June 2000 34 Applied Research on Decentralization of Health Systems in Latin America: Bolivia Case Study Applied Research on Decentralization of Health Systems in Latin America: Bolivia Case Study Thomas J. Bossert, PhD Harvard School of Public Health Fernando Ruiz Mier KPMG/Bolivia Scarlet Escalante Independent Consultant Marina Cardenas Independent Consultant Bruno Guisani Independent Consultant Katherina Capra Independent Consultant Joel Beauvais, BA Harvard School of Public Health Diana Bowser, MPH Harvard School of Public Health June 2000 This publication was produced by the Data for Decision Making Project at the Harvard School of Public Health, funded by the U.S. Agency for International Development under Cooperative Agreement No. DPE-5991-A-00-1052-00. It was done in collaboration with the Latin America and Caribbean Health Sector Reform Initiative, funded by the U.S. Agency for International Development under Contract No. HRN- 5974-C-00-5024-00. The views expressed herein are those of the author and do not necessarily reflect the views of the U.S. Agency for International Development. TABLE OF CONTENTS ACRONYM LIST .............................................................................................................iii ACKNOWLEDGMENTS.................................................................................................... v INTRODUCTION............................................................................................................. 1 METHODOLOGY & THE DECISION-SPACE APPROACH ............................................................ 2 OVERVIEW OF THE HEALTH SYSTEM IN BOLIVIA .......................................................... 5 BACKGROUND: DEMOGRAPHICS, HEALTH INDICATORS, PUBLIC FINANCE.................................. 5 POLITICAL DECENTRALIZATION REFORMS .................................................................... 7 HEALTH SECTOR DECONCENTRATION AND THE “NUEVO MODELO DE SALUD”......... 12 POLICY PROCESS & HISTORY OF DECENTRALIZATION ......................................................... 14 ANALYSIS OF DECISION SPACE........................................................................................ 17 BRIEF OVERVIEW OF METHODOLOGY OF BOLIVIA STUDY .......................................... 24 BACKGROUND ............................................................................................................. 24 DESCRIPTION OF THE INFORMATION................................................................................ 25 THE SOURCES OF INFORMATION..................................................................................... 26 FIELD WORK............................................................................................................... 26 NATIONAL DATA ANALYSIS AT THE MUNICIPAL LEVEL ......................................................... 28 PRINCIPAL TRENDS....................................................................................................... 29 MUNICIPAL REPORTS ABOUT HEALTH SPENDING ....................................................... 30 MUNICIPAL SPENDING ON HEALTH .................................................................................. 30 UTILIZATION OF MUNICIPAL HEALTH CARE SERVICES COEFFICIENTS...................................... 34 CORRELATION ANALYSIS ............................................................................................... 38 RELATIONSHIP BETWEEN HEALTH EXPENDITURE AND FORMAL AND INFORMAL SECTOR UTILIZATION.................................................................................................. 39 HEALTH CARE SPENDING AND OTHER UTILIZATION VARIABLES............................................. 39 HEALTH CARE SPENDING FOR INFRASTRUCTURE AND EQUIPMENT ......................................... 40 HEALTH CARE SPENDING IN RELATION TO MUNICIPAL CHARACTERISTICS................................ 41 FINAL COMMENTS........................................................................................................ 42 DESCRIPTION AND ANALYSIS OF CASE STUDIES ......................................................... 43 EXTERNAL FACTORS ..................................................................................................... 44 MUNICIPAL CHARACTERISTICS........................................................................................ 44 EFFECTIVE COORDINATION............................................................................................ 45 KEY PLAYERS’ PROFILES ................................................................................................ 45 RELATIONSHIPS ........................................................................................................... 46 INNOVATIONS ............................................................................................................. 47 PERFORMANCE INDICATORS........................................................................................... 47 CASE STUDY RESULTS................................................................................................... 48 i Applied Research on Decentralization of Health Systems in Latin America: Bolivia Case Study MUNICIPAL CHARACTERISTICS........................................................................................ 49 INITIAL SITUATION—INSTALLED CAPACITY, EXPERIENCE, AND ALTERNATIVE FORMS OF HEALTH CARE......................................................................................................... 50 INSTITUTIONAL CAPACITY.............................................................................................. 50 KEY INFORMANTS PROFILES........................................................................................... 51 INNOVATIONS ............................................................................................................. 54 EFFECTIVE COORDINATION............................................................................................ 55 PERFORMANCE ............................................................................................................ 56 RESOURCE ALLOCATION EFFICIENCY................................................................................ 57 PROVISION OF SERVICE EFFICIENCY ................................................................................. 58 CONCLUSION ............................................................................................................... 60 BIBLIOGRAPHY............................................................................................................. 61 ANNEX I. BOLIVIA FIELD RESEARCH GUIDE ................................................................. 62 MUNICIPAL CHARACTERISTICS........................................................................................ 62 INCENTIVES ................................................................................................................ 63 INFORMAL DECISION-MAKING STRUCTURE ....................................................................... 63 INNOVATION............................................................................................................... 64 PERFORMANCE ............................................................................................................ 66 ANNEX II. DESCRIPTION OF RANKING SYSTEM FOR SUBJECTIVE VARIABLES IN BOLIVIA CASE STUDIES ............................................................................................................. 69 PUBLICATIONS OF THE LATIN AMERICA AND THE CARIBBEAN REGIONAL HEALTH SECTOR REFORM INITIATIVE ....................................................................................... 72 ii ACRONYM LIST ADL Administrative Decentralization Law ADN Alianza Democrática Nacional (National Democratic Alliance) COB Bolivian Workers Central COREDES Corporaciones Regionales de Desarrollo (Regional Development Corporations) CSUTB Syndical Unions and Peasant Workers DIDES Departmental Health Directorates DILOS Local Health Directorates DITES Territorial Health Directorates FCO Compensatory Department Fund FIS Social Investment Fund IBSS Instituto Boliviano de Seguro Social (Social Security System) IEH Special Hydrocarbon Tax IPB Property Tax Law 1493 Ley de Ministerios del Poder Ejecutivo (Executive Ministerial Power Law) Law 1606 Ley de Modificaciones a la Ley de Reforma (Modifications to the Reform Law) LLP Law of Popular Participation MBL Free Bolivia Movement MNR Movimiento Nacional Revolucionario (National Revolution Movement) MOH Ministry of Health MSPS Ministry of Health and Social Welfare NMS Nuevo Modelo de Salud (New Health Model) OTBs Organizaciones Territoriales de Base (Territorial Base Organizations) PAE Strategic Action Plan PAO Plan Anual Operativo Municipal (Annual Municipal Operative Plan) PDM Municipal Development Plan SILOS Sistema Local de Salud (Local Health Care System) SNIS National System of Health Information SNMN Maternal and Child National Insurance (Seguro Nacional de Maternidad y Niñez) iii Applied Research on Decentralization of Health Systems in Latin America: Bolivia Case Study SRS Regional Health Secretariates UBAGES Basic Health Management Units UDPASO Social Policy Analysis Unit UPROS Health Programming Unites iv ACKNOWLEDGMENTS The authors wish to thank the many Bolivian officials and observers who provided support through interviews and documents, including Dr. Fernando Lavadenz, Dr. Ruiter Prieto, Dra. Mariam Lopez, Dr. Guillermo Cuentas, Hugo Loiaza, George Gray Molina, and Fernando Medina. In addition, the unfailing support