricultural history in which the upper and lower classes were
dependent upon each other.[iii] In the past decade the ratio between the
income of the upper 20% and the lower 20% held stable.[iv] The democratic government composed of
executive, legislative, and judicial branches, and a four-year rotating
presidency, has also shown remarkable stability. Sustained economic growth has built a GDP per capita of USD$8,500
in 2001 with the primary industries being services, industry, and
agriculture. The development model,
“Based on promoting exports and tourism and modernizing state institutions in
the 1990’s,”[v] has landed
Costa Rica in 41st position in a 1999 development survey of 162 of
the world’s wealthiest countries.[vi]
A primary contributor to Costa
Rica’s success has been its focus on the well being of its people. For Costa Rica, health and education are
priorities for the success of their nation.
The World Bank highlights this priority:
“The Government of Costa Rica sees the health sector as an essential
determinant of the country’s economic and social development, giving it a
priority that is manifested in sustained high levels of spending and active
policy attention at the highest levels.”[vii]
The
attention to health has brought this middle-wealth country’s health indicators
in line with those of OECD countries.[viii] In 2001 the average life expectancy at birth
in Costa Rica was 76.6 years.[ix] In 2000, 97% of births were attended by
skilled professionals, 89% of the pregnant women were given prenatal care, and
93% of children under 1 had health insurance.[x] From 1990 to 2000 life expectancy increased
by 0.8 years, the fertility rate dropped, and the population grew due to an
influx of Nicaraguan immigrants.[xi] In 2000 there were 16 physicians and 3.2
nurses per 10,000 population.[xii] In 1999 there were 12,000 people living with
HIV/AIDS, giving an adult prevalence rate of 0.54%.[xiii] However, Costa is the only Central American
country to provide antiretroviral treatment to all patients through its social
security system.[xiv] The leading causes of death were
cardiovascular disease and neoplasms, which is comparable to many OECD
countries.[xv] Spending on health care has increased
steadily over recent years, and in 2000 it composed 9% of the national GDP.[xvi]
These
outcomes are the result of one of the world’s most successful “universal”
health care systems. “Universality” in
the Costa Rican system means that 100% of the population is given equal
comprehensive public health insurance with equal access to services. The success of the system is built upon a
history of stalwart determination by the national government to ensure high
quality health care for its entire people.
In 1941 social security legislation was passed in Costa Rica, establishing
the Costa Rican Bureau of Social Security (CCSS). This legislation set the provisions for medical insurance that
through the gradual expansion of the CCSS would eventually become a universal
health insurance system. Costa Rica
wrote a new constitution in 1949. The
most significant component of the Constitution was the abolishment of a
national army. This opened funding and
allowed more attention to go toward social programs, such as education and
health. Gradual health sector
improvement ensued until 1973, when the health sector was given a dramatic
boost. The General Health Law of 1973
placed all health treatment services, including all health care areas and
hospitals, under the control of the national social security program. In the next decade public health care
coverage extended to reach 78% of the population in 1982. By this point, all those employed,
regardless of their socioeconomic status, received health care.[xvii] The Ministry of Health (MOH), which was
established in 1907[xviii],
at this time was responsible for public health programs such as prevention and
promotion, and provided primary care for the uninsured. The MOH and the CCSS, working together to
provide national health care, continued to refine their roles. In the early 1990’s the MOH turned over
primary health care provision responsibilities to the CCSS.[xix] The MOH has since been in charge of all
public health programs, and the CCSS has been in charge of all health provision
programs.
The public
sector is the predominant health care sector in Costa Rica. It is composed of the following branches:
“The Costa Rican Social Security Fund (CCSS), which provides health
insurance, including comprehensive health care and financial and social
benefits; the National Insurance Institute (INS), which covers occupational and
automobile accidents; the Costa Rican Institute of Water Supply and Sewerage
Systems (AyA), which regulates the supply of water for human consumption and
wastewater disposal; and the Ministry of Health (MOH), which monitors the
performance of essential public health functions and exercises the steering
role in the sector.” [xx]
The CCSS
provides universal health care insurance to employed Costa Ricans. Workers contribute 15% of their salaries to
health insurance, broken down in this manor: 9.25% from the employers, 0.25%
from the total national wages, and 5.5% from actual worker wages.[xxi] Universal coverage means that even those who
are unemployed are able to obtain public funding for all health services,
including prescription drugs. By law,
the CCSS must cover 100% of the population, and it achieves this with the
following strategy:
“The CCSS is aware that only 80% of the population is insured either
through the compulsory or voluntary system, or as pensioners or their
dependents. Of the remaining 20%, 10%
are insured through state subsidies, given that this population group is under
the poverty line. The other 10% can
request public services when necessary and pay for them directly.”[xxii]
Not only
is the insurance coverage universal, but also the access to comprehensive
health care is nearly equal throughout the country:
“A 1998 study showed that…access was practically the same in rural and
urban areas (average distances to the nearest facility of 1.28 km and 1.10 km,
respectively).”[xxiii]
A large
reason why the quality of coverage and access to care are so strong is that the
CCSS employs a large number of mid-level health workers:
“[There is] a relatively modest supply of doctors, which apparently
serves the country’s needs quite well because of extensive use of auxiliary
nurses and health assistants; these personnel work in the rural health posts,
health centers, and hospitals.”[xxiv]
Mid-level
health workers with little training are very effective at extending access to
rural areas. The relatively small
amount of training necessary makes it easier for people from villages to become
medically certified and contribute to the health care provision in their
villages. The usage of mid-level health
workers also reduces the overall cost of the health care system because the
government doesn’t have to pay for expensive medical educations, and it doesn’t
have to pay high doctors’ salaries.
South Africa is looking to use more mid-level health workers for just
this reason.
The CCSS
has a very innovative way of organizing its health care professionals. It provides five comprehensive care programs
for children, adolescents, women, adults, and the elderly.[xxv] It operates through 93 health areas and 783
Basic Comprehensive Health Care Teams (EBAIS).[xxvi] Each EBAIS is composed of a physician, a
nurse, and one or more primary care technical assistants (ATAP’s). Currently each EBAIS serves an average of
3,500 people.[xxvii] Teamwork is an overarching theme in the
health care system. The branches of the
centralized public health sector must work together, the states must cooperate
with national mandates, and the health care providers work in teams. Working in teams allows each EBAIS to
develop comraderie and refine its skills as a unit to provide better health
care than if the members were working in inconsistent groups. These teams serve set groups of people. In the Costa Rican system, a person is
assigned to providers and a medical center based on place of residence.[xxviii] Lack of choice may be perceived as a
problem, but consistency gives each patient the best care he can receive in a
centralized publicly funded system.
Consistency also nurtures Costa Rica’s highly developed information
collection system. There is a very
extensive amount of information available in the public health sector. However, the private sector lacks an
efficient information collection system.
This is a significant problem because of the increasing importance of
the private sector in health care.[xxix]
Thirty
percent of the population used the private sector in 2001, and 24% of doctors
worked at least partly in the private sector.[xxx] The CCSS does not cover the costs of private
sector usage. Mixed Medicine, in which
a patient will pay for a private consultation with the physician of his choice,
and the CCSS will pay for the diagnostic services and drugs, is playing an
increasing role.[xxxi] Another new trend is the usage of Corporate
Medical Officers. In this type of
program a company will hire a private physician to care for its workers and
their families, and the CCSS pays for diagnostic and drug services.[xxxii] A more direct form of Public-Private
Partnership (PPP) arose in 1998 when the CCSS began purchasing services from
private providers called health cooperatives.
“In 2001, four cooperatives and a foundation at the University of Costa
Rica were already contracted, serving a total population of 400,000.”[xxxiii] 11% of the population now gets coverage from
PPP’s.[xxxiv] Incorporating the private sector has
alleviated some of the strain on the public system. The private sector does not threaten the public sector because
people are happy with the public insurance they already pay for, the quality of
public health care is very high, and publicly employed providers are well
compensated.[xxxv] A major problem that is arising with the
incorporation of the private sector is the difficulty of regulating it. It has been suggested that:
“There are opportunities for the CCSS to use its purchasing power to
require minimum performance as it contracts more with private providers.”[xxxvi]
Strengthening
the CCSS’s central power will make it more effective. In a country where interests are do not deviate far from general
consensus, centralizing power is the most effective way to guide social
programs to achieve equity and public satisfaction and monitor outcomes. The
CCSS has wielded its power throughout its existence to effect change. The CCSS uses its central purchasing power
to maximize cost-effectiveness of drug purchases by making mass orders to
international pharmaceutical companies for all the nation’s pharmaceutical
needs. Another example of how the CCSS has been able to affect a positive
change is the recent implementation of management contracts.
In 2001,
all health areas signed management contracts, which set outcome-based goals for
performance to be evaluated at the end of each year.[xxxvii] This is a significant step toward giving
health sector administration more of a business-like approach. Hospital and clinic directors are now
getting managerial education.[xxxviii] This will hopefully increase efficiency in
medical facilities. Management
contracts are the primary new tool to guide the reallocation of public funds on
a performance-based system, where case mix, adjusted production, and quality
outcomes will determine hospital revenues.[xxxix] This gives incentives to hospitals and
providers to be more efficient and have better patient outcomes. The result is that finally, half of the
accountability for health sector performance is now taken off of the CCSS and
put onto the hospitals and clinics.[xl] The evaluation of management contracts will
be aided by a Diagnostic Related Groups (DRG) system, which is set up in Costa
Rica but has not yet been used.[xli] The DRG system is a way of monitoring the
services rendered by each hospital or clinic monthly. It is a helpful guide, but it only gives quantitative
measures. Therefore qualitative
evaluation will have to be made separately when evaluating each hospital’s
annual performance. There will need to
be a large amount of new support for the CCSS to successfully monitor this
program and link pay to performance.[xlii]
In
parallel, the MOH has recently developed a regulation program for the
accreditation of hospitals based on quality assurance. The program is currently a pilot project,
which requires all maternity hospitals to adhere to standards set by the MOH in
order to earn accreditation.[xliii] However, “The ministry’s ability to enforce
sector regulation is weak,”[xliv]
and will need support to make this program effective on a national scale.
The
Ministry of Health has recently maintained a low profile. With the transfer of many of its programs to
the CCSS in the 1990’s, the MOH lost power.
However, throughout the history of the Costa Rican health care system,
the Ministry of Health’s public health programs have been crucial to the
success of the system. Milton Roemer
praises the MOH’s prevention programs:
“The benefits of prevention were dramatically demonstrated. Their strength and effectiveness probably
contributed to the harmonious relationships that the MOH developed later with
the social security program.”[xlv]
Indeed,
the MOH’s prevention and promotion programs have contributed greatly to Costa
Rica’s overall health outcomes. The
following two departments give examples of what the MOH contributes:
“Sanitary controls for and registration of drugs, food, and hazardous
toxic substances are the responsibility of the Department of Drugs and
Narcotics Controls and Registries of the MOH.
Health regulation and surveillance, which includes the monitoring of air
and soil quality, housing, chemical safety, and hazardous waste are the
responsibility of the Environmental Sanitation Division of the MOH.”[xlvi]
There are
several other programs that contribute to Costa Rica’s health sector
success. By 1995 the National Institute
of Aqueducts and Sewers (AyA), had provided potable drinking water to 99.6% of
the population, and had given 95.7% of the population a sewerage system. Electricity was available to 93% of the
population at that time.[xlvii] The Costa Rican Demographic Association does
extensive work in sex education and family planning.[xlviii] Roemer states, “Health-related research, to
produce new knowledge in fields of special importance, is exceptionally
well-developed in Costa Rica.”[xlix]
The
specialization of duties created by dividing the MOH and the CCSS and their
collaboration has lead to a very successful health care system. Milton Roemer says, “According to
conventional measurements of health status, the results [of the Costa Rican
health care system] have been phenomenal.”[l] However, nothing makes a more decisive
statement about the success of a health care system than the satisfaction
levels of its users. A 2000 SUGESS
survey found that 88% of health system users reported receiving proper medical
treatment and 81% said the physicians educated them properly.[li] And a national survey in 2000 showed that
over 70% of health system users were satisfied with their care.[lii]
Reform
The Costa
Rican health care system has matured through several waves of challenge and
reform. Despite its impressive health
outcomes, Costa Rica is now in a period of reform intended to refine its
successful programs, and improve efficiency by building off of trends that have
been developing for years. A period of
reform starting in 1994 was successful, and now the World Bank will provide an
extra surge to finish implementing positive reforms.
The reform
period from 1994-2001 was funded by the Inter-American Development Bank
(USD$4.3 million), and the World Bank (USD$22 million). Technical support was also given by the
Pan-American Health Organization/World Health Organization.[liii] This reform had a four part agenda:
“A steering role for the Ministry of Health and its strengthening;
institutional strengthening of the CCSS; a new system for the reallocation of financial
resources; and adaptation of the health care model.”[liv]
The new
World Bank reform project is entitled, “Costa Rica – Second Health Sector
Strengthening and Modernization Project.”
This project will allocate nearly USD$33 million to: “Improve health
system performance and financial sustainability by supporting the ongoing
policy changes in the health sector in Costa Rica.”[lv] The Costa Rican government’s reform
priorities are to: “Develop high levels of regulatory capacity and to implement
the most important regulations during the next five years.”[lvi]
Many of
the problems with the health care system can be better addressed by first
strengthening the centralized power of the MOH and the CCSS. PAHO states:
“Steering role functions [in the MOH] need to be further strengthened,
and it is necessary to improve the performance of certain essential public
health functions, the management of services [by the CCSS], the quality of
care, and equity in the allocation of resources.”[lvii]
Once the
MOH and the CCSS have been strengthened, then the CCSS will be better enabled
to fulfill its responsibility of facilitating the reform projects. A major objective is to improve the
financial state of the health care system by enacting efficiencies and
reallocating funds.
We have
already reviewed the reform mechanisms for reallocating funds; namely, using
management contracts to create performance-based allocation of funds. Another movement to save money is to reduce
the amount of inpatient care by transferring more patients to ambulatory
care. Inpatient care is far more
expensive than ambulatory care. But
ambulatory care requires higher quality health service initially, and better
mechanisms for providing home care. The
World Bank makes this statement about increasing ambulatory care:
“In 1999, fewer than 5 percent of all hospital discharges were resolved
in an ambulatory setting. With minor
investments in training, equipment and infrastructure (remodeling), the CCSS
could increase ambulatory interventions to nearly 20 percent of all
discharges. Benefits would include cost
savings of more than USD$12 million per year, improved quality, and greater
patient satisfaction.”[lviii]
Another
area where financial improvements can be made is in purchasing
pharmaceuticals. “Pharmaceuticals
represent 12% of CCSS health expenditure (nearly 1% of the GDP).”[lix] There needs to be improved monitoring of
drug usage through improved communication between health centers and the
central purchasing power of the CCSS, so that the correct amounts and types of
drugs are purchased.
The need
for better communication calls for an improvement in health care information
systems. For reasons referred to above:
“Implementation of an integrated [information] management system for
health care providers, hospitals and health areas is a continuing obstacle to
improved efficiency.”[lx]
Better
access to information will be needed to monitor health outcomes, which is
especially important to the new performance-based funding allocation
system. The natural counterpart to
improving communication is improving technology. In the past ten years technology has made astronomical
advances. However:
“The CCSS has not built a new hospital in the past 30 years, and during
the 1990’s investment [in hospital infrastructure] was reduced to less than 3
percent of total expenditure.”[lxi]
More money
will clearly have to be invested into hospitals and technology if Costa Rica is
to achieve the high potential for health care that its excellent system has set
it up for. While Costa Rica has
impressive outcomes for its region and its economy, it still lags behind the
best systems in the world in terms of performance. But it may work its way up in the pattern of gradual improvement
that it has traditionally followed.
A major
problem with health care access is that there are long waiting lines for
specialty care such as orthopedics, surgery, and gynecology. PAHO reports:
“[At the start of 2001 the waiting list for surgical hospitalization
numbered nearly 14,000 patients][lxii]…75%
of hospitals have one or more specialties with…waiting lists longer than three
months.”[lxiii]
Another
area where access can be improved is in rural areas. Although Costa Rica does an excellent job of extending services
to all, there is still room for improvement toward equity.[lxiv] As the demographics change, approaches
toward equity will have to follow suit.
There is an increasing elderly population, which will benefit from
establishing better home care and hospice care mechanisms.[lxv] Likewise, the leading causes of death have
changed in Costa Rica, and the MOH needs to adjust its prevention and promotion
programs to address non-communicable diseases and healthy lifestyles.[lxvi]
Medical
education also needs to adjust to the changes of the times. In particular the medical education
curriculum needs to better address the most advanced technologies,
pharmaceutical advances, and the new primary health care model. At the same time, continuing medical
education needs to be enforced and the same topics need to be taught to keep
the current physicians up to date.[lxvii]
These
reforms are being made to Costa Rica’s strong comprehensive health care system
to help it achieve its potential for reaching and sustaining goals of
universality, quality, and affordability.
Implications
One of the
World Bank’s statements of purpose for funding the second health sector reform
in Costa Rica is:
“Provision of assistance to expand knowledge of international
experiences in similar topics, emphasizing and facilitating the dissemination of
the Costa Rican experience to other countries.”[lxviii]
Costa
Rica’s health care system will serve as an example to other countries. There are very few countries that match
Costa Rica’s profile of small size, small population, social and political
solidarity, and gradually growing middle-wealth economy. But it was not these factors that led to
Costa Rica’s excellent health care system.
It was how Costa Rica used these factors that has aligned it for
success. When one looks at Costa Rica
in the Latin American context, the nation’s achievements become very
impressive. The factors listed above
did not come with the land, but were arrived at through social
development. It becomes apparent that
steadfast commitment to social reform with priorities on education and health
may lead a nation to social success.
Costa Rica
can be looked at as a pilot project for Latin America. This is analogous to looking at the health
care system in one state of India as compared to the entire nation. When segmented down to a manageable region,
a centralized health care system works best if one agrees with the Costa Rican
model. Centralization allows for
decisive management, and power to effect the changes necessary to building a
successful health care system. However,
when dealing with a larger region, the South African and Canadian systems point
to centralization within states, and a decentralized national approach under
the control of a central authority.
There are
several components of the Costa Rican health care system, which should be of
special notice to India. Primarily,
management contracts are an excellent way to share accountability, promote the
monitoring of information and health outcomes, promote improved quality of care
through incentives, and reduce costs by leading to more efficiency. Mid-level health workers are very valuable
for extending care to underserved regions and for reducing overall medical
costs. Costa Rica’s use of Public-Private
Partnerships may carry some lessons about how to better incorporate India’s 80%
private sector into a national health care system. And Costa Rica’s ability to harness and utilize external aid
could be a good example to India, which will rely heavily on external funding
to alleviate its problems with HIV/AIDS, and to build its national health care
system.
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[l] Roemer, Milton. National Health Systems of the World – Volume I. Oxford University Press. New York, NY: 1991. Pg. 420
[li] “Profile of the Health Services System of Costa Rica.” PAHO. May 27, 2002. Pg.27.
[lii] “Profile of the Health Services System of Costa Rica.” PAHO. May 27, 2002. Pg. 17.
[liii] “Profile of the Health Services System of Costa Rica.” PAHO. May 27, 2002. Pg. 2.
[liv] “Profile of the Health Services System of Costa Rica.” PAHO. May 27, 2002. Pg. 2.
[lv] “Costa Rica – Second Health Sector Strengthening and
Modernization Project.” World Bank.
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http://www-wds.worldbank.org/.
Pg. 6.
[lvi] “Costa Rica – Second Health Sector Strengthening and
Modernization Project.” World Bank.
2001.
http://www-wds.worldbank.org/.
Pg. 6.
[lvii] “Profile of the Health Services System of Costa Rica.” PAHO. May 27, 2002. Pg. 2.
[lviii] “Costa Rica – Second Health Sector Strengthening and
Modernization Project.” World Bank.
2001. http://www-wds.worldbank.org/. Pg. 4.
[lix] “Costa Rica – Second Health Sector Strengthening and
Modernization Project.” World Bank.
2001.
http://www-wds.worldbank.org/.
Pg. 4.
[lx] “Costa Rica – Second Health Sector Strengthening and
Modernization Project.” World Bank.
2001.
http://www-wds.worldbank.org/.
Pg. 4.
[lxi] “Costa Rica – Second Health Sector Strengthening and
Modernization Project.” World Bank.
2001.
http://www-wds.worldbank.org/. Pg. 4.
[lxii] “Profile of the Health Services System of Costa Rica.” PAHO. May 27, 2002. Pg. 6.
[lxiii] “Profile of the Health Services System of Costa Rica.” PAHO. May 27, 2002. Pg. 26.
[lxiv] “Costa Rica – Second Health Sector Strengthening and
Modernization Project.” World Bank.
2001.
http://www-wds.worldbank.org/. Pg. 4.
[lxv] “Costa Rica – Second Health Sector Strengthening and
Modernization Project.” World Bank.
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http://www-wds.worldbank.org/. Pg. 4.
[lxvi] “Costa Rica – Second Health Sector Strengthening and
Modernization Project.” World Bank.
2001.
http://www-wds.worldbank.org/. Pg. 5.
[lxvii] “Costa Rica – Second Health Sector Strengthening and
Modernization Project.” World Bank.
2001.
http://www-wds.worldbank.org/. Pg. 4.
[lxviii] “Costa Rica – Second Health Sector Strengthening and Modernization Project.” World Bank. 2001. http://www-wds.worldbank.org/. Pg. 7.