Experts from the faculties of Medicine, Law and Economics at the University of Chile agree that the country should move towards a different health care system, with a single insurer at the centre, a large Fonasa (National Health Fund). The academics’ proposal is for the pooling of funds, i.e., that health funds should not be individual, but collectivised, and then distributed on a solidarity basis.
Amid growing concerns and criticism, the isapres are in the midst of a profound crisis that calls into question the viability of the country’s health care system. These private institutions are facing a series of challenges that affect both beneficiaries and the system as a whole. Isapres use various criteria, such as age, gender and pre-existing conditions, to set insurance prices, generating price discrimination that has been widely questioned. This situation has led to numerous lawsuits and criticisms of the isapres system, as this practice is considered unfair and undermines equal access to health care.
Another preoccupying aspect is the lack of transparency in the isapres’ processes. Users face difficulties in understanding the scope and limitations of their plans, as well as the mechanisms for it to make their rights known. The lack of clear and accessible information has generated a climate of distrust towards these institutions, damaging the relationship with their affiliates. In this context, the Supreme Court’s ruling obliging isapres to return unjustified extra charges to their affiliates has forced a rethink of the model.
Dr Cristián Rebolledo, head of the Health Policies, Systems and Management Programme at the University of Chile’s School of Public Health, says this issue should have been resolved many years ago. “The problem of the isapres was identified, configured and even denounced more than ten years ago, back in 2010 it was already being said that this issue of the factor tables was unconstitutional, as well as the unilateral price increases. It had already been seen many years ago when these letters arrived announcing that the price had been raised. Certain legal techniques had even been generated and there were lawyers who were working on this. It generated an overload of the courts, it’s an old story,” says Rebolledo.
There were three presidential commissions in the last decade to study how to resolve the isapres issue. “So, talking about the crisis of the isapres and that they will go bankrupt in the coming months is clearly contingent, but it is reductionist with respect to all the elements that were being shown and about which there was preoccupy. Several people were already saying that this was a system that had no way back, that it was going to burst at some point. The pandemic probably accelerated and triggered some additional elements that have led to the current situation,” adds the medical school academic.
“From here at the School of Public Health we have been saying in various places, especially those of us who study the issue of health policies, that it was questionable to say that the isapres were fulfilling a role in social security, because they had the logic of private insurance, despite being financed with the Social Security Agreement, which is 7%,” says Rebolledo. “When they have a logic of ‘skimming’, when they raise prices, when they can say that people are not insurable, when they generate a difference between men and women, that is not social security, it is an insurance logic. So, of course, this hybrid of saying that we will pass on the person’s contribution, but playing with insurance rules, is clearly not desirable,” says the Dr. in Public Health.
In the hypothetical case that the isapres ‘escape’ the Supreme Court ruling, they would still have to reformulate and move forward in the logic of social security. What the ruling does now is not only impose that they pay the money they overcharged inappropriately. The ruling also imposes conditions on them to continue operating in the future. “The Supreme Court came to settle an issue that should have been settled by the Executive ten years ago,” says the professor from the School of Public Health at the University of Chile.
For Fabián Duarte, director of the Department of Economics and academic at the Faculty of Economics and Business at the University of Chile, this problem has arisen since the very creation of the isapres system. “This issue has been discussed for, I would say, more than 12 years. It is not a new issue. It is a system that has a lot of problems, but that is the way it was built. Now, in the last few years, it has had a financial crisis caused in turn by the fact that they cannot change their prices, basically. So, it’s a pretty critical moment for the isapres, and now even more so with this ruling and having to pay back that amount of money,” says the economist.
Professor Pamela Martínez, PhD in Law and academic at the Department of Labour Law and Social Security of the Faculty of Law of the University of Chile, argues that the use of the isapres’ tables to adjust their values is unconstitutional, as the courts have ruled. “It is contrary to the principle of equality before the law and non-discrimination. Moreover, as a result of these increases in the plans, a legal services industry was created, in the sense that the protection recourse was used so that every time the isapres proposed an increase, the affiliates of the system filed appeals, collapsing the courts”. It should also be noted that the isapres continued to apply the table despite it being considered unconstitutional.
He adds that “this is a question of fact. In other words, will the ruling be complied with? It must be done, the ruling must be complied with. We are under the rule of law and the rulings of the courts, especially the country’s highest court, must be complied with,” she says. “The bottom line is that we are dealing with a private health system that based part of its business system, from 2010 onwards, on not complying with the law,” says the professor.
What is the best solution?
Professor Rebolledo argues that from public health it is necessary to evolve towards what is known as pooling of funds. “I think there is a scenario to which we definitely have to mobilise, which is what is known as pooling of funds. This has been a long-cherished expectation of those of us who are dedicated to this issue, who consider that health funds should not be individual, but rather collectivised. This is true in terms of collection. Now, how are they distributed? I would like them to be distributed in solidarity,” says Professor Rebolledo.
Solidarity in social security is expressed through the function of pooling, i.e., that regardless of how much one contributes, one will receive more according to needs. Could it be state-run like a large Fonasa? “Yes, there are some of us who believe that we should move towards that. But we have to decide after that how we go on: from pooling, which is the solidarity-based sharing of money – and also of risk in some way – one could migrate to a more virtuous system of single or multi-insurance. “My preference, and it might even be ideological, is for single insurance. But under no circumstances maintain the current situation,” says Dr. Rebolledo.
“For this system to work, the surgery is big, it’s a major surgery, it’s not about changing the isapres for something else. It is a little more complex than that because it also has to do with the form of care that we Chileans have. On the private side, the care model we have is a model that does not allow cost containment by providers, because the way insurers pay in general is what we call Fee for Service and for each service I pay something. So, the economic incentives are wrongly set. This is the change that needs to be made in the long term, to move to a different system of care. Therefore, based on this different care system, the way of paying will be different and the incentives given to providers will be an incentive to contain costs and, therefore, costs will not rise as much as they are rising now and we will end up with a more sustainable insurance system over time,” says Professor Fabián Duarte.
“What definitely has to change is to move to a base insurance, let’s say universal insurance or a single insurance. That’s the best way to do it. And the only thing you can do there, if you have more players, is to have some kind of risk compensation funds. And if you don’t have more actors, if there is only one actor which is Fonasa, you don’t have that kind of fund, because the problem we have now is risk selection. Private insurers select, therefore, they skim the market, you are left with the lowest risks. And that doesn’t work well in a complete system, because then the other party, the public party in this case, takes the highest risks and makes it more expensive. And the point of health insurance is to combine high and low risks so that the costs are prorated or else we end up like we are now,” adds the professor from the Faculty of Economics and Business.
“My feeling is that it is easier with a single insurer, which would be Fonasa, because all the risks are there, the whole population is there, and after having a second level where you have well-regulated complementary insurance. There is room for the private sector, whether private insurers such as the isapres or others, to participate in this market. I think it’s a very interesting market, it’s a big market and it could even be a much better market than the one we have now, because the one we have now restrict you a lot,” says Duarte.
Professor Martínez adds that “this is a more complex issue than complying or not with a ruling because it has to do with a model, and I think it has to do with distinguishing access, the right to health for Chilean men and women. In most of the models of countries that have a social and democratic rule of law or that have advanced in health coverage, health insurance is one and it is public, and therefore the state collects the money and redistributes it to maintain the health system”.
What happens if the isapres collapse? By law we will all be in Fonasa, and that will mean that some of the population who go to high-end providers will have to pay more out of pocket when they go for treatment. “What we have to prevent in all this collapse is that private providers (health centres), which are key, do not spill out. So, if the isapres become insolvent and cannot pay the private providers, and the private providers are going to spill out and have to go bankrupt or close, then we are in trouble,” warns the economist.
“What is in crisis, in this sense, is this model of health management, the model of materialisation of the right to health, which is typical of the subsidiary state, and how the health model was constructed in the 1980 Constitution. What the government is proposing is precisely to move towards a single insurance system. And, in some way, that the isapres should be considered as a complementary insurance”, says the lawyer.