PROFILE OF THE HEALTH SERVICES SYSTEM OF COSTA RICA (1st edition, 2 February 1999) (2nd edition, 27 May 2002)* PROGRAM ON ORGANIZATION AND MANAGEMENT OF HEALTH SYSTEMS AND SERVICES DIVISION OF HEALTH SYSTEMS AND SERVICES DEVELOPMENT PAN AMERICAN HEALTH ORGANIZATION Profile of the Health Services System of Costa Rica EXECUTIVE SUMMARY Costa Rica is a unitary state with a land area of 51,000 km2 and a population of nearly 4 million. The country is divided into seven provinces, 81 cantons, and 459 districts. According to the July 2000 census, 59% of the country’s 3,810,179 inhabitants reside in urban areas. The indigenous population numbers 63,876 (1.7% of the total population), divided among eight ethnic groups.1 The government is made up of the executive, legislative, and judicial branches, the first two are elected every four years. In recent decades, elected governments have alternated between the two majority parties. Between 1992 and 1999, the economy grew 5.8% on average, but growth sharply dropped to 1.9% in 1998-1999 and then to 1.5% in 2000, with no signs of a recovery in the short term. Some 5% of the population is illiterate, but the figure ranges from 1% to 15.4% in the different cantons. In 1999, 20.6% of households were poor and 6.7% indigent, according to the National Institute for Statistics and Censuses (INEC). Costa Rica’s Human Development Index has continued to rise, from 0.745 in 1975 to 0.821 in 1999, placing it 41st among the 162 countries ranked worldwide and fifth in the Region. Costa Rica’s gender-related development index in 1999 was 0.795, ranked 42nd, while it’s ranking per capita GDP was 60th. The health sector in Costa Rica is made up of the Ministry of Health (MH), the Costa Rican Social Security Fund (CCSS), the National Insurance Institute (INS), the Costa Rican Institute of Water Supply and Sewerage Systems (AyA), the University of Costa Rica, and the municipalities. The MH exercises the steering role for the sector. During the 1990s, the MH transferred health prevention and promotion programs to the CCSS. This enabled the CCSS to adapt its health care model, integrating promotion and prevention activities with those for treatment and rehabilitation. The CCSS is the only public entity that provides maternity and health insurance for the entire population of the country, and to this end it has a network of services at the first, second, and third levels of care. The first level provides five comprehensive care programs through a network of 93 health areas with 783 Basic Comprehensive Health Care Teams (EBAIS) and some peripheral and deconcentrated clinics. The second level provides emergency services, diagnostic support, specialized outpatient consultations, and basic surgical procedures through a network of health centers and peripheral and regional hospitals. The third level provides hospitalization and high-tech medical and surgical services in three national general hospitals and five specialized hospitals. Ninety percent of the population belongs to this health insurance system and the remain ing 10% can use it if necessary for emergency services. Financing for public health insurance comes from i Pan American Health Organization three sources: employers contribute 9.25% of the wages paid, workers contribute 5.50% of their wages, and the State contributes 0.25% of the total national wages (in all, the financing amounts to 15% of a worker’s salary). Actuarial studies show that the health insurance system is financially sustainable for at least 10 years, but the CCSS has begun to take steps to improve its collection system by developing a new model for allocating resources through management commitments with suppliers that require performance-based accountability. In 2000, the national averages for prenatal care and delivery by skilled personnel were 89% and 97%, respectively. Health care coverage for children under 1 year was 93%, and the infant mortality rate was 10.2 per 1,000 births. In 1988, the CCSS began to purchase first-level services from external providers called health cooperatives. The results have been considered positive: 400,000 inhabitants (11% of the population) are now covered by these or by similar types of providers. In addition, due to higher demand, the CCSS began to purchase some specialized services as well. Within the framework of State reform, health sector reform began in 1994 with a four-part agenda: a steering role for the Ministry of Health and its strengthening; institutional strengthening of the CCSS; a new system for the reallocation of financial resources; and adaptation of the health care model. To promote the reform process, the country used loans of $4.3 million from the Inter-American Development Bank (IDB) and $22 million from the World Bank, as well as technical cooperation from PAHO/WHO. These projects and their external financing concluded in 2001. Evaluation of their results shows progress with respect to service coverage and access, mechanisms for allocating financial resources and provider payment systems (fees for first-level services and hospital production units for hospital services). However, the results also show that there is work to be done on the reform of the health system. Steering role functions need to be further strengthened, and it is necessary to improve the performance of certain essential public health functions, the management of services, the quality of care, and equity in the allocation of resources. This has prompted the health sector to propose new financing that will permit a continuation of the reforms currently under way. ii Profile of the Health Services System of Costa Rica 1. CONTEXT Political Context: Costa Rica is a unitary state with an area of 51,000 km2 and a population of nearly 4 million. The country is divided into seven provinces, 81 cantons, and 459 districts. The government is made up of the executive, legislative, and judicial branches, the first two of whic h are elected every four years. In recent decades, elected governments have alternated between the two majority parties: the National Liberation Party (PLN), and the Social Christian Unity Party (PUSC). There has also been a growing trend toward voter abstention, which reached 30% in 1998 and 31% and 39% in the first and second rounds of the 2002 elections. The elections of February 2002 were a milestone in the country’s political history, because a third political party attracted a large number of votes. The election went for the first time to a second electoral round, and the National Assembly during the next administration will be made up of lawmakers from four parties. The political, administrative, and fiscal system is centralized. Budgets are determined centrally and have little flexibility.2 Municipal resources represent only 2% of total public spending. However, in July 2001 the government agreed to reform Article 170 of the Constitution in support of a law to transfer responsibilities to municipalit ies. The idea was to gradually increase their resources up to 10% of public spending for education, transportation, housing, and health projects.3 The policy management instrument is the National Development Plan (NDP) for 1998-2002, and the Ministry of National Planning and Economic Policy is the executive branch entity in charge of monitoring its execution. Social development policies are part of the NDP and are implemented through sectoral programs prepared by the different ministries. Results are evaluated quarterly through the National Evaluation System (NES), which the government uses to assess public sector performance.4 Other auxiliary agencies that control public management include the Office of the Comptroller of the Republic; an ombudsman’s office called the People's Defender, which monitors the quality of public services, including those pertaining to health; and the IV Constitutional Court, which has the authority to revoke legislative decisions considered unconstitutional. The objective of the National Health Policy for 1998-2002 and the National Health Plan for 1999- 2004 is sectoral management, leadership, and coordination.5 The social and political factors that can adversely affect the health situation are immigration, growing unemployment and the informal market, stagnation of the economy, the number of poor households, and environmental pollution. Economic Context: The economy grew at 5.8% on average between 1992 and 1999, but then declined sharply to 1.9% over the period 1998-1999 and then to 1.5% in 2000. No signs of recovery are seen for the short term.6 The decline in economic growth in the United States, 1 Pan American Health Organization reduced exports of manufactured goods, and the drop in international coffee and banana prices contributed to slower economic growth. The share of GDP by economic sector in 2000 was 24.2% for manufacturing; 17.9% for trade, restaurants, and hotels; 10.7% for agriculture, forestry, and fishing; 10.3% for community and social services; 9.4% for transportation, storage, and communications; 5% for real estate activities; and 3.5% for construction. 7 International technical cooperation fell by 17.6% between 1990-1999 and nonreimbursable cooperation by 12.6%. The Inter-American Development Bank increased its share of reimbursable cooperation to the country from 35.7% to 54.4% over the same period, while USAID and Japan reduced their credits.8 The country’s social development index puts it on a list of countries that are not prioritized to receive external financing and international cooperation. Economic Indicators, 1993-2000 Year INDICATOR 1993 1994 1995 1996 1997 1998 1999 2000 Per capita GDP in constant 2,893.6 3,093.1 3,345.5 3,296.1 3,485.0 3,740.1 4,096.4 4,044.5 prices, in US$ (1) Economically active population, 1,143,324 1,187,005 1,231,572 1,220,914 1,301,625 1,376,540 1,383,452 1,390,560 in thousands (2) Total public expenditure as a 37.2 42.7 40.0 40.1 39.6 38.7 37.5 percentage of GDP Public social expenditure as a 15.8 16.6 15.4 16.8 17.1 17.1 16.5 17.4 percentage of GDP (3) Annual inflation rate (%) (4) 9.0 19.0 22.6 13.9 11.2 12.3 10.1 10.2 Sources: (1) Central bank; (2) INEC; (3) MIDEPLAN; (4) State of the Nation report.