Marketizing HMOs to Latin America

Dorothy Guellec

The number

of for-profit health care organizations has quadrupled in the pas 17 years, a

study by the Henry J. Kaiser Family Foundation said. For-profit HMO’s were 18%

of all plans in 1981 but increased to 74% by 1998. The proportion of enrollees

in for profit HMO’s grew from 12% to 63% during that period.


content with the U.S. stock performances, the companies are now seeking a wider

market base, and are invading Latin America.

The major

research study into this phenomenon appeared in the New England Journal of

Medicine on April 8th, 1999 and was virtually ignored by the media. There were a

few articles here and there. Such familiar names as Aetna, Cigna and others have

entered Argentina, Brazil, Chile, and Ecuador (the 4 countries studied in depth

by the research team) and opened newly privatized markets. The group is based at

the University of New Mexico and reports that many of the managed care

organizations operating procedures most frequently criticized and under review

in the U. S. are quietly being exported.


investigators for this New England Journal of Medicine study are: Howard

Waitzkin M.D. Ph.D. Professor and Director of the Division of Community Medicine

in the University of New Mexico School of Medicine Department of Family and

Community Medicine and Celia Iriat Professor of Collective Health at the

University of Buenos Aires and visiting faculty member at UNM. Karen Stocker, a

graduate student in Anthropology shares authorship. The group focused mainly on

these 4 countries in addition to the United States.


1993, according to Dr. Waitzkin, institutions such as the World Bank and the

International Monetary Fund have made privatization of state owned hospitals and

clinics a lending requirement when Third World countries are seeking loans.

Often times those former state run hospitals and clinics are purchased by US and

European insurance companies, who then introduce US style models of managed



history of health care in many Latin American countries is vastly different from

the systems in the United States. Despite economic underdevelopment, in Latin

America there is an aim to assure universal access to health care. However

during the 1990’s the World Bank and other international lending agencies

instituted "structural adjustment" requirements that public health

care institutions and government social security funds be converted to private

management and/or ownership as conditions for new loans. These privatization

programs have created multi-billion dollar capital pools that multinationals

have sought to capture.

All this

creates barriers to health care for the elderly, the unemployed, and the working

poor. Governments in Latin America traditionally have accepted the social

responsibility of providing basic care for their people, but as managed care has

moved in the priorities have shifted and spending is now reduced for these

vulnerable groups of patients. Spending for clinical services is down too due to

administrative needs and mainly the return for investors.


that fail to implement "structural adjustment," read managed

care/shareholder bottom line policies, are threatened with the cutoff or

"drastic reduction of loans, credit to buy essential imports, and food


As the

expansion of managed care slows in the U.S. managed care organizations are

likely to continue to enter new markets abroad. Here is a comment from someone

in Thailand: "I am working in a big government hospital in Thailand. As you

know, my country is developing in all aspects and try to copy some managing

system from yours. My hospital is for serving the under privileged people, that

is over 90% of patients cannot pay even a baht (1/37 US $) and sometimes the

hospital must pay for return home bus-fare. When IMF came in 2 years ago it said

this system cost a lot of money and cause lots of missed management. So it

suggests change by turning the hospital to autonomous hospital and use something

like HMO system to manage the ill people. I wonder it will be disaster to Thai

people". I want to protect the writer’s identity.


Waitzkin has said that "it is a common perception that health care is

better in the United States, yet in many instances it hasn’t been. People

migrate to the U.S. for a number of economic reasons, but finding better health

care is seldom one of them."


Guellec, Journalist medical specialty Member,

Foreign Press Association

tel (914) 271 5644

(fax) 914 2716188

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