The Expansion of Public Health Insurance in Mexico Health
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London School of Economics and Political Science The Expansion of Public Health Insurance in Mexico Health, Financial and Distributional Effects Belén Sáenz de Miera Juárez A thesis submitted to the Department of Social Policy at the London School of Economics for the degree of Doctor of Philosophy, London, September, 2017 1 Declaration of Authorship I certify that the thesis I have presented for examination for the PhD degree of the London School of Economics and Political Science is solely my own work other than where I have clearly indicated that it is the work of others (in which case the extent of any work carried out jointly by me and any other person is clearly identified in it). The copyright of this thesis rests with the author. Quotation from it is permitted, provided that full acknowledgement is made. This thesis may not be reproduced without my prior written consent. I warrant that this authorisation does not, to the best of my belief, infringe the rights of any third party. I declare that my thesis consists of 44,661 words. Statement of conjoint work I confirm that Chapter 6 was jointly co-authored with Dr. Joan Costa and Professor Frank Cowell, who provided guidance on the structure of the chapter and empirical strategy. I conceived the idea for the analysis, wrote all the sections of the Chapter and carried out all the estimates. Overall, I contributed 85% of this work. 2 Abstract During the past decade, the Mexican government launched an ambitious expansion of public health insurance through the Seguro Popular programme (SP). As a result, health care access was legislated as citizens’ entitlement, a generous benefit package was offered, and public health expenditure was significantly increased. In 2011, the programme had reached 52 million affiliates. However, there is limited evidence on its effects on a number of outcomes and their distribution. This thesis analyses three aspects that are key to evaluate health system performance. Specifically, using quasi-experimental methods and recent distributional measures of pure health, it examines the effect of universal insurance coverage on infant mortality, non-medical consumption, and health inequalities. Drawing on municipality-level data, the first article finds that the programme led to a 3.9 per cent decrease in infant and neonatal mortality. These reductions were concentrated in more populated, urban, and less marginalised municipalities, however, probably because this type of municipalities have been traditionally better equipped and are thus better prepared to offer all the interventions from the benefit package. Based on data from the Mexican Family Life Survey (MxFLS), the second article shows that unexpected health events such as accidents and deterioration in physical capacity are associated with large declines in non-medical consumption. Social security seems to provide protection against both types of shocks, but endogeneity-corrected estimates show that the SP only protects consumption against accidents. This suggests that income losses associated with disability shocks for which the programme does not offer protection, are likely larger than medical care 3 expenditures, and poses the question of whether other social security benefits, such as disability insurance, should also be extended. Finally, the third article analyses the distribution of health in the context of the SP implementation. Unlike traditional studies, pure health inequality and mobility are analysed using a recently developed class of indices appropriate for categorical data. If a downward-looking definition of status is employed, the distribution of health appears stable, but if an upward-looking definition is adopted, a significant increase in inequality is observed. Evidence of strong persistence in health was also found. This lack of improvement in the health distribution suggests that factors other than health insurance coverage, such as institutional performance, are more important determinants of health inequalities. Overall, this thesis finds important health effects from extending health insurance coverage but limited effects on economic welfare and the distribution of health status across the entire population. 4 Acknowledgements First thanks must go to my supervisor, Dr Joan Costa, for his guidance and support during the preparation of this thesis. I also want to thank Professor Alistair McGuire and Professor Stephen Jenkins for their comments to my Major Review Document, an early version of this manuscript. I am grateful to Professor Frank Cowell too for his ideas and suggestions for Chapter 6. My deepest gratitude goes to my family for their unconditional love and support, and to Onidnas, for his patience and understanding. The support and company of my friends (despite the distance) has been invaluable. This thesis is dedicated to the memory of my father. 5 Contents List of Abbreviations ................................................................................................. 9 List of Tables ............................................................................................................ 11 List of Figures ........................................................................................................... 13 1. Introduction ...................................................................................................... 15 2. Public Health Insurance in Mexico ................................................................ 18 2.1 Antecedents of the Seguro Popular Programme: The Divide between Formal and Informal Workers ............................................................................................ 18 2.2 The Seguro Popular Programme: Health Access for All as Citizens’ Entitlement ............................................................................................................. 23 3. Data ................................................................................................................... 37 3.1 Municipality Level Data .................................................................................. 37 3.1.1 Infant Mortality ......................................................................................... 38 3.1.2 Seguro Popular Coverage ......................................................................... 44 3.1.3 PROSPERA Coverage ............................................................................... 44 3.1.4 Municipality Characteristics ..................................................................... 45 3.1.5 Health Supply ............................................................................................ 46 3.2 Individual Level Data ....................................................................................... 46 4. The Effect of Health Insurance on Infant Mortality .................................... 51 4.1 Introduction ...................................................................................................... 51 4.2 Public Interventions to Improve Child Survival before the SP ........................ 55 4.2.1 Oral Rehydration Salts and Vaccination Programmes during the Eighties and Nineties ........................................................................................................ 56 6 4.2.2 The PROSPERA Programme .................................................................... 57 4.3 Literature Review ............................................................................................. 60 4.3.1 Expected Effects of Health Insurance on Health ...................................... 60 4.3.2 Empirical Evidence from Middle-income Countries................................. 63 4.4 Data and Methods ............................................................................................ 67 4.4.1 Data ........................................................................................................... 67 4.4.2 Identification Strategy ............................................................................... 67 4.4.3 Empirical Model ....................................................................................... 71 4.5 Results .............................................................................................................. 72 4.5.1 Main Results .............................................................................................. 72 4.5.2 Robustness Checks .................................................................................... 74 4.5.3 Heterogeneity of the Results ..................................................................... 77 4.5.4 Benefit-cost Analysis ................................................................................. 82 4.6 Discussion ........................................................................................................ 86 5. Consumption Smoothing and Health Insurance Expansion ........................ 89 5.1 Introduction ...................................................................................................... 89 5.2 Theoretical Framework .................................................................................... 92 5.3 Literature Review ............................................................................................. 93 5.4 Data and Methods ............................................................................................ 96 5.4.1 Empirical Model ....................................................................................... 96 5.4.2 Data and Measures ..................................................................................