Wednesday, October 25, 2006

Sick health

The plans of private health schemes to jack up their rates by up to 23 percent next year drives something of a coach and horses through the government’s dreams of an election year prize freeze since it would add around one percentage point to the inflation of early 2007 but there are reasons other than sheer greed for the proposed increase.

The main justification is, of course, cost pressures. The current worldwide trend is for health costs to double every four or five years and Argentina is by no means immune from that trend — the relentless increases in the prices of medicine, technology and equipment in general mean that hospitals, clinics and laboratories have all become far more expensive. As for wage costs, doctors remain scandalously underpaid but the trade union representing non-medical staff (whose veteran boss Carlos West Ocampo recognizes that the costs of health schemes have risen) managed to extract its benchmark 19 percent pay increase for 2006.

Furthermore, far from being subsidized (like, for example, public transport), private health schemes are taxed (including IVA value-added taxation) — even if they have been allowed to run up tax arrears of nearly two billion pesos in the difficult years since the 2002 devaluation and even if the government is more open to the idea of exempting them from the cheque tax than to granting them the rate increase sought (denied yesterday).

But if the private health schemes have several valid arguments to justify their increases, long-suffering patients have every right to feel aggrieved (and Ombudsman Eduardo Mondino has already served notice that he will be resisting the increases on their behalf). Yet a more imaginative approach to this problem than price freeze electioneering could rescue the government from this cruel dilemma between driving the private health schemes into the ground and punishing the general public. Argentina’s health system is hopelessly broke, yes, yet underfunding is not especially the reason — Argentina spends several billion dollars on health care every year and definitely belongs to the more generous half of the world’s countries in this respect.

If instead of unimaginatively muscling price freezes, the government thus attempted some far-reaching reforms to improve the quality of spending, demonizing the middlemen instead of the health care providers, it might yet be possible to control both prices and costs — and even offer doctors something approaching decent pay.


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