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    • Arturo Vargas-Bustamante
      Arturo Vargas-Bustamante

Mexico’s Experience with Health Care Reform

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Well before the U.S. passed the Affordable Care Act, Arturo Vargas-Bustamante was part of his country’s successful effort to move toward universal health coverage.

A new political party assumes power with the election of a highly popular president who is expected to institute major policy changes, not the least of which is reforming a failing health care system. But the effort to pass landmark legislation ensuring universal access to care meets with considerable resistance from the political opposition in Congress and powerful special interests. In the end, a law passes that most public health advocates view as representing significant progress, although it doesn’t go as far as they might have hoped.

If this sounds like a description of the events leading to the approval and implementation of the U.S. Patient Protection and Affordable Care Act of 2010, that’s because Mexico’s earlier experience in passing the 2003 System of Social Protection in Health legislation – which included Seguro Popular (popular insurance), a program designed to bring universal coverage to a nation in which half of the population was uninsured – bears remarkable similarities to what would unfold in the United States by decade’s end.

Dr. Arturo Vargas-Bustamante joined the administration of Vicente Fox when he was elected president of Mexico in 2000, and for the next two years Vargas-Bustamante, now an assistant professor at the UCLA Fielding School of Public Health, worked for the Financial Protection Unit in Mexico’s Ministry of Health, conducting research that helped to shape Seguro Popular’s development.

Vargas-Bustamante was charged with comparing potential approaches to reform with the experiences of other countries in Latin America, and analyzing the types of health insurance coverage that could be integrated within the design of the program. “The idea was to project the outcomes of each scenario being considered,” he explains. “We would take an ambitious proposal, a middle-of-the-road proposal, and a conservative proposal and brief the minister of health on what was likely to occur based on each – taking into account the political, legal and economic consequences.” 

“The idea was to project the outcomes of each scenario being considered. We would take an ambitious proposal, a middle-of-the-road proposal, and a conservative proposal and brief the minister of health on what was likely to occur based on each – taking into account the political, legal and economic consequences.”

Faced with a country in which half of the population – nearly 50 million Mexicans – was uninsured, the government set out to pass legislation that would achieve universal coverage. “The major issue was funding,” Vargas-Bustamante says. “How were the funds allocated to this proposal going to be used to reach those who most needed to benefit?” Another question the policy makers had to consider was one the United States would later face: how to maximize participation in the new insurance plan. What incentives should there be to enroll – a mandate or subsidies? Finally, how would health care services be delivered under the new insurance plan – in public clinics, private clinics, or a mixture of the two – to ensure that the people who enrolled received quality care?

Looming over the development of Seguro Popular were the political realities. Fox’s election had broken the 71-year uninterrupted rule of the Institutional Revolutionary Party (PRI), raising expectations for radical change. But the Mexican Congress remained dominated by the PRI, many in Fox’s administration were linked to the old party, and interest groups that benefited from the status quo were poised to dig in. “We had to find that middle balance between knowing that the population wanted major reforms, but also being aware that there was going to be political resistance,” Vargas-Bustamante recalls.

If that aspect of the Mexican experience was similar to what the Obama administration faced beginning in 2009, other factors made the policy environments quite different. On the one hand, Mexico is a considerably poorer nation than the United States, with far fewer economic resources to allocate to health care. Yet in other ways, structural factors made the task of passing and implementing reform in Mexico easier. A centralized, publicly managed government health plan is the main provider and financer of public health services in Mexico, whereas the private sector is the primary provider in the United States, with public financing divided between the states and the federal government.

The legislation that passed in 2003 – essentially shifting the existing public program to an insurance-based system – fell short of what Vargas-Bustamante might have considered ideal. Nonetheless, Vargas-Bustamante notes, the financial incentives for the poor – access to health services that are virtually free – make enrollment “a no-brainer.” Vargas-Bustamante’s group also hoped to emulate the experiences of nations such as Colombia and Chile, where public financing is used to spur competition among public and private health care providers for health plan enrollees. That proposal was shot down by various interest groups, although a compromise provision enables plan administrators to outsource with private-sector providers when public clinics are unable to deliver the services guaranteed in the plan.

The primary goal of Seguro Popular was to improve access to care for vulnerable populations that were uninsured and unable to obtain health coverage under the previous system. By that measure, the program, which was first implemented in 2004, has succeeded. Every Mexican is eligible to enroll, and doing so guarantees a wide range of basic health services, as well as medications and coverage of major illnesses. Fees are based on income; for the majority of enrollees, though, the cost is next to nothing.

To be sure, there have been problems, notably with uneven quality and inefficiencies in the delivery of Seguro Popular services. “The health care system is still segmented, like it is in the United States, which promotes the accumulation of benefits in very privileged sectors of society,” says Vargas-Bustamante. “The best approach to reform would have been to unify the health care system. But that is controversial. A lot of people benefit from the way it is now.”

According to the Mexican government, the country reached its goal of universal health insurance coverage in 2012. Vargas-Bustamante notes that research indicates the poorest families have benefited most from the program through reduced out-of-pocket expenditures. “The policy wasn’t the ideal way of expanding coverage,” Vargas-Bustamante says. “But it is probably the best we could have done politically, and it has helped millions of families.”