The wave of neoliberal healthcare reforms that spread across Latin America in the late 1980s started in Chile and was soon followed by Colombia, Argentina and Brazil. In the case of Colombia, where neoliberal ideas and international financial institutions‟ policies were
191
128 adopted most closely, the reforms took place in the 1990s (Homedes & Ugalde, 2005, p. 84). Between 1986 and 1994 Colombian governments introduced neoliberal policies in healthcare that “resulted in the emergence of a new way of governing Colombian health care services and the population‟s health, [thus governmental intervention was based on] different domains of knowledge and technologies of power such as public health, public administration, hygiene, health economics, and social security, among others” (Vega, 1999, pp. 35f, 54f). Law 10 of 1990 was a first big step towards deregulation at different levels. This law aimed “to diminish the cost of health care by promoting a cheap primary medical care for the poor, by enhancing community participation and self-care, and by increasing efficiency in the performance of the system” (Vega, 1999, p. 40). Article 1 of this law declared the Colombian healthcare system as a public service, “that is to say, a set of institutions regulated by the central state but not necessarily under its direct administration and ownership” (Vega, 1999, p. 41) which paved the way towards a stronger market orientation in healthcare.
In the period from 1992 to 1998, during the third liberal government in office in a row, deregulation was aimed at facilitating the creation of „new markets‟ (Estrada, J., 2004, p. 85). During the 1990s one policy was “to create conditions for making private profit. In the future, the modernising ideals of progress, efficiency, and equity would take the form of state- regulated market relationships, private initiative, and individual choice” (Vega, 1999, p. 62). There were important legal-political reforms during this time inspired by a neoliberal rationality, e.g. Law 50 of 1990, which introduced labour flexibilisation; Law 30 of 1992, which deregulated the education system; Law 142 of 1994, which introduced market rules in the provision of public services; and Law 226 of 1995, which allowed the privatisation of state assets.
The arrival of a new generation of technocrats, managers, consultants, advisers and experts of all kinds boosted neoliberal ideas in Colombia. Most of them came from the social elites, had studied in leading American universities and shared with international financial organisations similar cultural and economic interests (Estrada, J., 2004, p. 51; Vega, 1999, p. 63). Some authors have argued that the neoliberal wave of reforms in Latin America “was not based on people‟s needs, but strongly inflamed by the needs of foreign – especially North American – corporations” (De Vos, et al., 2006, p. 1604). Latin America was indeed a promising market, but it was necessary to create adequate political and legal conditions in order to implement the neoliberal project without causing trauma. During the economic crisis
129 of the 1980s, the IMF and the WB “took advantage […] and pressed for health reforms as a condition for borrowing.” Thus, a market-oriented model for healthcare was promoted as the right thing to do in Latin America, with the participation of USAIDS,192 IADB,193 and even PAHO (Bertranou, 1999, p. 1; De Vos, et al., 2006, p. 1604; Homedes & Ugalde, 2005, p. 83).
In 1993, the year when Law 100 was implemented, the World Development Report of the WB stated the “need to improve equity and allocative efficiency through guaranteeing universal access to a basic package of services” (Homedes & Ugalde, 2005, p. 84). In Colombia, the PC of 1991 established “the principles and the rules for the operation of a minimum state, and defined the conditions for the wide operation of private market relations” (Vega, 1999, p. 43), then providing the foundations for a new social order based on the market. The implementation of different measures to reduce public spending as well as to reduce poverty was the strategy of the WB and the IMF to introduce this ideology in Latin America. According to the new policies, state involvement in healthcare should be limited to the provision of essential clinical, public health services and the correction of the “deficiencies of the market”. These deficiencies were “[…] problems of adverse selection, moral risk, and others such as externalities and imperfect competence between providers of health services” (Vega, 1999, p. 55). Then, the WB‟s recommendation was to implement universal insurance in a context of regulated competence, i.e., healthcare services would be ruled by a market rationality while the state would guarantee the correct functioning of the system (Rodríguez-Monguió & Infante, 2004, p. 137f). In short, Law 100 was a turning point from “a unified, integrated, and regulated system [to] a regulated market based on the separation of functions” (Rodríguez-Monguió & Infante Campos, 2004, p. 131), a separation between the purchaser and the provider, between financing and provision in the name of efficiency (De Vos, et al., 2006, p. 1605). As Juan Luis Londoño, the Colombian mastermind of the healthcare reform, who would later become Minister of Health, put it: Law 100 sought to implement a “structured pluralism and managed performance” in healthcare (Londoño & Frenk, 1997, p. 17; Rodríguez-Monguió & Infante, 2004, p. 132), which in practical terms entailed a process of deregulation, decentralisation and privatisation of healthcare (Homedes & Ugalde, 2005, p. 84).
192
United States Agency for International Development.
193
130 Based on Law 100 international financial organisations demanded from the government to cut spending for public services and to act only as regulator but no longer as provider (Homedes & Ugalde, 2005, p. 83f). In the name of democracy and community participation, with the decentralisation technical responsibility and financial resources returned to municipalities (Kalk, 03, p67). However, this meant that an increasing financial burden of public services was transferred from the central government to the provinces. Yet, “[t]he policy of decentralization was wrapped under the hard-to-oppose principle of transferring power from unconcerned and inefficient central bureaucrats to the people” (Homedes & Ugalde, 2005, p. 84). In 1995 the PAHO, the WB, and the IADB “agreed on concrete strategies for health sector reform in the continent” (De Vos, et al., 2006, p. 1604) and PAHO became one of the main supporters of the Colombian reform (Coronell, 2011). For many critics of the reform it was ironic that in 2000 the WHO ranked the Colombian healthcare system first in the world despite of its tremendous deficiencies. It was clear that there was an ideological overlap between the ideologues of the reform and the staff of international organisations such as WHO/PAHO (Homedes & Ugalde, 2005, p. 89).
In the National Assembly that was responsible for the new political constitution of 1991, a Transitory Commission discussed issues related to social security and health. However, its recommendation to include in the constitutional text issues like the creation of a national healthcare service similar to the NHS in the UK, and a national policy on prescription drugs were never considered properly (de Currea-Lugo, 2003, p. 91). In the end, only two articles about health were included: Article 48, which stated the right to health, although not a fundamental right,194 and Article 49, which decentralised health services (PC, 1991), leaving the organisation of a healthcare system in the hands of the Congress. Unfortunately, the Colombian Congress is a place full of hidden agendas, where many interests are at stake and powerful lobbyist groups influence the decision making process. The bill 34 of 1992 illustrates how much the neoliberal rationality had penetrated the legislative by then. According to this bill, the state would only have a regulatory and normative role in the economy and therefore private companies should be allowed to participate in any area. Concomitantly, non-profitable areas considered of „social importance‟ would remain in the state‟s hands (Estrada, J., 2004, p. 98). In the end, Law 100 of 1993, the most radical healthcare reform ever carried out in Colombia was adopted, creating the General System of
194
„Health‟ was understood as part of „social security‟, which was defined by the Constitutional Court‟s Decision T-116 of 1993.
131 Health and Social Security,195 hereafter GSHSS, a mixed private/public system in contrast to a tax-financed systems like in Portugal or the UK and social insurance systems like in France and Spain.