Photo via Clarín

President Mauricio Macri announced yesterday that the government will reform the national healthcare system in order to implement universal coverage in Argentina.

“When you feel like no one is taking care of your health, you feel as if your dignity weren’t being respected,” said Macri when announcing the initiative in an act in the Casa Rosada.

The system will come into effect in the next months (it wasn’t specified when) and will be comprised of the following: An increase in the amount of funds destined to hospitals as well as an improvement in the mechanism by which these are allocated; the repayment of all debt incurred by obras sociales (“social insurance”), the most common healthcare plan, which works through unions; and the creation of a government body tasked with evaluating the best way to treat diseases throughout the country.

To afford the reform, the Macri administration will get its hands on an AR $30 billion fund called the Solidarity Redistribution Fund (FSR). This fund has been highly controversial over the last few years because it was actually based on government subsidies to unions… which the government never paid.

This is how the system was supposed to work: 15 percent of the money all union affiliates paid to their obra social went to the FSR to pay for expensive or complex treatments. In 1993, the Menem administration sanctioned Law 23.661, which committed the State to reimburse the funds obras sociales paid hospitals for serious treatments. However, according to unions and the current administration, the State never actually paid obras sociales back, and debt piled up to AR $30 billion. The Macri administration will use part of these FSR funds to pay back some of this debt. The rest will be destined to fund the reform. Let’s break down its different aspects:

Universal Coverage

The Macri administration intends to create a universal coverage system, which aims at covering the 15 million people who are not currently covered by any social security. These people will be given a card including their medical history, and its purpose will be twofold: On the one hand, make it easier for doctors to know their medical record and on the other, allow Argentines to get discounts on medication, as Obras Sociales allows.

According to Clarín, government officials expect to have a website ready for people to sign up by the end of the month.

More Funds For Healthcare

Macri announced that AR $8 billion out of the aforementioned AR $30 billion will be destined to “strengthen both the healthcare system and our hospitals so they can face the new demand this new universal coverage plan will generate.”

Moreover, he announced AR $4.5 billion will be used to create a so-called “Fund for Emergency and Assistance from Healthcare Agents.” Its purpose will also be twofold: It will provide financial assistance to Obras Sociales during epidemics and will fund programs for disease awareness and prevention.

Roughly AR $14 billion will be used to buy sovereign debt bonds (Bonar 2020), and will be administrated by the Health Services Superintendence (an organization that works under the Health Ministry). These bonds’ interests will go to the Redistribution Fund for Solidarity to actually pay for future treatments.

The remaining AR $2.7 billion will be used to cancel more debts with unions’ Obras Sociales

Bureaucratic Reforms

Moreover, the initiative will create the National Agency for Health Technology Evaluation. The agency will seek to prevent the government or its officials from spending more money than they should when buying equipment or prescribing or ordering medication. “The agency will study and apply technology to, for example, have doctors presribe the right medication,” said Macri during the act. “Sometimes we do this in a way that wastes money,” he added.

Another reform aims at incorporating more modern information and communication equipment to speed up the process by which the national administration allocates funds to public hospitals.